288 Mass. 111 | Mass. | 1934
This suit in equity is brought by the plaintiff, alleging that he is trustee in bankruptcy of The Eastern Publishing Company, Inc., to set aside as fraudulent and unauthorized certain mortgages and conveyances by it to the defendant, who was a director of that corporation. The defendant filed a plea in bar of this tenor: “That this plaintiff is not entitled to prosecute this action against this defendant, because the order of the United States District bankruptcy court purporting to appoint him trustee in bankruptcy of the Eastern Publishing Co. is a nullity, since said court did not have jurisdiction to adjudicate said Eastern Publishing Co. a bankrupt.” This plea was submitted for decision on the following facts: The Eastern Publishing
It is assumed for the purposes of this decision that want of jurisdiction by the bankruptcy court can be raised in this suit. Hersey v. Hersey, 271 Mass. 545, 553. Old Dominion Copper Mining & Smelting Co. v. Bigelow, 203 Mass. 159, 206-210. S. C. sub nomine Bigelow v. Old Dominion Copper Mining & Smelting Co. 225 U. S. 111, 134-135. In re Goodfellow, 1 Lowell, 510. In re Garneau, 127 Fed. Rep. 677. Stuart v. Aumiller, 37 Iowa, 102, 104, 105. The proper way to raise the issue of legal incapacity of the plaintiff to sue is a plea in bar. Whiton v. Balch, 203 Mass. 576, 578-579. White v. E. T. Slattery Co. 236 Mass. 28, 31.
The right of the plaintiff to bring this suit depends upon the question whether the United States District Court of Massachusetts had jurisdiction to appoint him as trustee upon the voluntary petition in bankruptcy of the corporation. The corporation was dissolved by St. 1932, c. 139, operative on March 31, 1932, by § 1 of which it was provided in substance that the dissolution should be subject to the provisions of G. L. (Ter. Ed.) c. 155, §§ 51, 52, 56. By § 51 of the latter chapter it is provided that a corporation thus dissolved “shall nevertheless be continued as a body corporate for three years after the time when it would have been so dissolved for the purpose of prosecuting and defending suits by
One proper purpose and suitable method of closing the affairs of a corporation might be proceedings in bankruptcy. The word “suit” in § 51 must be interpreted in a broad sense, in view of the purpose intended to be accomplished by the statute. As was said in Worcester Color Co. v. Henry Wood’s Sons Co. 209 Mass. 105, 110, with reference to another provision touching corporations, “Suit is used in this statute as a comprehensive word 'To apply to any proceeding ... by which an individual pursues that remedy in a court of justice, which the law affords’ and includes an action at law.” Willard v. Kimball, 277 Mass. 350, 357. See Commonwealth v. Gallo, 275 Mass. 320, 335; Matter of Keenan, 287 Mass. 577, 581-583. The pertinent sections of our statutes and the decisions rendered concerning them contain no restrictions as to the methods to be followed, nor the courts whose jurisdiction may be invoked by corporations conditionally dissolved in gradually settling and closing their affairs. There is no exclusion of resort to the bankruptcy courts established by the United States. As used in § 51 and in order to effectuate the legislative intent disclosed by its main provisions, the word “suit” embraces a voluntary petition in bankruptcy. A chief purpose of the bankruptcy act is to enable the affairs of a bankrupt to be settled and his property distributed among those entitled to receive it.
There is nothing contrary to this result in Oklahoma Natural Gas Co. v. Oklahoma, 273 U. S. 257, 259, where there was no provision continuing a qualified existence of the corporation for the purpose of suing and being sued
It follows that there was error in sustaining the plea in bar and in dismissing the bill. The plea should have been adjudged insufficient and the defendant permitted to answer to the merits.
Final decree reversed.
Plea adjudged insufficient.