United States v. Samuel Neidorf and Maria Glickman, of the Estate of Mannes n.glickman

522 F.2d 916 UNITED STATES of America, Plaintiff-Appellant, v. Samuel NEIDORF and Maria Glickman, Executrix of the Estate of Mannes N.Glickman, Defendants-Appellees. No. 73-2993. United States Court of Appeals, Ninth Circuit. Aug. 4, 1975. Ronald R. Glancz (argued), U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellant. Leo Altshuler (argued), Beverly Hills, Cal., Henry J. Shames (argued), Los Angeles, Cal., for defendants-appellees. OPINION Before CHAMBERS, MERRILL and WALLACE, Circuit Judges. WALLACE, Circuit Judge: 1 This case concerns the construction of the statute of limitations applicable to damage suits brought by the United States, 28 U.S.C. § 2415 . The sole question on appeal is whether the government's complaint states a claim founded upon a tort, which must be sued upon within three years after it accrues, or founded upon "any contract express or implied in law or fact," which must be sued upon within six years. Id. §§ 2415(a), (b). The district court held that the government's claim, which was brought more than three years but less than six years after it accrued, 1 was founded upon tort and thus barred by section 2415. The court granted…

This case concerns the construction of the statute of limitations applicable to damage suits brought by the United States, 28 U.S.C. § 2415 . The sole question on appeal is whether the government’s complaint states a claim founded upon a tort, which must be sued upon within three years after it accrues, or founded upon “any contract express or implied in law or fact,” which must be sued upon within six years. Id. §§ 2415(a), (b). The district court held that the government’s claim, which was brought more than three years but less than six years after it accrued, 1 was founded upon tort and thus barred by section 2415. The court granted summary judgment in favor of Neidorf and the estate of Glickman and the United States appeals. We reverse.

In its complaint, the government alleged that while renegotiation claims for excessive profits were pending against Hermetic Seal Products Co. (Hermetic Seal), Neidorf, Glickman and Klebanoff, 2 as officers and directors of the corporation, caused it to distribute to themselves as shareholders $2,025,000 in dividends through a dummy corporation, Western Hemisphere Industries, Inc. In addition, through an intricate series of corporate…

(concurring and dissenting).

I agree with the majority that insofar as the complaint states a cause of action against Neidorf and Glickman as shareholders, the action is founded upon quasi-contract and the six-year limitations period applies. I cannot agree that the same holds true for the cause of action to set aside fraudulent conveyances.

The concept of a fraudulent conveyance arose in England from a hybrid statute 1 designed both to raise revenue and to punish offenders who sought to avoid the forfeiture of property to the Crown flowing from a conviction of treason or felony. 1 G. Glenn, Fraudulent Conveyances and Preferences §§ 61a and b, at 86-92 (rev. ed. 1940). After the concept became transformed into a device for the use of private creditors, the creditor was required, at a minimum, to have reduced his underlying claim to judgment before proceeding to attack the fraudulent conveyance either by way of execution or by a creditor’s bill in equity. See Richardson v. Michel, 45 Cal.App.2d 188, 195-201 , 113 P.2d 916 (4th Dis. 1941); 1 G. Glenn, supra, § 85, at 144. One result of this split between proceedings at Law and in equity was that courts tended to look to the…