Gaynor v. Metals Reserve Co., 13641.

• Decision Date: 25 March 1948
• Docket Number: No. 13641.,13641.
• Citation: 166 F.2d 1011
• Parties: GAYNOR v. METALS RESERVE CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

166 F.2d 1011 (1948)

GAYNOR v. METALS RESERVE CO. et al.

No. 13641.

Circuit Court of Appeals, Eighth Circuit.

March 25, 1948.

Robert B. Pike, of Sioux City, Iowa (Francis J. Parker, of Deadwood, S. D., on the brief), for appellant.

H. F. Fellows, of Rapid City, S. D., for appellees.

Before GARDNER, THOMAS, and COLLET, Circuit Judges.

GARDNER, Circuit Judge.

This was an action brought by appellant against Metals Reserve Company and Colonial Mica Corporation, to recover $12,956.49 for certain sheet mica sold and delivered by plaintiff to defendants at their places of business in the City of Custer, South Dakota, and to recover the further sum of $20,868.96 for damages on account of the failure of defendants to accept certain products proffered by plaintiff. Summons was served upon the defendant Metals Reserve Company on the 30th day of March 1945, and on the defendant Colonial Mica Corporation on the 4th day of April, 1945. Metals Reserve Company answered, pleading two defenses, first, that the complaint failed to state a claim against defendant upon which relief could be granted, and second, denied each and every allegation contained in the complaint. The Colonial Mica Corporation answered, pleading two defenses, first that the complaint failed to state a claim against defendant upon which relief could be granted, and second, with certain immaterial admissions, denied each and every allegation contained in the complaint. The case was continued to the June, 1947 term.

On June 3, 1947, defendant Metals Reserve Company filed a motion to dismiss on the ground that plaintiff had failed to comply with the provisions of Public Law No. 109, 79th Congress, June 30, 1945, 15 U.S. C.A. § 601 note, in that he had failed within twelve months after the date of such enactment, namely July 1, 1945, to file any proceeding for or obtain any order allowing action to be maintained against the Reconstruction Finance Corporation, and on the ground that the action had abated as against the moving defendant by reason of such Act of Congress. On the same date defendant Colonial Mica Corporation filed a motion to dismiss the action as to it because the complaint failed to state a claim against it upon which relief could be granted. The motions were heard by the court on June 4, 1947, at which time the court entered an order dismissing the action as to the defendant Metals Reserve Company on the ground that plaintiff "has failed, as required by Federal statute, to file, prior to July 1, 1946, any proceedings for or any order allowing this action to be maintained against Reconstruction Finance Corporation, and for the reason this action is now abated against said defendant." The court also sustained the motion to dismiss as to the defendant Colonial Mica Corporation on the ground that the amended complaint fails to state a claim against said defendant upon which relief can be granted. Final judgment of dismissal was accordingly entered as to each of the defendants and this appeal followed.

Plaintiff seeks reversal on substantially the following grounds: (1) Under the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, the court erred in entertaining the motions to dismiss because they were not interposed before answer; (2) the court erred in holding that plaintiff's action was abated and in dismissing the same as against defendant Metals Reserve Company on the ground that plaintiff had failed to file, prior to July 1, 1946, any proceeding for or any order allowing the action to be maintained against the Reconstruction Finance Corporation; (3) the court erred in holding that the complaint did not state a claim against the defendant Colonial Mica Corporation upon which relief could be granted.

Appellant refers to Rules of Civil Procedure, Rule 12 (b, g, h), and contends that the court should have denied the motions for dismissal because they were not interposed before answer. If the court had denied the motions it might well have been urged here that the court was warranted in so doing because they had not been timely interposed. Where, however, the court has granted the motions, the rule, we think, can not be invoked as the basis for reversal of the judgment.

We shall first consider the judgment of dismissal as to the defendant Colonial Mica Corporation. A perusal of the complaint discloses that the only acts of the defendant Colonial Mica Corporation complained of were performed by it in its capacity as agent for Metals Reserve Company. Under the South Dakota Code, Section 3.0402, an agent may become responsible to third persons in the course of his agency only (1) when, with his consent, credit is given to him personally in a transaction; (2) when he enters into a written contract in the name of his principal, without believing, in good faith, that he has authority to do so; or (3) when his acts are wrongful in their nature. Without detailing the allegations of the complaint, we are clear that it contains no allegations which create any liability as against Colonial Mica Corporation. All of the acts of this defendant were performed in its capacity as agent. There is therefore no basis for liability as to the Colonial Mica Corporation. Whitney v. Wyman, 101 U.S. 392, 25 L.Ed. 1050; Marcus Loew Booking Agency v. Princess Pat, Limited, 7 Cir., 141 F.2d 152.

Under date June 30, 1945, Public Law No. 109 was passed and approved, to take effect July 1, 1945. This joint resolution reads as follows:

"Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding any other provision of law, all functions, powers, duties, and authority of the corporations hereinafter designated, are hereby transferred, together with all their documents, books of account, records, assets, and liabilities of every kind and nature, to Reconstruction Finance Corporation and shall be performed, exercised, and administered by that Corporation in the same manner and to the same extent and effect as if originally vested in Reconstruction Finance Corporation, and the designated corporations are hereby dissolved: Defense Plant Corporation, Metals Reserve Company, Rubber Reserve Company, and Defense Supplies Corporation, created by Reconstruction Finance Corporation pursuant to the Act of June 25, 1940 (54 Stat. 572), and Disaster Loan Corporation created by the Act of February 11, 1937 (50 Stat. 19), are hereby designated as the corporations to which this joint resolution applies.

"Sec. 2. The Reconstruction Finance Corporation shall assume and be subject to all liabilities, whether arising out of contract or otherwise, of the corporations dissolved by this joint resolution. No suit, action, or other proceeding lawfully commenced by or against any of such corporations shall abate by reason of the enactment of this joint resolution, but the court, on motion or supplemental petition filed at any time within twelve months after the date of such enactment, showing a necessity for the survival of such suit, action, or other proceeding to obtain a determination of the questions involved, may allow the same to be maintained by or against the Reconstruction Finance Corporation.

"Sec. 3. This joint resolution shall take effect on July 1, 1945.

"Approved June 30, 1945."

This action properly commenced was at issue and was pending at and prior to the adoption of this resolution. The trial court entered judgment of dismissal "for the reason that this action is now abated against said defendant." The conclusion that the action was so abated was manifestly based upon the fact that by the above quoted Public Law No. 109, the Metals Reserve Company had been dissolved since the commencement of the action. In the absence of statutory provision extending the existence of or conferring power upon a corporation for the purpose of winding up its affairs, the dissolution of a corporation ipso facto terminates its existence. So far as new corporate acts or transactions are concerned, they can have no validity so far as they are dependent upon the power conferred by the charter....