Hammar v. St. Louis Motor Carriage Co.

• Decision Date: 21 February 1911
• Parties: HAMMAR et al. v. ST. LOUIS MOTOR CARRIAGE CO.
• Court: Missouri Court of Appeals

134 S.W. 1060

155 Mo. A. 441

HAMMAR et al. v. ST. LOUIS MOTOR CARRIAGE CO.

St. Louis Court of Appeals, Missouri.

February 21, 1911.

1. CORPORATIONS (§ 34)—APPEARANCE—CORPORATE EXISTENCE.

Where a corporation appears by attorney and defends an action, it cannot deny its own existence, and such an appearance precludes the admission of evidence showing the dissolution of the corporation before the beginning of the action.

2. CORPORATIONS (§ 553)—DISSOLUTION—APPOINTMENT OF RECEIVER—COLLECTION OF ASSETS.

Where a corporation, pending plaintiff's action against it, transferred its assets to another corporation, and the directors appropriated all of the proceeds to their own use, and ceased to act for it, and the corporation had no place of business and no property to satisfy plaintiff's judgment, it was proper to appoint a receiver to compel restitution from the directors.

Appeal from St. Louis Circuit Court; J. Hugo Grimm, Judge.

Action by Percy F. Hammar and others against the St. Louis Motor Carriage Company. From a judgment for plaintiffs and appointing a receiver, defendant appeals. Affirmed, and cause remanded.

Action for appointment of a receiver. Defendant is a manufacturing company, incorporated under the laws of Missouri. On May 19, 1905, plaintiffs brought suit against it in the circuit court of the city of St. Louis to recover damages for breach of contract, and defendant was duly summoned and appeared therein. Thereafter, about December 8, 1905, and while said suit was pending, the directors of the defendant company, acting unanimously, caused a corporation to be organized under the laws of the state of Illinois and transferred to it all of the property and assets of the defendant company, taking therefor to themselves and in their own names all of the capital stock of the Illinois corporation, except a few shares that went to the secretary, who was a stockholder of the defendant, but not a director. Each took in proportion to his or her holding of stock in the defendant company. Absolutely nothing went to the defendant company in its corporate capacity on account of the transfer. The stock thus received and appropriated by the directors of the defendant corporation was worth, at the time, from $70,000 to $100,000 above all the defendant's liabilities. After the transfer the defendant company did not assert any right of ownership in the stock of the Illinois corporation, did no more business, and had no place of business. Its officers and directors abandoned it, held no meetings, and discontinued acting for it, except that the plaintiffs' suit for breach of contract continued to be contested in the name of the defendant. On April 10, 1907, plaintiffs recovered judgment against defendant in said suit, and had execution issued against the corporation. A part of the judgment debt was made on the execution, and it was returned nulla bona as to the residue. There being no property of the defendant to levy upon, plaintiffs demanded of defendant, through its president, that it compel restitution by the directors of property and assets sufficient, at least, to satisfy plaintiffs' judgment, but it refused, and plaintiffs...