Trower v. Stonebraker-Zea Live Stock Co.

• Decision Date: 12 January 1937
• Docket Number: No. 2397.,2397.
• Citation: 17 F. Supp. 687
• Parties: TROWER et al. v. STONEBRAKER-ZEA LIVE STOCK CO. et al.
• Court: U.S. District Court — Northern District of Oklahoma

17 F. Supp. 687

TROWER et al. v. STONEBRAKER-ZEA LIVE STOCK CO. et al.

No. 2397.

District Court, N. D. Oklahoma.

January 12, 1937.

Hobart E. Duggins, of Tulsa, Okl., for plaintiffs.

Poe, Lundy & Morgan, of Tulsa, Okl., for defendants.

FRANKLIN E. KENNAMER, District Judge.

This action was instituted in the district court of Tulsa county, Okl., and has been removed to this court by petition, because of diversity of citizenship. A motion to remand the cause to the state court is on for consideration.

Plaintiffs' amended petition alleges, in substance, that the plaintiffs are residents of Tulsa county, and are engaged in the business of listing leases and selling oil and gas leases and other property; that the defendant, Stonebraker-Zea Live Stock Company, is a corporation, chartered in the state of Oklahoma, owning property in Oklahoma, and that the officers of the corporation were Charlotte T. Zea, president, E. P. Wheat, vice president and managing officer, and William C. Lucas, secretary, all being nonresidents of the state of Oklahoma, and residents of Kansas City, Mo., and that the said individuals constituted the board of directors of the corporation.

The amended petition further alleges that the corporation was dissolved by operation of law in the year 1931; that since that date the corporation has endeavored to operate in Oklahoma as a corporate entity, and has carried on business with citizens of Oklahoma, and that the directors of the corporation are now the trustees of the creditors and stockholders and members of the corporation, and that the individual defendants are now acting in the capacity of trustees for the corporation and its creditors, and hold title to the legal assets of the corporation.

It is further alleged that the plaintiffs are creditors, and that the trustees, as officers, directors, and managers, now hold in trust the assets of the corporation, and that the individuals are proper parties to be sued in the courts of Oklahoma; that the said trustees were the sole directors of the corporation, and are now the sole trustees of the assets of the corporation.

The amended petition further charges that the defendants, either jointly or severally, and as trustees, own and hold certain personal property and real property, located in Oklahoma, which is described in the amended petition.

It is further alleged that during August, 1935, E. P. Wheat, the vice president, treasurer, and managing officer of the corporation, engaged one J. O. Patterson to sell certain oil and gas mining leases on real properties located in Oklahoma, and that said Patterson directed the plaintiffs to find a purchaser, and that the defendant, Wheat, agreed to pay a reasonable commission for the services of plaintiffs in making a sale; that through the efforts of the plaintiffs, the defendant Wheat sold the leased property to the Empire Oil & Refining Company, and Cities Service Gas Company, selling the property for a consideration of $300,000, and that the deal between the parties was brought about through the efforts of the plaintiffs; that a reasonable commission on said sale is $15,000.

Plaintiffs seek the appointment of a receiver to take charge of the real and personal property, because none of the officers or directors are residents of Oklahoma. In short, the action is for the recovery of a brokerage commission upon an alleged sale of property of a dissolved corporation in August, 1935, and some four years after the alleged dissolution of the corporation.

Service of process was made upon the secretary of the state of Oklahoma, summons was directed to Stonebraker-Zea Live Stock Company, a corporation, and its officers, directors, and trustees, Charlotte T. Zea, president, director, and trustee, E. P. Wheat, vice president, treasurer, director, and trustee, and William C. Lucas, secretary, director, and trustee, by serving the secretary of state. No service of process has been made upon the individual defendants. The individual defendants petitioned for the removal of the case.

Plaintiffs contend, in support of their motion to remand the cause to the state district court, that the individuals are not parties to the suit and that they have no standing in court. It is contended that the individuals are sued as trustees, in a representative capacity, and are not sued individually; that no service of process was made upon them, nor was any attempt to serve them individually. The removing defendants contend that they have been sued as trustees, and that as such, being residents of the state of Missouri, they have a legal right to remove the cause to the federal court, and that it can make no difference that they have not been served with process.

The amended petition clearly states that the corporation had been dissolved by operation of law prior to the arising of plaintiffs' cause of action. In other words, a transaction is set forth as having been had with the trustees of a dissolved corporation subsequent to its dissolution. The statutes of the state of Oklahoma provide, section 5361, C.O.S.1921, as amended by Session Laws 1927, ch. 25, section 9788, O. S.1931: "Unless other persons are appointed by the court, the directors or managers of the affairs of such corporation at the time of its dissolution are trustees of the creditors and stockholders or members of the corporation dissolved, and have full power to settle the affairs of the corporation, and to collect and pay debts and divide among 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."

Section 5362, C.O.S.1921, section 9789, O.S.1931, fixes the responsibility of such trustees, making them jointly and severally responsible to the creditors, stockholders, and members of the corporation to the extent of its property in their hands. This statute has been construed by the Supreme Court of Oklahoma, and that construction is binding upon this court. There can be no question about the liability of such trustees...