St. Albans Granite Co. v. Elwell & Co.

• Court: Vermont Supreme Court
• Writing for the Court: POWERS, C. J.
• Citation: St. Albans Granite Co. v. Elwell & Co., 88 Vt. 479, 92 A. 974 (Vt. 1915)
• Decision Date: 23 January 1915
• Parties: ST. ALBANS GRANITE CO. v. ELWELL & CO.

92 A. 974

88 Vt. 479

ST. ALBANS GRANITE CO.

v. ELWELL & CO.

Supreme Court of Vermont. Franklin.

Jan. 23, 1915.

Exceptions from Franklin County Court; E. L. Waterman, Judge.

Assumpsit by the St. Albans Granite Company against Elwell & Co. Verdict and judgment for the plaintiff, and defendant excepts. Judgment affirmed.

Argued before POWERS, C. J., and WATSON, TAYLOR, SLACK, and HEALY, JJ.

C. G. Austin & Sons, of St. Albans, for plaintiff.

Richard A. Hoar, of Barre, for defendant.

POWERS, C. J. The plaintiff, a corporation organized under the laws of this state, sold several granite monuments to the defendant; and, the same not having been paid for, this action of general assumpsit is brought to recover the purchase prices thereof. The writ issued in September, 1912, and was duly entered in court. The defendant pleaded the general Issue, payment, and offset, and also filed a declaration in offset, claiming to recover thereunder a balance due by way of damages on account of certain contracts for granite jobs other than those sued on.

The several claims on which the suit is predicated had, before suit, been assigned to different creditors for money advanced, and notice thereof had been given to the defendant; and this action is brought and prosecuted in behalf of such creditors.

On March 1, 1913, and while this suit was pending in the county court, the plaintiff corporation, by its proper officers, filed the sworn statement of voluntary dissolution specified in P. S. 772. Thereupon the defendant pleaded this fact in bar of the action. No question is here made as to the legal sufficiency of such sworn statement, and no question of pleading is raised. The defendant insists, however, that by the very terms of P. S. 773, the result is that the corporation has ceased to exist, and the pending suit is abated. The provision relied upon reads as follows:

"A corporation causing the sworn statement * * * to be filed * * * shall not thereafterwards, in this state or elsewhere, conduct or transact any corporate business, nor possess any corporate functions, except in case proceedings are instituted against such corporation by creditors or stockholders and then only for the purpose of adjusting the rights of such creditors or stockholders; and such corporation and all rights and privileges existing thereunder, except as set forth in this section, shall cease to exist."

The case before us does not require that we say what the result of filing the sworn statement would be in an ordinary action of the corporation to recover a debt due it. The jury, by special verdicts, has established the fact, already stated, that the claims covered by this action had been duly assigned, and that the assignees began and are prosecuting this suit for their own benefit.

Neither the validity of the assignments, nor the standing of the assignees, is affected by the fact that it does not appear from the writ or declaration that the action is brought in behalf of such creditors. However useful and convenient such an allegation might be as notice to the defendant of the rights of the assignee and a guide to the court in protecting the same, the rules of pleading do not require it. Mutual Life Ins. Co. v. Allen, 113 Ill. App. 89; Hayes v. Virginia Mut. Protec. Ass'n, 76 Va. 225; Bentley v. Standard F. Ins. Co., 40 W. Va. 729, 23 S. E. 584; Kelly v. Greany, 216 Mass. 296, 103 N. E. 779.

It is the policy of the courts to give full recognition to the rights of the beneficial owner under such assignments as are here involved, and they "exert themselves to afford them every support and protection not inconsistent with the established principles and modes of proceeding which govern tribunals acting according to the course of the common law." Welch v. Mandeville, 1 Wheat. 233, 4 L. Ed. 79; Upton v. Moore, 44 Vt. 552. The assignee will be protected against the acts of the assignor, so far as can be done without prejudicing the rights of the debtor (Dazey v. Mills, 10 Ill. [5 Gllman] 67); and the assignor will not be permitted to prejudice the rights of the assignee by receiving the money, releasing the debt, entering a retraxit, or dismissing the action (Clarksons v. Doddridge, 14 Grat. [Va.] 42; Welch v. Mandeville, supra; Sloan v. Sommers, 14 N. J. Law, 509; Halloran v. Whitcomb, 43 Vt. 306). The assignee may use the name of the assignor to collect the claim assigned, and the latter's consent thereto is not necessary. Bates, Adm'r, v. Kempton, 7 Gray (Mass.) 382. The court will permit such use over the protest of the assignor (Sumner v. Sleeth, 87 Ill. 500; Calhoun v. Tullass, 35 Ga. 119), and in a proper case compel it (Anderson v. Miller, 7 Smedes & M. [Miss.] 586).

Such being the law of the subject, it seems clear that the statute ought not to be so construed as to cut off the rights of the assignees, unless its terms compel such a construction. And, notwithstanding the positive language used, we think it does not apply to the situation here presented. The whole purpose of the statute is to force these corporations to pay their license fees or go out of business. The exception shows that it was the purpose of the Legislature to protect the interests of creditors. But the assignees are creditors of the corporation, and to hold as we are urged to by the defendant would accomplish the double injustice of relieving it of an honest debt and of forcing the assignees to lose their equally honest debts. The corporation is not here conducting or transacting corporate business, or exercising a corporate function within the fair meaning of the statute. It is not asserting a corporate right or privilege, within that meaning. It is not acting at all. It is the mere passive agency, through the use of whose name the assignees are acting. The right to use the corporate name in enforcing these claims passed to and vested in the assignees as an incident of the assignments long before the corporate officers filed their statement. Assuming that the Legislature could, we do not think the Legislature did interfere or attempt to interfere therewith. We do not think the statute extends to the case here presented.

The objections to this construction on account of administrative difficulties are without merit. The court was sufficiently empowered to indemnify the corporation and protect the defendant in the matter of costs. It could, by proper findings and orders, protect each of the assignees in his particular rights, without compelling them to resort to separate actions which would be vexatious to the defendant.

We are much embarrassed in the consideration of the defendant's exceptions to the admission and exclusion of evidence by the meager and unsatisfactory record before us. And in this connection it may not be amiss to suggest, as we have often done before, that the excepting party is required, at his peril, to spread upon the record enough to show affirmatively that error was committed at the trial.

The specification filed by the plaintiff shows eight separate contracts of varying amounts; each bearing a number and aggregating $364. Construing the bill of exceptions most strongly against the defendant, as under our rule we are bound to do, it fairly appears...