Reilly v. Antonio Pepe Co.

• Decision Date: 07 November 1928
• Citation: 143 A. 568,108 Conn. 436
• Court: Connecticut Supreme Court
• Parties: REILLY v. ANTONIO PEPE CO.

143 A. 568

108 Conn. 436

REILLY v. ANTONIO PEPE CO.

Supreme Court of Errors of Connecticut.

November 7, 1928

Appeal from Superior Court, New Haven County; Allyn L. Brown, Arthur F. Ells, and Christopher L. Avery, Judges.

Action by Anna Reilly, as administratrix of Thomas J. Reilly deceased, against the Antonio Pepe Company, to recover damages for personal injuries and death of plaintiff's decedent, alleged to have been caused by defendant's negligence. Verdict and judgment for plaintiff for $10,000 and defendant appeals. No error.

William A. Bree and H. Frederick Day, both of New Haven, for appellant.

Robert R. Rosan, of Port Chester, N. Y., for appellee.

Argued before MALTBIE, HAINES, HINMAN, BANKS, and WOLFE, JJ.

HAINES, J.

Plaintiff's decedent, Thomas J. Reilly, was injured in a collision in New York City on May 1, 1923, between a trolley car on which he was conductor and a truck of the defendant company, and died of his injuries some hours afterward. He was a resident of New York state, while the defendant was a Connecticut corporation. Letters of administration were taken out in New York by the plaintiff, who is the widow and sole heir of the decedent, May 24, 1923, and also in Connecticut November 30, 1923. Action against the defendant was brought in Connecticut December 5, 1923; the complaint being based upon chapter 13 of the Consolidated Laws of New York, entitled " An act relating to estates of deceased persons." Upon a demurrer sustained the plaintiff amended her complaint and based it upon the General Statutes of Connecticut, § 6137. A further demurrer was overruled, issues were joined February 4, 1925, and hearing had, resulting in a disagreement of the jury, and on January 25, 1927, the defendant filed certified copies of a preliminary and final certificate of dissolution of the corporation, together with a motion to erase the case from the docket on the ground that the defendant corporation had been dissolved October 19, 1923, prior to the institution of the action, which motion was later denied. During the trial of the case the presiding judge called the attention of counsel to the opinion of this court in the case of Commonwealth Fuel Co. v. McNeil, 103 Conn. 390, 130 A. 794, which was decided after the original demurrer sustained, and suggested that, if the plaintiff had a right of action, it would rest upon the laws of the state of New York rather than of the state of Connecticut. The plaintiff was thereupon permitted to file a substitute complaint on October 25, 1927, when the defendant again demurred and was overruled. The defendant then answered the complaint by general denial and setting up as affirmative defenses that of contributory negligence, the statute of limitations, and the invalidity of the action of the court of probate in this state in granting letters of administration on the ground of lack of jurisdiction. The jury gave a verdict for the plaintiff for $10,000, to which, upon motion, interest from the date of the death of the decedent, $2,690, was added. The defendant moved in arrest of judgment on the ground that the complaint was insufficient in law to warrant the judgment, and this motion was denied.

The first of the numerous assignments of error is the denial of the motion to erase the case from the docket; the recital in the motion being:

" Because said corporation was dissolved on the nineteenth day of October, 1923, prior to the institution of this action."

Passing for the moment the question whether such a recital in a motion to erase was proper, we find, from our examination of the certificates of dissolution and the record, that letters of administration were taken out by the plaintiff in New York May 24, 1923, and five days afterward the stockholders voted to dissolve the corporation under the provisions of the General Statutes of this State, § 3446 et seq.; that six days thereafter on June 4, 1923, the preliminary certificate of dissolution was prepared, and fifteen days after the four months' limitation to creditors required by statute, on October 16, 1923, they filed the final certificate certifying that they had sold or collected all the assets of the corporation and distributed the same among the stockholders, most of the amount distributed going to Antonio Pepe himself. Service in this action was made upon the defendant in its corporate capacity, and in the same capacity it appeared and pleaded, contested the case on its merits, and went to the jury, but failed to obtain a verdict. Coming to a second trial three years after the case was brought, it denied, for the first time, its own existence and capacity to act as a corporation; the copy of the certificate of final dissolution being filed two years after the pleadings were closed for the first trial and on the same day the motion to erase was filed.

The action of the four stockholders, who, it appears were also the directors, in thus beginning dissolution proceedings within five days after the plaintiff had taken out administration in New York, and the expedition attending its completion, justifies the inference that it was done with the definite purpose of defeating the plaintiff's claim, and the filing of the motion to erase the case from the docket is clearly designed to consummate that purpose. Whatever the object may have been, the proposition for which the defendant is here contending amounts to this: That the shareholders of a Connecticut corporation can defeat the claim of a New York creditor and prevent its establishment and collection, by agreeing among themselves to dissolve the corporation and divide its assets if they can conclude the process and obtain the signature of their certificate by the secretary of the state, before the creditor can bring suit. It is claimed that the corporation was legally dissolved under the terms of our statutes which provided that the directors upon the vote or assent of the stockholders shall act as trustees to close up the business of the corporation; shall, within two weeks after such action of the stockholders, send written notice to every known creditor to present his claim, stating where and to whom it is to be presented, and limiting a time not less than four months thereafter when this shall be done. General Statutes, § 3447. Claims not presented within the time so limited, and rejected claims not put in suit within the four months after notice of the rejection, shall be barred. General Statutes, § 3449.

Our statutes further provide that upon the completion of their duties the directors shall prepare, swear to, and file with the secretary of the state a certificate in prescribed form stating that they have performed their duties as trustees, and " the secretary shall examine the same, and, if he finds that it conforms to law, shall indorse thereon the word ‘ approved,’ with his name and official title, and shall thereupon record such certificate in a book kept by him for such purpose. When such certificate has been approved by the secretary. the existence of such corporation shall terminate." General Statutes, § 3451. The defendant insists that the approved certificate in the present record conclusively establishes that the defendant corporation is absolutely out of existence and that it follows that the court had no further jurisdiction to hear or determine this case which was brought against it after the date of the dissolution. But other provisions of our statute law show that such dissolution is not necessarily absolute and final for all purposes and in all events. In an early case in this state a similar claim was made to the effect that the result of dissolution proceedings, when completed, deprived the corporation of all its franchises and of every corporate capacity. But this court said the claim " that the winding up of the affairs of a corporation produces practically the death of it, may be conceded; but it is not that absolute and technical dissolution which the law recognizes as extinguishing all its rights and its existence so that it cannot be sued by a creditor" and that dissolution in any mode, save by legislative repeal or judicial decree, does not affect the rights of creditors, and that their right to establish and enforce just claims will be deemed to continue in existence. Pahquioque Bank v. Bethel Bank, 36 Conn. 325, 335, 4 Am.Rep. 80. Thus we have seen the corporation continues, by statute, for the benefit of a creditor who brings suit within four months after his claim has been rejected; so, too, a mortgage creditor or a lienor may enforce his claim against the corporation. General Statutes, § 3450. Corporations dissolved by voluntary action as in this case " shall continue so far as may be necessary to enable them to prosecute and defend suits by or against them, to close up their affairs, dispose of their property and distribute their assets." General Statutes, § 3453. Furthermore, in those jurisdictions where by statute actions survive the death of the tort-feasor, and where it is further provided that corporate existence shall continue after dissolution for the purpose of winding up the corporate affairs, it is the general rule that a corporation is liable after dissolution. This is upon the theory that the dissolution is analogous to civil death. Corpus Juris, vol. 14A, p. 1159, § 3817, and cases.

No further citations are necessary to show that the mere appearance of the final certificates of dissolution upon the record in this case, even if we regard them as properly filed and proven, does not conclusively establish that the court was without jurisdiction, or that this action could not be maintained. Miller v. Newburg Coal Co., 31 W.Va. 836, 8 S.E. 600, 13 Am.St.Rep. 903.

A motion to erase the case from the docket...