Lusk Lumber Co. v. Independent Producers Consol.

• Citation: 43 Wyo. 191,299 P. 1044
• Decision Date: 02 June 1931
• Docket Number: 1692
• Parties: LUSK LUMBER CO. v. INDEPENDENT PRODUCERS CONSOL., ET AL
• Court: United States State Supreme Court of Wyoming

299 P. 1044

43 Wyo. 191

LUSK LUMBER CO. v. INDEPENDENT PRODUCERS CONSOL., ET AL

No. 1692

Supreme Court of Wyoming

June 2, 1931

APPEAL from District Court, Natrona County; BRYANT S. CROMER, Judge.

Action by the Lusk Lumber Company against the Independent Producers Consolidated and others. From an order striking the cause from the docket, plaintiff appeals.

Reversed.

For the appellant there was a brief by Ellery & Spencer and oral argument by Mr. C. R. Ellery, of Cheyenne, Wyoming.

An action pending against a corporation is not abated by dissolution of the corporation, and it is unnecessary to revive the action or apply for substitution. The franchise of Independent Producers Consolidated, a corporation, was cancelled by executive proclamation under Ch. 117, Laws 1925 on or about July 19, 1927, while this action was pending. The trial court upon motion struck the cause from the docket upon the theory of abatement. There was no abatement of the action, and substitution was unnecessary. 5757-5759-5760 and 5761 C. S. Our contention is predicated upon 5443-5444 C. S. apparently enacted to contravene the common-law rule of abatement. 1 C. J. 136; Schmidt Co. v. Mahoney (Neb.) 82 N.W. 99; Ferguson Co. v. Garrett (Tex.) 252 S.W. 738; Pease v. Co., 243 U.S. 273; LyonGray Co. v. Ins. Co., 269 U.S. 80; Iron Co. v. Brown Co., 44 F. 539; Slayden v. O'Dea, (Calif.) 189 P. 1062-1065; Hanson v. McLeod, (Ark.) 294 S.W. 998; Hayhurst v. Hospital, (Id.) 224 P. 78; Gas Co. v. McFarland, (Okla.) 288 P. 468; Shepard v. Co., (Va.) 153 S.E. 649. The trial court erred in not striking the cause from the docket as to other defendants, even though a joint liability existed.

For the respondents, there was a brief by O. N. Gibson, of Riverton, Wyoming.

Our statutes on revivor are 5750, 5759, 5760, 5761 C. S. The sections relating to dissolved corporations and their standing after dissolution are 5441, 5442, 5443, 5444 C. S., and sections relating to execution are 5437 and 5438. Certificates of incorporation are forfeited for failure to pay license tax. Laws 1925, Ch. 117. At common law, the dissolution of a corporation abates pending litigation. Oklahoma Co. v. State, (Okla.) 273 U.S. 391; Bank v. Colby, 21 Wall. 609. The code authorizes the revivor and continuance of an action against the representative or successor in interest, of the party that has ceased to exist, and provides how and when it may be done. Cunkle v. Ry. Co., (Kas.) 40 P. 185; Glazier v. Henebuse, et al., (Okla.) 91 P. 874. The rule is recognized in California by numerous decisions, the most recent being Van Landingham v. Packers, 208 P. 976, and re-affirmed in Kansas; Young Co. v. Dunne, 254 P. 323. It is not for the courts to mitigate by opinion, the harshness of the law of limitations. See above authorities. Originally the specifications of error raised the constitutionality of the statute forfeiting a corporate charter by executive proclamation. This point was waived in counsel's brief. The dissolution of a corporation, implies its utter extinction as a body capable of suing, or being sued, and actions pending against it, are abated by its dissolution. 7 R. C. L. 745, 14a C. J. 1200; Kansas Company v. Smith, (Kan.) 19 P. 637; Cunkle Co. v. Interstate Rwy. Co., supra; Glazier v. Hennebuse, (Okla.) supra; Crossman v. Water Co., (Calif.) 89 P. 337; McCulloch v. Norwood, 58 N.Y. 562; Judson v. Love, 35 Cal. 463; Newhall v. Co., (Calif.) 128 P. 1040; Rossi v. Caire, (Calif.) 161 P. 1161. The Texas statutes differ from those of Wyoming, and cases from that state are therefore readily distinguished. The Oklahoma cases follow the Kansas decisions. However, the case of Gas Co. v. McFarland cited by appellant is based upon a statute adopted from North Dakota, and perhaps influenced by the opinion in 273 U.S. 237.

RINER, Justice. KIMBALL, C. J., and BLUME, J., concur.

OPINION

RINER, Justice.

This case again comes to this court by direct appeal. Its disposition on its first appearance is reported in Lusk Lumber Co. v. Independent Producers Consolidated, et al., 35 Wyo. 381, 249 P. 790, 36 Wyo. 34, 252 P. 1029, and there the facts involved in the litigation on its merits are fully detailed. It will be unnecessary to repeat them here, as we are now concerned with what occurred subsequent to the return of the case to the District Court and matters which, as it happens, do not concern the merits.

Pursuant to the mandate of this court, leave was given the plaintiff to file an amended petition, which was done June 7, 1927. On August 5, following, there was filed in the case by the former attorney for the Independent Producers Consolidated, a suggestion to the court "that since the former trial of this cause the said corporation has been dissolved and no one since is authorized to file a pleading or enter an appearance on its behalf. "

After a motion to strike and to make more definite plaintiff's amended petition had been filed by O. E. Macy, Receiver of the First State Bank of Riverton, Wyoming, and had been ruled on by the trial court, upon leave given, plaintiff, on May 19, 1930, filed its second amended petition. The same date plaintiff also filed a motion for judgment against the Independent Producers Consolidated, based on its failure over a period of more than two years to answer or otherwise plead to plaintiff's amended petition. June 6, 1930, the defendant receiver filed his verified motion to strike the cause from the docket, for the reason that:

"The Defendant Independent Producers Consolidated was, at the time of the former trial of this cause, a corporation duly organized and existing under and by virtue of the laws of the State of Wyoming. Since the date of said trial, and prior to August 5, 1927, the said corporation was dissolved. The dissolution thereof was called to the attention of this court by a written suggestion filed in this cause on August 5, 1927. More than one year having elapsed since the dissolution of said corporation, this Defendant moves that pursuant to Sec. 5759, Compiled Statutes of Wyoming, 1920, the above entitled cause be stricken from the docket."

Plaintiff interposed, on September 4, 1930, a written "Resistance" to said motion. Subsequently and on the 10th of the month last mentioned, the receiver's motion came on for hearing, and the District Court made an order which, after reciting the several appearances of the parties by their counsel and the reception of evidence in support of the motion, found:

"That on July 19, 1927, the corporate franchise of defendant Independent Producers Consolidated was cancelled by the State of Wyoming, and that since said date its corporate powers have ceased.

"WHEREFORE IT IS ORDERED, ADJUDGED AND DECREED that said Motion be and the same hereby is sustained and said cause is hereby stricken from the docket; costs herein to be taxed in the sum of $ ___ against the plaintiff."

To this action of the trial court plaintiff reserved its exception, it has served its notice of appeal and has brought the record and this order in the case here for review, as previously indicated.

It seems to be a conceded fact in the case that the defendant Independent Producers Consolidated, on July 19, 1927, suffered a forfeiture of its charter for failure to pay the annual corporation license tax and file the annual statement, as required by Chapter 117, Laws of 1925--somewhat over a month after the amended petition of the plaintiff was on file in the case. The statute last mentioned, after detailing the procedure to be followed by the state officials in order to accomplish the forfeiture of a derelict corporation's charter, provides: "Any person or persons who shall exercise or attempt to exercise any powers for or on behalf of any corporation named in such proclamation after the publication of such proclamation and the filing of proof thereof in the office of the Secretary of State shall be deemed guilty of a misdemeanor" (Section 2) and punished as the law directs.

The view of the trial court which led to the making of the order before us and the contention which is urged here, seem to be as follows:

It being well settled that at common law a corporation which has been dissolved implies its utter extinction, the result of the dissolution can not be distinguished from the death of a natural person in its effect. Oklahoma Natural Gas Co. v. State of Oklahoma, 273 U.S. 257, 47 S.Ct. 391, 392, 71 L.Ed. 634, and cases cited. When the dissolution of the defendant Independent Producers Consolidated occurred, as above related, the action instituted by plaintiff became subject to the provisions of Article IV of Chapter 361, W. C. S. 1920--(Secs. 5747-5763) our law generally governing revivor of actions. The particular sections of that law thus invoked are, Section 5747, which declares that: "Except as otherwise provided, no action or proceeding in any court shall abate by the death of either or both of the parties thereto except" certain named actions of which the case at bar is not one; Section 5750, which provides:

"When one of the parties to an action dies or his powers as a personal representative cease before judgment, if the right of action survives in favor of or against his representatives or successor, the action may be revived and proceed in the name of such representatives or successor."

Section 5759, reading:

"An order to revive an action against the representative or successor of a defendant shall not be made without the consent of such representative or successor, unless within one year from the time it could have been first made."

And Sections 5760 and 5761, in general directing that the order of revivor may be made forthwith, but shall not be made without defendant's consent after the...