156 A. 150 | Pa. | 1931
A short chronology of the pleadings in the present case is necessary to an understanding of the issues involved: Plaintiff sued in trespass to recover damages from the Mount Pocono Light Improvement Company, for personal injuries sustained by her October 20, 1926, by reason of alleged negligent acts of defendant company. The summons issued June 2, 1927, and defendant's attorneys entered an appearance June 30, 1927. December 30, 1927, plaintiff filed her statement of claim and January 30, 1928, defendant filed an affidavit of defense raising questions of law. These questions *520 were decided against defendant with leave granted "to file an affidavit of defense as by the Practice Act required." February 4, 1929, attorneys who had appeared for Mount Pocono Light Improvement Company filed with the court a suggestion and affidavit of defense setting forth that "since the date of commencing the action above stated and since the date of filing of the defendant's original affidavit of defense, _____ the defendant, with the approval of the Public Service Commission of the Commonwealth of Pennsylvania, sold, assigned, disposed of and conveyed to the Pennsylvania Power Light Company [a Pennsylvania corporation] _____ all [its] franchises, _____ and property, real, personal and mixed." No formal notice of the sale was given plaintiff. The transfer, it was contended in the affidavit of defense, extinguished the corporate existence of defendant and, inasmuch as "plaintiff had no lien upon any of the property and franchises" of defendant company at the time of the conveyance, the affidavit prayed that rules be allowed to show cause why plaintiff's trespass action should not be abated, and further why proceedings in the case should not be stayed until by proper process plaintiff had "caused all persons responsible for any of the liabilities of the said defendant, Mount Pocono Light Improvement Company, if any such there be, to be brought in and made parties defendant to said action." Both rules were granted February 4, 1929.
Plaintiff, in turn, on April 9, 1929, filed an answer, which was further amended February 28, 1930, asking that a rule be allowed on defendant to show cause why the Pennsylvania Power Light Company, purchaser of the property and franchises of defendant company, should not be substituted as a party defendant. The court allowed this rule, to which defendant answered, and, upon consideration, the court denied the prayer of plaintiff to substitute the Pennsylvania Power Light Company as a party defendant, and abated the damage action against the Mount Pocono Light Improvement *521 Company. Plaintiff has appealed and the Pennsylvania Power Light Company has filed a brief on which appear the names of counsel formerly appearing for defendant company. The paramount question involved in the appeal is whether plaintiff's suit for damages against defendant corporation should abate because of the latter's transfer of its franchises, property and all its assets to the Pennsylvania Power Light Company.
The property of the Mount Pocono Light Improvement Company passed to the Pennsylvania Power Light Company under authority of sale conferred by section 23 of the Act of April 29, 1874, P. L. 73, as amended by section 5 of the Act of April 17, 1876, P. L. 30. The pertinent part of the amending section 5 provides: "It shall be lawful for any corporation _____ to sell, assign, dispose of and convey to any corporation created under or accepting the provisions of this act, its franchises, and all of its property, real, personal and mixed, and thereafter such corporation shall cease to exist, and the said property and franchises not inconsistent with this act, shall thereafter be vested in the corporation so purchasing as aforesaid." It was the view of the court below, and is here argued, that immediately upon completion of the sale by the Pocono Company of its property to the Pennsylvania Company, the words, "such corporation shall cease to exist," so completely terminated the existence of the former corporation that the pending trespass action must necessarily abate for want of a subsistent defendant. Considering the facts of the present case, the construction contended for is not warranted by the language contained in the quoted provision of the act.
The statute of 1874 and its amendments plainly reveal that the words "shall cease to exist" primarily refer to a cessation of carrying on the business for which the selling corporation was created. This is borne out by Com. v. The Lumber City Water Co.,
In Zimmerman v. Puro Coal Co.,
It is admitted the present plaintiff stands in the position of a creditor of defendant corporation, as she holds a claim which vested before the corporation sold its property. A person having a cause of action capable of adjustment and liquidation upon a trial, is a creditor: In re Chestnut Street Trust Co.,
Not only had plaintiff begun her action against defendant before the latter's sale of its property to the Pennsylvania Power Light Company, but defendant's attorneys had entered their appearance and defendant had filed an affidavit of defense. Although there is no doubt that the selling corporation, by reason of the sale of its property, ceased to exist in so far as its right to supply electric light in the Borough of Mount Pocono is concerned, we find nothing in the statute of 1876 *524
which forces upon the creditor-plaintiff the injustice of having her suit, which must be presumed to be based upon a legitimate claim, summarily abated. The reports contain numerous cases in which the courts have protected interests of suitors in actions analogous to the situation plaintiff here presents. In Shakman v. U.S. Credit System Co.,
Although we need not decide the point, it is proper to call attention to the fact that the pleadings indicate that the Pennsylvania Power Light Company took over the property of defendant under circumstances warranting a finding, upon evidence produced to support the allegations in the pleadings, that the transaction between the two corporations was in reality a merger, or such union of interests as, in law, caused the buying corporation to assume defendant's obligations. There is much to show that the purchase was attended by an intimacy of interest tending to render the transaction, in so far as the Pennsylvania Power Light Company's interest was concerned, a purchase cum onere. For instance, it is averred that, at the time *525 of the commission of the alleged negligent acts on the part of the Mount Pocono Light Improvement Company, it was affiliated or associated with the Pennsylvania Power Light Company to the extent that both companies were managed, operated and controlled under the same management and system. It is admitted that the common stock of both companies was owned by the same holding company, and, by defendant's own showing, thirteen of the same persons were officers or directors in both companies. It further appears that both companies operated from the same office. Plaintiff states that the business of the Mount Pocono Company was conducted by the agents, servants and employees of the Pennsylvania Power Light Company; that after the sale, the power company took over and operated the business formerly conducted by defendant; and that the sale was merely a formality giving effect to a union of the companies which had in reality occurred previous to the accident upon which the suit is based. Whatever the liability of the Pennsylvania Power Light Company may or may not prove to be, we pass that point and note that the proper course at the present state of proceedings requires plaintiff first to proceed to judgment against defendant if she can, and, having secured judgment, to levy where defendant's assets liable for the judgment may be found.
The statute of limitations pleaded by counsel for the Pennsylvania Power Light Company has no application to plaintiff's action against the present defendant. The injury occurred on October 20, 1926, and the trespass action was instituted on June 2, 1927, fully within the statutory period.
The order of the court below abating the action against the Mount Pocono Light Improvement Company is reversed and the proceedings reinstated; the order refusing plaintiff's motion to substitute the Pennsylvania Power Light Company as a party defendant *526 in the original suit is affirmed without prejudice to plaintiff, who is directed to proceed in accordance with the views expressed in this opinion.