Court Opinion

ID: 7369933
Source: CourtListenerOpinion
Date Created: 2022-07-28 00:09:24.11589+00
Date Added: 2024-06-11T13:38:11.328675
License: Public Domain

On Rehearing.
The burden of appellee's application for rehearing is, in effect, that appellee (plaintiff below) was entitled to recover, all other questions aside, for the reason that at the time the defendant corporation, Reo Truck Sales Service, Inc., sold the truck to A. E. Blackwell on a contract of conditional sale, and thereupon transferred said contract to the appellant (claimant below), said Reo Truck Sales Service had ceased to exist as a corporation and could, therefore, convey no title to the property or, more specifically, vest any title in the appellant by way of such transfer and assignment. Appellant, on the other hand, contends that the trial court erred in admitting evidence that said corporation was dissolved on the day preceding the transaction culminating in the transfer and assignment of the contract to appellant; this for the reason that the corporation, although it had been dissolved, remained legally capacitated to perform such a transaction, in view of the statute vesting a dissolved corporation with power to settle its affairs, disposing of its properties, for a period of five years. Code 1940, Tit. 10, § 110.
On original consideration of this case, we concluded that the real issue in controversy was the identity of the bus covered by appellee's mortgage and appellant's assigned *Page 648 
contract of conditional sale. We thought then, and are of the opinion still, that the question now posed was without influence upon the solution of the material issue on trial. If there was but one bus, if it was properly described in appellee's mortgage, if the mortgage was properly and seasonably filed for record, and nothing intervened to obviate the constructive notice to appellant as a result of its recording, then appellee was entitled to recover, irrespective of the validity vel non of the transfer and assignment made by or for the dissolved corporation. If there were in fact two busses — if appellee's mortgage covered a vehicle different from that covered by appellant's assigned contract — then in that event the appellee could in no wise have been aided or affected by the fact, if so, that the attempted sale or transfer to appellant was void.
Nevertheless, in view of the fact that the question of the effect of the dissolution of the defendant corporation may be injected into the case on a retrial, we proceed to a consideration of that question.
Under the statute a corporation may be dissolved by agreement of the stockholders to that end, and is effected by the execution of such an agreement, certified by the proper officers, and filed for record in the office of the probate judge of the county where the corporation was organized. Code 1940, Tit. 10, § 104. Apparently the defendant corporation was effectively dissolved under the provisions of this statute, on January 27, 1948, the day preceding the purported sale of the bus to its president, as an individual, and the transfer and assignment to appellant of the contract of conditional sale. But a corporation continues to exist, for certain purposes, for a period of five years after its dissolution. Among such purposes is the settling of its business and disposition of its property. Code 1940, Tit. 10, § 110. That such a corporation may, by following the procedure laid out in the statute, supra, dispose of its property, may sell an item of personal property, is too clear for argument. Such a sale per se is not "for the purpose of continuing" the corporate business. On the other hand, corporate officers are under duty to settle the dissolved corporation's affairs, included in which is the sale of the corporate property. Cohen v. Pavlik, 235 Ala. 289, 178 So. 435; Pankey v. Lippman, 187 Ala. 199, 65 So. 771, among other cases which might be cited.
Thus, we conclude that, compliance with the statute having been met, the transaction between the defendant corporation, or its alter ego, with appellant was valid. It follows that evidence with respect to dissolution of Reo Truck Sales 
Service, Inc., was erroneously admitted over claimant's objection.
The application for rehearing is overruled.
Rehearing overruled.
BROWN, LIVINGSTON, LAWSON and SIMPSON, JJ. concur.