Winkleman v. Des Moines & Mississippi Levee District No. 1

153 S.W. 539, 171 Mo. App. 49, 1913 Mo. App. LEXIS 586

• Court: Missouri Court of Appeals
• Decided: February 4, 1913
• Status: Published

Opinion

NORTONI, J.

This is a suit on a judgment. The finding and judgment were for plaintiffs and defendant prosecutes the appeal.

Plaintiffs ’ predecessor in right recovered the judgment in suit in the circuit court of Clark county on November 19, 1890, in the sum of $1963.77, against the Egyptian Levee Company, a corporation formed and existing at the time by virtue of an act of the Legislature passed February 27, 1855. The Egyptian Levee Company was incorporated under this act for the purpose of reclaiming and protecting from overflow about 11,000 acres of land in Clark county lying between the Des Moines and Fox rivers and near the Mississippi. [See Session Acts 1855, page 73; Local Laws and Private Acts, 1855, page 281.] During the existence of this corporation, which continued active until shortly before the defendant was organized in 1903, it contracted the indebtedness which was reduced to judgment in November, 1890, as above stated. The judgment was not paid by the Egyptian Levee Company and it appears that corporation ceased its activities before the defendant was organized.

The Egyptian Levee Company was authorized by the’act of incorporation to exercise the power of eminent domain and to build and repair levees, ditches and embankments to prevent the inundation of lands within the levee district, to levy taxes to a fixed limit, to pay for the construction of such earthworks, and also collect taxes for the purposes of keeping them in repair. It was authorized, too, to acquire title in fee simple (which it did) to the right of way for its levees and embankments, not to exceed one hundred feet in width. The property thus acquired and constructed by that company consisted of rights of way, levees and ditches, drains, etc., and amounted in value to $20,000 at the time it was finally taken over or absorbed by defendant.

It appears that several years after plaintiffs’ predecessor in right recovered the judgment in suit against the Egyption Levee Company, the board of directors of that company refused to meet and further conduct its affairs or utilize the corporate franchises' which it enjoyed. Shortly thereafter, on December 28, 1903, defendant, Des Moines & Mississippi Levee District No. 1, was organized by a decree of the circuit court of Clark county, under the general statutes of Missouri touching such matters — that is to say, under article 7, chapter 122, Revised Statutes of Missouri, 1899. (The same is now Art. 9, chap. 41, R. S. Mo. 1909.) Defendant, Des Moines & Mississippi Levee District No. 1, so incorporated in 1903 under the general statutes, was created for identically the same purpose as the prior corporation, Egyptian Levee Company, against which the judgment in suit was then outstanding and unpaid. Furthermore, the new corporation, or defendant levee district, included precisely the same lands, territory and inhabitants as the old one, and exercised the same powers with respect to levying and collecting taxes for the same purposes.

In the proceedings had with respect to the incorporation of defendant levee district in 1903, the board of supervisors of the new district appointed three disinterested freeholders of the county, under section 8365, Revised Statutes 1899, for the purpose of taking the relinquishment of right of way for levees and drains and to assess the value of any levees or improvements then constructed which might he utilized by the new district. Although these commissioners qualified and acted, they did not assess the value of the right of way, levee and ditches, then constructed and in existence, of the prior Egyptian Levee Company, notwithstanding it is agreed such property was of the value of more than $20,000.. However, defendant Des Moines & Mississippi Levee District No. 1 appropriated the right of way, levees, ditches, drains and improvements of the Egyptian Levee Company to its own use and has continued to use the same ever since.

Though the old Egyptian Levee Company has never been dissolved by an act of the Legislature, or otherwise formally declared out of existance, plaintiffs prosecute this suit against defendant- — that is, the succeeding or new corporation — to recover the amount of the indebtedness owing to them by virtue of the judgment against the prior Egyptian Levee Company, on the theory that it is in fact the successor as a continuation of the prior levee company and in which the prior levee company, together with all of its assets, is merged.

It is argued on the part of defendant that the recovery may not be sustained against it for the reason that it does not appear that the prior Egyptian Levee Company had been dissolved and no longer exists. But we are not so persuaded. While it is true that the prior levee company was not dissolved by a formal act of the Legislature, or otherwise, if it were possible to otherwise dissolve it, it appears beyond question that that company ceased active operations after plaintiffs’ judgment was recovered and shortly before defendant, or the new levee company, was incorporated. The record reveals that the hoard of directors last elected by the old company refused to qualify or to further act in that capacity and utilize the franchises which the company enjoyed by virtue of its incorporation. Immediately thereafter defendant, or the new levee district, was organized under the general statutes for identically the same purposes as the old one. It included and covered the same territory as and no more than the old one did. By virtue of its incorporation, it clothed itself with the same rights of eminent domain and the taxing power possessed and enjoyed by the Egyptian Levee Company, and thereupon took over and appropriated, without any compensation whatever, all of the property, consisting of levees, ditches, drains, etc., owned by the prior company. The inhabitants and the lands included within both corporations were, at the time of the incorporation of the new company, identical and the same. The new company proceeded to exercise the corporate franchises thus acquired for the benefit of the same territory and the same lands and the same inhabitants, to levy taxes, construct levees, drains, etc. etc., and the old company, while remaining in existence, in that it was not formally dissolved, lay dormant with respect to the corporate franchises which it had theretofore enjoyed and which are being utilized as to the same subject-matter by defendant.

In such circumstances, it is competent for the court to treat the old corporation as defunct, though it in fact still exists; for the grant of power and franchises is to the inhabitants of the incorporated territory rather than to the dry shell of the corporation, and these franchises are being utilized each day for the benefit of the same inhabitants as under the old corporation. In other words, because of the voluntary nonuser of the franchises on the part of the old company and their exercise by the new company, the matter amounts in law to a continuation of the old corporation under the name of the new company, rather than to a new and distinct creation of corporate capacity and liability. [See Broughton v. Pensacola 93 U. S. 266; 4 Dillon, Muncipal Corporations, secs. 171, 172, 173, also sec. 170.] As a general proposition, 'when two or more private corporations are consolidated into a new corporation with a new name, and the constituent corporations go out of existence, if no arrangements are made respecting their property and liabilities, the consolidated corporation may be required to respond for the outstanding liabilties of the constituent companies. [See 6 Am. & Eng. Ency. Law (2 Ed.), 818, 819; Fans’ Admr. v. Exchange Bank of Jefferson City, 79 Mo. 182. See, also, Kinion v. Kansas City, Ft. S. & M. R. Co., 39 Mo. App. 574; Karn v. Illinois Southern R. Co., 114 Mo. App. 162, 89 S. W. 346.] That the principle should obtain alike with respect to the ordinary municipal corporation no one can doubt. Indeed, the doctrine has been affirmed and enforced by our Supreme Court in the case of such municipal corporations as school districts, where the debtor district had been absorbed through the incorporation of a new school district under the statute, and included the same and additional territory as that constituting the former incorporated body. [See Thompson v. Abbott et al., 61 Mo. 176; Hughes v. School District, 72 Mo. 643.] .The principle is eminently just and should be extended to every case where the new corporation comes into existence and includes the same territory and the same inhabitants for the same purposes as the old one. and appropriates the property of the prior corporation to the uses of the inhabitants for which the corporation was erected to serve. [See 4 Dillon Municipal Corporations, secs. 170, 171, 172, 173; Hill v. City of Kahoka, 35 Fed. 32; Broughton v. Pensacola, 93 U. S. 266; Mobile v. Watson, 116 U. S. 289, 6 Sup. Court Rep. 398; People v. Murray, 73 N. Y. 535.] That drainage districts incorporated under the statutes such as those involved here are public corporations of the State, municipal in character, and resembling in their attributes townships and school dictricts, is settled by the Supreme Gourt decisions to that effect. [See Wilson v. Drainage & Levee Dist., 237 Mo. 39, 139 S. W. 136; Morrison v. Morey, 146 Mo. 543, 560, 561, 48 S. W. 629.] The court very properly found the issue for plaintiffs and gave judgment enforcing the liability of defendant for the obligation of the Egyptian Levee Company on the theory that it was merely a continuation of the old company under a new name.

But defendant insists that a recovery on the judgment in suit is barred by the Statute of-Limitations. The judgment was recovered on November 19, 1890, in the sum of $1963.77 against the Egyptian Levee Company and together with accrued interest and costs now amounts to nearly $5000. At the time this judgment was recovered, the statute prescribed a limitation period of twenty years as to such judgments, but in 1895, or about five years after the recovery of the judgment, the limitation statute was amended and the period of limitation theretofore.prescribed at twenty years was fixed by the amendment at ten years instead. [See Laws 1895, p. 221; and, as amended, see Sec. 1912, R. S. 1909.] The amended statute contains no words suggesting that it should be retroactive in its operation. Furthermore, it makes no provision as to a reasonable time for suits on judgments recovered prior to its enactment. This suit was instituted against defendant on the judgment December 7, 1905, or fifteen years after the judgment was recovered, and more than ten years after the Statute of Limitations was amended reducing the period of limitations from twenty years to ten. It is argued by defendant that though it be conceded the statute is not retroactive in its operation, a recovery on the judgment is nevertheless barred by the amended statute for the reason that ten full years elapsed after the amendment and prior to the institution of this suit. When we consider that Statutes of Limitation pertain to the remedy only, and that it is competent for the Legislature to reduce the period of limitation at any time so long as a reasonable time for enforcement of existing rights is afforded, it would seem that the argument inheres with much force; hut, he this as it may, the proposition is concluded here by prior decisions of the Supreme Court on the identical statute and amendment thereto now in judgment. In those cases, the court says the amended statute must he regarded as having no application to judgments rendered prior to its enactment. [See Tice v. Fleming, 173 Mo. 49, 55, 56, 72 S. W. 689; Cranor v. School Dist., 151 Mo. 119, 52 S. W. 232.] The syllihi in the case of Tice v. Fleming, supra, seems to support defendant’s argument here, but upon a scrutiny of that case, it is not sustained by the opinion of the court, which it purports to reflect. However, on a prior- occasion this court was misled by the language of that syllibi and stated the rule of law in Bick v. Robbins, 131 Mo. App. 670, 111 S. W. 612, to the effect that the amended statute of 1905 prescribed a limitation of ten years from the date of its passage, available against actions on judgments then in existence, when the judgment would not be barred at an earlier date under the statute-before its amendment. What was there said on this question should be ex-pressely overruled, for it is obvious that the Supreme Court holds that the amendment of 1905 is not applicable at all to judgments, recovered prior to its enactment.

The judgment should be affirmed. It is so ordered.

Reynolds P. J., and Allen, J., concur.