Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/437

 PART V.] DISSOLUTION. [§ 435. and if no such provision exists, the most experienced legal ad- viser might be puzzled to advise how an acceptance of the sur- render of franchises could be brought about, unless by lobbying a special bill through the legislature. Besides, the idea of the necessity of the acceptance of a surrender of franchises on the part of the authority granting them, seems intimately connected with the old doctrine — now certainly a thing of the past — that on the dissolution of a corporation all its debts were extin- guished. There seems to be no valid reason why an ordinary stock corporation, charged with the performance of no public duty, should not be allowed to close up its business at any time, and dissolve. 1 § 435. The consequences of a dissolution are both substan- tial and formal. The substantial consequences are Effect of a that the business is wound up, and all the legal dlssolutlon - relations subsisting in respect of the corporate funds are liquidated. The formal consequences are that the corpora- tion can no longer act as such either before the courts or in business transactions. 2 Accordingly, the liquidation of its affairs will ordinarily have to be conducted by a receiver or other officer appointed for that purpose. After its dissolution the corporation can institute no suit, nor be made a party defendant; 3 and all suits already brought by or against it are abated. 4 And judgment cannot be entered against it. 3 1 Holmes, etc., M'f gCo. v. Holmes, etc., Metal Co., 127 N. Y. 252; Elyea v. Lehigh S. M. Co., 169 K Y. 29. If the rights of the public intervene, the state would seem at least to have the right to compel the corporation to continue its business; however impracticable the actual assertion of any such right might be. See §§ 454, 455, and State v. Western, etc., R. R. Co., 95 N. C. 602. 2 Saltmarsh v. Planters', etc., Bank, 17 Ala. 761. See Schleider v. Diel- man, 44 La. Ann. 462; Weatherley v. Capital City Water Co., 115 Ala. 156. See § 504. 3 Saltmarsh v. Planters', etc., Bank, 17 Ala. 761; City Ins. Co. v. Com- mercial Bank, 68 111. 348; Bank of La. v. Wilson, 19 La. Ann. 1; Mus- catine Turn Verein v. Funck, 18 Iowa, 469; Miami Exporting Co. v. Gano, 13 Ohio, 269. See Cooper v. Oriental Savings Association, 100 Pa. St. 402; contra, Schmitt & Bro. Co. v. Ma- honey, 60 Neb. 20. 4 National Bank v. Colby, 21 Wall. 609; Terry v. Merchants', etc., Bank, 5 Dobson v. Simonton, 86 N. C. 492. See cases in last note. Where the answer shows that the plaintiff was a corporation at the date of the contract 27 sued on, the fact of its subsequent dissolution will not avail to reverse a judgment in its favor. Kansas City Hotel Co. v. Sauer, 65 Mo. 279. 417