Court Opinion

ID: 3629757
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:09:36.200975+00
Date Added: 2024-06-11T14:07:39.867583
License: Public Domain

The act of 1811, for the organization of manufacturing corporations, provided that, for all the debts of the company at the time of its dissolution, the persons then composing the company should be individually responsible to the extent of their respective shares of stock in said company and no further. (Lawsof 1811, ch. 67, § 7.) The question at the trial was, whether the corporation was legally dissolved on the 14th day of April, 1852, that being the time when the defendant sold his stock. The learned justice before whom the cause was tried without a jury, decided that it had not been dissolved at that time, and I think his decision was clearly right.
At common law, a corporation aggregate might be dissolved within the time limited by the charter: First. By act of parliament; Second. By the loss of all its members, or of an integral part, by death or otherwise; Third. By surrender of its franchises; and, Fourth. By forfeiture of its *Page 99 
charter through negligence or abuse of the privileges conferred by it. (1 Bl. Com., 485; Ang.  Ames on Corp., ch. 22, § 1; 2Kent Com., 305.)
As a general rule, to constitute a dissolution of a corporation, by a surrender of its franchises or by misuser or nonuser, the surrender must be accepted by the government, or the default must be judicially ascertained and declared. (6 Barn. Cress., 703; 6 Cow., 26; 9 Cranch, 51; 4 Wheat., 698; 13Lou., 497; 4 Paige, 481; 14 Pick., 63.) But in the case ofSlee v. Bloom (19 John., 456), it was held, in the Court of Errors, that a manufacturing corporation, organized under the act of 1811, might be deemed dissolved, so as to make the stockholders liable for its debts, when it had suffered all its property to be sold and the trustees had actually relinquished their trust, and had for more than a year done nothing manifesting an intention of resuming their corporate functions. The court in that case held that under the circumstances the corporation might be deemed to have surrendered its franchises and to be dissolved in fact. Whether the court did not, by that decision, rather supply what might be deemed a defect in the statute, than announce the law as it was to be found on the books, it is not necessary to inquire. It is enough that it has ever since been adhered to, and must now be deemed a correct construction of the act. (Penniman v. Briggs, Hopk., 300;S.C. in error, 8 Cow., 387.) But, in the language of Chancellor KENT, it should not be carried beyond the precise facts upon which the case rested.
In the case at bar, there was no such evidence of an intention on the part of the company to surrender its corporate functions. There had been no sale of its property, and so far as there was any proof of the condition of its affairs, it had property more than enough to pay its debts; and although it had resolved to wind up its affairs, there was no proof to show that it had ceased to act as a corporation. There had been no judgment recovered against it at this *Page 100 
time; indeed, the condition of the corporation was very different from the condition of the one deemed to be dissolved in Slee v.Bloom.
Again, in that case, the principle was laid down that a surrender might be effected by acts in pais, and it seemed to be decided as a question of fact. The intention on the part of the corporation was inferred from all the facts proved. If, therefore, the surrender or non-surrender in such a case be determined as a question of fact, the judge before whom the cause was tried having determined in this case that there had been no surrender, on the part of the company, of the corporate franchises, his decision must be deemed final and conclusive upon this court.
Again, there may be a question whether the plaintiff is not estopped from alleging that there was such a dissolution of the company as to make the defendant liable for its debts. The defendant, on the fourth of April, transferred his stock to Fuller, who was then the owner and holder of the demand upon which this action is brought. He received the transfer of the stock as the stock of an existing corporation. It seems to me, therefore, that Fuller would have been estopped from alleging that the corporation was then dissolved. And, if he could not have sustained an action against the defendant upon the demand while he held it, it is difficult to see how his assignee can sustain one.
Upon the whole, I think the cause was correctly disposed of at the circuit, and the judgment at the general term should be affirmed.
All the judges concurring,
Judgment affirmed. *Page 101