Michard v. Myron Stratton Home

• Decision Date: 17 October 1960
• Docket Number: No. 18804,18804
• Citation: 144 Colo. 251,355 P.2d 1078
• Parties: Radislau MICHARD, d/b/a Mrs. Michard Candles, Plaintiff in Error, v. MYRON STRATTON HOME, a Colorado corporation, Defendant in Error.
• Court: Colorado Supreme Court

Page 1078

355 P.2d 1078

144 Colo. 251

Radislau MICHARD, d/b/a Mrs. Michard Candles, Plaintiff in Error, v. MYRON STRATTON HOME, a Colorado corporation, Defendant in Error.

No. 18804.

Supreme Court of Colorado, En Banc.

Oct. 17, 1960.

Wallace Lundquist, Eugene D. Faus, Denver, for plaintiff in error.

Joseph A. Craven, Glenn G. Saunders, Denver, amici curiae.

Karl R. Ross, Colorado Springs, for defendant in error.

DOYLE, Justice.

The parties will be referred to as they appeared in the trial court, where plaintiff in error was plaintiff and defendant in error was defendant.

Plaintiff's complaint set forth two claims for relief. The first alleged the unlawful termination of a certain five year lease in which the plaintiff was the lessee and the defendant was lessor. This lease pertained to certain business premises in downtown Denver. The second claim sounded in tort and described an alleged property injury perpetrated by the defendant on the plaintiff, fraudulent in character, and growing out of failure of the defendant through its agent to disclose plans which it then had to demolish the improvements on the leased premises. Plaintiff alleged that had she known that defendant then intended to enter into a long term lease involving demolition of the building in question she would not have signed the lease; that she closed her Chicago business and moved to Denver in the belief that the lease would continue for 5 years with a three year renewal, but within a matter of months after its execution she received notice of termination.

The trial court dismissed the complaint. The reason for dismissal of the first claim was insufficiency of the trade name affidavit which had been filed by plaintiff. This affidavit showed plaintiff and her husband, Charles Thomas Michard, as co-partners doing business as Mrs. Michard Candies. The trial court granted plaintiff 10 days within which to amend her complaint to reflect the information as shown by the trade name affidavit or to amend the affidavit. Plaintiff elected to proceed on the basis of the complaint as filed and the first claim was thereupon dismissed. Dismissal of the second claim grew out of the charitable character of defendant corporation. The trial court held that by reason of being a charity the defendant was immune from liability based upon the torts of its agents.

In seeking review and reversal, the plaintiff contends that the action can be maintained without compliance with the statute, C.R.S. '53, 141-2-1 and 141-2-2, which provisions were invoked by the defendant. 141-2-2 reads:

'Penalty for failure to file.--In default of filing for record such affidavits as in section 141-2-1, such persons, partnerships, associations, and corporations, so trading and doing business shall not be permitted to prosecute any suits for the collection of their debts until such affidavit shall be filed. Every person and corporation so in default shall be deemed guilty of a misdemeanor and upon conviction thereof in any court of competent jurisdiction, shall be fined in any sum not less than ten dollars, nor more than three hundred dollars.'

Plaintiff argues that this statutory provision does not operate to prohibit a claim based upon the unlawful termination of a lease, in essence a breach of contract, and has no application to unliquidated demands. Plaintiff's contention with respect to dismissal of her second claim is that the immunity relied on by the defendant does not apply to intentional torts; that fraud is intentional in nature and consequently the immunity does not bar the action. A further argument of plaintiff is that if the charitable immunity restriction does apply to intentional torts the rule should be modified or abolished in accordance with the present trend of decisions throughout the United States. A final argument is that the socalled trust fund immunity should not be extended so as to exempt property which has been devoted or dedicated to business purposes--that this is outside the contemplation of the doctrine as originally conceived and as now recognized.

In maintaining that the trial court ruled correctly on all points, defendant argues that the plaintiff, having filed a trade name affidavit, was bound to bring her action in accordance with the information set forth therein or to amend either the trade name affidavit or the complaint so as to eliminate variance. As to the second claim, defendant argues that the cases dealing with the charitable immunity make no distinction between (a) negligent and intentional torts and (b) the type of assets in the trust fund, whether devoted to charitable purposes or business objectives, and further argues that the trust fund theory is an established doctrine in Colorado and that it should not be abolished or even restricted.

I. The question whether the trade name statute, C.R.S. '53, 141-2-1 and 141-2-2, is applicable.

We disagree with the contention of plaintiff that she was not doing business and with her further contention that this statute is restricted to actions based on liquidated debts. The holding in Melcher v. Beeler, 48 Colo. 233, 110 P. 181, that the statute is inapplicable to claims sounding in tort, and in Wallbrecht v. Blush, 43 Colo. 329, 95 P. 927, that it is inapplicable to actions for the recovery of real property, furnish no guide whatsoever to a decision dealing with the instant circumstances. The case of Wallace Plumbing Co. v. Dillon, 71 Colo. 224, 205 P. 950, 951 is more closely analogous. There the action was to recover compensation for work, labor and materials furnished at the request of the defendant. The court held that the statute applied to this type of claim and it thus recognized the statute's relevancy where the demand sounds in contract which is unliquidated. The ruling of the trial court in this respect was therefore correct. The Wallace case recognized the matter as one in abatement which may be corrected. On this, the Court said:

'It is not, however, necessary that there be a new trial as to any issue except this single one as to the filing of a proper affidavit. Plaintiff's failure to file the proper affidavit, if such is the fact, is merely a matter in abatement. Rudneck v. Southern California Metal & Rubber Co., 184 Cal. 274, 193 P. 775, 778. This conclusion is supported by Rollins v. Fearnley, 45 Colo. 319, 323, 101 P. 345, holding that a corporation may effectually pay the annual license tax after non-payment is pleaded; and, presenting evidence of the payment, preserve its standing in the pending suit. If upon a new trial it appear that plaintiff has filed, at any time prior to such new trial, the proper affidavit with the county clerk and recorder, it will be sufficient to warrant a judgment in his favor. This procedure is suggested in Rudneck v. Southern California Metal & Rubber Co., supra.'

In the present case the plaintiff can very easily correct the caption or file a new trade name...