Meramec Spring Park Co. v. Gibson

268 Mo. 394 | Mo. | 1916

FARIS, P. J.

— This- is an action to determine interest in certain real estate situate in Crawford County. Upon trial defendant had judgment, and plaintiff has appealed.

The common source of title is the Meramec Iron Company. Defendant claims through mesne conveyances from a sheriff’s deed bottomed upon a judgment and sale for taxes in an action instituted by publication against the Maramec -Iron Company. The plaintiff claims through a conveyance made in 1902 by all of the surviving directors of the Maramec Iron Company (sic), which conveyance was made pursuant to a written request of all the stockholders of said last •named company. The Meramec Iron Company attempted to organize as a corporation under the provisions of chapter 62 of the General Statutes of 1865, on the 20th day of April, 1870. On said last mentioned date one William. Jones and five others signed and acknowledged articles of association of the said Meramec Iron Company, obviously with the intention of organizing the same as a private business corporation. These articles of association were duly filed and recorded in the office of the recorder of deeds of Phelps County, Missouri, on December 12, 1871, but no, copy thereof was ever filed in the office of the Secretary of Státe. In September, 1872, a meeting of the incorporators of said company was duly held pursuant to notice, at St. James, Missouri, which town was designated as the place of the principal office of the company. Other meetings of the stockholders of the Meramec Iron Company were held from time to time during the following twenty years at divers places, among others, at the Southern Hotel in St. Louis, pursuant to changes made and entered of record in the minutes of the company. ■ So far as the record before us discloses, the last meeting ever held by the board of directors of this company was held on the 14th day of October, 1891, in the city of St. Louis.

On the 2nd day of January, 1894, an action was begun in the circuit court of Crawford County by the collector of revenue, of that county against the Meramec Iron Company for taxes upon the land here in controversy. This action was commenced by filing, among other things, an affidavit for an order of'publication,, which order was duly made so far as concerns the point here, and duly published for a sufficient length of time. This order recited that the' Maramec Iron Company was defendant therein. It will be noted that the name “Meramec” is misspelled in said order and that no designation of said Meramec Iron Company as a corporation appears therein. The allegation of non-residence in this order of publication is, to-wit: “That the defendant is k non-resident' of the State of Missouri so that ordinary process of law cannot he served upon Mm or them as the case may be.” In due course, judgment by default was rendered against the Maramec Iron Company for the delinquent taxes for which the suit last above mentioned was instituted. Thereafter a sale of this land was had and thereat it was purchased by one M. A. Leftwich, who subsequently conveyed it to one A. H. Harrison (now, apparently attorney for appellant herein), who in turn conveyed it to defendant. Defendant subsequently conveyed it, hut later, and prior to this action, again purchased it and yet owned it at the time he was sued herein.

It is conceded that the surviving directors of the Maramec Iron Company who conveyed the land in controversy to the plaintiff, were- all of the surviving directors of the Meramec Iron Company. And since no point seems to he made upon this conveyance we need not set it forth (nor the facts concerning it) •more at length. In passing it may he stated that in the written request to the said surviving directors of. the Meramec Iron Company to convey the land in dispute to plaintiff here, the word Meramec, is spelled once as last above herein and once it is spelled Maramec. Also, it may he observed, that in'the deed of conveyance made pursuant to the above request by said surviving directors of the Meramec Iron Company, the word “Meramec” as it appears in the title, of said Iron Company, is spelled thirteen times Maramec and not once otherwise. Which fact, we predict, will prove unlucky for plaintiff if we shall come so far as to reach it in our discussion.

Upon a trial of the case before the court (at which trial no instructions were asked or given on either side), judgment was rendered for defendant, adjudging him to be the owner in fee of the land in dispute. Such judgment, inevitably, as a necessary incident, required a finding by the court that the sale of the land for taxes was in all things valid (as against a collateral áttack) and sufficient to divest title out of the Meramec Iron Company and to vest it, through mesne conveyances, in defendant. All other questions, seem to be conceded throughout the record; at least there is no controversy made in the briefs upon either side about them. t

To a determination of this question, in the light of the various attacks thereon, our discussion of the case will be directed. In the discussion of it, if other facts shall become necessary we shall state them.

Mooted.nS I. Many novel and interesting questions are mooted in the briefs of learned counsel upon the record before us. Among these are: (a) Is Maramec Iron Company idem sonans with Meramec Iron Company? (b) Does an attempt to organize a corporation, which fails to create a de jure corporation for lack of following the law, have the effect to create a de facto corporation? (c) Is it necessary to sue such a body as a corporation? (d) Is service by publication upon such a (legally) abortive aggregation bad for that it follows the statute which prescribes the manner of service upon a nonresident individual, rather than that prescribing the manner of service by publication upon a de jure corporation? (e) Does such an abortive aggregation expire and become ipso facto dissolved by statutory limitation in twenty years (absent other time fixed in the articles of association) under the statute of 1865? [Sec. 1, p. 326, G. S. 1865.] (f) If it does so expire in whom does the title to its land vest? (g) Is such an aggregation dissolved and dead in the sense that after snch dissolution hy limitation it may not he sued for taxes in the quasi- name of the aggregation, in which name it carried its real estate upon the land records? In short, after expiration hy limitation is such an aggregation dissolved and dead within the purview of sections 11498 and 11499, Revised Statutes 1909, and of our ruling that a dead person cannot he sued for taxes, even though he be seemingly the record owner? [Sec. 11498, supra.]

It will be instantly appreciated that all of these questions are interesting; many of them are novel, and some of them are very close and difficult; largely because in any view which we may take, we must in our consideration thereof seem to beg many questions and assume as facts things.which are in reason contradictory antitheses of each other.

, corporation. II. We take the last point first, and recur to some of the pertinent facts, which were that more than 21 years elapsed after the Meramec Iron Company filed its articles of association in the office of the recorder of deeds of Phelps County and after it held meetings. of its board of directors as a pseudo-legal corporation, till it was sued for taxes on January 2, 1894. These articles of association did not set forth the period during which the proposed corporation should exist, and it follows that under the statute then' (and now) (Sec. 2990, R. S. 1909) in force, its life as a corporation was limited to twenty years (Sec. 1, p. 326, G-. S. 1865), if we are permitted to apply the same rule, to a de facto corporation as we apply to a de jure corporation. This period of twenty years had expired somé two years before the suit for taxes was. begun against it. Learned counsel for respondent concedes, in making another point, that while the Meramec Iron Company was not organized as a corporation pursuant to the statutes then in force, and while its corporate existence would not have been proof against a direct attack by the State, nevertheless since it held itself out to the world as a corporation and proceeded to deal and act and hold property as a corporation, its existence as a corporation cannot he collaterally attacked. In this view we are forced to acquiesce. While confessedly, for lack of a charter issued by the Secretary of State, the Meramec Iron Company never became a private corporation de jure, yet by reason of the existence of statutes which permitted it to be organized, for user of the powers it assumed, by its taking part of the necessary steps to organize as a corporation, it became (at least) as to all persons attempting to attack it collaterally, a de facto corporation, and thus (in such case and against such persons) entitled to all the rights, privileges and liabilities of a corporation de jure.

Dead TaxP Sun.0"'' Did' it so far expire by statutory limitation as that it could not he sued as a corporation twenty-two years after its attempted organization? We think that this question must he likewise answered in the affirmative. It has been held in this State under our statute (Sec. 19, p. 329, G. S. 1865) that after the expiration by statutory limitation of a corporation’s life, its property goes to its directors as trustees for the stockholders, and does not, as at common law, revert to the grantor. [Bradley v. Reppell, 133 Mo. l. c. 552; Richards v. Coal Co., 221 Mo. l. c. 158.] From this alone it follows on principle that the defunct corporation could not be sued after its dissolution and death by the expiration of its charter; in such wise, at least as to foreclose a lien against lands it no longer owned; hut which by operation of law had passed to its late directors as trustees for its shareholders. For the corporate entity is dead ipso facto (10 Cyc. 1271) when its statutory years are accomplished and its holdings of whatever sort, by force of the statute, pass to others. . [Sec. 19, p. 329, G. S. 1865; Bradley v. Reppell, 133 Mo. l. c. 552; McCoy v. Farmer, 65 Mo. 244.]

While thus on obvious principle it would appear to follow that no action can be maintained against a corporation after it expires by statutory limitation, and that a judgment against such defunct corporation is absolutely void, we have not in this State been able to find a case so holding in express terms. But in the Federal courts, and in other jurisdictions, as shown by the text-books and the cases themselves, this rule seems to be settled beyond dispute. In the case of Pendleton v. Russell, 144 U. S. l. c. 644, it was said:

“Looking at the judgment of the circuit court of the United States, we are satisfied that the ruling of the Court of Appeals was correct. That judgment purports to be against the insurance company, Put that, company, at. the time, had no legal existence. It had been dissolved and its franchises, rights and privileges declared forfeited by a decree of the Supreme .Court of New York, in a proceeding brought by the Attorney General of the State, in the name of the people, and a receiver appointed of the effects of the corporation. The judgment was therefore no more .valid against a non-existing corporation than it would have been if rendered for a like amount against a dead man. The receiver was not substituted in the place of the dissolved corporation; no process or citation was issued by that court to bring him before it, nor any proceeding taken for that purpose. Nor would such a proceeding have had any effect, for, the corporation having expired, the suit itself had abated. ’ ’

In the case of Crossman v. Vivienda Water Co., 150 Cal. l. c. 580, it was held: “It is settled beyond question that, except as otherwise provided by statute, the effect of the dissolution of a corporation is to termínate its existence as a legal entity, and render it incapable of suing or being sued as a corporate body or in its corporate name. It is dead, and can no more be proceeded against as an existing corporation than could 'a . natural person after Ms death. There is no one who can appear or act ’for it, and all actions pending against it are abated, and any judgment attempted to be given against it is void. As to this, all' the text-writers agree, and their statement is supported by an overwhelming weight of authority. [See 5 Thompson on Corporations, secs. 6721, 6722, 6723; 2 Clark &• Marshall on Private Corporations, secs. 322, 329; Angell & Ames on Corporations, sec. 195 ; 2 Morawetz on Corporations, sec. 1031; 10 Cyc. 1316; 7 Am. & Eng. Ency. of Law, p. 854; Pendleton v. Russell, 144 U. S. 640; National Bank v. Colby, 21 Wall. 609; Mumma v. Potomac Co., 8 Pet. 281; Sturges v. Vanderbilt, 73 N. Y. 384; Rodgers v. Adriatic F. Ins. Co., 148 N. Y. l. c. 38.] ”

Likewise it was so held m the late case of Venable Bros. v. Southern Granite Co., 135 Ga. 508, 32 L. R. A. (N. S.) 446. In an excellent note to the above case to be found in the citation last above, it is said: “The doctrine is well established that in the absence of statutory regulation, the expiration of corporate life hy. lapse of time or decree of dissolution works an abatement of pending actions at law or against it, the reason being that its existence as a legal entity is ended, and therefore a judgment subsequently rendered will be void.” [Nelson v. Hubbard, 96 Ala. 238; Wilcox v. Continental Life Ins. Co., 56 Conn. 468; Terry v. Bank, 66 Ga. 177; Eagle Chair Co. v. Kelsey, 23 Kan. 632; Bank v. Trimble, 6 B. Mon. 599; Musson v. Richardson, 11 Rob. (La.) 37; Read v. Bank, 23 Me. 318; Olds v. Trust Co., 185 Mass. 500; Torry v. Robertson, 24 Miss. 192; Greenbrier Lumber Co. v. Ward, 30 W. Va. 43; National Bank v. Colby, 21 Wall. 609; Pendleton v. Russell, snpra.] Nor is it in our view necessary to overrule the case of Board of Commrs. v. Shields, 62 Mo. 247, or St. Louis Gas Light Co. v. St. Louis, 84 Mo. 202. For in the instant cáse the Meramec Iron Company does not assert its continued existence, nor had it used its corporate offices for some three years before it was sued on the 2nd day of January, 1894. In the Shields case and in the Gas Light Co. case, supra, the pseudo-corporations were using their corporate powers and asserting their corporate existences, and the opposing parties had been dealing with them as corporations; while in the instant case the Meramec Iron Company tacitly concedes its death, as also expressly do its directors and shareholders. But it is plain and obvious that if the two cases last mentioned are opposed to the view that after the expiring of a corporation through statutory old age, a judgment against it is not void, then those cases are opposed, not only to the universal weight of authority, but to all reason and principle. Of course, if it be true as the cases hold, that a judgment which is rendered against a corporation after its dissolution by statutory expiration is void, it follows that such judgment being void may be attacked collaterally.

D^Facto Corporation, If it be urged that since in truth, for lack of compliance with section 2 of chapter 62 of the Revised Statutes of 1865, the Meramec Iron Company never became a de jure corporation, but became nevertheless by virtue of its efforts to follow the law, and of its use'r of corporate powers a de facto corporation, and that having become such de facto corporation it would continue by user to be a suable de facto corporation indefinitely, the answer is that a de facto corporation exists because (and only when) there is a law or statute permitting its incorporation for the purposes and with the powers assumed, but which law was not followed (though attempted so to be) in its organization. Therefore a de facto corporation, just as does a de jure corporation, ceases to exist as soon as the law which allows it to exist has failed. Here the law forbids either private or collateral attack, it is true, but if the Meramec Iron Company had been a de jure corporation it could not have existed longer than twenty years, because under the facts here there was no warrant of law for a longer life for this sort of corporation, and the moment its span .of life reached the statutory limit it would, ipso facto, have ceased to exist instantly. [10 Cyc. 1271.] Since, we repeat, no de facto corporation can exist,' except where there is law allowing a corporation to be formed and co use the powers of a corporation for the purposes set out in its articles of association, so no de facto corporation can continue to, exist even by continued user, after the term fixed by law as the period of its existence, has expired. For “the first requisite,” says Constantineau in his excellent work on the De Facto Doctrine, “to constitute a de facto corporation is the existence of a law authorizing the incorporation. When, therefore there is no law providing for the .organization of municipal corporations, there cannot be any such corporation either de facto or de jure.” [Constantineau on the De Facto Doctrine, sec. 50.] Elsewhere this author says that “the law recognizes no distinction between public and private corporations in the application of the de facto doctrine.” [Ibid., sec. 47.] Moreover, it is obvious that the view that by user and usurpation a corporation of whatever sort can be kept alive indefinitely, would have the effect to render nugatory and to practically emasculate all statutes providing for the. organization of private corporations. For such a view applied to the concrete facts here would be tantamount to saying: Observe the law, become a de jwre corporation and die of old age in twenty years; refuse to follow the law, become a de facto corporation and live forever.

We conclude then that since the judgment for taxes was rendered against the Meramec Iron Company, which was organized as a corporation de facto under chapter 62 of the Revised Statutes of 1865, after said company had become dissolved by statutory efflux of time, such judgment was void and the subject of collateral attack,, and a sale for taxes of the land in controversy bottomed on said judgment did not pass title to the purchaser thereof. This view disposes of the case and renders unnecessary a consideration of the other interesting points mooted.

It follows that the judgment nisi was wrong, and that this case should be reversed and remanded with directions to enter judgment for plaintiff decreeing it to be the owner of said land and adjudging that defendant has no title or estate therein. Let this be done.

All concur, Revelle, J., in result.