LEEDY, J.
This is an appeal by plaintiffs in a proceeding under Sec. 9432B,
to review a decision of the Unemployment Compensation Commission of Missouri re-assessing unemployment contributions against plaintiffs-appellants, which, with interest, aggregated $1246.41. • The circuit court affirmed. In Division One an opinion was adopted (one judge dissenting) affirming the circuit court’s judgment, and the cause was transferred to the court en banc.
The writer, to whom this case was assigned after the divisional opinion failed of adoption en banc, has changed his view, and reached the conclusion that the case was properly ruled .by the divisional opinion. Utilizing portions of that opinion as part of the general framework for this one, it will be amplified by treating of the aspect of the case to which the dissent was directed. The issue is one of law, there being no substantial dispute concerning the facts. The case really turns upon the question of the nature and effect of the statutory forfeiture of a corporation’s charter, and is determinable upon, a construction of the applicable sections of Art. I, Chap. 33, R. S. ’39, and Mo. R. S. A., as the same existed at and following the date of forfeiture, and prior to the effective date of “The General and Business Corporation Act of Missouri.” (Laws 1943, p. 410 et seq.. and amendments thereto; Laws 1945, p. 696; Laws 1945, p. 711.)
On and prior to January 1, 1940, plaintiffs were the sole shareholders and directors of Shelco Manufacturing Company, Inc., a Missouri corporation (hereinafter referred to as “Shelco”), and an “employer” within the purview of the Unemployment Compensation Law, Art. 2, Chap. 52, secs. 9421-9445.
On January 1, 1940, Shelco having failed to make the annual registration report required by See. 5085, and having failed to file the anti-trust affidavit required by Sec. 5086, its charter was on that date, pursuant to Sec. 5091, forfeited, and so declared by the Secre
retary of State, and its certificate duly cancelled. However, the plaintiffs did not undertake, as trustees, to liquidate the corporation’s affairs as contemplated by Sec. 5094, nor was rescission of the forfeiture, as provided by See. 5093, ever applied for, but the garment manufacturing business of Shelco was thereafter operated by plaintiffs in manner as theretofore, and in the corporate name until January .10, 1942, at which time continuing business losses resulted in an accumulation of obligations, including Federal taxes, and forced a “close down.” The only company asset then remaining was machinery “mortgaged for more than it was worth.” All of the unemployment contributions in question accrued during the period of more, than two whole years next
after
the date of forfeiture.
The commission by its order and finding assessed unemployment contributions due and payable since January 1, 1940, against plaintiffs, having drawn the conclusions of law that plaintiffs, by virtue of Sec. 5094, “became trustees, of Shelco Manufacturing Company, Inc., on January 1, 1940, and as such trustees were without power or authority to transact any business on behalf of the .corporation except to wind up its affairs and distribute its assets. Since these trustees did transact business for a purpose other than winding up the affairs of the corporation and distributing its assets, they have become-personally liable and are jointly and severally liable for the obligations incurred by them because of having engaged in business operations and activities beyond the scope of their authority as such trustees. Such liability includes the liability for the payment of contributions on the wages of persons employed by them after January 1, 1940.”
Plaintiffs complain that, under Sec. 5094, the assessment should have been made against them
as trustees
(to the extent of assets received by them from the corporation), and contend that the assessment against them as individuals should be vacated because “directors of a corporation who carry on the business of the corporation after its charter is forfeited for failure to file affidavits or reports, are not liable personally for the corporation’s obligations after the charter forfeiture, but are liable only as trustees to the extent of funds of the corporation received by them.” The cases relied on are Fidelity Adjustment Co. v. Cook, 339 Mo. 45, 95 S. W. 2d 1162, and Woodward Hardware Co. v. Fisher, 269 Mo. 271, 190 S. W. 2d 576. They further contend that while forfeiture of Shelco’s charter ended Shelco’s existence as a corporation
de
jure, yet its continued operation as. formerly, and under the corporate name, constituted Shelco a corporation
de facto
whose corporate existence can be questioned only in a direct proceeding by the State, and meanwhile plaintiffs can be subjected to no personal liability for obligations incurred after the forféiture.
Neither of the two eases relied on under their first assignmnt is in point because they did not involve the issue presented here. Both were actions based solely upon
statutes
imposing personal liability for the debts of a corporation upon officers and directors (as partners) who continue to carry on the business after forfeiture of the corporation’s charter. Liability was denied in each, but on the ground that the portions of the statutes upon which the actions were based were unconstitutional because of defective titles. As pointed out in the Woodward case, the effect of the portions of the statute held unconstitutional would have been to make the directors personally responsible as partners for obligations incurred
before
as well as after the-forfeiture and cancellation of the charter. Liability apart from that expressly imposed by such statutes was not asserted, and hence not considered. It is this latter question with which we are now confronted.
Annual registration is required under- Sec. 5085 “on or before the first day of July.” Section 5086 provides that the anti-trust affidavit shall be filed at the time of registration. Section 5089 fixes the fee for annual registration at $5.00, if the corporation “registers within thirty days from the first day of July,” and provides for an increasing scale up to $35.00, if such registration is made December 1, or thirty days thereafter. Section 5090 provides for the issuance by the Secretary of State of a certificate of registration, and says “that certificates of registration shall not be issued to any corporation until it has complied with all the provisions of this article. Transaction of business as, or the exercise of the functions of, a corporation without certificate of registration posted as herein required, shall be prima facie evidence of a violation of this article.”
Then follows the section upon the effect of which the case turns. It is Sec. 5091, and reads as follows: “If any corporation shall fail to comply with the provisions of this article, on or before the thirty-first day of December, the corporate rights and privileges of such corporation shall be forfeited, and the secretary of state shall thereupon cancel the certificate, or license, of such corporation by appropriate entry on the margin of the record thereof, whereupon all the powers, privileges and franchises conferred upon such corporation by such certificate, or license, shall subject to rescission as in this article provided, cease and determine, and the secretary of state shall notify such corporation by mail, addressed to its postToffice address, as disclosed by the records of 'his office, that its corporate existence and rights in this state have been forfeited and canceled, and the corporation dissolved, subject to rescission as in this article provided.”
Another section (See. 5094) provides that “When the forfeiture of the certificate, or license, of any corporation has been declared, the officers and directors or the manager, or managers, of the affairs of said corporation, at the time such forfeiture is declared, by what
ever name they may be known in law, shall be trustees of such corporation with full power to settle its affairs and distribute its assets among its stockholders; after paying the debts due and owing by such corporation; and as such trustees to sue and recover debts and property due such corporation, and they shall be jointly and severally responsible to the creditors and stockholders of such corporations to the extent of its property and assets that may properly come into their hands. ’ ’
Section 5100 makes it a misdemeanor, punishable by fine or imprisonment in the county jail, or both-, for any person or persons to “exercise, or attempt to exercise, any of the powers, privileges, or franchises of any corporation after the certificate or license of- same has been forfeited and canceled as in this article provided.”
The question giving rise to division of opinion is whether, in view of provisions of Sec. 5093 and Sec. 5101,
the forfeiture provided by Sec. 5091 is to be regarded as absolute, or whether it is conditional and in the nature of a suspension for at least one year before becoming-absolute. This court has never passed on this-exact question. The nearest approach to it appears to be State ex rel. McDowell v. Libby, (Mo. App.) 175 S. W. 2d 171, where Sec. 5093 was unsuccessfully invoked as amounting to mere suspension, and not a dissolution. There are other cases, both within and without this jurisdiction, which take the view that the forfeiture under Sec. 5091 operates'as an ipso facto dissolution, subject, however, to rescission. Estel v. Midgard Inv. Co., (Mo. App.) 46 S. W. 2d 193; Watkins v. Mayer, (Mo. App.) 103 S. W. 2d 566; Arnold v. Streck, (C. C. A., 7th Cir.) 108 Fed. 2d 387; Arnold v. H. Piper Co., 48 N. E. 2d 580, 319 Ill. App. 91. Contra: State v. A. B. Collins Co., (D. C., Mo.) 34 Fed. Supp. 549.
In the absence of a construction by this court, Judge Otis of the United States District Court for the Western District of Missouri, in State v. A. B. Collins Co., (1940) 34 Fed. Supp. 550, 552, (the second of two similarly styled cases), likewise construed Sec. 5091 as providing- ipso facto forfeiture for the defaults here in question. Of Sec. 5091 he said, “If would be difficult to conceive of
any language which could be more expressive of dissolution of corporate existence than the language used in this statute. Failure to comply with the provisions of law, so says the statute, ipso facto results in the forfeiting of ‘the corporate rights and privileges of 'such corporation. ’ The Secretary of State does not forfeit those rights and! privileges. They are ipso facto forfeited.” He held that a corporation against which the action prescribed by Sec. 5091 has been taken is dissolved and non-existent, saying that that conclusion “seems, on the face of the statutes involved, to be beyond possible controversy.” However, in that case, because there had been no rescission, nor application therefor, and no facts upon which such an application could be bottomed, See. 5093 was thought not to be concerned, and its possible effect not considered; nor was Sec. 5101. Except for the circumstance that his opinion thus omits consideration of these two sections (and they are the only ones upon which suspension could possibly be implied), we might well adopt his as our own exposition, and without further comment.
As we have noted,'in providing for rescission of forfeiture, Sec. 5093 speaks of presenting an affidavit “setting forth that such corporation has not
suspended
its ordinary and lawful business within one year next before the filing of such affidavit.” It is not even debatable that mere suspension (to say nothing of forfeiture) of corporate powers would of necessity so disable a corporation as to bring about at least a temporary cessation of its usual and ordinary business during the period of suspension, because in the absence of its franchise, or license, it could lawfully do nothing. Furthermore, it can hardly be supposed that the condition upon which rescission may be' effected is to be bottomed upon a showing, under oath, of criminality ■under Sec. 5100. Therefore, to give ordinary meaning to the word “suspended”, as here used, would result in direct conflict with the other sections, and defeat the manifest object and purpose of the act as a whole.
“ ‘Suspend’ ordinarily means temporary cessation; in its natural signification, something which may not be permanent rather than that which necessarily is so; but the connection in which the word is used may give it a stronger meaning and
it may imply a termination.”
60 C. .T. 1191 (Italics ours.) We think the requirements of the several sections mentioned make it plain that the word “suspended” was used in the latter sense; that is, the statute contemplates revivor of a corporation which, notwithstanding temporary cessation of operations in consequence of the forfeiture, has not been permanently disabled, by the termination (as distinguished from temporary cessation) of its business, either through voluntary retirement from the field, insolvency, liquidation, or other cause. A too literal -construction of a section of a statute which would prevent the enforcement of the whole, act according to its intent should be avoided,
Turning to Sec. .5101 (the xoertinent portions of which are set out in full in marginal note #2 hereof), it will be seen that it purports to apply in two situations: First, to a corporation “in suspension,'” and, secondly, to a corporation “after the forfeiture of its certificate, or license.” It is quite apparent that in using the words “in suspension” and “after the forfeiture of its certificate, or license” recognition is accorded to the distinction between these statuses, and that they are not synonymous. This is emphasized by the alternative requirements of the same sentence that the corporation “shall have first been reinstated,
or
the forfeiture entered against it rescinded,
as in this article provided.”
But the article, while making provision for rescinding a forfeiture, wholly fails and omits to provide a method for reinstatement of a suspended corporation. Therefore, taken literally, it would mean that a corporation might be suspended (thus implying a temporary condition), but, for want of method, could not be reinstated; whereas, from the more lasting and serious consequences of forfeiture, the article provides speedy and sinrple relief by way of rescission. Was such an anomaly intended?
It will be found that formerly the law did x^rovide for suspension of corporations on October 1 for failure to register and file the anti-trust affidavit. (Laws 1913, p. 167.) This was the express provision of Sec. 8 of that act. Section 9 provided for reinstatement on or before December 1. of corporations suspended under Sec. 8, and, in default thereof, Sec. 10 provided for forfeiture on the latter date. Section 21 of that act is in the exact language of present Sec. 5101, and, in that setting its recitals with respect to suspension and reinstatement were appropriate and meaningful. But the 1913 act was repealed by Laws 1917, p. 230, which re-established the penalty of fine for such delinquencies, the. method prior to 1913. In 1919, the 1917 act was repealed, and replaced by the act now under scrutiny. Laws 1919, p. 227, now embodied in Art. I, Chap. 33. The 1919 act follows the general scheme of the 1913 act. In fact many (if not most) of its sections, including present Sec. 5101, were taken bodily from the 1913 act, 'but with the important difference that the suspension feature of the 1913 act was omitted. It would appear that in so borrowing Sec. 5101 from the former act, its inapplicable suspension and reinstatement provisions were simply not deleted.
“It is a general rule that the courts, in the interpretation of a statute, may not take, strike, or read anything out of a statute, or delete, subtract, or omit anything therefrom. To the contrary, it is a cardinal rule of statutory construction that significance and’ effect should, if possible, be accorded to every word, phrase, sentence, and part of an act. However, there are cases in which words of a statute are so meaningless or inconsistent with the intention of the legislature otherwise plainly expressed in the statute, that they may be rejected as surplusage, and omitted, eliminated, or disregarded.”
50 Am. Jur., Statutes, see. 231, p. 219. The situation here presented undoubtedly calls for the application of the latter portion of this rule. Apart from its vagrant references to suspension and reinstatement, Sec. 5101 is in complete harmony with the rest of the article. But such references are so inconsistent with, and contrary to the spirit and intent of the whole article, so plainly evident from the other sections hereinabove set out, as to be meaningless and without purpose.
Adverting to the words of the statute, it plainly provides, “If any corporation shall fail to comply with the provisions of this article . . . the corporate rights and privileges of such corporation
shall he forfeited,
and the secretary of state
shall thereupon cancel the certificate,
or license, . . . whereupon
all the powers, privileges and franchises
conferred upon such corporation by such certificate, or license,
shall
subject to rescission, . . .
cease and determine,”
and the corporation notified by mail “that its corporate existence and rights in this state have been forfeited and canceled,
and the corporation dissolved,”
etc. See. 5091.
Of what effect is a forfeiture pursuant to these provisions — does the forfeiture effect a “dissolution,” and, if not, what aspect or attribute of corporate entity,
de facto
or otherwise, remains? “The term, ‘dissolution,’ as applied to a corporation, signifies the extinguishment of its franchise to be a corporation and the termination of its corporate existence. It has been described as that condition of law and fact which ends the capacity of the body corporate to act as such and necessitates a liquidation and extinguishment of all legal relations existing in respect to the corporate enterprise.” 16 Fletcher, Cyclopedia of Corporations, sec. 7966. And this court has said in the case of Bruun v. Katz Drug Co., Inc., 351 Mo. 731, 736, 173 S. W. 2d 906, 909 (after quoting the excerpt from the section, supra, of Fletcher’s Cyclopedia), “the forfeiture of a corporation’s charter by the Secretary of State for failure to comply with the laws of Missouri effects a ‘dissolution.’ (Citing cases.) ‘Apart from statutes extending the existence of, or conferring powers upon, corporations for the purpose of winding up their affairs, the dissolution of a corporation implies the termination of its existence and its utter extinction and obliteration as an entity or body in favor of which obligations exist or accrue or upon which liabilities may be imposed.’ 13 Am. Jur., sec. 1342, p. 1191; 19 C. J. S., Corporations, sec. 1727.”
From the plain language of the statute, and upon the authority of the eases cited, our conclusion is that the effect of a forfeiture as provided in See. 5091, is to ipso facto completely conclude the corporate entity, and without judicial action, except and subject, to the right of rescission upon the application and showing required by Sec. 5093. In this connection, it may be said that Collier v. American Cafeteria. 215 Mo. App. 182, 256 S. W. 118, and Yerxa, Andrews &
Thurston v. Viviano, (Mo.) 44 S. W. 2d 98, are clearly distinguishable, and for the reasons pointed out by Judge Otis in the Collins case. At the time Collier’s license was cancelled (it was a foreign corporation), the 1913 act providing for suspension was in effect. The suspension ripened into forfeiture, which was later rescinded, thus removing the prohibition imposed by present Sec. 5101 (then in force) against maintaining the action “unless . . . the forfeiture entered against it [is] rescinded.” The result in the Collier case was undoubtedly correct.
The commission concluded the law to be and found plaintiffs “jointly and severally (personally) liable,” because, as trustees, they had transgressed their powers. (See conclusions of law, supra.) Upon forfeiture, the plaintiffs under See. 5094 became
trustees
with the full power to liquidate Shelco’s affairs to the end of protecting the interests of the stockholders and the creditors. Plaintiffs, as trustees, were without power to transact any business of Shelco, except to wind up its affairs and distribute its assets. Sec. 5094; Turner v. Browne, 351 Mo. 541, 173 S. W. 2d 868; Estel v. Midgard Inv. Co., supra; Arnold et al. v. Streck et al., supra; Illinois Power & Light Corporation v. Hurley, 49 F. 2d 681. Acting beyond their powers as trustees, plaintiffs continued the -transaction of business in like manner as had Shelco prior to the forfeiture, paying or becoming obligated for wages upon which unemployment contributions were payable to the Unemployment Compensation Fund. Plaintiffs, the stockholders of Shelco, a corporation prior to the forfeiture, had enjoyed the freedom from personal liability to its creditors, and had vested the managerial responsibility of Shelco-in themselves. (The plaintiff, J. II. Leibson, was, in fact, the owner of all of the certificates of capital stock.) Begulatory provisions had been enacted by the Legislature for the protection of stockholders and creditors, and in aid of the taxing power of the State. Such legislative provisions wére ignored by plaintiffs as directors, and again, subsequently to the resulting forfeiture (of which forfeiture plaintiffs should be charged with knowledge), plaintiffs, as trustees, acted beyond their powers. It seems to us a court should recognize plaintiffs’ personal liability for obligations so incurred by them in such unlawful transaction of business in the corporate name, transgressing their powers as trustees. If a court should otherwise rule, such a ruling would be in violation of the plain purpose of the law, open the door to fraud, and sanction the former directors’ operation of the business, without liability, affording opportunity for wasting or diverting the corporate assets, thus subjecting stockholders, creditors and the State to a remediless loss of their rights to avail themselves of the corporate property. It seems no Missouri decision supports or opposes our decision upon this very question, but the bases of the decisions of courts of other jurisdictions lend support to our ruling. Ewald Iron Co.
v. Commonwealth, 140 Ky. 692, 131 S. W. 774; Jones v. Young et al., 115 W. Va. 225, 174 S. E. 885; Poritsky v. Wachtel, 27 N. Y. Supp. 2d 316; Trower et al. v. Stonebraker-Zea Live Stock Co. et al., 17 F. Supp. 687.
This brings us to the other assignment that while the forfeiture operates to “end the corporation as a
de jure
corporation, but it continues as a
de facto
corporation, whose existence can be questioned only in a direct proceeding by the State for that purpose. ’1 It has been written the legality of the existence of a corporation cannot be questioned collaterally on the ground that it has forfeited' its charter unless the forfeiture has been adjudged and enforced in a direct proceeding by the State. This is true unless the intention is clearly expressed that the forfeiture and dissolution shall take effect ipso facto and without any proceeding to adjudge and enforce the same. 18 C. J. S., Corporatiohs, sec. 105, p. 501. The latter principle was applied by this court en bane in Bradley v. Reppell, 133 Mo. 545, 32 S. W. 645, 54 Am. St. Rep. 685, where the term of existence had expired by limitation. This was held to be an ipso facto disso'hb tion, and that, accordingly, it ceased to be a corporation
de ‘juré and de facto,
which could be shown and taken advantage of in a collateral proceeding without the necessity of judicial investigation, there being no element of estoppel involved. We perceive no difference in principle between the effect of an ipso facto dissolution because of the expiration by limitation of corporation’s period of existence, and ipso facto dissolution under the statutes here involved.
The judgment should be be affirmed.
It is so ordered.
Conkling, Clark
and
Douglas, JJ.,
concur;
Tipton,
C. J., concurs in result;
Hyde, J.,
dissents in separate opinion;
Ellison, J.,
dissents, and concurs in the dissenting opinion of
Hyde, J.