Opinion
No. 4929.
July 17, 1970.
APPEAL FROM SECOND CIRCUIT COURT HON. S. GEORGE FUKUOKA, JUDGE.
RICHARDSON, C.J., MARUMOTO, ABE, LEVINSON AND KOBAYASHI, JJ.
John T. Vail ( B. Martin Luna on the briefs, Ueoka Vail of counsel) for appellant.
William S. Ellis, Jr., appellee, pro se.
Ralph E. Corey, for appellees except William S. Ellis, Jr., present but did not argue.
MDG Supply, Inc., brought action to cancel a warranty deed from Diversified Investments, Inc., to William Ellis as a conveyance in fraud of creditors. The deed purported to convey certain real property which was already subject to a court ordered sale to satisfy a judgment obtained by appellant. The lower court dismissed the action as barred by HRS § 416-33 since it was not brought within 90 days of the recording of the deed.
We reverse. HRS § 416-33 allows a corporation to make a voluntary transfer of all or substantially all of corporate assets by affirmative vote of three-fourths of the stockholders, rather than unanimous approval as required by common law. The enforcement section of this statute provides: "No action or suit to set aside a sale, lease, or exchange by a corporation on the ground that this section has not been complied with, or upon any other ground, shall be brought more than ninety days after the recording of the instrument * * *." It is clear from the legislative history, and from the plain reading of the statute, that it is intended to apply only to actions by stockholders. See 1937 Senate Journal, 295-296. It does not apply to actions by creditors of the corporation to set aside a conveyance in fraud of creditors. Cf. Long Const. Co. v. Empire Drive-In Theatres, Inc., 208 Cal.App.2d 726, 25 Cal. Rptr. 506 (1962).
Reversed, and case is remanded for proceedings consistent with this opinion.