Hawley v. Bonanza Queen Min. Co.

• Decision Date: 07 December 1910
• Parties: HAWLEY v. BONANZA QUEEN MINING CO. et al.
• Court: Washington Supreme Court

111 P. 1073

61 Wash. 90

HAWLEY v. BONANZA QUEEN MINING CO. et al.

Supreme Court of Washington

December 7, 1910

Department 2. Appeal from Superior Court, Snohomish County; W. W. Black Judge.

Action by Jesse B. Hawley against the Bonanza Queen Mining Company and others for foreclosure of liens. Judgment for the defendants, and plaintiff appeals. Judgment affirmed.

Merrick & Mills, for appellant.

Bell &amp Anderson, for respondents.

RUDKIN, C.J.

This action was instituted against the Bonanza Queen Mining Company and others to foreclose certain liens for labor performed in and about the company's mines. The defendants, other than the mining company, were not served with process and made no appearance in the action. The mining company answered to the merits, but when the case was called for trial its counsel suggested to the court that since the commencement of the action the company's name had been stricken from the records of the office of the Secretary of State, pursuant to chapter 140 of the Laws of 1907, for failure to pay its annual license fee for the period of two years; that it had not applied for reinstatement within the time prescribed by chapter 19 of the Laws of Extraordinary Session of 1909; that the time for making such application has expired, and that the corporation was thereby dissolved. This suggestion was accompanied by a certificate from the Secretary of State showing the foregoing facts. Upon this suggestion of counsel and the accompanying proofs, judgment was entered abating the action as to the mining company, from which this appeal is prosecuted.

'The complete dissolution of a corporation destroys its capacity to be sued at law because a judgment can no more be rendered against a dead corporation than against a dead man. It cannot thereafter be made a party defendant in an action brought by a receiver to set aside a fraudulent conveyance of its assets. The necessary effect of the dissolution of a corporation is to abate all actions pending against it at the time of its dissolution, in the absence of a saving statute providing for the continuation of such actions. Decisions are sometimes met with which hold in general terms a doctrine opposed to that just stated. Thus, according to an early decision in Missouri, the expiration of the charter of a corporation does not affect legal proceedings already commenced against it. It is enough to say of such decisions that unless they can be justified by some local statute they were badly decided. It follows that a judgment rendered against a corporation after it has been dissolved is voidable, in the sense that it will be reversed on error, or that the execution of it will be perpetually enjoined. Other authoritative courts have gone to the length of holding that a judgment rendered against the corporation after its dissolution, although in an action previously commenced, is not merely erroneous, but absolutely void.' 10 Cyc. 1316 et seq.

In National Bank v. Colby, 21 Wall. 609, 22 L.Ed. 687 Mr. Justice Field said: 'With the forfeiture of its rights, privileges, and franchises the corporation was necessarily dissolved, as the decree adjudged. Its existence as a legal entity was thereupon ended; it was then a defunct institution and judgment could no more be rendered against it in a suit previously commenced than judgment could be rendered against a dead man dying pendente lite. This is the rule with respect to all corporations whose chartered existence has come to an end, either by lapse of time or decree of forfeiture, unless, by statute, pending suits be allowed to proceed to judgment notwithstanding such dissolution. The prolongation of the corporate life for this specific purpose as much requires special legislative enactment as does the original creation of the corporation. No such enactment is found in the act of Congre...