116 Ark. 74 | Ark. | 1914
This is an action at law instituted by the Attorney General against the Arkansas Cotton Oil Company, a domestic corporation, to recover penalties for alleged violation of the anti-trust statutes. During the pendency of the action in the circuit court of Pulaski County, the defendant conveyed all of its assets to another corporation for a nominal consideration, and by a resolution adopted by a majority of the stockholders, filed in the office of the Secretary of State, surrendered its charter. Thereupon a motion was filed in ■this case, by one who had been a stockholder of the dissolved corporation and-the vice president and secretary thereof, to abate the action on the ground that since the corporation had dissolved, an action against it could no longer be maintained. The court sustained the motion and the Attorney General appealed to this court.
There is a statute concerning the voluntary dissolution of corporations, which reads as follows:
“Sec. 957. Any corporation may surrender its charter by resolution adopted by the majority in value of the holders of the stock thereof and a certified copy of such resolution filed in the office of the county clerk of the county in which such corporation is organized, shall have effect to extinguish such corporation.
“Sec. 958. When any corporation has surrendered its charter, the chancery court shall have jurisdiction to pay its debts and to distribute its assets among the stockholders according to their several interests.” Kirby’s Digest, § § 957-958.
It is insisted that the suit can not be abated as against the State, and for ground of that contention it is said that the State would be without a remedy. But we inquire why can not the action be abated, if there is nothing in the statute which authorizes its continuance? The legislative will is supreme and the unqualified right of dissolution is declared in the statute. The statute does, as before stated, contain a provision for the payment of debts and the distribution of assets, but this does not, for obvious reasons, apply to the recovery of a penalty. The distinction between a penalty and a debt is pointed out by the Supreme Court of the United States in the case of Huntington v. Attrill, 146 U. S. 657. Speaking of penal statutes, the court said “Strictly and primarily, they denote punishment, whether corporal or pecuniary, imposed and enforced by the State, for a crime or offense against its laws.”
The State, to sustain its contention, relies upon the case of Shayne v. Evening Post Publishing Co., 168 N. Y. 70, an opinion of the New York Court of Appeals rendered by Judge Parker. That was an action for libel against a domestic corporation, and, the charter of the corporation having expired by limitation during the pendency of the action, there was a motion to'revive or continue the action in the name of the trustees, the motion being founded on a statute of that State which provided that upon the dissolution of any corporation the directors should be the trustees of the creditors, stockholders or members, with full power to settle the affairs of the corporation, collect and pay outstanding debts and distribute surplus proceeds. The court held that the action for libel came within the terms of the statute and that the cause should be revived against the former directors of the defunct corporation as trustees. There is much in the opinion in that case which seems to be at variance with the current of American authority; but whether it should be followed in a ease involving the right to revive an action against a corporation for liability other than a penalty, we need not consider. It has much persuasive force but it is not an authority on the question now before us. Whether that court was right or wrong in deciding that an action for libel fell within the terms of the statute, that question is not pertinent to the issue now bef ore us. We must look for a solution of this question to the statutes of our own State, which provide for the payment of debts and distribution of assets of a dissolved corporation, but not for the payment of penalties.
A decision of one of the Texas courts of civil appeals is precisely in point. Mason v. Adoue, 30 Texas Civil Appeals Reports 276, 70 S. W. 347. That was an action, the same as .this, to collect penalties for alleged violations of the anti-trust laws of that State; and during the pendency of the action the defendant corporation was dissolved by the judgment of another court, and it was held that this operated as an abatement of the action. The Supreme Court of that State denied a petition for a writ of error.
We are of the opinion that that is the correct solution here, and that the circuit court was correct in entering an order abating the action.
It is urged that the effect of this holding is to thwart the efforts of the State to enforce the anti-trust laws, giving corporations the privilege of defeating the State’s right of action by voluntary dissolution. But the answer to this is that the remedy lies with the Legislature. It is entirely within the power of the lawmakers to declare that a dissolution shall not abate an action to enforce the anti-trust laws; and that notwithstanding such dissolution, the accrued penalties shall be enforced against the assets of the corporation. Until that remedy is provided by the lawmakers themselves, none can be molded by the courts, in the face of the statutes now in existence, which expressly and unqualifiedly give the right of dissolution without any provision, after such dissolution, for the enforcement of penalties.
Judgment affirmed.