Court Opinion

ID: 5554890
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:39:21.076902+00
Date Added: 2024-06-11T08:35:17.866447
License: Public Domain

Walkek, J.,
dissenting.
When this case was decided, I reserved the right to dissent, in case I could not, on reflection and examination, bring my mind to concur in the judgment rendered. Further reflection and investigation has satisfied me that my doubts were well founded, and the decision was wrong. I will give my reasons for so thinking.
There is no difference between the majority of the Court and myself, except as to the construction of our own statutes. I concur with them as to what the Common Law was; but I differ with them as to the meaning of our statutes. -What are the provisions of these statutes? Rev. Code, sec. 1683, says: “ Every corporation is dissolved * * * by a surrender-of its franchises.” Sec. 1685 says: “A corporation may be dissolved by a voluntary surrender of its franchises to the State. In such case, such surrender does not relieve its officers or members from any liability for the debts of the corporation.” Sec. 1687 says: “Upon the dissolution of a corporation for any cause, all of the property and assets of every description belonging to the corporation shall constitute a fund — first for the payment of its debts, and then for equal distribution among its members. To this end the Superior Court of the county where such corporation was located, shall have power to appoint a receiver, under proper restrictions, *420properly to administer such assets under its directions.” Sec. 1688: “The dissolution of a corporation from any cause shall not in any manner affect any collateral or ultimate or other liability, legally incurred by any of its officers or members.” By section 1492, where a Bank charter is forfeited by the judgment of the Court, at the instance of the Governor, “the Judge shall pronounce .the judgment for all purposes, whatever, saving the use of its corporate name, in collecting and paying its debts, and in conveying its-real and personal estate, which power shall be exercised by á receiver appointed by the Court for that purpose.” Section 1499 says: “ When a Bank surrenders its charter, or the use thereof, it may make, in good faith, an assignment of all its effects for the payment of all its debts, as natural, persons may, but it cannot thereby prevent such preference among its creditors as the law gives.” Section 1500 provides that any creditor or stockholder may move the Court within six months to set aside the assignment; and, “if the assignment be set aside, a-receiver must be appointed.” Bead in the light of the other sections quoted what does section 1685 mean by saying, “a corporation may be dissolved by a voluntary surrender of its franchises to the State?” And what does section 1683 .mean when it says, “every corporation is dissolved * * by a surrender of its franchises ?” “ Is dissolved by a surrender,” and on a dissolution, for any cause, the property shall constitute a fund— first for the payment of the debts of the corporation. Section 1687.
Under the old law, a corporation might propose to surrender its franchises, and the proper authority could accept or reject, as it might see proper, according to the circumstances of the particular case. Under the Code the offer to accept the surrender is held out to all the corporations in the State, and they may make “ a voluntary surrender ” whenever they may choose to do so. The corporation thus, ceases to exist and the law provides what shall be done with its assets. A Bank may make an assignment of all its assets, and if done in good faith, the assignment will be upheld, otherwise, the assignment will be set aside and a receiver appointed; and a *421receiver is provided for in all cases where such an officer may be needed. The difference between the old law and the Code is, that by the former the acceptance of the surrender was subsequent to the tender, and by special action in each case, while by the latter a general rule is prescribed by which all corporations may voluntarily surrender their charters; the State having in advance provided for their acceptance, and' provided for the distribution of the assets very much as in cases of the death of natural persons. - The State, one party to the contract, by the charter, says the corporators may cease to be a corporation by a voluntary surrender; and when such dissolution of the corporation takes place the assets may go into the hands of an assignee or receiver, and be disposed of in a certain way. When the .corporators accept the terms by a voluntary surrender, there is an agreement between them and the State as to how the corporation is to be dissolved; the act of acceptance is already passed, and what shall be done with the corporate assets already provided by law. In order that the rights of third persons may be protected, the assets of the corporation are to be first applied to the payments of its debts, and if a Bank is insolvent, the order of paying off the debts shall be the same as is prescribed in cases of administration, to the extent applicable, except where special preference or postponement is given by law. Rev. Code, sec. 1495. If there still be debts outstanding after the assets of the corporation are exhausted, section 1688 comes in and says: “ The dissolution of a corporation from, any cause shall not in any manner, affect any collateral or ultimate or other liability, legally incurred by any of its officers or members.” Take the whole of the -provisions together and they seem to be amply sufficient to guard the rights of all. The question simply is, whether a corporation may terminate its existence or not, the rights of all persons being fully protected by law. If such was not the intention of the Legislature, I am very much mistaken. I cannot understand several of the provisions of the statute unless they intended a general rule by which corporations might effect their own dissolution by means of a voluntary surrender. If *422the intention was to give authority to corporations to surrender their franchises at will, and cease to exist as corporations, then all the provisions seem to harmonize with this intention, and the guards thrown around seem to be sufficient to protect the rights of all concerned. As a matter of policy I see nothing wrong about it. If the corporators wish to surrender their franchise, why not let them do so, and let the corporation be dissolved ? The corporators so wish. The assets are to be applied first, to-the payment of the debts of the corporation, and then to be distributed among the stockholders. If there be debts still due, after the assets are exhausted, collateral, ultimate and other liabilities of the officers and members are not in any manner affected by the dissolution. It follows that, I think, when the charter had been voluntarily surrendered, the corporation ceased to exist, and the Court ought to have so held.