Court Opinion

ID: 8017474
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:06:28.257832+00
Date Added: 2024-06-11T16:36:26.763841
License: Public Domain

DISSENTING OPINION.
VALLIANT, C. J.
The plaintiff, Lucinda B. Ashton, on May 21,1908, filed her bill in equity against the defendants, having for its object the dissolution of the defendant, the Merchants’ Improvement and Investment Company, a corporation existing under the laws of this State; the vacation .of its offices and directorship; the appointment of a temporary receiver to take charge of its books, property, papers and effects, collect the rents, pay off existing obligations; and to have A. H. Penfield account for his official conduct in the management of the property, and restore all moneys, property and effects of the company taken or misplaced by him as secretary and treasurer thereof; pay the rents of the office occupied by him as an officer of the company, and all other sums lost by reason of misconduct, neglect or bad management; and upon final decree a prayer was made for the distribution of the assets of the company among its stockholders, etc.
A trial was had in the circuit court of Buchanan county, which resulted in a decree in favor of plaintiffs, as hereinafter set forth, dissolving the corporation, and ordering that the appointment of the receiver be made permanent.
Just prior to the rendition of the decree, on motion duly presented, the court permitted the Ashton Investment Company to file an intervening petition in order that its right in the premises might be adjudicated at the same time, which was more or less interested in the matters and things stated in the plead*431ings. Since, however, the filing of this intervening petition did not change the general issues involved in the case, it will be unnecessary to pay any further atten- . tion to it.
After moving unsuccessfully for a new trial and in arrest of judgment, the defendants duly appealed the cause to this court.
The record is unusually long; the defendants’ abstract thereof covers about 350' pages of printed matter, and the plaintiffs’ abstract covers about fifty pages. The petition also is unusually long, covering thirteen pages of printed matter. It will be necessary, therefore, in order to bring the statement of the case within reasonable bounds that a general abridgment ' of the pleadings and evidence be made.
The bill alleged that plaintiff was the owner of forty-nine shares of the capital stock of the Merchants ’ Improvement and Investment Company, and Effie McDonald Smith was the owner of two shares, and Annie A. Penfield the owner of forty-nine shares, this being the total capital stock of the company. She further alleged that Arthur H. Penfield was employed as sec- ' retary of the defendant company. After alleging the incorporation of the Merchants’ Improvement and Investment Company, the material allegations of the petition are substantially as follows:
The corporation had ceased to exercise its rights under its charter, except maintaining and renting building owned by it.
That Thomas Ashton, husband of Lucinda B. Ash-ton, purchased forty-nine shares of the capital stock on January 6, 1902, and from that time until the date of his death, July 5, 1906, was a stockholder and director of the Merchants’ Improvement and Investment Company. That Thomas Ashton, by his last will and testament, gave Lucinda B. Ashton the stock in the Merchants’ Improvement and Investment Company for life. That Annie A. Penfield and Effie McDonald *432Smith are daughters of Lucinda B. Ashton and of Thomas Ashton, deceased.
The value of the real estate owned by Merchants’ Improvement and Investment Company was alleged to be twenty-five thousand dollars, and there is no allegation that it was indebted in any sum whatever to any person.
It is further alleged that A. IT. Penfield was interested in the Bank of Commerce, located in the Merchants’ Investment and Improvement Company’s building, and that as secretary of Merchants’ Improvement and Investment Company, and managing officer of said bank, he was enabled to and did use the funds of the Merchants’ Improvement and Investment Company to bolster up the bank and his own credit, to the injury and detriment of the Merchants’ Improvement and Investment Company.
It is alleged that A. H. Penfield, by virtue of his relations to Annie A Penfield, his wife, and Effie McDonald Smith, his sister-in-law, and by virtue of the fact that he is adviser, business agent, manager and . director of said last named defendant, is enabled to and does control their votes and directs their acts in all things pertaining to- the company wherein Lucinda B. Ashton’s interests are involved, and that the Pen-fields and Mrs. Smith are hostile to Lucinda B. Ash-ton.
It is further alleged that Lucinda B. Ashton is hot consulted in the management of the affairs of the Merchants ’ Improvement and Investment Company, and that her rights as stockholder and director are ignored, and that she has no voice in the management of ■the affairs of the company.
It is further alleged that A. PI. Penfield receives a salary of fifty dollars per month for looking after the business as secretary of the company, and that the board of directors had no authority to pay a salary under the by-laws, which is alleged to be as follows: *433“Tile officers of this company shall receive no salary for services, except such as shall be voted by the board of directors.”
It is further alleged that the directors have paid' out more money than is necessary for expenses, including the fifty dollars salary, which is alleged to be exorbitant.
It is further alleged that A. H. Penfield is occupying rooms of the company as its office and that he also carries on his personal business in said rooms, without paying anything therefor.
It is further alleged that there is a janitor employed by the company to keep the offices in the building clean and this is seriously objected to by the pleader.
It is alleged that A. H. Penfield, Annie A. Penfield and Effie McDonald Smith have combined and conspired together, with the object in view of controlling the management, using up the income and securing the profits and funds of the company for their own use, and to deprive Lucinda B. Ashton of dividends and profits from stock she is alleged to own.
It is alleged that A. H. Penfield is a person of bad reputation and that he has appropriated the funds of the company to- his own use.
It is alleged that A. H. Penfield and Annie A. Pen-field have charged off upon the books of the company $1450, long past due, that is owing the company by the Bank of Commerce, and that A. H. Penfield, as secretary and manager of the company, did not present the company’s claim to the Bank of -Commerce, and that A. H. Penfield and Annie A. Penfield were stockholders in the Bank of Commerce at the time.
It is further alleged that A. H. Penfield has caused the property of the company to be insured for a sum largely in excess of its value, and .that by arrange*434ment with, the agents he received part of the commission.
It is alleged'that A. H. Penfield has destroyed the cash hook of the company, thereby rendering it impossible to secure a correct accounting of the cash receipts and disbursements of the company.
It is further alleged that A. II. Penfield has caused, to be eliminated with acid, entries on the books of the company, for the purpose of juggling the accounts, and thereby rendering it impossible to ascertain the gross earnings of the company. That A. H. P’enfield has denied Lucinda B. Ashton the privilege of examining the books, and that she was compelled to apply to the court to compel Penfield to permit her to examine the books. That the board of directors purchased stock in the Citizens Bank, a corporation, organized for carrying on a banking business, and that the purchase was unauthorized. That A. EL Penfield, in violation of the by-laws, transferred his stock to Effie McDonald Smith, with the aid and assistance of Mrs. Annie A. Penfield, for the reason that Penfield could depend upon Mrs. Smith doing his bidding. That Annie A. Penfield and Effie McDonald Smith were the* tools of A. H. Penfield, and that Penfield had made his boast that Lucinda B. Ashton should not have any dividends from the company.
It is further alleged that Annie A. Penfield, A. H. Penfield and Effie McDonald Smith were not suitable persons to handle money or control their own property, and that the corporation under its present management can no longer- serve any useful or lawful purpose.
It is further alleged that Annie A. Penfield, Effie McDonald Smith and A. II. Penfield have entered into a conspiracy to defraud Lucinda B. Ashton of her property right, and that the acts of Annie A. Penfield and Effie McDonald Smith are the acts of A. II. Pen-*435field. It is further alleged that Lucinda B. Ashton has no adequate remedy at law, although there is no allegation that Annie A. Penfield and Effie McDonald Smith are not solvent.
There are other allegations in the petition which are wholly irrelevant to the questions here presented for determination, referring solely to controversies between A. H. Penfield, Lucinda B. Ashton, Ashton InVestment Company and Bank of Commerce, in which Merchants’ Improvement and Investment Company, Annie A. Penfield and Effie McDonald Smith have no interest, knowledge or concern.
In due time defendants filed their separate motions, asking the court to set aside and revoke the order appointing a temporary receiver. It appears that the court refused to pass upon these motions until the final hearing of the cause was reached.
Thereafter the defendant company demurred to the petition, which was overruled by the court.
Defendants then moved the court to strike out certain portions of the petition, which motions were by the court overruled. .
These motions and demurrers are too lengthy to be set out here; they cover some fifteen pages.
The defendants then filed separate answers, each of which consisted of a general denial and a plea “that if plaintiffs have any cause of action same is at law which will afford plaintiffs full and adequate relief, and further there is no equity stated in the bill. ’ ’
The plaintiffs introduced evidence tending to prove the allegations of the bill; and that introduced by defendants tended to contradict those charges and to support the charges contained in the answer.
The decree of the court (formal parts omitted) • is as follows:
“Afterwards, and on November 21, 1908, same being a day of the September term of court, order and decree was entered as follows, to-wit:
*436“The court having heretofore taken up for consideration the motions of the Merchants’ Improvement and Investment Company, Arthur H. Penfield, Annie A. Penfield, Effie McDonald Smith, to revoke and set' aside the order heretofore made in this cause appointing a receiver herein, and also this cause having heretofore come on for final hearing, that is to say, this court having at the same time taken up for disposition both the aforesaid motions and the trial of this cause upon its merits, and- the court having heretofore considered said motions and the pleadings herein, and having heard the evidence adduced by the respective parties, and having taken the cause and all of said matter under advisement, until this time, and now on this day this cause coming on for further hearing the plaintiff appears in person and by Fulkerson, Graham and Smith, and C. P. Strop, her attorneys, and the defendants appear in person and by W. D. Rusk and C. C. Crow, their attorneys, thereupon the Ashton Investment Company, a corporation, ask this court for leave of court to file, an intervening petition herein, which leave is by the court granted, and said Ashton Investment Company at this time files said intervening petition. Thereupon this court, upon full consideration of all of the pleadings herein and all of the evidence adduced herein, finds that the allegations of plaintiff’s petition are true and that plaintiff is entitled to judgment dissolving the Merchants’ Improvement and Investment Company, a corporation, one of. the defendants named in plaintiff’s petition, and that plaintiff is entitled to a judgment winding up the affairs of said corporation, and that the orders of this court heretofore named herein appointing a temporary receiver in this cause be made permanent for the purpose of winding up the affairs of said Merchants’ Improvement and. Investment Company and distributing its assets as provided by law.
*437“It is therefore ordered, adjudged and decreed by the court that the motions of the Merchants’ Improvement and Investment Company and Arthur H. Penfield, Annie A. Penfield, Effie McDonald Smith, to revoke and set aside the order heretofore made in this cause appointing a receiver he and the same is hereby overruled, and it i.s further ordered and adjudged and decreed by the court that the Merchants ’ Improvement and Investment Company, a corporation, be dissolved, as prayed, and that Elliott Spalding, Esquire, heretofore appointed as temporary receiver herein, be and he is hereby appointed permanent receiver of said corporation, with the usual powers and duties enjoyed and exercised by receivers in accordance' with the practice of the court and the statutes in such cases provided. It is further ordered, adjudged and decreed that, the defendants and each of them be and they are hereby forever restrained and enjoined from collecting debts or receiving payments thereon belonging to said Merchants’ Improvement and Investment Company or from paying out or transferring or in any manner interfering with or delivering to any person excepting the receiver heretofore appointed any of the" moneys, property or effects of the said Merchants’ Improvement and Investment Company, and said defendants are enjoined and restrained from interfering in any manner with the affairs or management of said company.
“It is further ordered and adjudged that said receiver take possession of and sequester the property, real and personal, of said corporation, and to which said corporation may be entitled, and that said receiver take a true account of the assets and property of said corporation and make his report therein to the next term of this court, and now here this court retains jurisdiction of this cause for the purpose of making such further orders herein as may be necessary to carry into effect and execute the above and foregoing *438judgments and decrees, and for the purpose of making such orders as may be necessary relative to the winding up of the business of said corporation and the payment of its debts and the distribution of its assets and as to the conduct of the receivership herein.”
I. While the decree states that the court found all the issues for the plaintiffs, however by reading the entire decree it will be seen that the court did not adjudicate any issue presented by the pleadings, save and except a dissolution of the defendant corporation, and the order appointing the temporary receiver permanent.’ There is, therefore, no question but those two here presented for review.
Since the trial of this cause in the circuit court, the identical questions here presented have been determinated by this Court in Banc in the case of State ex rel. v. Foster, 225 Mo. 171. That case is so analogous to this, we feel justified in quoting somewhat extensively therefrom.
Among other things, the bill in that case charged that:
“(3). Plaintiffs further aver that said John W. Donnell has been guilty of reckless, fraudulent and extravagant mismanagement in his conduct of the business of -said company in that he has paid .an agent, named Scritzmeier, whom he employed to devise and operate the aforesaid scheme of contracts heretofore referred to, the sum of four hundred dollars out of every one thousand dollars deposited with it or paid to the Donnell Manufacturing Company under said scheme, and the aggregate, of the sums so paid to said agent is more than forty thousand dollars. Plaintiffs further say that the services rendered by said agent Scritzmeier in procuring said contracts did not extend over or cover a period of more than .four months, and the said services are well known by the said John W. Donnell not to be worth more than one hundred *439or two hundred dollars per month at the time he paid the said sum of forty thousand dollars therefor. Plaintiffs further aver that said John W. Donnell also employed other agents to assist the said Scritzmeier in operating said scheme and in inducing.the people to make such contracts and such deposits, paying them the sum of $6250' for a few months’ services, although said John "W. Donnell, at the time he made such payments, well knew that the services so rendered were not worth, the sum of $6250, and knew that they were not in any event worth more than the sum of one hundred dollars per month for each of the agents so employed during the time they were actually engaged in working for said corporation, or a total sum of $600.
“(4). Plaintiffs further aver that said John W. Donnell, by and through his domination and control of the officers of the defendant corporation, has paid to himself, as a pretended salary for his services as the president and general manager thereof, the sum of sixtv-nine thousand dollars in excess of the amount of salary which he was lawfully authorized to draw from or be paid by said corporation.
“ (5). Plaintiffs further aver that as soon as the deposits above referred to, amounting to more than one hundred thousand dollars, had been made with the defendant corporation by the parties induced to sign said contracts, the defendant, John W. Donnell, paid to himself the sum of $20,050 out of the money so received as a pretended payment of • an indebtedness from said corporation to himself; which pretended indebtedness appears on the books of said Donnell Manufacturing Company, but plaintiffs charge and aver upon information and belief that the said pretended indebtedness was wholly fictitious and false, and that said John W. Donnell had no right to malee such payment to himself out of said funds, or any other funds or moneys belonging to the Donnell Manufacturing Company.
*440■“(6). Plaintiffs further aver that at the last annual stockholders’ meeting of said corporation, which has ever been called by its officers, and which was held in March, 1907, James A. Watkins appeared and protested aganst the adoption of the aforesaid scheme of making contracts and asking for one thousand dollars and two thousand dollar deposits, which said plan and scheme was then being devised by said John W. Donnell; and plaintiffs aver that said protest of James A. Watkins was not heeded by the said Donnell and the other directors of the said corporation. Plaintiffs further aver that neither James A. Watkins nor any other of the minority stockholders of said corporation had then, or had for a long time prior thereto, been given any information about the business or condition of said company, and had been denied any voice in the management of its business.
“(7). Plaintiffs further aver that said John W. Donnell has caused to be made upon the books of the Donnell Manufacturing Company, certain entries and items indicating that said corporation is still indebted to him in a large amount, but plaintiffs aver, upon information and belief, that said pretended indebtedness is wholly fictitious and that said corporation is not indebted to said John W. D'onnell in any sum or amount whatsoever, but that on the contrary he is largely indebted to said corporation.
“(8). Plaintiffs further aver that by reason of said misconduct and mismanagement of the business and affairs of said company, its credit has been destroyed and its business has been irreparably injured, and its reputation for honesty and fair dealing has been wholly lost, and that it will be impossible hereafter to carry on its business with profit or success with or without the use of the mails; that the capital stock of said company has become largely impaired, even if said company is not now insolvent, and that for the past year, and several years prior thereto, its *441business has been conducted at a large annual loss, and that unless a receiver is appointed to take charge of the business and affairs of said corporation to wind up its affairs and distribute its assets among the creditors and stockholders, its remaining assets will be dissipated, diverted, wasted by said John W. Donnell and his co-directors, and the stock of plaintiffs and other stockholders in said corporation will be rendered worthless.
“Wherefore, the premises considered, plaintiffs pray the court to appoint a receiver for the purpose of taking charge of all the assets and business of the said Donnell Manufacturing Company and of liquidating the same; and they pray that the said John W. Donnell and his co-directors be enjoined from interfering with the management of said business by said receiver, and that the court, by its decree, declare said John W. Donnell and his co-directors, and each of them, ineligible, by reason of their conduct aforesaid, to hereafter hold the office of director in said corporation; and that said receiver, after paying the debts and obligations of said corporation, be directed to divide the amount thereafter remaining among its stockholders pro rata, and that the defendant corporation be dissolved and its existence as'a corporate organization terminated.”
It is also charged that on account of the fraudulent conduct of the defendants, the Postmaster-Greneral had issued a fraud order denying them the use of the United States mails, etc.
There was an abundance of evidence introduced tending to prove those charges; and the trial court rendered judgment against the unfaithful officers of the corporation for the sums of money which they had misappropriated, appointed a receiver and entered a decree dissolving the corporation, etc.
In discussing those questions, Judge Fox, in speaking for the court, said:
*442“Directing our attention to the first inquiry, that is, did the chancellor in the case of Watkins et al. v. Donnell Manufacturing Company et al., have the power to enter the decree as indicated, dissolving the Donnell Manufacturing Company, a corporation; or, to put the inquiry in another form, by such decree upon that subject did the chancellor exceed his power in making the decree as herein pointed out?
“The most satisfactory answer to that inquiry can be furnished by pointing- to the rules announced upon that subject by the text-writers, as well as to the adjudicated cases treating of that question.
“In the Cyclopedia of Law and Procedure, vol. 10, p. 1305, the rule applicable to this subject is thus stated in the text: ‘In the absence of enabling statutes, courts of chancery have no jurisdiction to decree the dissolution of a corporation; nor as a general rule can such a court, during the life of the corporation, wind up its business and sequestrate its property and effects, on the application of a shareholder as such; but when a corporation dies by reason of the expiration of its charter, or becomes substantially dead by reason of the non-user of its franchises, a court of equity has jurisdiction, under principles already elaborated, to lay hold of its assets by its receiver and distribute them among its creditors.’
“A similar rule is announced by the eminent text-writer, Mr. High, on Receivers, sec. 288, p. 249, wherein he states that ‘the general jurisdiction of equity over corporate bodies does not extend to the power of dissolving the corporation, or of winding up' its affairs and sequestrating the corporate property and effects, in the absence of express statutory authority/
“Mr. Thompson, in his Commentaries on the Law of Corporations, vol. 4, in treating of this subject, is in harmony with the rule as announced by Mr. High. He says, in section 4538, that ‘in the absence of statutes enlarging its powers, the general rule is that a *443court possessed of chancery powers merely, has no jurisdiction, either at the suit of the State through its Attorney-General, or at the suit of a stockholder or other' private person, to dissolve a corporation and decree its winding up, for the misuser or non-user of its franchise, or for other causé; but that the only proceeding which can be taken to that end is a proceeding by the State, on information in the nature of a quo warranto, in a court of common law jurisdiction. The theoretical reason is that the franchises are granted by the State, and that they can only be vacated or forfeited in a proceeding by the State, which generally takes the form of a proceeding at law by information in the nature of a quo warranto.’ ■
“In Wheeler v. Pullman Iron & Steel Co., 143 Ill. 197, in treating of this question, the rule was again announced that ‘in the absence of statutory authority, courts of chancery had no jurisdiction to decree a dissolution of a corporation by declaring a forfeiture of its franchise, either at the suit of an individual or of the State. [Verplanck v. Merchants’ Ins. Co., 1 Edw. Ch. 84; Doyle v. Peerless Petroleum Co., 44 Barb. 239; Folger v. Columbia Ins. Co., 99 Mass. 274; Attorney-General v. Bank of Niagara, 1 Hopk. 354; Denike v. Cement Co., 80 N. Y. 605.] The mode of enforcing a forefeiture of the charter at common law was by scire facias or quo warranto in courts of law only, and at the suit, only, of the sovereign.’ It will be observed in that case that the court pointed out that there was a statute in that State conferring upon courts of equity full power, on good cause shown, to dissolve or close up the business of any corporation, and to appoint a receiver to take charge of the assets.
“Similar statutes have been enacted in other States, but, so far as this State is concerned, we know of no statute which undertakes to authorize a court of equity to dissolve a corporation; hence, in the absence *444of such a statute the rule as herein indicated as to the powers of a court of equity, would be applicable.
“In Life Indemnity Assn. v. Hunt, 127 Ill. 257, it was again ruled that in the absence of statutory provisions courts of equity have no jurisdiction to decree the dissolution of a corporation by forfeiture of-its franchises, either at the suit of an individual, or at the suit of the State; citing in support of such rule Attorney-General v. Utica Ins. Co., 2 Johns Ch. 370; Slee v. Bloom, 5 id. 366; State v. Merchants’ Ins. Co., 8 Humph. 234; Attorney-General v. Bank of Niagara, 1 Hopkins’ Ch. 334; Doremus v. Dutch Reformed Church, 3 N. J. Eq. 332; Doyle v. Peerless Petroleum Co., 1 Edw. Ch. 83; Strong v. McCagg, 55 Wis. 624; 2 Morawetz on Corporations, sec. 1040. It was also pointed out in that case that in all cases holding that courts of equity have no power in the absence of a statute to decree a dissolution of a corporation, it is uniformly admitted, whenever the question has arisen, that jurisdiction to decree the dissolution of a corporation may be conferred upon courts of equity by statute.
“In Neall v. Hill, 16 Cal. 145, treating of this proposition, the law applicable to this subject was stated in this language:. £ It is well setled that a court of equity, as such, has no jurisdiction over corporate bodies for the purpose of . . . winding up their concerns. We do not find that any such power has ever been exercised, in the absence of a statute conferring the jurisdiction.’
“In the French Bank case, 53 Cal. l. c. 551, it was said: ‘ Of course, it is not to be doubted that the trustees of a corporation, the persons who constitute its directors, and from time to time exercise the corporate authority in the management of its affairs, are subject, to the control of courts of equity, or, as observed by Chancellor Kent, “that the persons who from time to time exercise the corporate powers, may, in their char*445acter of trustees, be accountable to this court (the court of chancery) for a fraudulent breach of trust; and,” he adds, “to this plain -and ordinary head of equity the jurisdiction of this court over corporations ought to be confined.” [Attorney-General v. Utica Ins. Co., 2 Johns. Ch. 388.] And in the exercise of these admitted equity powers of the court, referable to the well-known grounds upon which its jurisdiction ordinarily proceeds, embracing the cognizances of fraud, accident, trust, and the like, the rights of natural persons injured or put to hazard through corporate proceedings unauthorized by law, will find ample protection and redress.’
“In Denike v. Cement Lime Co., 80 N. Y. 599, the plaintiffs who were stockholders in such Lime Company, sought a dissolution of the corporation and the appointment of a receiver to take charge of its assets. Earl, J., speaking for the Court of Appeals of New York, in treating of the proposition as to whether the plaintiffs, as stockholders in the case, could maintain the action for the dissolution of the corporation and the appointment of a receiver, announced the conclusions of that court in this language: ‘A corporation owes its life to the sovereign power, and under what circumstances it shall forfeit or be deprived of that life, depends upon the same power. A corporation may be dissolved by forfeiture through abuse or neglect of its franchises; but such forfeiture, unless there be special provisions by statute, can only be enforced by the sovereign in some proceeding instituted in its behalf. Here there is no allegation in the complaint that this corporation had forfeited its charter, or that it had in any way become dissolved; but a portion of the relief prayed is that it be dissolved. All the stockholders uniting might undoubtedly surrender the' franchise of a corporation and work its dissolution. But can a portion of them do this, in the absence of statutory authority? There is no statute in this State which au*446thorizes a portion of the stockholders to maintain an action to dissolve a manufacturing corporation, and I know of no decision holding that they can. The statutes (2 R. S. 467) provide for the voluntary dissolution of corporations, hut that must he upon application to a proper court “of the'directors, trustees or other officers having the management of the concerns ’ ’ of the corporation, but not upon the application of a portion of the stockholders.’ In further discussing the question in that case, the learned judge remarked: ‘ There is abundance of authority for holding that there is no general power in a court of equity for sustaining such an action as this prosecuted by a portion of the stockholders,’ citing Verplanck v. Mercantile Ins. Co., 1 Edw. Ch. 84; Galwey v. Sugar Refining Co., 13 Abb. Pr. 211, s. c., 36 Barb. 256; Ramsey v. Erie Railway Co., 7 Abb. Pr. (N. S.) 156, 181; Howe v. Deuel, 43 Barb. 505; Latimer v. Eddy, 46 Id. 61; Belmont v. Erie Railway Co., 52 Id. 637, 665; Gilman v. Green Point Sugar Co., 4 Lans. 483; Wilmersdoerffer v. Lake Mahopac Imp. Co., 18 Hun. 387.
“In Thompson v. Greeley, 107 Mo. 577, while the proposition of the power of a court of equity to dissolve a corporation was not in judgment before the court, yet in treating of the question of the appointment of receivers and their duties, it is clear that the court fully recognized the general rule, as heretofore pointed out, applicable to that subject; and in meeting the contention in that case that there was no authority to appoint a receiver to wind up the affairs of a corporation, it'was pointed out that ‘the temporary control of an insolvent corporation by a court and a receiver does not operate as a dissolution and forfeiture of its franchises. After the debts have been paid, and the necessary capital' restored, this corporation could resume business under its original charter. ’
“In Decker v. Gardner, 124 N. Y. 334, in discuss- ’ ing this subject it was again pointed out that ‘the *447power to declare a forfeiture of corporate franchises was originally in England vested in courts of law, and was exercised in a proceeding brought by the Attorney-General in the name of the sovereign. The court of chancery never assumed jurisdiction in such cases until it- was conferred by act of Parliament. It declined until the power was conferred by statute, to . . . dissolve corporate bodies.’ And it was also said in that case, referring to the judicial history of the courts, that ‘the courts of this country followed the English system,’ citing numerous eases in support of such statement. Following this it was indicated by that case that-the jurisdiction in courts of equity to dissolve corporations is now a subject of statutory regulation in a number of the states.
“With the exception of Miner v. Ice Co., 93 Mich. 97, the rule announced by the text-writers and the adjudications of the appellate courts of the various states, has been strictly adhered to. The Michigan case, upon the facts disclosed by the record, held that the relief prayed for should be granted even though the decree had to go to the extent of dissolving the corporation; however, it was with commendable frankness conceded that ‘the general rule undoubtedly is that courts of equity have no power to wind up a corporation, in the absence of statutory authority.’
“Learned counsel for respondents upon this question direct our attention to the cases of Cantwell v. Columbia Lead Co., 199 Mo. l. c. 36-43; State ex rel. v. Bank, 197 Mo. l. c. 593; State ex rel. v. Scarritt, 128 Mo. l. c., 339. We have given those cases a very careful examination, and with the highest respect for the views entertained by learned counsel we are unable to assent to the insistence that those cases furnish any support to the contention that a court of . equity has -any power to dissolve a corporation.
“In Cantwell v. Columbia Lead Co., while it is true the petition for the appointment of a receiver did pray *448for .the dissolution of the corporation, it will be observed that case reached this court by appeal from an order refusing to revoke the appointment of a receiver and no conclusion was announced in the case, except that the court had jurisdiction to appoint a receiver. The proposition' of the power of a court of equity to dissolve a corporation was not in judgment before the trial court in the Cantwell Case.
“In State ex rel. v. Scarritt the proposition now under consideration was not only not involved, but was not discussed. That proceeding sought a writ of prohibition, and in treating of it this court announced the rules of law applicable to the issuance of writs of that character- — on the one hand if the trial court had no jurisdiction or was about to do acts in excess of its power and jurisdiction, that the writ would go. On the other hand, if the court had jurisdiction of the subject-matter, then it was not a question of whether -or not the petition in the proceeding to which the writ of prohibition was to apply stated a good cause of action; as to that question the court had a right to consider and rule upon the petition. In other words, it was ruled in that case that where jurisdiction over the parties and the subject of the cause is acquired, any error of the trial court in ruling on the sufficiency of the pleading forming the basis of the suit cannot be corrected by resort to a writ of prohibition. It was held in that case, and rightfully so, that the court had full power to do the act which it was invoked to do, namely, appoint a receiver of the assets of the corporation, and to determine in the first place whether the facts warranted that action of the court. Manifestly, that case has no application to the proposition now under consideration as to the power of a court of equity, in, the absence of any statute conferring such power, to dissolve a corporation.
“State ex rel. v. Bank, supra, to which our attention has been directed, does not in any way undertake *449to determine the question we are now considering. It does discuss the question of receivership, and concedes the holding that a receivership does not dissolve a corporation, then proceeds to point out the; usual' re: suit flowing from the appointment of a receiver, 'ás‘ a reason why there should be extreme caution in thé/fit'sí instance of appointing even a receiver. It is clear' that the case falls far short of furnishing any support ;to the insistence that a court of equity has power, in the absence of statutory authority, to dissolve a corporation.
“We see no necessity for further discussing this proposition. If the rule announced by the eminent text-writers, to which we have made reference, and .the uniform holdings of practically all the courts that have treated of the subject, that the rule announced by the text-writers is sound and should be adhered to, are to be longer followed, then we see no escape from the conclusion that the chancellor in the case of Watkins et al. v. Donnell Manufacturing Company et al. exceeded his power in rendering a decree dissolving the Donnell Manufacturing Company, a corporation, and this court upon the application presented, notwithstanding the decree has been entered, may prohibit the further exercise of any unauthorized jurisdiction in attempting to enforce such decree.”
That case was carefully considered by the Court in Banc, and after a careful reconsideration of it, wb are fully satisfied with the law as there announced and the conclusions therein reached. There is nothing further that could be said upon the subject.
That case is controlling in the casé at bar; and we are, therefore, of the opinion that the judgment should be reversed and the cause remanded, with directions to the circuit court to set aside its decree and dismiss plaintiffs’ bill.
Woodson, J., concurs in these views.