Moore v. Whitcomb

• Decision Date: 31 October 1871
• Citation: 48 Mo. 543
• Parties: JOHN C. MOORE et al., Plaintiffs in Error, v. GEORGE W. WHITCOMB, Defendant in Error.
• Court: Missouri Supreme Court

48 Mo. 543

JOHN C. MOORE et al., Plaintiffs in Error,

v.GEORGE W. WHITCOMB, Defendant in Error.

Supreme Court of Missouri.

October Term, 1871.

Error to Mississippi Circuit Court.

Polk, Causey & Drake, for plaintiffs in error.

I. By section 19, p. 329, Gen. Stat. 1865, it is expressly provided that on the dissolution of a corporation the officers of it are trustees for the purpose of administering its assets. If there is only one surviving officer, he, of course, is sole trustee for these purposes.

II. There can be no question that the corporation was dissolved at the time this proceeding was instituted. The petition states expressly that the corporation was dissolved on the 1st of October, 1861, and the question of such dissolution is completely covered by the confession made by the demurrer. (Mumma v. The Potomac Company, 8 Pet. 281.) The manner of the dissolution is utterly immaterial while the fact of dissolution stands confessed.

III. It is unnecessary and supererogatory that the petition should have stated any other facts bearing on this point. But it does state other facts. It expressly avers that the charter of the Cairo & Fulton Railroad Company was repealed. The fact of repeal therefore stands admitted, and cannot be questioned in the posture in which this case stands before this court. Of course the dissolution of the corporation is the inevitable consequence. The petition further states that the State of Missouri seized and took possession of the franchises of the company, and all its rolling stock and other property, and on the 1st of October, 1861, sold the same. Such seizure worked a dissolution. A corporation may be dissolved by a surrender of all its corporate rights, and may do and suffer to be done acts equivalent to a direct surrender; and if a corporation suffer acts to be done which destroy the end and object for which it was instituted, it is equivalent to a surrender of its corporate rights--that is, it is dissolved. (Slee v. Bloom, 19 Johns. 456.)

IV. When the State becomes the purchaser of such railroad under the lien reserved, both the lien and the former company are extinguished, and the indebtedness is extinguished with the company. (Advisory constitutional opinion, 37 Mo. 129.)

Louis Houck, for defendant in error.

I. The bill shows no equity. Courts of equity will not consider a corporation dissolved until the fact of a dissolution has been first ascertained by a proceeding in quo warranto or by scire facias. No such proceeding has taken place in the case at bar. How, then, can a court of equity consider the corporation dissolved? (President, etc., v. Trenton Bridge Co., 2 Beach, 46; State v. Merch. Ins. & Trust Co., 8 N. H. 235; Society, etc., v. Morris Canal, etc., Saxton, 157; Att'y-Gen. v. Stevens, id. 369; Am. Law Reg., N. S., 586, and cases cited; see also Abb. Dig. 338 et seq., tit. Forfeiture; Att'y-Gen. v. Utica Ins. Co., 2 Johns. Ch. 371-7; Ang. & Ames on Corp. 734.)

II. A cause of forfeiture cannot be taken advantage of or enforced against a corporation collaterally or incidentally, or in any other mode than by a direct proceeding for that purpose against the corporation, so that it may have an opportunity to answer. (Ang. & Ames on Corp. 777; Abb. Dig. 339, § 12.)

III. But it is claimed that by the “sell-out act” the Cairo & Fulton Railroad Company was dissolved. No such provision is contained in that act. The ninth section provides that “the companies purchasing any of the above-named railroads shall have all the rights, franchises, privileges and immunities which were had and enjoyed by the companies for whose default said roads were sold, under the charter and the laws amendatory thereof.” This certainly cannot be construed as dissolving the Cairo & Fulton Railroad Company. No attempt is made to repeal the charter of the company. The charter is not declared forfeited. The mere fact that the railroad of the Cairo & Fulton Railroad Company was seized does not dissolve the company, because a railroad corporation may exist although it have no railway. (State v. Rives, 5 Ired., N. C., 309; Com. v. Tenth Mass. Turnp. Corp., 5 Cush. 509; Bruffet v. Great Western R.R. Co., 25 Ill. 353.) Nor can it be said that the Cairo & Fulton Railroad Company of Missouri is dissolved because the franchises possessed by the company are vested in the purchasers of the road. The Legislature was not competent to vest in the purchasers the franchises of the said company, for this would be special legislation. (Atkinson v. C. & M. R.R. Co., 15 Ohio St. 35; see Sess. Acts 1865-6, p. 112, § 9.)

IV. Again, if the “sell-out act” dissolved the Cairo & Fulton Railroad Company of Missouri, by the act of 1868 (Sess. Acts 1868, p. 92) provision is made how the affairs of the Cairo & Fulton Railroad Company of Missouri shall be settled up. The mode pointed out by the Legislature should be pursued.

V. It is true the Cairo & Fulton Railroad was subject to the provision of the general corporation law providing that all charters shall be subject to alteration and repeal. But the charter of the company has in no way been directly repealed.

CURRIER, Judge, delivered the opinion of the court.

This action was commenced by the plaintiffs, as creditors of the Cairo & Fulton Railroad Company, against the defendant, as the sole remaining officer of the company competent to act as a trustee under the statute in relation to dissolved corporations. (Gen. Stat. 1865, p. 329, § 19; R. C. 1855, p. 375, § 19.) The petition is demurred to, and the questions presented for consideration arise upon the action of the court in sustaining the demurrer. It is conceded that this proceeding cannot be sustained unless it is shown that the corporation was dissolved at the time the suit was instituted. As showing such dissolution it is averred in the petition as follows:

“The plaintiffs further relate that by an act of the Legislature of the State of Missouri, approved February 19, 1866, entitled ‘An act to provide for the sale of certain railroads and property by the governor, to foreclose the State's lien thereon, and to secure the early completion of the Southwest Branch...