Diprete v. Vallone., 1685.

• Decision Date: 13 July 1944
• Docket Number: No. 1685.,1685.
• Citation: 38 A.2d 769
• Parties: DiPRETE et al. v. VALLONE.
• Court: Rhode Island Supreme Court

38 A.2d 769

DiPRETE et al.

v.VALLONE.

No. 1685.

Supreme Court of Rhode Island

July 13, 1944.

Daniel A. Colton, of Providence, for complainants.

Ralph Rotondo, of Providence, for respondent.

CONDON, Justice.

This is a bill in equity for specific performance of a contract to purchase certain real estate situated in the city of Cranston belonging to the City Loan Company, Inc., a Rhode Island corporation. The cause was heard in the superior court on bill and answer, and a decree as prayed for in the bill was duly entered. From that decree respondent has appealed to this court.

In his reasons of appeal the respondent has set out several reasons but relies solely upon the ground that the decree is against the law. He contends that he should not be compelled to perform his contract to purchase the real estate in question, because the persons with whom he contracted cannot give him a good and marketable title. Those persons are not the complainants described in the bill but are three directors of the corporation, which was formally dissolved by a decree of the superior court on December 22, 1937. These directors were authorized by the court “to liquidate the assets of the corporation into cash” and “from time to time distribute the same pro rata among the stockholders.”

At the time of the entry of the decree in the case at bar the complainants were all of such stockholders and included among them were the said directors but they are not described in the bill of complaint as such directors. The real estate in question here was then undisposed of and still of record in the name of the corporation. For some unexplained reason it was not converted into cash at the time when other corporate assets were so converted and distributed. The stockholders, however, now claim that the directors have the power to convey to respondent a good title to this real estate because of a vote of the stockholders authorizing said directors to dissolve the corporation, and also because of the decree of the superior court vesting them with the authority to turn the corporate assets into cash and distribute it to the stockholders according to their interests in the corporation.

Respondent claims that, under General Laws 1938, chapter 116, article II, § 63, such power and authority have ceased because three years have elapsed since the decree of dissolution was entered. He further contends that the title is, therefore, in the stockholders, themselves, as tenants in common and not in the directors as trustees for them.

This is the sole issue which we are asked to decide. In their briefs the parties agree that the controversy is purely a question of law, namely, whether the so-called trust theory or tenant in common theory is to be applied to determine in whom is vested the title to a dissolved corporation's real estate after the time limited by the statute for winding up its corporate life has expired. While we say this is the controversy, there is in reality no controversy between the parties on that issue. In his brief the respondent, contrary to the reason of appeal upon which he relies, agrees with the complainants that the trust fund theory, which holds that the power to convey title is in the directors, is the correct theory.

In essence then the instant cause is but a superficial controversy by which the parties ask us to declare the law generally on this question and settle it for all future cases. They appear to be indirectly seeking a determination such as is obtainable by certification of a question of doubt and importance. There is, however, an express method under our statute, G.L.1938, chap. 545, § 5, by which such a question may be presented here, and it does not seem to us that an appeal ought to be permitted for such a purpose.

It appears from the record that the trial justice indicated to the parties the doubtful character of the proceeding before him but felt there was nothing that he could do but decide the legal question raised by ...