Floerchinger v. Sioux Falls Gas Co.

• Decision Date: 27 July 1942
• Docket Number: 8467
• Citation: 5 N.W.2d 55,68 S.D. 543
• Parties: LOVINEA FLOERCHINGER, Respondent, v. SIOUX FALLS GAS CO., Appellant
• Court: South Dakota Supreme Court

68 SD 543, 5 NW2d 55 (1942)

LOVINEA FLOERCHINGER, Respondent v. SIOUX FALLS GAS CO.,

Appellant

South Dakota Supreme Court

Appeal from Circuit Court, Minnehaha County, SD

Hon. Lucius J. Wall, Judge.

#8467—Affirmed.

Chapman & Nisbet, Sioux Falls, SD

Attorney for Appellant.

Charles Lacey, Sioux Falls, SD

Attorney for Respondent.

Opinion filed July 27, 1942

ROBERTS, J.

This is an appeal from an order overruling motion to quash the service of summons on the ground that defendant corporation had been dissolved and its existence terminated under the laws of the state of its creation. Plaintiff instituted this action to recover damages for personal injuries alleged to have resulted from the negligence of the defendant. Summons and complaint were served on December 31, 1940, upon the Secretary of State as the appointed agent of the defendant for service of process. The showing made in support of the motion is that the defendant, a corporation organized under the laws of the State of New Jersey, filed in the office of the Secretary of State in this state on August 31, 1917, as required by statute, a statement appointing such officer as its agent upon whom service of process against the corporation might be served in respect to any liability arising out of any business, contract, or transaction in this state; that the defendant company was dissolved as authorized by a statute of the State of New Jersey on December 17, 1940; that a certificate of dissolution was issued by the Secretary of State of New Jersey; that persons who were directors of the corporation at the time of the voluntary dissolution became statutory trustees to settle the Affairs of the corporation; and that the said trustees have filed no appointment of the Secretary of State as agent for service of process in this state.

It is well settled that at common law the power of a corporation to sue and to be sued is extinguished when it has been dissolved. 97 ALR 483. The result of the dissolution as pointed out by the Supreme Court of the United States in Oklahoma Natural Gas Co. v. State of Oklahoma, 273 US 257, 47 SCt 391, 71 LEd 634, cannot be distinguished from the death of a natural person in its effect. Counsel for the trustees, appearing specially for the purpose of the motion to quash service, contend that upon dissolution of the corporation the appointment of the Secretary of State as agent for service of process was completely and unconditionally terminated; that there is no one in this state upon whom service may be made.

Section 14:13-1, Rev. Stat. of New Jersey of 1937, provides for the voluntary dissolution of a corporation. The regularity of the proceedings under this statute including the issuance of a certificate of dissolution on December 17, 1940, is not questioned. Section 14:13-4, however, contains the following provisions: “All corporations, whether they expire by their own limitation or be annulled by the legislature or be otherwise dissolved, shall be continued bodies corporate for the purposes of prosecuting and defending suits by or against them, of enabling them to settle and close their affairs, of disposing of and conveying their property and of dividing their capital, but not for the purpose of continuing the business for which they were established.”

Sections 14:13-5 and 14:13-6 provide that upon dissolution the directors shall be trustees “to settle the affairs” of the corporation and may sue for and recover debts and property “by the name of the corporation, and shall be suable by the same name.” The Supreme Court of New Jersey in Hould v. John P. Squire & Co., 81 N.J.L. 103, 79 A. 282, 283, construing the effect of these provisions, said:

“The general object of section 53, (14:13-4), as evident from its language, indicates that it is remedial in character; ... . Hence the section must be liberally construed. Examining it in the light of this rule, we think that the words ‘prosecuting suits by them’ must be held to mean all suits of whatever character, and whether pending at the time of dissolution or necessary to be commenced afterwards, in order to enforce a right then existing in the corporation; and conversely the words ‘defending suits against them’ mean suits at law or in equity, in contract or tort, or of what nature soever, and whether begun before or after dissolution. To hold otherwise would enable a corporation to defeat valid causes of action for heavy damages by...