Okla. Natural Gas Co. v. Mcfarland

• Decision Date: 27 May 1930
• Docket Number: Case Number: 19488
• Citation: 1930 OK 270,288 P. 468,143 Okla. 252
• Parties: OKLAHOMA NATURAL GAS CO. v. McFARLAND.
• Court: Oklahoma Supreme Court

1930 OK 270

288 P. 468

143 Okla. 252

OKLAHOMA NATURAL GAS CO. v. McFARLAND.

Case Number: 19488

Supreme Court of Oklahoma

Decided: May 27, 1930

Syllabus

¶0 1. Abatement and Revival--Effect of Dissolution of Corporation upon Pending Action.

The rule of the common law that upon the dissolution of a corporation a pending action at law, to which the corporation is a party, thereupon abates, has no application in the state of Oklahoma.

2. Statutes--When Special Statute and not General Statute Applies to Subject-Matter.

Where there are two provisions of the statutes, one of which is special and particular and clearly includes the matter in controversy, and where the special statute covering the subject prescribes different rules and procedure from those in the general statute, it will be held that the special statute applies to the subject-matter, and that the general statute does not apply.

3. Abatement and Revival--Effect of Dissolution of Corporation upon Pending Action--Revival not Required.

By virtue of section 5361, C. O. S. 1921, a pending action, to which a corporation is a party litigant, does not abate upon the dissolution of the corporation in the sense that continuance thereof requires revival under the provisions of our Code of Civil Procedure, but may be continued and prosecuted to final adjudication in the corporate name, with the board of directors or managers constituting the trustees of the corporation, unless other persons shall be appointed, with the power of management of such litigation to finality.

Commissioners' Opinion, Division No. 2.

Error from County Court, Creek County; Sebe Christian, Judge.

Action by the Oklahoma Natural Gas Company against Z. L. McFarland. From a judgment sustaining defendant's plea in abatement, plaintiff appeals. Reversed, with directions.

Allen, Underwood & Smith and Sam T. Allen, for plaintiff in error.

Joe R. Miller and R. E. Stephenson, for defendant in error.

TEEHEE, C.

¶1 This appeal questions the correctness of the judgment of the county court of Creek county in abating plaintiff in error's action against defendant in error, to whom we will refer hereinafter as plaintiff and defendant, respectively, according to their trial positions.

¶2 It appears by the record that, on April 25, 1921, plaintiff, the Oklahoma Natural Gas Company, a corporation, filed suit against defendant Z. L. McFarland, to recover the sum of $ 986.49, for gas furnished by plaintiff to defendant for a stated period of time. Defendant denied plaintiff's claim in the amount sued for, but admitted his indebtedness to plaintiff in the sum of $ 160.15, which sum he tendered. Upon trial of the cause there was a jury verdict and judgment thereon for plaintiff in that sum. On September 23, 1924, the judgment was reversed by this court and the cause remanded for a new trial. See the same styled case, 103 Okla. 6, 229 P. 216.

¶3 Upon remandment, defendant, on January 31, 1927, filed an amended answer in which he amplified his denial of plaintiff's petition, but again admitted his indebtedness to plaintiff in the amount of $ 160.15, as in his original answer, which sum he again tendered.

¶4 On October 18, 1927, defendant filed a plea in abatement. Therein he alleged, to wit:

"That the Oklahoma Natural Gas Company was a corporation and instituted said suit against the defendant as a corporation.

"The defendant would further show to the court that, heretofore, and on or about the 14th day of July, 1926, an application was filed in the district court of Tulsa county, Okla., for the dissolution of said corporation. Due notice of said hearing was given and as provided by law. The application for the dissolution of said plaintiff corporation came on for hearing in the district court of Tulsa county, Okla.. on the 22nd day of September, 1926. The said district court entered its decree on said date dissolving said corporation, a copy of the decree being marked 'Exhibit A,' hereto attached and made a d, and have full power to settle the affairs of the corporation, and to collect and pay debts and divide among the stockholders the property which remains after the payment of debts and necessary expenses; and for such purposes may maintain or defend actions in their own names by the style of the trustees of such corporation dissolved, naming it; and no action whereto any such corporation is a party shall abate by reason of such dissolution."

¶15 It is to be noted that the statute was amended subsequent to the origin of this case by an additional provision thereto providing that service of process on a dissolved corporation may be had by service thereof on the Secretary of State. Chapter 25, S. L. 1927.

¶16 The statute, in its original form, was adopted from Dakota Territory. See section 2940, Dakota Territorial Code., Comp. Laws 1887. It does not appear that the statute had been construed, in the relation here at issue, by the Dakota Territorial Court prior to our adoption thereof, nor that it has been construed by the courts of the Dakota states prior to their amendment thereof. Likewise, it does not appear that a statute of similar import was considered in the Cunkle Case, supra, and its not having been heretofore considered by this court, the question presented thereunder is therefore one of first impression in this jurisdiction.

¶17 Under our rule of statutory construction, the language employed to express the legislative intent of the statute, in its original form, appears to signify and effectuate three purposes, namely: (1) That a dissolved corporation has a limited continued existence until its affairs have been settled by its trustees, who may be either the board of directors or managers thereof, or persons appointed by the court at the dissolution proceedings; (2) that a dissolved corporation by the name of its trustees has the legal capacity to sue and to be sued in relation to any matter in the course of the settlement of its affairs; and (3) that any pending action to which a corporation is a party at the time of its dissolution continues to final adjudication as though dissolution had not obtained, without regard to our general statutory provisions upon the subject of survival and revival of actions.

¶18 In this concept of the statute, in respect to the third phase thereof, we are supported by the case relied on by plaintiff, Oklahoma Natural Gas Co. v. Oklahoma, supra. That case also arose out of the fact of plaintiff's dissolution, and had reference to two actions pending in the Supreme Court of the United States, both styled the same. Therein the plaintiff, its successor, and the defendant joined in motions to substitute the name of the successor for that of the plaintiff. These were filed within the statutory period fixed by our Code provisions for the revival of actions. In the consideration of the motions the court gave its concept of section 5361, after quoting the same, in this language:

"We have found no Oklahoma case that construes this provision with reference to the question now before the court. The language of the section would seem to indicate that, as there is to be no abatement, the Oklahoma Natural Gas Company for litigating purposes is still in being and continues to be a party before this court."

¶19 The court further said:

"The showing made for the motion is that the Oklahoma Natural Gas Company was by a decree of the district court of Tulsa county, Okla., duly and legally dissolved as a corporation. There is nothing to indicate why the company was dissolved. We may assume, but we do not know, that it was in anticipation of its dissolution by force of law and that the proceeding was undertaken in order to transfer its assets, its obligations, and its liabilities to another corporation which is averred to be a corporation of another state, to wit, of Delaware, although the seal which is attached to the consent of the Oklahoma Natural Gas Corporation, by its president and secretary, and accompanies the motion, shows that it was incorporated, not in Delaware, but in Maryland.

"The motion is signed by counsel for the appellant, the Oklahoma Natural Gas Company. He does not explain how he continues to represent the appellant, if, in fact, it has ceased to be as he represents to this court.

"In the absence of a fuller showing as to just what the proceeding was in the district court of Tulsa county in respect to the dissolution of the old company, and in view of the provisions of the Oklahoma statute, we think it unwise to grant the motion for substitution, even though with the consent of the appellees. It may be that with the disclosure of all the facts and circumstances we may find that what was done with the consent of all the parties to this suit is in fact a novation which we can make effective. United States v. City Bank, 19 HOW 385, 15 L. Ed. 662; Ex parte South and North Ala. R. Co. 95 U.S. 221, 222, 24 L. Ed. 355.

"We are not advised as to whether, at the time of the dissolution of the corporation by time, liquidating trustees of the old company were appointed under the statute. If they were, then they should appear in this proceeding. The motion to substitute is denied without prejudice to a renewal of it on a fuller showing."

¶20 The ground of denial apparently was met, as the motions were later granted by memorandum decisions. See same styled case, 274 U.S. 721, and 744, and notes to 71 L. Ed. 634.

¶21 The syllabus to the case, as that appears in 71 L. Ed. 634, reads as follows:

"1. The dissolution of a corporation cannot be distinguished from the death of a natural person in its effect upon litigation to which the corporation was a party, and will therefore, in the absence of statute to the contrary, abate all litigation in which the corporation appeared either as plaintiff or defendant.

"2. A motion to substitute a successor for a dissolved corporation, pending litigation to determine a liability which has been assumed by the successor will be denied, although it is

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