McBride

In November of 1931 an involuntary proceeding in bankruptcy was commenced against Western Bond and Mortgage Company. McBride, appellant here, was appointed trustee in December of 1934, after an adjudication on the petition entered the previous September. The present suit was begun by appellant on October 2, 1943. It sought judgment in a large sum against appellee Farrington, former president of the bankrupt corporation, on the allegation that he had procured without consideration the transfer to himself of assets of the bankrupt. The fraudulent transfers were alleged to have occurred in December 1929 and in December 1930. The complaint asserted that the deception practiced by appellee was not discovered until September 21, 1943.

Defenses of laches and of the statute of limitations were interposed, the limitation relied on being that provided by the Oregon Statute, Sec. 1-206, O.C.L.A., which prescribes a limitation of two years from the discovery of the fraud or deceit. These issues were segregated by a pre-trial order and were tried first. The court found that upon the appointment of appellant as trustee all records of the bankrupt corporation were promptly placed in his hands,…