Bruun v. Katz Drug Co.
| Decision Date | 13 June 1949 |
| Docket Number | 41255 |
| Parties | James Bruun, Appellant, v. Katz Drug Company, Incorporated; Katz Drug Company, a Delaware Corporation; M. H. Katz, Isaac Katz, Rose Katz and Minnie Katz, Trustees of the Assets of Katz Drug Company, or Famous Drug Company, a former Missouri Corporation, Respondents |
| Court | Missouri Supreme Court |
Rehearing Denied July 11, 1949.
Appeal from Jackson Circuit Court; Hon. Paul A. Buzard Judge.
Affirmed.
In 1929 plaintiff filed a statutory wage action against a Missouri corporation which was subsequently dissolved. In 1948 the officers and directors of the dissolved corporation, and a Delaware corporation which had acquired the assets of the Missouri corporation, were made parties. The statute of limitations had run against these subsequent parties and the motion to dismiss was properly sustained.
Henry W. McFeely and George Hornecker for appellant.
(1) The trial court erred in finding that plaintiff's supplemental petition fails to state a claim against Katz Drug Company, the Delaware corporation, upon which relief can be granted. Plaintiff's supplemental petition states a cause of action against the Delaware corporation, as the subsisting corporation in a merger, consolidation, reorganization or sale, the transfer being substantially "by themselves to themselves," and creating an identity of parties. Hibernia Ins. Co. v. St. Louis & New Orleans Transportation Co., 13 F. 516; Sweeney v. Heap O'Brien Mining Co. and Grand Haven Mining Co., 194 Mo.App. 140, 186 S.W. 739; Abeken v. United States, 26 F.Supp. 170; Kinsello v. Marquette Eastern Finance Corp., 28 S.W.2d 427; Blackington v. United States, 6 F.2d 147; State ex rel. Consolidated School Dist. Number 8 of Pemiscot County v. Smith, 343 Mo. 288, 121 S.W.2d 160; Schneider v. Schneider, 347 Mo. 102, 146 S.W.2d 584. (2) Plaintiff's rights and cause of action under Section 5082, Revised Statutes of Missouri, 1939, continues against Katz Drug Company, the Delaware corporation. The identity of the Missouri and the Delaware corporations eliminates a negative to plaintiff's statement of this issue, but the point will be further considered here. State v. Arkansas Oil Co., 116 Ark. 74, 171 S.W. 1192; Fair Labor Standards Act, 1938, 29 U.S.C.A. 216 (b); Greenberg v. Arsenal Bldg. Corp., 144 F.2d 292; Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296; Overnight Motor Transportation Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216, 86 L.Ed. 1682; Mason v. Adoue, 30 Tex. Civ. App. 276, 70 S.W. 347. (3) The trial court erred in applying Section 1014, Revised Statutes of Missouri, 1939, as a bar to plaintiff's supplemental petition and his cause of action against Katz Drug Company, the Delaware corporation and in finding plaintiff failed to diligently prosecute the cause. Limitation did not run in favor of the Delaware corporation, because it is the subsisting corporation in a transfer of assets from the controlling interests in one corporation to the same interest controlling the other corporation, with notice. Sec. 5082, R.S. 1939; Manhattan Oil Co. v. Mosby, 72 F.2d 840; N.Y. Central & Hudson River R. Co. v. Kinney, 260 U.S. 340; Wabash Ry. Co. v. Bridal, 94 F.2d 117; 41 Am. Jur., p. 48, sec. 267; 49 C.J., p. 570, sec. 795; Berssenbrugge v. Luce Mfg. Co., 30 F.Supp. 101; Boonville Special Road Dist. v. Fuser, 184 Mo.App. 634, 171 S.W. 962. (4) The trial court erred in applying Section 1014, Revised Statutes of Missouri, 1939, as a bar to plaintiff's supplemental petition and his cause of action, against Katz Drug Company, the Delaware corporation, because there was deception by defendants as to the relationship of Missouri and Delaware corporations and assets involved. Where there is deception and the deception is repeated or continued, Statute of Limitation does not run. Oregon Mortgage Co., Ltd. v. Renner, 17 F.Supp. 727; 54 C.J.S., p. 198, sec. 192. (5) The trial court erred in finding that plaintiff's supplemental petition fails to state a cause of action against Katz Drug Company, the Delaware corporation, and the individuals named in petition, as Trustees of the assets of the Missouri corporation. The statutes indicate clearly that any one taking the assets of a corporation ". . . by whatever name they may be known in law, shall be trustee of such corporation . . ." Secs. 5036, 5094, R.S. 1939; Abeken v. United States, 26 F.Supp. 170; Schneider v. Schneider, 347 Mo. 102, 146 S.W.2d 584; Blackington v. U.S., 6 F.2d 147; Sweeney v. Heap O'Brien Mining Co. and Grand Haven Mining Co., 194 Mo.App. 140, 186 S.W.2d 739. (6) The plaintiff's rights and cause of action under Section 5082, Revised Statutes of Missouri, 1939, continues against the individuals named in the supplemental petition and the Delaware corporation, as trustees of the assets of the Missouri corporation. State v. Arkansas Oil Co., 116 Ark. 74, 171 S.W. 1192; Cases construing the Fair Labor Standards Act, 1938, 29 U.S.C.A. 216 (b) as remedial; Greenberg v. Arsenal Bldg. Corp., 144 F.2d 292; Overnight Motor Transportation Co. v. Missel, 316 U.S. 572, 62 S.Ct. 1216; Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296. (7) There is an identity of parties in the original petition and supplemental petitions and the cause of action stated in each is the same. Manhattan Oil Co. v. Mosby, 72 F.2d 840; Wabash Ry. Co. v. Bridal, 94 F.2d 117. (8) There is a trust and trusteeship as to the Delaware corporation, and the individuals, by Sections 5036 and 5094, Revised Statutes of Missouri, 1939, and by the facts and circumstances. Especially as to the Delaware corporation, there has been a secret trust. The trust was not repudiated. There is a continuing offense and continuing remedy. All of which takes this case out of the Statutes of Limitations. Secs. 5036, 5082, 5094, R.S. 1939; Cape County Sav. Bank v. Wilson, 225 Mo.App. 14, 34 S.W.2d 981; Koppel v. Rowland, 319 Mo. 602, 4 S.W.2d 816; Boonville Road District v. Fuser, 184 Mo.App. 634, 171 S.W. 962. (9) Katz Drug Company, the Delaware corporation, and the individual defendants all collaborated and took part in the deceptions that have been mentioned, which tolled the Limitation Statute to a date not earlier than September 23, 1943. Oregon Mortgage Co., Ltd., v. Renner, 17 F.Supp. 727; 54 C.J.S., p. 198, sec. 192. (10) By Section 847.22 (3) (d), Missouri Civil Code of Procedure, 1943, liability extends to all the defendants. (11) The order of dismissal referred to plaintiff's cause of action "if any he had." That is a reference to the merits of the case, and no part of the case has ever been tried on the merits.
Paul R. Stinson and Lawrence R. Brown for respondents Katz Drug Co., a Delaware Corporation, M. H. Katz, Isaac Katz, Rose Katz and Minnie Katz; Stinson, Mag, Thomson, McEvers & Fizzell of counsel.
(1) The motion to dismiss was properly sustained by the trial court because if plaintiff ever had any right of action against any of these defendants it has long ago been barred by the statute of limitations. Jaicks v. Sullivan, 128 Mo. 177, 30 S.W. 890; Sears v. Missouri Mortgage Loan Co., 56 Mo.App. 122; Landis v. Saxton, 105 Mo. 486, 16 S.W. 912; Thompson v. Allen, 86 Mo. 85; Hiller v. Schulte, 184 Mo.App. 42, 167 S.W. 461; Haney v. Thomson, 339 Mo. 505, 98 S.W.2d 639; Anderson v. Doran, 211 S.W. 80; Meyer v. Interurban Ry. Co., 271 S.W. 865, 219 Mo.App. 360; De Vault v. Truman, 354 Mo. 1193, 194 S.W.2d 29; Bruun v. Katz Drug Co., 351 Mo. 731, 173 S.W.2d 906; Bruun v. Katz, 211 S.W.2d 918; Johnson v. United Rys. Co., 243 Mo. 278, 147 S.W. 1077; Oklahoma Natural Gas Co. v. Oklahoma, 273 U.S. 257, 71 L.Ed. 634; Blum v. Postal Telegraph, Inc., 54 F.Supp. 898, 60 F.Supp. 237; 74 A.L.R. 1280, 1282, Annotation Re Substitution of Defendants; Sec. 1014, R.S. 1939. (2) The motion to dismiss was properly sustained by the trial court because the suit is based upon a penal statute, and as such it did not survive the dissolution of the original defendant, the Missouri corporation. Quinn v. Sayman Products Co., 296 S.W. 198; Williams v. Gideon-Anderson Lumber Co., 224 S.W. 51; State v. Arkansas Oil Co., 116 Ark. 74, 171 S.W. 1192; Auslen v. Thompson, 38 Cal.App. (2d) 204, 101 P.2d 136; Brown, Price Admr. v. Cummins Distilleries Corp., 56 F.Supp. 941; United States v. Mitchell, 163 F. 1014; In the matter of Francis Schreiber, 110 U.S. 76, 28 L.Ed. 65.
This is an appeal from an order dismissing the appellant's supplemental petition because (a) the petition failed to state a claim against these respondents upon which any relief could be granted; (b) the claim is barred by the five year statute of limitations (section 1014, R.S. Mo., 1939); and (c) this cause was filed on March 30, 1929, and appellant had failed to diligently prosecute it. There have been two previous appeals in this cause to this court. They are reported in 351 Mo. 731, 173 S.W. 2d 906 and 211 S.W. 2d 918.
This supplemental petition was filed on July 2, 1948. Briefly it states that since the filing of the original petition against the Katz Drug Company, a Missouri corporation, the Katz Drug Company, a Delaware corporation, was incorporated June 13 1929, and licensed to do business in Missouri June 26, 1929; that the same individuals who had control of the Missouri corporation became the officers and directors of the Delaware corporation; that the assets and business of the Missouri corporation were transferred to the Delaware corporation; that on June 26, 1929, the Missouri corporation changed its name to Famous Drug Company, which charter was forfeited by the State on January 1, 1930; that the answer of the Missouri corporation was filed May 15, 1929; that the president and last board of directors of the Missouri...
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