Swan Land Cattle Company v. Frank/Dissent Brown

Mr. Justice BROWN, dissenting.

I concur in the opinion of the court that the question involved in this case needs little more than its bare statement to indicate the answer that should be made to it, but I do not concur in the answer made by the court. Admitting to the fullest extent the proposition that the mere discontinuance of business by a corporation, the sale of its assets, the failure to re-elect officers, and the nonuser of its franchise, do not, ipso facto, work a dissolution of the corporation, it seems to me that this is aside from the merits of the case. I agree, too, that before resorting to the stockholders a judgment should, if possible, be obtained against the principal debtors, which in this case are the three Wyoming corporations. But the law does not compel that which is impossible, and, if the facts alleged in the bill show that no judgment can be obtained against the corporations, and that it is useless to pursue them, the bare existence of such corporations, ought not to defeat the recovery of a just claim. I do not understand it to be denied that, if the corporations had been formally dissolved by the decree of a competent court, the plaintiff might have maintained this bill, and the fact that it had no judgment against the corporations would be no defense.

Now, the allegations of the bill in this case are such as to show, not only that the Wyoming corporations are practically dissolved, and exist only in name, but that it would be impossible to obtain a judgment against them in the jurisdiction where they were organized. The Revised Statutes of Wyoming (section 2431) provide that 'A summons against a corporation may be served upon the president, mayor, chairman, or president of the board of directors or trustees, or other chief officer, or, if its chief officer be not found in the county, upon its cashier, treasurer, secretary, clerk, or managing agent; or, if none of the aforesaid officers can be found, by a copy left at the office or ther place of business of said corporation, with the person having charge thereof.' In that connection the allegation of the bill is 'that, after the sale of their said properties to your orator, and the receipt by them of the purchase price as aforesaid, they had outstanding, except their said three vendors paid whatever liabilities liability to your orator herein set forth, and distributed the money and stock obtained from your orator as the proceeds of said sale, and all their other assets, amongst their respective shareholders, and the same were received by said shareholders, and since that time said three corporations have not, nor has either of them, made any use whatever of their franchises, but they have abandoned the same; and neither of said corporations has any officer or agent upon whom process can be served; and they have not, nor has either of them, any assets of any kind out of which any judgment at common law against them or either of them could be satisfied.' Now if there be no officer or agent of a corporation upon whom process can be served it follows that there can be no office or other place of business of such corporation, within the meaning of section 2431, since the only object of an office or place of business is for the accommodation of an officer or agent. The act does not authorize service upon a trustee, but only upon the president of the board of trustees, who would, of course, be an officer of the corporation. The allegations of the bill in these particulars may be shown to be untrue, but upon demurrer they must be taken as true.

It is true that by section 2435 'service by publication may be had * *  * in actions against a corporation incorporated under the laws of this territory which has failed to elect officers, or to appoint an agent, upon whom service of summons can be made, *  *  * and which has no place of doing business in this territory.'

But while such service by publication might be effective so far as to charge any property of the corporation within the territory, it would not create a general liability against the corporation which would be available elsewhere. This court has repeatedly held that a personal judgment is without any validity if it be rendered against a party served only by publication of a summons, but upon whom no personal service of process within the state was made, and who did not appear. Pennoyer v. Neff, 95 U.S. 714; Harkness v. Hyde, 98 U.S. 476; St. Clair v. Cox, 106 U.S. 350, 1 Sup. Ct. Rep. 354.

The cases relied upon to sustain this decree do not touch this question, and the authorities which require corporations to be made parties to a bill against the stockholders have no application to cases in which it is only useless, but impossible, to make them parties. I do not think the defendants in this case, who are charged with receiving the proceeds of a gross fraud, should be permitted to take refuge in the shadow of these defunct corporations.

Mr. Justice GRAY was not present at the argument, and took no part in the decision of this case.