Court Opinion

ID: 7275512
Source: CourtListenerOpinion
Date Created: 2022-07-25 19:58:56.633554+00
Date Added: 2024-06-11T16:18:50.466628
License: Public Domain

Mr. Justice Shepard
delivered the opinion of the court:
Whether the plea to the sci. fa. should have been considered a plea in abatement instead of in bar, is a question about which there is much doubt. Some authorities hold that nul tiel corporation is a plea in abatement strictly. Heaston v. Cin., etc., Rwy. Co., 16 Ind., 275, and cases therein cited. In Conard v. Atlantic Ins. Co., 1 Pet., 397, Story, J., without discussion, treats it as a plea in abatement; while in B. & P. R. R. Co. v. Fifth Baptist Church, 137 U. S., 568, it is called a good plea in bar. See also Northumberland Bank v. Eyer, 60 Pa. St, 437.
In other cases, again, it is treated as good either in bar or in abatement, at the option of the pleader. Society, etc. v. Town of Pawlet, 4 Pet., 501 ; Life Assn. v. Goode, 71 Tex., 90; Gould’s Pl. (5th ed.), 504.
It is not necessary for us to decide this question, however, because the judgment below can be sustained upon another ground of undoubted soundness.
The plea alleges merely that the plaintiff “was dissolved and ceased to have any existence as a corporation.” This is a conclusion of law and not a statement of the facts from which the legal conclusion of dissolution could be arrived at.
Morawetz, in his excellent treatise on the Law of Corporations (2 Vol., Sec. 1004), points out five ways in which a corporation may be legally dissolved. To these might be added the case, where by express provision of the charter itself, the omission to perform some act is made to work a forfeiture and may be pleaded in bar of some right or privilege incident to the corporate franchise. Bywaters v. P. & G. N. Rwy. Co. 73 Tex., 624, and cases cited in the opinion.
*236It is a sound rule of pleading that requires the facts which show the legal dissolution of the corporation to be stated with substantial accuracy, in order that the court may be informed of their legal sufficiency, and the opposing party of the character of the evidence he will be called upon to meet.
The supporting affidavit, if to be considered at all in this connection, is hardly more definite in its terms than is. the plea, though it may be inferred from it that the proof of dissolution would consist of evidence of non-user of the corporate franchise. If true, this would not amount to a dissolution of the corporation. The authorities are practically unanimous to the effect that a corporation does not lose its franchise or become legally dissolved by discontinuing its business, ceasing to maintain an office or to elect officers, or by becoming hopelessly insolvent. 2 Morawetz on Corp., Secs. 1008, 1010, ion.
Non-user may constitute good ground for pronouncing forfeiture in a proceeding instituted for that purpose, on behalf of the State, but it does not of itself work a legal dissolution.
It follows from what has been said that the judgment of the court below must be affirmed with costs.

Judgment affirmed.