Billiard Table Mfg. Corp. v. First-Tyler Bank & Trust Co.

16 F. Supp. 990, 1936 U.S. Dist. LEXIS 1934
CourtDistrict Court, N.D. West Virginia
DecidedNovember 14, 1936
StatusPublished
Cited by4 cases

This text of 16 F. Supp. 990 (Billiard Table Mfg. Corp. v. First-Tyler Bank & Trust Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. West Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Billiard Table Mfg. Corp. v. First-Tyler Bank & Trust Co., 16 F. Supp. 990, 1936 U.S. Dist. LEXIS 1934 (N.D.W. Va. 1936).

Opinion

BAKER, District Judge.

This is a suit in assumpsit. On August 31, 1931, the plaintiff was incorporated under the laws of the state of Illinois with its offices and principal place of business in the city of Chicago. It engaged in the manufacture, sale, and handling of a certain type of “pin ball” machine or device described by it as a “billiardette table.” On Juné 20, 1933, the plaintiff and one R. A. Broadwater entered into a written agreement for the sale and placing of fifty billiardette tables. Pursuant thereto, the defendant, a West Virginia banking corporation, was denominated as an escrowee, and there was deposited with it Broadwater’s note for $5100, dated June 20, 1933, and payable to the order of the plaintiff on July 5, 1933, together with certain other papers styled respectively “Commission Contract,” “Collection Report No. 10177,” and “Conditional Sales Contract.” Thereupon the defendant executed to the plaintiff the document upon which the presen! action is based, entitled “Escrow Receipt” acknowledging receipt of the $5100 note and further reading as follows: “Immediately upon delivery to the escrowee by the representative of The Billiard Table Mfg. Corp., of Commission Contracts and Collection Reports all signed by lessees and the representative of The Billiard Table Mfg. Corp., equal in number to the number of tables specified in the Conditional Sales Contract or Chattel Mortgage and purchase contract aforesaid, the escrowee agrees to send to The Billiard Table Mfg. Corp., at the above address by registered mail a New York or Chicago draft for the amount of money es-crowed hereunder and also the Conditional Sales Contract or Chattel Mortgage and purchase contract and note or notes escrowed hereunder.”

On July 5, 1933, Broadwater deposited with the defendant $5100, taking up his note for that amount. On July 7, 1933, the defendant advised the plaintiff’s president, by letter, of the receipt of this money.

On July 13, 1933, the General Assembly of the state of Illinois enacted “An Act to revise the law relating to corporations for pecuniary profit.” Laws 111.1933, p. 308 (Smith-Hurd Ill.Stats. c. 32, § 157.1 et sea.). This act, in section 94 thereof (Smith-Hurd Ill.Stats. c. 32, § 157.94) provided, in effect, that the dissolution of a corporation by a court of equity when the court did not liquidate the assets and business of the corporation should not take away or impair any remedy given against said corporation, its directors or stockholders, for any liability incurred prior to dissolution if suit be brought thereon and service of process had within two years after the date of dissolution and further provided that such suits might be prosecuted against the defendant corporation in its corporate name. Sections 86 and 87 of this act (Smith-Hurd Ill.Stats. c. 32, §§ 157.36, 157.87) provided that upon the dissolution of any corporation, either voluntarily or involuntarily, by a court of equity, that the assets of the corporation might be collected in such suit through the appointment of receivers for the corporation. Section 163 of this act (Smith-Hurd Ill.Stats. c. 32, § 157.163) provided as follows : “The repeal of a law by this Act shall not affect any right accrued or established, or any liability or penalty incurred, under the provisions of such law, prior to the repeal thereof.” Section 167 of this act (Laws 111.1933, p. 387) provided generally for the repeal of the previously existing corporation act of June 28, 1919 (Laws 111.1919, p. 312), in force July 1, 1919, as amended.

On November 28, 1933, the defendant acknowledged the receipt and delivery to it of 50 commission contracts and 50 collection reports properly signed, but refused thereafter to deliver the money escrowed with it upon advice from Broadwater that the contract between him and the plaintiff had been voided by fraud and misrepresentation in the procurement thereof on the part of the plaintiff and upon other objections by Broadwater.

On February 28, 1934, the present action was instituted, and the defendant ap-. peared and attempted to iqterplead Broad-water.

On May 16, 1934, while the defendant’s interpleader motion was pending decision, the plaintiff was dissolved, upon action of the Attorney General of the state of Illinois, by the superior court of Cook coun[992]*992ty, 111., for failure to file annual reports, to pay its franchise tax, and to maintain a place of business or principal office in the state of Illinois. In the dissolution proceedings the plaintiff did not appear and no attempt was made to liquidate the assets and business of the plaintiff by the Illinois court.

The interpleader motion being thereafter quashed, the defendant tendered and filed two special pleas in bar to the further prosecution of this action alleging the plaintiff’s dissolution and denying the plaintiff’s right under the Illinois law, to further prosecute this suit in this court. To these pleas the plaintiff filed special replications citing the provisions of section 163 of the 1933 Illinois Business Corporation Act (Smith-Hurd Ill.Stats. c. 32, § 157.163) in avoidance of the effect of its dissolution in Illinois. To each of these replications the defendant has demurred, and the case is before the court on these demurrers.

Before the passage of the 1933 Illinois Business Corporation Act, an Illinois corporation had the right and power to collect debts due it and to maintain suits in its corporate name for the same for a period of two years after its date of dissolution. Illinois Business Corporation Act of June 28, 1919, in force July 1, 1919, Laws 111.1919, p. 320, § 14 (Smith-Hurd Ill.Stats. c. 32, § 157.94 note). However, in the enactment of the 1933 Illinois Business Corporation Act this right and power was withdrawn by the Legislature by the omission of the former provisions from the new act. Illinois Business Corporation Act, in force July 13, 1933, § 94 et seq., Acts of General Assembly of State of Illinois 1933, at pages 308, 354 et seq. (Smith-Hurd 111. Stats, c. 32, § 157.94 et seq.). In the 1933 act, upon application of any interested party, the assets of any corporation undergoing involuntary liquidation may be collected by the appointment of receivers to collect the same pending dissolution. Illinois Business Corporation Act, in force July 13, 1933, sections 86 and 87.

Under the admitted common-law and federal Rule, the dissolution of a corporation, ipso »facto, abates pending actions in which the corporation is a party, unless there be some specific curative or saving statute. Oklahoma Natural Gas Co. v. Oklahoma, 273 U.S. 257, 47 S.Ct. 391, 71 L.Ed. 634; 7 Ruling Case Law 738. And the laws of the corporate domicile determine its power to maintain either local or foreign actions after dissolution. Oklahoma Natural Gas Co. v. Oklahoma, supra; Pendleton v. Russell, 144 U.S. 640, 12 S.Ct. 743, 36 L.Ed. 574; 7 Ruling Case Law 739.

Thus the power of the plaintiff to maintain the present suit is circumscribed by the Illinois statutes. This fact is admitted by the plaintiff’s special replications as well as the fact that under the general provisions of the 1933 Illinois Business Corporation Act no provision is made to empower the plaintiff further to prosecute the present action in its corporate name.

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Bluebook (online)
16 F. Supp. 990, 1936 U.S. Dist. LEXIS 1934, Counsel Stack Legal Research, https://law.counselstack.com/opinion/billiard-table-mfg-corp-v-first-tyler-bank-trust-co-wvnd-1936.