Court Opinion

ID: 6873780
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:04:49.545157+00
Date Added: 2024-06-11T16:05:27.330009
License: Public Domain

On Petition for Rehearing.
PER CURIAM.
Three grounds are argued on the petition for rehearing. There is nothing in the first two grounds that is not discussed in the opinion.
The third ground is that the language of section 7069, Alabama Code of 1928, properly construed, shows that the expiration of the charter by limitation of itself does not work a forfeiture, but that there must be expiration accompanied by a dissolution proceeding. The language of the statute is: “Corporations whose charters expire by limitation and which are dissolved by forfeiture or by any other cause, except by judicial decree,” etc.
Counsel insist that the italicized word “and” sustains the interpretation contended for by them. We have given the point careful consideration, but we are unable to follow counsel's view in this respect.
The Constitution of Alabama specifically limits the life oí a bank to twenty years from the time of organization and requires it then to close up its business and to settle its affairs and liabilities. Sections 6383 and 6384 of the Alabama Code of 1928 authorize extension for an additional twenty years on application at any time before the expiration of the original term, and provide a method to this end. Section 7069, applying general*550ly to corporations, contains the language which it is now said requires something more than the time limitation of the charter to put an end to the bank’s existence. As section 7069 now appears, it is a consolidation of four sections of the Alabama Code of 1896, sections 1298. 1299, 1300, and 1301. These sections in turn had been brought down in successive codifications, at least from 1852. The original provision, Code 1852, § 1489, was: “All such corporations, whose charters expire by their own limitation, or are annulled by forfeiture, or dissolved for any other cause, exist as bodies corporate for the term of five years,” etc.
This section was modified in the Code of 1886, § 1690, to read: “All corporations whose powers expire by limitation, all which are dissolved by forfeiture or any other cause, exist as bodies corporate for the term of five years,” etc.
As interpreted by the Supreme Court of Alabama, the language above was held to apply to an involuntary dissolution by operation of law upon the expiration of the charter period, Anderson v. Buckley, 126 Ala. 623, 629, 28 So. 729; and there is nothing in the statutory provision or in the decisions of the court which supports the view that corporations which expire by limitation must also be “dissolved by forfeiture or by any other cause.” We -think it not proper to read the present statute differently.
In the Code of 1907 the present section (7069) first appeared, as follows:
“3516. Exist for five years after dissolution by limitation or forfeiture rfor certain purposes.—
“Corporations whose charters expire by limitation and which are dissolved by forfeiture or by any other cause * * * exist as bodies corporate for the term of five years,” etc.
It is clear that under the prior sections the Legislature had in mind at least two distinct classes of corporations which should continue to exist for five years; namely, those whose charters expired by limitation and those which were dissolved by forfeiture or by some other cause. These two classes would, indeed, embrace all corporations whose existence terminated in any manner. The necessary effect of appellees’ argument is that now the Legislature has made the five-year provision applicable to one class of corporations only; namely, to corporations whose charters expire by limitation and which corporations have in addition been dissolved by forfeiture or by any other cause. In other words, appellees contend that there must be a concurrence of two conditions, expiration by limitation and dissolution by forfeiture or by other cause, before section 7069 becomes applicable. This construction would totally exclude from the force of the statute a large class of corporations; namely, those whose existence was terminated for cause but whose charters had not expired by limitation. We think the best proof of the fallacy of this argument is the fact that the courts of Alabama have applied section 7069 to cases where expiration by limitation was not present, but where dissolution by forfeiture or by other cause was present. Pankey v. Lippman, 187 Ala. 199, 65 So. 771, was a case where dissolution was effected by agreement of all the stockholders. This clearly was dissolution “by any other cause,” and the court held that a bill based on section 3516, now section 7069, stated a good cause of action. Similarly, in Cohen v. Pavlik, Ala.Sup. 1938, 178 So. 435, section 7069 was held applicable where dissolution was effected by the stockholders. In neither of these cases does it appear that the charters of the corporation involved had expired by limitation. Thus it is apparent that expira^ tion by limitation and dissolution by forfeiture or other causé need not be simultaneously present in order for section 7069 to apply ; and it is equally obvious that if appellees’ argument will not work both ways it is not correct.
We think tire statute as it is now phrased means to describe (just as it always has) two classes of corporations which cóntinue for five years; namely, “Corporations whose charters expire by limitation and [corporations] which- are dissolved by forfeiture or by any other cause.” Unless this construction is the true one, the Supreme Court of Alabama has many times since 1907 fallen into error.
The petition for rehearing is denied.