52 Mo. App. 439 | Mo. Ct. App. | 1893
Lead Opinion
The petition of the plaintiffs alleged: “First. That the Kansas City & Independence Short Line Kailroad Company is a corporation organized and existing under and by virtue of the laws of the state of Missouri; that the capital stock of said corporation is $100,000, divided into one thousand shares of the par value of $100 each.
11 Second. That at the time of the organization of said corporation all of the capital stock was subscribed for by parties in the state of Missouri and elsewhere, and five per cent, of the capital stock of said corporation was paid into the treasury of said corporation by the stockholders, and that no other sum of money has ever been paid into the treasury by any stockholder thereof.
“Third. That S. M. Ford, one of the plaintiffs herein, subscribed for and is the owner of fifty shares
“Fourth. That there are about fifty stockholders in said corporation holding from one hundred shares to one share each, and that some of the stockholders in said corporation are non-residents of the state of Missouri, and that quite a number of the stockholders of said corporation are insolvent.
“Fifth. That the money heretofore mentioned and paid into the treasury by the stockholders has been expended, and other debts and liabilities contracted by said corporation amounting to about the sum of $2,000, which has been unpaid by said corporation; that said corporation has no property or assets,andis wholly insolvent ; that Yictor Bell recovered a judgment which is of record in the circuit court of Jackson county, for the sum of $166.08, and costs; that Kevil & Waples recovered a judgment against said corporation for the sum of $76.95, which is of record in said circuit court; that after the obtaining of said judgment the said judgment creditors in said respective judgments again filed a motion under the statute asking judgment against plaintiff, D. S. Orrison, and judgment in said two actions was rendered against plaintiff, D. S. Orrison, for said amounts above stated, which judgment so rendered was by D. S. Orrison paid.
“That O. S. Crysler, in the said circuit court of Jackson county, Missouri, recovered a judgment against said corporation, which, together with costs, amounted to the sum of $1,070; that after the obtaining of the said judgment said judgment creditor filed a motion in said action under the statute asking judgment against plaintiff, S. M. Eord, upon his unpaid stock, and a judgment upon said motion was rendered
“Sixth. That they, by reason of said judgments so rendered against them, and such other stockholders as may be compelled to pay said other judgments and outstanding claims, are entitled to contribution from the remaining stockholders of said corporation that are solvent; that no stockholder has paid into the treasury or expended any money for said corporation other than the five per cent, paid in as heretofore stated, and that all of the stockholders of said corporation are liable to plaintiffs for their proper and proportionate share towards paying said judgments.
“Seventh. That said corporation was organized in April, 1887, since which time and for the last eighteen months there has been no meeting of the board of directors and officers of said corporation, and that said officers and directors have failed to call in any proportion of the unpaid installments due from the stockholders upon the capital stock due by the stockholders to the corporation, and have failed and neglected to make any provision for the payment of the judgments rendered against said corporation and the debts owing hy said corporation.
“Eighth. That a number of the stockholders of said corporation are non-residents of this state, a number are insolvent, and the only way in which a fair and equitable settlement of the debts of said corporation can be. made by the solvent stockholders thereof is by the appointment of a receiver, with the power to collect from such solvent stockholders their proper and proportionate share necessary to pay the debts of said corporation and the proper costs of these proceedings.”
The defendant corporation failed to appear and defend the suit. At the return term of the writ the court on the application of the plaintiffs made an order, appointing a receiver, enumerating his powers therein.
At the October term following, the other defendant Cusinbary was on his application made a party defendant, and, thereupon, filed a motion to vacate the order of the court theretofore made for the appointment of the receiver, etc. This motion was sustained as to that part of the order which conferred upon the receiver authority to sue for assets and collect the unpaid subscriptions of stockholders, and overruled as to that part appointing him. Subsequently the receiver filed an application for instructions, and also made a report showing the names of the solvent stockholders of the corporation, the indebtedness of the corporation, etc. Upon the hearing of the application, testimony was received by the court, 'the tendency of which was to show that, of the stock subscribed to the corporation, only about $1,600 or $1,700 had been paid; that this amount had been paid out for attorney’s fees, surveying, etc.; that judgments had been rendered against plaintiffs as shareholders in favor of certain
The court thereupon ordered an assessment of twenty per cent, on the shares of stock to be made for the purpose of paying the indebtedness of the corporation, and that such shareholders as had, theretofore, made payments be credited therewith, and that the same be deducted from the amounts assessed against them, and that, the receiver be authorized to sue for and collect such assessments, and to hold the same subject to the orders of the court. The allegations of the petition were not controverted by an answer of either of the defendants. After successive motions for a new trial, and in arrest had been severally overruled, the defendant Cusinbary took this appeal.
The grounds of appeal assigned by the appealing defendant are: First. Plaintiffs’ bill of complaint did not state a cause of action, or any facts invoking equity jurisdiction. Second. The lower court had no jurisdiction of the person of the defendant, Kansas City & Independence Short Line Railroad Company, at the time the receiver in this cause was appointed. Third. There is a defect of necessary parties defendant to plaintiffs’ bill of complaint. We will examine seriatim these several assignments.
As to the first of these, it may be premised that this proceeding is outside and independent of any statutory provision in this state relating to the appointment of receivers. As a general principle courts have no jurisdiction to appoint receivers in the absence of express statutory authority, except in cases of extreme necessity. Beach on Receivers, sec. 404; Thompson v. Greely, 107 Mo. 577. The supreme court of this state, in the case just cited, fully recognizes the power of the courts of equity to appoint receivers and to sequestrate the property of corporations for the protection of
The law will afford them no adequate remedy against this threatened wrong. This unpaid stock is a trust fund for all the debts of the corporation, and will not a court of equity, under these circumstances,
This brings us to the question of jurisdiction of the person of the defendant raised by the defendants’ assignment of errors. The defendant contends that the corporation, before the time of the service of the summons in this case, had virtually surrendered its ■charter, whereby its dissolution was accomplished, and that, therefore, the court acquired no jurisdiction of the person of the corporation by reason of the service of the writ upon a quondam officer. This question must be determined with reference to pertinent existing statutory provisions. By section 2664, it is provided that if any corporation formed under article 2, chapter 42, relating to “railroad companies,” shall not, within two years after its articles of association are filed and recorded in the office of the secretary of state, begin the construction of its road, and shall not within one year thereafter expend thereon not less than ten per cent, of the amount of the capital stock, its corporate existence and powers shall cease. The petition upon its face shows that it did not at any time ■expend on the construction on its road ten per cent, or any other per cent, of the amount of its capital.
By further reference to section 2513, the statute defining the general powers, duties and liabilities of
It has been declared by the supreme court of this-state, that under the provisions of section 19, G-eneral Statutes, 1865, page 329, which is identical with section 2513, supra, a corporation, which suffers acts to be-
At first blush we were inclined to think that the provisions of section 2519, allowing suits to be brought after dissolution of the corporation against the stockholders “without joining the company in such suit,” was a statutory recognition of the existence of the corporation after dissolution, but further reflection convinces us that such is not the case. If the corporation has ceased to exist, if its powers are extinct and its managing officers have become fimetns officio, if such managing officers have been converted into statutory trustees of the corporation, and in that capacity alone represent the corporation, it is, quite difficult to understand how in this action against the •corporation the service of summons on any one of them as president or managing officer of the corporation •could confer jurisdiction over the person of the dead corporation. As such managing officers they could not appear and defend the action. Nothing they could do would bind the corporation. The status of the corporation in this case is analogous to that of a corporation whose dissolution was occasioned by the expiration of its charter. The trustees in a proper case could be sued, but certainly not the extinct corporation. The logical corollary to this is that there is a defect of necessary parties to the action.
Rehearing
ON MOTION FOR REHEARING.
The plaintiffs find fault with our construction of section 2664, Revised Statutes, which provides that if any railroad corporation formed under article 2, chapter 42, shall not begin the construction of its road and shall not within one year thereafter expend thereon not less than ten per cent, on the amount of its capital, “its corporate existence a/nd powers shall cease.”
It stands admitted that the defendant railway company had wholly failed to comply with the said statutory requirement. It is further admitted that the corporation has only collected of its stockholders something like one and three-quarters per cent, on its subscribed capital stock, just enough to pay the engineers and attorneys who were in its service about the time of its organization. In the opinion it is held that the effect of this omission to comply with the statute was ipso facto to forfeit absolutely the defendant’s charter without judicial determination.
The general principle is not disputed that a corporation, by omitting to perform a duty imposed by its charter, does not ipso facto cease to be a corporation, but simply exposes itself to the hazard of being-deprived of its corporate character and franchises by the judgment of the court in a proceeding against it by quo warranto on the part of the state. But the legislature possesses the undoubted power to provide that a corporation may lose its corporate existence without the intervention of the courts by an omission of duty or violation of its charter, or default as to imposed
We are aware that some courts have disfavored the views expressed in the cases which we have followed in our ruling in the present case. The question under consideration has not been, as far as we have been able to discover, heretofore presented point blank to any one of the appellate courts of this state. We think, however, that the language of
But it will be seen further by reference to sections 8 and 9 of article 1 of the act of 1856-7 relating to “banks and banking” (Acts, 1856-7, 16, 17), that, while it was provided that in case any bank suspended specie payment at any time for a period of ten days, “its charter shall cease and determine,” it is also there further provided that proceedings by scire facias should in such case be commenced against the bank in the proper circuit court, and, if the charge was sustained by the court, that it should annul the bank’s charter. There the statute itself provides a procedure in case
The plaintiffs’ construction of the statute in question renders the words, “its corporate existence and powers shall cease,” meaningless. Or, in other words, that the. statute without these words would be just as effective as it is with them.
According to the plaintiffs’ petition, the life of the defendant corporation was extinct by operation of law .long before the institution of their suit, and we are unable to perceive from whence it derived the power to resuscitate it for the plaintiffs’ present purpose. It results that we must adhere to the conclusion reached in the opinion.