Youree v. Home Town Mutual Insurance Company of Warrensburg

• Decision Date: 24 February 1904
• Citation: 79 S.W. 175,180 Mo. 153
• Parties: YOUREE v. THE HOME TOWN MUTUAL INSURANCE COMPANY OF WARRENSBURG, MISSOURI, et al., Appellants
• Court: Missouri Supreme Court

79 S.W. 175

180 Mo. 153

YOUREE v. THE HOME TOWN MUTUAL INSURANCE COMPANY OF WARRENSBURG, MISSOURI, et al., Appellants

Supreme Court of Missouri

February 24, 1904

Appeal from Johnson Circuit Court. -- Hon. Wm. L. Jarrott, Judge.

Affirmed.

O. L Houts for appellants.

There was no service upon the defendant insurance company, or any of the defendants. The court, therefore, erred in overruling the motion of appellants to quash and strike out the sheriff's return, and the judgment should be reversed and the cause remanded. R. S. 1899, secs. 994, 995 and 996; Hoen v. Railroad, 64 Mo. 561; Railroad v Hoereth, 144 Mo. 136. The statute provides the only way to obtain service of summons upon a corporation in this State, and that way must be strictly pursued. The very language of the return shows conclusively that neither Sadler nor Faulkner was "the president or other chief officer of such company," as contemplated by the statute. Faulkner was the last vice president of the company only, in the language of the return, and Sadler had charge of the property and the affairs of the company as acting receiver according to the return. But it further appears from plaintiff's petition and the record in this case that the company at the time had no president or chief officer and had no business or business office. Plaintiff has so alleged and is bound by her allegation. Delivery to defendant Sadler "acting receiver and chief officer of said company and in charge of its place of business" was not "leaving a copy thereof at any business office of said company with the person having charge thereof" as provided by the statute, because the sheriff did not leave a copy of the writ and summons at the company's place of business with Charles Sadler, but simply gave the copies to Charles Sadler without saying where he was, and the return is for that reason bad if otherwise good. Laney v. Garver, 105 Mo. 355. Defendant Sadler was not a "person having charge" of the "business office" as contemplated by the statute. He did not represent the company, but had been appointed receiver by the court and as such and as the officer and representative of the court and not of the company, had taken possession of the company's property and affairs not for the purpose of doing business, but to wind up the affairs of the company, and after he was removed as receiver, continued to hold that property simply as custodian till somebody was appointed to take charge thereof. Service upon him, then, or leaving a copy with him, was not service upon the company. If he had continued to be receiver of the company and had not been removed, service upon him would not have been service upon the company. Health v. Railroad, 83 Mo. 617. The Home Town Mutual Insurance Company was not properly served; none of the defendants, therefore, was properly served, and the whole return was bad and should have been stricken out. Westmeyer v. Gallencamp, 154 Mo. 28.

Ewing Cockrell for respondent.

(1) By the insolvency of defendant company and the cessation of its business of insurance, it suffered a de facto dissolution such as to let in remedies of creditors to wind it up. Moore v. Whitcomb, 48 Mo. 543; Savings Assn. v. Kellogg, 52 Mo. 588; Perry v. Turner, 55 Mo. 425; Kehlor v. Lademann, 11 Mo.App. 553; Bank v. Gallaher, 43 Mo.App. 490; Thompson on Corporations, secs. 3340 and 3345. (2) On a de facto dissolution, the winding up of the company may for good cause be taken out of the hands of the directors, who are statutory trustees. Thompson, sec. 6829. (3) In such a proceeding, the directors are obviously necessary parties. Moore v. Whitcomb, 48 Mo. 548. (4) In this cause it is admitted by the pleadings "that there is no one who can lawfully wind up the affairs of said company disinterestedly and with justice to all parties except a receiver," and "that unless such a receiver is appointed, the creditors of the company will be greatly damaged and will recover nothing on their just claims against said company." Thompson, secs. 6555, 6556. (5) In a proceeding to appoint a receiver, the corporation itself is a necessary and proper party defendant. Thompson, sec. 6874. (6) Defendant company has not been de jure dissolved and may be summoned into court in order to appoint a receiver for it. Hotel Company v. Sauer, 65 Mo. 288; Bank v. Robidoux, 57 Mo. 446; Thompson, secs. 6666, 3345. (7) The corporation is properly summoned by service on its chief officer. In this case, the president has removed from the State and the acting chief officer is Chas. Sadler. Service may therefore be properly made either on the de facto chief officer, Sadler, or the de jure chief officer, the vice president, W. D. Faulkner. In this case service has been made on both the de facto and de jure chief officer. (8) The invalid and merely assumed (not real) appointments as directors and officers of the persons to whom the company was sold by appellants and the erroneous appointment of a receiver (in which proceeding plaintiff herein was not a party) were nullities and appellants still remained de jure directors and officers until the legal election and qualification of their successors. Thompson, secs. 792, 3851. (9) Furthermore, whatever the basis of the tenure of office by vice president Faulkner and appellants, it is admitted by the pleadings that said Faulkner and appellants were the only officers of the company of any kind. Hence appellants cannot question service on the corporation made by service made on its only and admitted chief officer.

OPINION

In Banc

FOX, J.

This suit is brought for the appointment of a receiver for the defendant, Home Insurance Company. The petition, which fully discloses the relief sought, is as follows:

"Now comes the plaintiff, Dora Youree, and states: That she is a member and creditor of the Home Town Mutual Insurance Company of Warrensburg, Missouri; that she suffered loss by fire on her policy Number 145, in said company in December, 1897 that in a suit against said company on said policy, a judgment was rendered in her favor in this court at the February term, 1899, for the sum of one thousand fifty-four dollars; that no part of said judgment has ever been paid by said company or by any one for it, and all of the aforesaid sum is still due her from said company.

"That said company was incorporated February 18, 1897, and was organized in the State of Missouri, and under the laws of said State, with its legal residence and chief place of business at the city of Warrensburg in the county of Johnson State of Missouri.

"That on or about December 3, 1898, the above defendants, W. W. Wood, W. D. Faulkner, James A. Kemper, W. L. Embree, M. C. Shryack, E. N. Johnson, W. L. Hyer, G. W. Hout, John E. Clark, R. L. Denton, J. M. Hill, J. P. Ozias and C. D. Middleton, who were then the officers and directors of said company, unlawfully and with great negligence sold the business of said company and the whole management and control of it and its assets to the following persons: C. H. Coppinger, J. C. Coppinger, A. J. Hare, J. R. Black, S. H. Black, R. J. Martin, Clay L. Prather, L. T. Collier, Abner Thompson, J. W. Snapp, R. W. Wood and R. J. H. Lafoon, or some of them, and assumed to appoint said persons as directors and officers of the company, the said defendants resigning from their positions as officers and directors of said company; that said persons never received or held any right or title to control or manage said company or to hold or exercise the offices to which they were assumed to have been appointed, and were at the February term, 1900, of this court, by a judgment of this court on an information in the nature of a quo warranto against said persons rendered at the February term of this court, 1900, ousted from the officers which they were exercising in said company, on the ground that they were never eligible thereto; that after said ouster said company became wholly insolvent, ceased to do any business of insurance for which it was organized and incorporated, and suffered a virtual de facto dissolution, such as would authorize the settlement and winding up of the affairs of said company by its directors or by a court of equity.

"That by a decree of this court rendered at the February term, 1900, a receiver was appointed for said company by said court; that the court found that losses had been sustained by the members of the company which had been allowed by or against the company, and payment of which was due from the company, in the amount of about seven thousand dollars, and the said receiver was by the court directed to wind up the affairs of the company and to bring suit against the said defendants, Wood, Faulkner, Kemper, Embree, Shryack, Johnson, Hyer, Hout, Clark, Denton, Hill, Ozias, and Middleton on account of the damages to the company caused by the said sale by them, and against the members of the company who were liable to it on their premium notes to it, and that said receiver brought said suits as directed.

"That at the February term, 1902, of this court, certain defendants in suit by the receiver on premium notes moved to set aside the orders appointing said receiver, and this court sustained said motion on the ground that the applicant for said appointment of receiver was only a member of said company and not a creditor and had not sufficient interest to entitle him to said appointment, and said orders of appointment were by the court set aside and all suits by said receiver abated.

"That at the June term, 1900, of this court said defendants who made said sale, filed a motion in this court asking the court to order the suit by the receiver against them dismissed and stating that in the name of said persons, C. H. Coppinger, J C. Coppinger, Hare, J. R....