of those to whom it has been so illegally paid does not, in essence, rob it of that quality. We have therefore no hesitation in affirming our former holding that the receiver may, by virtue of its appointment as such, and on behalf of the creditors, maintain the action quite independently of the statute. It is unnecessary here to determine whether the rights of the individual creditor to pursue the fund under the statute are suspended during the bankruptcy proceedings. That question is not now presented. We think it is settled doctrine that the good faith L of the corporation in paying dividends in impairment of capital or that of stockholders in receiving such dividends is no defense to an action for their recovery. American Steel & Wire Co. v. Eddy, supra, and cases there cited. The meritorious question in the case is, therefore, to determine when the statute of limitations began to run in favor of these defendants. It will be remembered that the last of the dividends said to have been unlawfully paid were so paid in July, 1904, and the bill of complaint in this case was not filed until October 22, 1910. It is the contention of counsel for complainant that the cause of action did not accrue until the present creditors came into existence and acquired a standing to assail the unlawful payment; that the receiver in prosecuting the action acts as the assignee of, or successor to, the individual rights of each creditor under the statute; and that the time when the fraud was committed is not the period from which the limitation is to be computed, but the time at which the plaintiff acquired the right to attack. On the other hand, defendants urge that the statute commenced to run from the moment of payment; that from such time the money so illegally paid became an asset of the insolvent, recoverable by it in a proper proceeding; and that the receiver is proceeding, not by virtue of any statutory rights conferred upon creditors, but under well-recognized equitable principles to recover assets of the insolvent which have been wrongfully diverted. The authorities upon the question are not harmonious, but we are disposed to accept the view presented by the defendants and hold that where unearned dividends are paid to innocent stockholders they cannot be recovered in an action brought more than six years after such payment. The question was carefully considered in Lexington Life, etc., Ins. Co. v. Page, supra, where it is said: "Can the stockholders rely upon the statute of limitations to protect themselves against the recovery of these dividends? The only argument that has been urged against their right to avail themselves of the statute is, that the dividends were a part of a trust fund, and should be regarded as having been received by them as such, and held by them as trustees. "The doctrine is well settled that such express and continuing trusts as are within the exclusive jurisdiction of courts of equity, and are not cognizable at law, are not affected by the statute of limitations. "But here there was no express trust; if any existed, it resulted by implication, from the facts of the case. The money was received by the stockholders in their own right, as that to which they were legally entitled, and there is nothing which authorizes the inference that they ever agreed to hold it in trust, or claimed it otherwise than as belonging to themselves. "Besides, the corporation could have maintained an action at law, for the recovery of the money received by them; and a court of equity would have had no jurisdiction to have adjudged its repayment to the corporation. "If, then, it constituted a trust at all in the hands of the stockholders, it was not an express trust, but received its character from legal implication, and was not such a trust as is within the exclusive jurisdiction of courts of equity, but was cognizable in a court of law, and consequently lacked the essential attributes of those trusts that are exempted from the operation of the statute”--citing Dudley v. Price, 10 B. Mon. (Ky.) 84. Again, in the case of Hayden v. Thompson, 17 C. C. A. 592, 71 Fed. 60, Judge Sanborn, delivering the opinion of the court of appeals, said: * * * "This is a suit brought for the benefit of the creditors of this bank, by their proper legal representative, to recover $213,708, which was unlawfully taken out of a trust fund that was sacredly pledged to secure them, and distributed in various amounts among these appellees without consideration. It is a suit in equity to execute a trust, to undo a fraud, and to prevent a multiplicity of suits. It is a suit to execute a trust, for the capital of a bank or other moneyed corporation constitutes a trust fund pledged to secure the payment of its creditors. It is a breach of that trust to divert any portion of this fund from the creditors of the corporation to pay dividends to its stockholders, when it is insolvent, and any funds so diverted may be followed by the creditors, or by their proper representative, and recovered from any one but a bona fide purchaser or a creditor, who has received them. * * * It is a suit to follow and recover a part of the capital of this bank which was wrongfully paid to and received by them. By receiving it they became liable to pay it back to the bank for the benefit of its creditors. This liability to repay this fund was an asset of the bank which passed to the receiver. Under the act of Congress he was vested with the right of the bank, and also with the rights of the creditors of the bank, to recover this fund for the purpose of an equal distribution among the latter. After his appointment he was the proper party to, and the only party who could, maintain a suit for its recovery. Bailey v. Mosher, 11 C. C. A. 304, 63 Fed. 488, 491; Bank v. Colby, 21 Wall. [U. S.] 609; Hornor v. Henning, 93 U. S. 228; Stephens v. Overstolz [C. C.], 43 Fed. 771; Bank v. Peters [C. C.], 44 Fed. 13. The act of Congress provides that, under the direction of the comptroller, the receiver shall take possession of the books, records, and assets of the bank, collect all debts, dues, and claims belonging to it, and that, upon orders of the courts, or if necessary, he may take 175 MICH.-12. certain other proceedings. The basis of this suit is a claim of the bank for a part of its capital pledged to, but diverted from, its creditors to these appellees. It was one of the primary duties of the receiver to collect all the dues and claims of the bank. The claim on which this suit is based was one of these claims. * * * This is a suit, we repeat, to recover diverted trust funds. It rests upon no statute or act of Congress. Its foundation lies deeper. It rests on the fundamental principle of equity that he who has received moneys impressed with a trust, without consideration, ought to and must restore them. The right to recover such funds in chancery courts existed long before these acts of Congress were passed, and we find no intimation in them of any intention to destroy or curtail it. * * * * "By the statutes of Nebraska, an action for relief on the ground of fraud is barred in four years after the cause of action accrues, but the cause of action in such a case is not deemed to have accrued until the discovery of the fraud. An action for the recovery of this $120 on any other ground stated in the bill than fraud is barred in four years from the time the cause of action accrues. Consol. St. Neb. 1891, §§ 4547, 4548, 4552. This suit was commenced on July 6, 1894, more than seven years after defendant Hall received his dividend. He filed a general demurrer to this bill. * By the terms of these statutes an action to recover this dividend from the defendant Hall was barred more than two years before this suit was commenced; but the counsel for the complainant seeks to escape from this conclusion on three grounds: First, that the stockholders who received unearned dividends are trustees of an express trust for the creditors of the bank, and the statute of limitations is inoperative against them; second, that the cause of action did not accrue until the fraudulent misappropriation of the dividend was discovered, and the bill alleges that the directors concealed it until the receiver was appointed; and, third, that the cause of action did not accrue until the receiver was appointed, and it was discovered that it was necessary to collect this fund in order to pay the creditors of the bank. "Express trusts are not within the statute of limitations because the possession of the trustee is pre sumed to be the possession of the cestui que trust. Prevost v. Gratz, 6 Wheat. [U. S.] 481, 497; Lewis v. Hawkins, 23 Wall. [U. S.] 119, 126; Railroad Co. v. Durant, 95 U. S. 576. But lapse of time is as complete a bar to a constructive or implied trust in equity as at law, unless there has been a fraudulent concealment of the cause of action. Speidel v. Henrici, 120 U. S. 377, 386 (7 Sup. Ct. 610); Dole v. Wilson, 39 Minn. 330, 333 (40 N. W. 161); Carrol v. Green, 92 U. S. 509; Streitz v. Hartman, 26 Neb. 33, 49 (41 N. W. 804); Insurance Co. v. Page, 17 B. Mon. [Ky.] 412, 447 [66 Am. Dec. 165]. The defendant Hall never held the dividend which he received under an express trust to secure the creditors of this bank. He never contracted to hold it for them or for that purpose. He received it as his share of the profits of the business of the bank, and held it as his own. The trust with which it is impressed arises from the fact that it was taken out of the fund held by the bank in trust to pay its creditors. The defendant, who was prima facie its owner, is converted into a trustee by the evidence of this fact, and the trust is an implied or resulting trust, created by operation of law, and not an express trust arising from contract or privity. The complainant cannot, therefore, escape the bar of the statute on the ground that it is inoperative against an express trust. "Nor can he escape on the ground that the fraudulent misappropriation was not discovered until the receiver of the bank was appointed. * * * So far as this record shows, he received his dividend in good faith, in the honest belief that he was justly entitled to it. The reason of the rule that the time limited by the statute for the commencement of an action for fraud shall not commence to run while the defendant conceals it is that he ought not to be permitted to take advantage of his own wrong. Neither the reason nor the rule has any application to a cause of action which is fraudulently concealed from the parties in interest by third persons. The fraudulent concealment of the defendant alone will delay the running of the statute. The result is that an action at law to recover this dividend of $120, which was paid to Hall in 1886, would have been barred before this suit was commenced, and by analogy this suit cannot be main |