Turner v. Browne

• Decision Date: 20 July 1943
• Docket Number: 38476
• Citation: 173 S.W.2d 868,351 Mo. 541
• Parties: Warren M. Turner, Trustee, Appellant, v. Grace G. Browne and T. G. Browne, Nell C. Browne and Clifford B. Kimberly, Statutory Trustees of the Springfield Quarry and Concrete Company, a Corporation
• Court: Missouri Supreme Court

173 S.W.2d 868

351 Mo. 541

Warren M. Turner, Trustee, Appellant, v. Grace G. Browne and T. G. Browne, Nell C. Browne and Clifford B. Kimberly, Statutory Trustees of the Springfield Quarry and Concrete Company, a Corporation

No. 38476

Supreme Court of Missouri

July 20, 1943

Appeal from Greene Circuit Court; Hon. Warren L. White Judge.

Reversed and remanded.

Warren M. Turner and Howard C. Potter for appellant.

(1) The so-called trustees are merely liquidators of a dissolved corporation. 16 Fletcher on Corporations 947, sec. 8175; 14A C. J. 1171, sec. 3838; 19 C. J. S. 1511, sec. 1744; Sec 5094, R. S. 1939; Holmes v. Camp, 175 N.Y.S. 349; In re Imperial Water Co. No. 3, 250 P. 394; Landis v. Saxton, 105 Mo. 486; Gilna v Barker, 254 P. 174, 78 Mont. 357; Fitzpatrick v. Stevenson, 67 P.2d 310, 104 Mont. 439; Crystal Pier Co. v. Schneider, 180 P. 948; In re Centennial Board of Finance, 48 F. 350. (2) As statutory liquidators the trustees of this dissolved corporation had power to make the agreement in question. 14A C. J. 1172; 19 C. J. S. 1415, sec. 1745; 16 Fletcher on Corporations 957; Ford v. K. C. & I. Short Line Ry. Co., 52 Mo.App. 439; Hanan v. Sage, 54 F. 651; Crystal Pier Co. v. Schneider, 180 P. 948; McPherson v. Commissioner of Revenue, 54 F.2d 751; Farmers' Elevator Co. v. Wunshel, 88 S.W.2d 574; Sec. 5094, R. S. 1939; Tazewell Electric L. & P. Co. v. Strother, 84 F.2d 327; Gilna v. Barker, 254 P. 174, 78 Mont. 357; Sager v. State Highway Comm., 125 S.W.2d 89. (3) A corporation, even when insolvent, may make an assignment for the benefit of creditors. 15A Fletcher on Corporations 99; Adam Roth Grocery Co. v. Monticello Hotel Co., 148 Mo.App. 513, 128 S.W. 542; Huse v. Ames, 104 Mo. 91. (4) The statutory trustees, under the circumstance, not only had a right but a duty to make the agreement. Sec. 5094, R. S. 1939; 16 Fletcher on Corporations 957, sec. 8178; 14A C. J. 1172, sec. 3840; 19 C. J. S. 1514, sec. 1745; Gilna v. Barker, 254 P. 174, 78 Mont. 357. (5) The statutory trustees cannot now object to the making of this agreement. 15A Fletcher on Corporations 105; 6 C. J. S. 1242, sec. 22; Perfex Radiator Co. v. Goetz, 191 N.W. 735. (6) The actions of the president and active trustee in signing the agreement was, when ratified, the action of the trustees. Hall v. Lavat, 301 Mo. 675, 257 S.W. 108; Farmers' Elevator Co. v. Wunshel, 88 S.W.2d 574; United States v. Fireman's Fund Ins. Co., 256 N.Y.S. 79.

Frank B. Williams for respondents.

(1) Motions for judgment on the pleadings are not like demurrers, part of the record proper, and exceptions to the rulings thereon are necessary to preserve the questions raised; such questions cannot be reviewed except as to the sufficiency of the pleadings to sustain the judgment rendered, unless a motion for new trial is made, and unless the exceptions reserved to the ruling on motion for judgment on the pleadings and motion for new trial after such motions are preserved in a bill of exceptions. Leahy v. Mercantile Trust Co., 296 Mo. 361, 247 S.W. 396; Hodson v. McAnerney, 192 S.W. 423; Sternberg v. Levy, 159 Mo. 617, 60 S.W. 1114, 53 L. R. A. 438; Godfrey v. Godfrey, 228 Mo. 507, 128 S.W. 970; Jones v. Cook, 249 S.W. 422; Frohoff v. Casualty Reciprocal Exch., 113 S.W.2d 1026; Galvin v. Kansas City, 122 S.W.2d 379. (2) There being no bill of exceptions filed in, and allowed by, the trial court, there is nothing before this court to show that respondents filed motions for judgment on the pleadings and the contents of said motions, or that the court sustained said motions, or that appellant excepted to the action of the court in sustaining said motions, or that appellant duly filed motion for new trial, or that the court overruled same, or that appellant filed affidavit for appeal, or that the court granted an appeal. Said matters and the rulings of the trial court thereon cannot be considered or reviewed here, and respondents' motion to dismiss or affirm should be sustained because there is nothing before the court except the record proper, consisting of the petition, answers and replies, and they support the judgment that was rendered by the trial court. Leahy v. Mercantile Trust Co., 247 S.W. l. c. 401; Sternberg v. Levy, 159 Mo. 617, 60 S.W. 1114; Winning v. Brown, 340 Mo. 178, 100 S.W.2d 303. (3) Instantly upon forfeiture of the corporate certificate or license of Springfield Quarry and Concrete Company, the corporation died and respondents, T. G. Browne, Nell C. Browne and Clifford B. Kimberly, its last officers and directors, became its statutory trustees, with full power to settle its affairs and distribute its assets among its stockholders after paying the debts due and owing by the corporation, and they, alone, had power to sue and recover such debts and property, and they, alone, were responsible to creditors and stockholders for the property of the corporation which came into their hands. Secs. 5091, 5093, 5094, R. S. 1939; Watkins v. Mayer, 103 S.W.2d 566; Estel v. Midgard Inv. Co., 46 S.W.2d 193; Samuel Sanday & Co., v. United States, 6 F.Supp. 597; Lorenzen v. United States, 41 F.2d 369; R. W. Wilson Motor Co. v. Hoover, 222 Mo.App. 560, 293 S.W. 61; Mercantile-Commerce Bank & Trust Co. v. Kieselhorst, 164 S.W.2d 342; Sager v. State Highway Comm., 125 S.W.2d 89; Quigley v. Wm. M. Rideout & Co., 127 S.W.2d 37; Bradley v. Reppell, 134 Mo. 545; State ex rel. Darr v. A. D. Collins & Co., 34 F.Supp. 550. (4) The above sections contemplate the dissolution of the corporation where it failed to comply with statutes respecting annual registration and annual statement. There is no distinction between a dissolution of the corporation by action of the stockholders under Sections 5036 and 5037, R. S. 1939, and a forfeiture of the corporate charter by the Secretary of State under Section 5094, R. S. 1939. Watkins v. Mayer, 103 S.W.2d 566. (5) This part of the law is not procedural. It concerns the fundamental law of the corporation enacted by the State which brought it into being. St. Louis Car Co. v. J. G. Brill & Co., 25 F.Supp. 244; Okla. Gas Co. v. Oklahoma, 273 U.S. 257, 47 S.Ct. 391, 71 L.Ed. 634. (6) The disfranchisement of a Missouri corporation completely incapacitates the corporation for the transaction of any further business under its franchise from the date of the disfranchisement, and the corporation thereupon becomes non-existent. Arnold v. Streck, 108 F.2d 387; State ex rel. and to use of Darr v. A. D. Collins & Co., 34 F.Supp. 550. (7) After a corporation is dissolved it can no longer act in a corporate capacity and its title to property ceases. It is devolved upon the trustees appointed by statute for the settlement of its affairs. Thereafter it has no power to make a legal contract or convey property in its corporate name and capacity. It ceases to be a corporation de jure et de facto. It has never been otherwise ruled in this State, nor elsewhere so far as we have been able to discover. Bradley v. Reppell, 134 Mo. 545; State ex rel. v. Scott County Macadamized road Co., 207 Mo. 54; 14A C. J., p. 1158, sec. 3815; 16 Fletcher's Cyc. Corps. (Perm. Ed.), p. 8543, sec. 8013. (8) The trustee's rights are good as against all in possession of corporate property other than bona fide purchasers for value. 19 C. J. S., p. 1541, sec. 1759. (9) The trustees being the real parties in interest, they alone, may sue to recover corporate assets. Secs. 849, 5094, R. S. 1939. (10) After dissolution of a corporation its statutory trustees may exercise none of the former powers of the corporation. Thereafter the corporation is bound only by acts of trustees for certain limited purposes and cannot be bound by the act of its former officers in acting as trustees. 14A C. J. 1172, sec. 3840; Ropp v. Fulton, 108 N.E. 946; 19 C. J. S., p. 1511, sec. 1744; Black v. Cunnell, 86 P.2d 545, 149 Kan. 118; 16 Fletcher's Cyc. Corps. (Perm. Ed.), p. 858. (11) The officers made by the statute trustees have only the powers and duties conferred by the statute. 16 Fletcher's Cyc. Corps. (Perm. Ed.), p. 555, sec. 8178. (12) Ordinarily those who deal with a defunct corporation are not in a position to say that they were innocent parties to the transaction and were ignorant of the status of the corporation and thus entitled to enforce the contracts made. 16 Fletcher's Cyc. Corps. (Perm. Ed.), p. 859, sec. 8118; State v. Gravel Road Co., 116 Mo.App. 175, 92 S.W. 153. (13) An honest belief of opposite party that corporation had not been dissolved is immaterial in determining the effect of the dissolution. State ex rel. and to use of Darr v. A. D. Collins & Co., 34 F.Supp. 550. (14) There is a distinction and a difference between incompleted acts or obligations of a corporation at date of dissolution and contracts entered into while the corporation was incapacitated. The former may be enforced, the latter may not. Sager v. State Highway Comm., 125 S.W.2d 89. (15) No valid judgment can be rendered against a corporation as such after it is dissolved and ceases to exist. Macklind Inv. Co. v. Ferry, 108 S.W.2d 21, 341 Mo. 493. (16) Neither can valid process be served upon the former president or other executive officer. Ford v. K. C. & I. Short Line Ry. Co., 52 Mo.App. 439. (17) Equity court has jurisdiction to enjoin statutory trustee of corporation from alienating any of assets of corporation, the charter of which had been forfeited for failure to file annual statement. Estel v. Midgard Inv. Co., 46 S.W.2d 193.

Dalton, C. Bradley and Van Osdol, CC., concur.

OPINION

DALTON

Action in equity in two counts to determine interest in a note secured by deed of trust on real estate, to foreclose the lien of the deed of trust and for injunctive and other equitable relief. After answers, a cross petition in two counts and other pleadings...