Court Opinion

ID: 9648348
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:15:20.917506+00
Date Added: 2024-06-11T17:24:56.736331
License: Public Domain

CLARK, Judge,
concurring.
I concur in the disposition of this case reached in the majority opinion and in the rationale which bases that decision on the manifest intent of the General Assembly to work a change in the law formerly controlled by Clark Estate Co. v. Gentry, 362 Mo. 80, 240 S.W.2d 124 (1951). I deem it appropriate, however, to point out the qualifications and limitations which this result imposes upon certain long recognized and recently reiterated principles of the law of corporations. What must result, if possible, is a harmonizing of statutes dealing with the same subject matter. City of Willow Springs v. Mo. State Librarian, 596 S.W.2d 441, 446 (Mo.banc 1980).
Retroactive validation of de facto lawsuits, such as that commenced in June 1978 by the then defunct A.R.D.C., Inc., runs afoul of several fundamental propositions. Under § 351.525(4), RSMo 1978,1 the power of a corporation in forfeiture to sue and be sued is exclusively vested in the directors and officers as statutory trustees, a condition which assumes no alternate authority in the corporation itself. Second, it has recently been held in J. M. Morris Construction Co. v. Mid-West Precote Co., 613 S.W.2d 180 (Mo.App.1981), that a suit brought in the corporate name after forfeiture is a nullity. Finally, the doctrine of relation back to overcome a statute of limitations is only operative when the original plaintiff had a legal right and status to sue at the time the suit was commenced.
Briggs v. Cohen, 603 S.W.2d 20 (Mo.App.1980).
By the unmistakable language of § 351.-540.2, all acts done in the corporate name during the term of corporate charter forfeiture are not absolutely invalid, only conditionally so.2 Thus, the statute has imposed a condition of uncertainty upon the affairs of the defunct corporation and those who deal with the corporation must act in recognition that legitimacy depends on future events, not on current status. Unless precluded by some intervening event, the corporate principals are indefinitely entitled to obtain relief by rescission of the forfeiture thereby expunging the taint which otherwise lay upon corporate acts during forfeiture.
Precautionary language alerting to this transitory condition was inserted in § 351.-525, RSMo 1978, in the same amendment which provided the retroactive effect of forfeiture rescission. In § 351.525(4), RSMo 1978, the termination of corporate powers, privileges and franchises and the dissolution of corporate existence upon forfeiture are expressly made “ * * * subject to rescission as provided in this chapter * * Whatever may be the wisdom of legislation creating this uncertain state of corporate affairs, potentially without limit in duration, the intent of the statutes is manifest. Those who deal with a corporation in suspension, with or without knowledge of its registration status, are instructed by the statute that acts which are ultra vires may, at the option of the corporation, be retroactively validated by rescission of forfeiture.
As the majority observes, State Farm made no contention that the legislature was without power to create a retroactively operative rescission of forfeiture, arguing only that the language of the statute should not be so construed. The fact is, however, that the statutes bear no other interpretation.
*848Some conditions must therefore be en-grafted on the fundamental propositions earlier stated. Jurisdiction and authority of officers and directors as statutory trustees for a defunct corporation to act, to sue and to be sued, as conferred by § 351.525(4), may or may not be operative depending on whether the forfeiture is later rescinded. A possibility remains for parallel actions, the assumption being that all rights and obligations in the statutory trustees terminate on rescission of forfeiture.
An action pursued to a conclusion in the name of the defunct corporation, as in J. M. Morris Construction Co. v. Mid-West Precote Co., supra, and prior to rescission of forfeiture, is a nullity. If, however, rescission is accomplished before the cause is terminated, the action is fully restored to vitality as though no impediment had existed. A pending cause by a defunct corporation is therefore of uncertain status dependent on whether rescission is effected before judgment.
Finally, as to the question of the statutes of limitation, it must be concluded that no certain bar of the statute forecloses the claim of a defunct corporation so long as some action has been commenced within the statutory period. In this, as in other situations, the effect of § 351.540.2 is to place within the control of the corporation’s principals the means to restore the corporate entity to its original standing or abandon the venture as may best serve their individual advantage. The General Assembly alone is the forum where the propriety of this condition can be addressed.
DIXON and NUGENT, JJ., concur.

. All statutory citations are to RSMo 1978.

. A single exception, not material here, concerns contracts made by the corporation during forfeiture. Such contracts may not be enforced by suit filed during forfeiture, but may be enforced in an action commenced after forfeiture has been rescinded.