152 Ark. 271 | Ark. | 1922
(after stating the'facts). It is true, as contended by appellant, that the corporation itself was liable for the income and excess profit taxes due by it to the United States by reason of the sale of its timber in August, 1917, and the 'Government had a lien upon the property of the corporation for the amount of said taxes. It is also true that the attempted surrender of the charter of the corporation by some of the stockholders in December, 1917, was null and void because the resolution-was 'adopted at a special meeting of which appellant had not been notified, and at which he was not present. Dierks Special School Dist. v. Van Dyke, ante p. 27.
The Government lien still obtained when appellant purchased the shares of stock of all the other shareholders and thereby dissolved the corporation. The dissolution of a corporation does not extinguish its liabilities, and through courts- of'equity creditors, including the Government, may pursue its -assets into the hands of any person who is not a bona fide purchaser. Holmes, Federal Taxes, 1922 Ed., p. 267.
See too, in Arlington Hotel Co. v. Rector, 124 Ark. 90, the court held that the debts or liabilities of a corporation existing at the time of its dissolution are not extinguished thereby, and in equity they may be -collected out of the assets of the defunct corporation in the hands of the shareholders, or any parties receiving the same except the innocent purchasers.
In recognition of this rule, appellant paid the taxes to the United States Government after he had purchased the shares of the other shareholders and had received a deed from the corporation to the land which it owned. This was all the property of the corporation left after the sale of the timber. Having paid the taxes, appellant claims that he is entitled to be reimbursed by the other shareholders for their proportionate part of the taxes. Appellant claims this right on the ground of mutual mistake in the sale from the other shareholders to him. According to the allegations of the complaint, appellant and appellees had overlooked the fact that any taxes would be due the United States on account of the sale of the timber by the corporation, and these taxes were not taken into account by the parties at the time appellant purchased the land from the other shareholders and had them to transfer their shares of stock to him. This did not amount to a mutual mistake. If it be assumed that the power of courts of equity to afford relief from the consequences of the mutual mistake of parties extends to questions of law in exceptional cases, yet its jurisdiction will bo exercised with caution and only in cases where it is clear that the mistake arose from a mutual misapprehension of facts, or of the legal operation of the instrument under consideration.
In the instant case the parties did not make any mistake about what their rights were. They simply overlooked the fact that the corporation would owe the United States certain taxes when the timber was sold, and that the Government would have a lien on the assets of the corporation for the taxes. Appellant acquired all the property of the corporation by purchase and paid the taxes in order to satisfy the lien of the United States, and, while it is unfortunate for him, yet he has no relief against the other shareholders, because he purchased their interests in the corporation. There was no mistake either of fact or law in the purchase. All the parties simply overlooked the fact that any taxes were due the Government and made no provision whatever concerning them. If the parties had entered into a contract 'in mutual mistake as to their relative and respective rights, either of them would have been entitled in equity to have it set aside. Here the appellant understood what he was buying from appellees, and they understood what they were selling him. They simply overlooked the matter of taxes to the United States. There was no mistake as to the legal effect of the contract between the parties and no mistake of fact in making it. The fact that they overlooked the taxes dne to the United States, and made no provision for their payment, does not justify either the reformation or rescission of the contract so as to impose upon appellees obligations which they never intended to assume.
Therefore the decree will be affirmed.
