Court Opinion

ID: 9826161
Source: CourtListenerOpinion
Date Created: 2023-09-01 15:26:54.639834+00
Date Added: 2024-06-11T07:41:53.833165
License: Public Domain

Mr. Justice Bonham :
I concur in the main opinion in this case prepared by Mr. Justice Carter. It occurs to me, however, that an issue made by certain exceptions and the argument of counsel for appellant may well be more especially noticed.
The appellant contends that, inasmuch as the presiding Judge charged the jury that plaintiff, Waccamaw Grocery Company, was a corporation, and the’ evidence showed that *81N. P. Jenerette was trading and doing business under the name and style of Waccamaw Grocery Company, it was error so to charge.
By Exception 6 the Court, it is alleged as error, charged the jury that it was necessary for the defendant—appellant here—to have an absolute ownership of the property in order to have the right to take it, without liability, and thereby excluded the question of joint ownership, the question'of both'parties being officers of the corporation, and excluded the further question of defendant’s right of possession by reason of the lien he held thereon.
Counsel for appellant argue that there was no legal transfer of the capital stock of the corporation held by him; that he had an equitable right to repossess himself of the assets of the corporation by reason of the fáct that, as the majority stockholder, he had the right to the possession, and that he had that right by reason of a lien thereon. Pie argues that, inasmuch as the Court charged on the question of the corporate capacity of the company, he should have charged further upon the questions above stated, especially as defendant, a layman unversed in the law, was without counsel in the trial of the case.
Presumably, the first allegation of error set out above, which is stated in Exception 11, is predicated upon the theory that the charter of the corporation had been forfeited when Jenerette bought the stock of Dawsey and became the sole stockholder of the corporation. And, presumably, this position is based upon the ground that Section 7726 of the Civil Code of 1932 requires that, in order to obtain a charter of a business corporation, there shall be two or more corporators, and, since only one is now in the corporation, the charter has been forfeited.
Section 7732, Civil Code (1932), provides that: “No irregularity in complying with the provisions of Sections 7726 to 7730, inclusive, and Sections 7732 to 7756, inclusive, shall be held to vitiate the incorporation until a direct *82proceeding to set aside and annul the charter be instituted by the proper authorities of the State; and all acts done and contracts entered into shall have the same force and effect as if no irregularity had existed.”
And this provision relates to operations of the corporation subsequent to, as well as those precedent to, the granting of the charter of incorporation.
The only provision in the Civil Code for the ipso facto forfeiture of a charter is for the failure to pay taxes". See Section 7704, Code 1932. There is ample provision for the forfeiture of a charter and dissolution of the corporation by proper legal process, upon good cause.
“The necessity of judicial proceedings to effect a dissolution in law depends usually upon construction of particular statutes, the rule being that unless there are some statutory provisions clearly requiring it, the breach of a condition subsequent does not operate as an ipso facto dissolution, but simply affords ground upon which the State may maintain judicial proceedings therefor; and that the corporation continues to exist, even after initial steps taken to forfeit its charter, or proceedings recommended for its dissolution, until the sovereignty which created it shall, by proper proceedings in a proper Court procure a final adjudication of forfeiture and dissolution.” 14 A. C. J., § 3683.
All charters granted under the provisions of our statutes governing this class of charters are perpetual, unless limited by the ternas of the petition. Section 7743, Civil Code (1932).
“The original charter duly certified is the highest evidence of the incorporation.” Sumter Tobacco Warehouse Co. v. Phoenix Assur. Co., 76 S. C., 76, 56 S. E., 654, 656, 10 L. R. A. (N. S.), 736, 121 Am. St. Rep., 941, 11 Ann. Cas., 780.
In the present case the original charter was put in evidence. There is an utter absence of proof that it has been amended or the corporation dissolved.
*83The Court committed no error when it charged that Waccamaw Grocery Company, the plaintiff named in the complaint, was the plaintiff in the action.
The second allegéd error set out hereinabove, and embodied in the sixth exception, likewise relates to the charge that plaintiff is the corporation; that defendant must have absolute ownership to justify his taking possession of the assets, the alleged errors being that this charge excluded the question of joint ownership by plaintiff and defendant, and the question of both of them being officers of the corporation, and the question of defendant’s right of possession by reason of the lien which he held on the physical assets of the company.
The argument in support of these contentions proceeds upon the hypothesis that there was no legal transfer of the defendant’s capital stock to plaintiff; hence defendant had an equitable ownership of it which entitled him to take possession of the assets of the company; that, as the majority stockholder, he had the right to direct and control and possess the assets of the corporation; that, by the terms of the sale of the capital stock of defendant to plaintiff, defendant had a lien on the physical stock of goods and the consequent right to seize them.
Section 7746, Civil Code (1932), provides that: “No transfers of stock shall be valid except as between the parties thereto until the same shall have been regularly entered upon the books of the corporation.”
It is a necessary deduction from the italicized words in the above quotation that any valid transfer of corporate stock, if made upon a good consideration, is valid as between the parties. In this case defendant admits that he sold his capital stock in the plaintiff corporation to N. P. Jenerette for a stated sum, that he accepted a note in payment thereof in which the purchaser, Jenerette, pledged his interest in the corporation as collateral security for the debt, and authorized Dawsey, if the debt is not paid *84at maturity, to sell the security in payment. He admits that he received several payments on this note, he admits that it was not due when he broke and entered the storeroom occupied by plaintiff and possessed himself of the physical assets of the corporation, which he proceeded to dispose of.
In these circumstances Dawsey had no right to take possession of the assets of the company vi et armis. If plaintiff was dissipating the assets, defendant had ample protection by proper legal proceedings. His action in taking possession of the assets in the manner pursued by him was high-handed to a degree. There was no error as alleged.
I concur in the conclusion of the main opinion that the judgment of the lower Court be affirmed.
Mr. Chiee Justice Brease and Mr. Justice Stabler and Mr. Acting Associate Justice W. C. Cothran concur.