Bruun v. Katz Drug Co.

• Decision Date: 07 June 1943
• Docket Number: 38300
• Citation: 173 S.W.2d 906,351 Mo. 731
• Parties: James Bruun, Appellant, v. Katz Drug Company, Incorporated
• Court: Missouri Supreme Court

173 S.W.2d 906

351 Mo. 731

James Bruun, Appellant, v. Katz Drug Company, Incorporated

No. 38300

Supreme Court of Missouri

June 7, 1943

Rehearing Denied September 7, 1943.

Appeal from Jackson Circuit Court; Hon. Paul A. Buzard Judge.

Reversed and remanded.

George Hornecker for appellant.

(1) Sections 1042 to 1047, inclusive, Revised Statutes of Missouri, 1939, do not apply to corporations. Secs. 1042, 1047, inclusive, R. S. 1939; Secs. 5036, 5094, R. S. 1939; Yerxa, etc., v. Viviano, 44 S.W.2d 98; Hammar v St. Louis Motor Carriage Co., 155 Mo.App. 441, 134 S.W. 1060; Ford v. K.C. & I. Short Line Ry. Co., 52 Mo.App. 439; Seaton v. C., R. I. & P. Ry. Co., 55 Mo. 416. (2) It was not the duty of plaintiff to bring in defendant's directors or managers as defendants. Secs. 5036, 5094, R. S. 1939; Yerxa, etc., v. Viviano, 44 S.W.2d 98; Wolcott Mfg. Co. v. Cady & Olmstead, 72 S.W.2d 845; Macklind Inv. Co. v. Ferry, 108 S.W.2d 21; Nudelman v. Thimbles, 40 S.W.2d 475. (3) A judgment rendered against a corporation whose charter has been forfeited is not void. Yerxa, etc., v. Viviano, 44 S.W.2d 98; Hammar v. St. Louis Motor Carriage Co., 155 Mo.App. 441, 134 S.W. 1060; Kinsella v. Marquette Easton Finance Co., 28 S.W.2d 427; Clark v. Willard, 292 U.S. 112, 54 S.Ct. 615; K. C. Hotel Co. v. Sauer, 65 Mo. 279; Wolcott Mfg. Co. v. Cady & Olmstead, 72 S.W.2d 845.

Paul R. Stinson for respondent; Ryland, Stinson, Mag & Thomson of counsel.

(1) At common law the dissolution of a corporation abated all actions. 16 Fletcher Cyc. Corp. (2d Ed., 1923), sec. 8147; Oklahoma Natural Gas Co. v. Oklahoma, 273 U.S. 257, 71 L.Ed. 634. (2) In Missouri a judgment rendered against a dissolved corporation is absolutely void. Macklind Inv. Co. v. Ferry, 341 Mo. 493, 108 S.W.2d 21; Watkins v. Mayer, 103 S.W.2d 566; Estel v. Investment Co., 46 S.W.2d 193; Park Co. v. Gibson, 268 Mo. 394, 188 S.W. 179; Pendleton v. Russell, 144 U.S. l. c. 644; Hecht Bros. Clothing Co. v. Walker, 224 Mo.App. 1156, 35 S.W. 372; State ex rel. v. A. B. Collins Co., 34 F.Supp. 550; Arnold v. Streck, 108 F.2d 387. (3) On notice and suggestion of defendant's dissolution plaintiff should have brought in defendant's officers and directors as defendants. Sec. 5094, R. S. 1939; Nudelman v. Thimbles, Inc., 225 Mo.App. 553, 40 S.W.2d 475; Watkins v. Mayer, 103 S.W.2d 566; Macklind Inv. Co. v. Ferry, 341 Mo. 493, 108 S.W.2d 21. (4) Sections 1042 and 1047, R. S. 1939 apply, and defendant's motion to dismiss was properly sustained. Secs. 1042, 1047, R. S. 1939; Bostick v. McIntosh, 278 Mo. 395; Cole v. Parker-Washington Co., 276 Mo. 220; Rutherford v. Williams, 62 Mo. 252; Board v. Railway, 36 Mo.App. 151; Johnson v. Hiller, 299 S.W. 135; Doering v. Kenamore, Admr., 36 Mo.App. l. c. 150; Mathewson v. Railroad, 44 Mo.App. l. c. 98; United States Tire Co. v. Keystone Tire Sales Co., 66 A. L. R. 1264; Nudelman v. Thimbles, Inc., 225 Mo.App. 553; Secs. 3280, 3670, R. S. 1939; Macklind Inv. Co. v. Ferry, 341 Mo. 493, 108 S.W.2d 21; Cole v. Parker-Washington Co., 276 Mo. 220; Secs. 60-3202, 3207, 3214, 3215, G. S. Kan., 1935; Cunkle v. Railroad Co., 54 Kan. 194, 40 P. 184; Arkansas River Gas Co. v. Molk, 135 Kan. 152, 9 P.2d 623; Young Const. Co. v. Dunne, 123 Kan. 176, 254 P. 323; McRae v. Piano Co., 69 Kan. 457, 77 P. 94; McCulloch v. Norwood, 58 N.Y. 562; Sturges v. Vanderbilt, 73 N.Y. 384; Crafton v. Union Ferry Co., 13 N.Y.S. 78.

Barrett, C. Westhues and Bohling, CC., concur.

OPINION

BARRETT

On March 30, 1929 James Bruun instituted this action to recover the sum of $ 8.96, which he claimed was the contracted balance due him as wages when he was discharged by his employer, Katz Drug Company, Incorporated, (a Missouri corporation), and his agreed salary of $ 120.00 per month until the balance of wages due was paid as a continuing penalty. Mo. R. S. A., Sec. 5082. At the time the suit was instituted, within sixty days of Bruun's discharge, the amount claimed was $ 230.00. By the time the case was appealed to this court the claimed continuing penalty exceeded $ 18,000.00.

The succession of events culminating in the problems presented by this appeal follow. On May 15, 1929 Katz Drug Company, the Missouri corporation, filed an answer which was in effect a general denial. The case was assigned to one of the divisions of the Circuit Court of Jackson County and on April 21, 1936, by leave of court, Ringolsky, Friedman, Boatright & Jacobs, the firm of lawyers who filed the answer, withdrew as attorneys for the defendant. On May 4, 1936 Ryland, Stinson, Mag & Thomson and J. G. Vineyard entered their appearance as counsel for the defendant and on May 25, 1936 notified Bruun and his counsel that on that day they had filed a suggestion of the dissolution of the defendant corporation. The suggestion stated that the corporation had been dissolved and the "attorneys for Katz Drug Company, Incorporated, . . . suggests to the court that the President and Board of Directors of the said corporation at the time of its dissolution were the following named persons: M. H. Katz, President, Rose Katz, Isaac Katz and Minnie Katz." Afterwards the case was assigned to other divisions of the court and on February 16, 1937 returned to the general docket. On January 5, 1942 the plaintiff filed and the court sustained his motion to list the cause for trial. On February 7, 1942 the defendant filed its "motion to dismiss" the plaintiff's cause "with prejudice." The motion recited that while the cause was pending the Katz Drug Company, a Missouri corporation, was dissolved and ceased to be a corporation and that suggestion of the fact of dissolution and the names of the last board of directors had been filed. The motion then recited that since the filing of the suggestion of dissolution the plaintiff had taken no steps or action to revive the cause against the president and board of directors of the corporation as provided by Mo. R. S. A., Secs. 1043 to 1046; that more than three terms of court had passed since the filing of the suggestion of dissolution and, therefore, the cause of action against Katz Drug Company was forever barred by Mo. R. S. A., Sec. 1047 and should be dismissed.

Upon the hearing of the motion to dismiss the evidence showed that Katz Drug Company was duly incorporated in Missouri on March 30, 1926 and that in June, 1929 its corporate name was changed to Famous Drug Company. On the 1st day of January, 1930, its corporate charter was forfeited by the Secretary of State for failure to comply with the corporation laws of the state relating to registration, filing of annual statements, anti-trust affidavits, etc. (Art. 1, Chapter 33, R. S. Mo. 1939.) In addition, the evidence showed that in August, 1930 a new corporation, Katz Drug Company, was incorporated under the laws of Delaware and that all of the assets of the Famous Drug Company were purchased by the Delaware corporation. The plaintiff, Brunn, offered no evidence except to show that his deposition had been taken on September 26, 1936 by Mr. Stinson, representing the named defendant.

The trial court made an order finally dismissing the plaintiff's cause with prejudice. In the order the court found that while the cause was pending the defendant's corporate charter had been forfeited by the Secretary of State of Missouri and that it was dissolved and ceased to be a corporation; that since that time it had not functioned as a corporation and the forfeiture of its charter had not been vacated or set aside. The court found the filing of the suggestion of dissolution and the names of the last board of directors of the corporation. The order then recites that "notwithstanding the filing of notice and suggestion of dissolution the plaintiff has never taken any steps or action whatever to revive this cause against the officers or directors of the defendant company, as provided by the statutes of the State of Missouri; and more than three terms of court have passed since the filing of said notice and suggestion of dissolution. Wherefore, . . . the plaintiff's cause, . . . has been and is forever barred and abated by the statutes of this State and particularly by the provisions of Section 1047, Revised Statutes of Missouri, 1939."

The plaintiff contends that Sections 1042 to 1047 do not apply to corporations and that it was the defendant's duty to bring in the individuals constituting the last board of directors as parties. The plaintiff also contends that a judgment against a dissolved corporation is not void and therefore argues, inferentially, that he may prosecute his action to judgment despite the corporation's dissolution and without making others parties to the suit.

The defendant contends, on the other hand, that a judgment against a dissolved corporation is void and, therefore, upon receipt of the notice and suggestion of dissolution the plaintiff was bound to have brought in the defendant's officers and directors as defendants and failing to do so within three terms must suffer the penalty of having his cause dismissed under the provisions of Sections 1042 to 1047, R. S. Mo. 1939. The defendant argues that unless the abatement and revival statutes (1042-1047) apply to dissolved corporations there is no machinery or procedure by which an action may be continued against the officers and directors of a dissolved corporation. The defendant insists that of necessity Sections 1042 to 1047 are applicable because they say: "No action shall abate by the death marriage or other disability of a party, if the cause of action survive or continue"; that on or before the third term the cause may be continued against the "representative or successor of such party in interest." The argument is that the underscored words when construed with Section 3670 (...