parol evidence was inadmissible to show Kraus was a joint maker. Again when the note read "We promise to pay, etc.," and was signed "National Forge and Iron Co., Mark Swarts, President," it was held to be ambiguous, as to whether it was the note of Swarts alone, or the company alone, or a jointnote, and parol evidence was admitted to clear up the ambiguity. 1894, Swarts v. Cohen, 11 Ind. App. 20. In neither of the foregoing was the corporate seal affixed. In Miller v. Roach, 150 Mass. 140 (1889), the note read, "We promise to pay, etc.," and in the usual place of the signature the corporate seal, giving the name of the corporation, was stamped, and "John Roach, Treasurer, was written partly across the seal. This was held to be the note of the company; see, also, City of Fond du Lac v. Otto, 113 Wis. 39, 90 Am. St. R. 830.

Judge Thompson, Vol. iv, §§ 5121-54, and Daniell's Negotiable Instruments, §§ 401-415, review many cases. The form of making and executing corporate notes is discussed in the following cases: 1823, Mott v. Hicks, 1 Cow. (N. Y.) 513, 13 Am. Dec. 550; 1839, Horah v. Long, 4 Dev. & B. (N. C.) 274, 34 Am. Dec. 378; 1855, Pierce v. Robie, 39 Maine 205, 63 Am. Dec. 614; 1880, Pack v. White, 78 Ky. 243; 1889, McKensey v. Edwards, 88 Ky. 272, 21 Am. St. Rep. 339; 1889, Liebscher v. Kraus, 74 Wis. 387, 17 Am. St. Rep. 171; 1889, McCandless v. Belle Plaine, etc., Co., 78 Iowa 161, 16 Am. St. Rep. 429; 1894, Swarts v. Cohen, 11 Ind. App. 20, collecting cases; 1896, Hately v. Pike, 162 Ill. 241, 53 Am. St. Rep. 304; 1896, Nebraska Nat'l Bank v. Ferguson, 49 Neb. 109, 59 Am. St. Rep. 522; 1897, Albany Furniture Co. v. Merchants' Nat'l Bank, 17 Ind. App. 531; 1897, Taylor v. Reger, 18 Ind. App. 466; 1898, National Bank v. Allen, 90 Fed. Rep. 545, 33 C. C. A. 169; 1898, Clark v. Read, 12 App. D. C. 343; 1899, Youngs v. Perry, 42 App. Div. (N. Y.) 247; 1900, Crawford v. Albany Ice Co., 36 Ore. 535, 60 Pac. Rep. 14.

55-WIL. CAS.

TITLE VII. CORPORATE DEATH-DISSOLUTION.

CHAPTER 11.

MODES AND EFFECT OF DISSOLUTION.

ARTICLE I. METHODS OF DISSOLUTION.

Sec. 239. In general.

THE BOSTON GLASS MANUFACTORY v. LANGDON.'

1834. IN THE SUPREME JUDICIAL COURT OF MASSACHUSETTS. 24 Pick. (Mass.) 49–54, 35 Am. Dec. 292.

[Assumpsit by Glass company upon a note given by defendant to plaintiff. Plea in abatement that there was at time of suit no such corporation-the facts showing an incorporation and organization in 1811, an assignment of all the corporate property in 1817 to trustees to pay creditors, and an omission to hold annual meetings, choose directors or transact business since that time. The jury were instructed that the corporate life continued, and they found for the plaintiff. The instructions and verdict upon them are assigned as errors.] MORTON, J. The legal establishment and due organization of the corporation were admitted; but it was contended that the facts disclosed showed a dissolution of it.

The elementary treatises on corporations describe four methods in which they may be dissolved. It is said that private corporations may lose their legal existence by the act of the legislature; by the death of all the members; by a forfeiture of their franchises; and by a surrender of their charters. 2 Kyd Corp. 447; 1 Bl. Comm. 485; 2 Kent's Comm. (1st ed.) 245; Angell and Ames Corp., 501; Oakes v. Hill, 14 Pick. 442. No other mode of dissolution is any where mentioned or alluded to.

1. In England, where the parliament is said to be omnipotent, and where in fact there is no constitutional restraint upon their action, but their own discretion and sense of right, corporations are supposed to hold their franchises at the will of the legislature. But if they pos

1

1 Statement abridged; arguments and part of opinion omitted.

sess the power to annul charters, it certainly has been rarely exercised by them. In this country, where the legislative power is carefully defined by explicit fundamental laws, by which it must be governed and beyond which it can not go, it has become a question of some difficulty to determine the precise extent of their authority in relation to the revocation of charters granted by them. But as it is not pretended that there has been any legislative repeal of the plaintiff's charter, it will not be useful further to discuss this branch of the subject.

2. As all the original stockholders are not deceased, the corporation can not be dissolved for the want of members to sustain and exercise the corporate powers. Besides, this mode of dissolution can not apply to pecuniary or business corporations. The shares, being property, pass by assignment, bequest or descent, and must ever remain the property of some persons, who of necessity must be members of the corporation as long as it may exist.

3. Although a corporation may forfeit its charter by an abuse or misuser of its powers and franchises, yet this can only take effect upon a judgment of a competent tribunal. 2 Kent's Comm. (1st ed.) 249; Corporation of Colchester v. Seaber, 3 Burr. 1866; Smith's Case, 4 Mod. 53. Whatever neglect of duty or abuse of power the corporation may have been guilty of, it is perfectly clear that they have not lost their charter by forfeiture. Until a judicial decree to this effect be passed, they will continue their corporate existence. The King v. Amery, 2 T. R. 515.

It

4. Charters are in many respects compacts between the government and the corporators. And as the former can not deprive the latter of their franchises in violation of the compact, so the latter can not put an end to the compact without the consent of the former. is equally obligatory on both parties. The surrender of a charter can only be made by some formal solemn act of the corporation; and will be of no avail until accepted by the government. There must be the same agreement of the parties to dissolve that there was to form the compact. It is the acceptance which gives efficacy to the surrender. The dissolution of a corporation, it is said, extinguishes all its debts. The power of dissolving itself by its own act would be a dangerous power, and one which can not be supposed to exist.

But there is nothing in this case which shows an intention of the corporators to surrender or forfeit their charter, nor anything which can be construed into a surrender or forfeiture.

The possession of property is not essential to the existence of a corporation. 2 Kent's Comm. (1st ed.) 249. Its insolvency can not, therefore, extinguish its legal existence. Nor can the assignment of all its property to pay its debts, or for any other purpose, have that effect. The instrument of assignment was not so intended, and can not be so construed. All its provisions look to the continuance of the corporation. It contains covenants that the assignees may use the corporate name for the collection of the debts and the disposition of the property assigned; that the corporation will not hinder or ob

struct them in the performance of these functions; that it will make any further conveyances and assurances which may become necessary, and will do and perform any other and further acts which may be required to enable the assignees fully to execute their trust. The instrument which covenants for future acts can not be construed to take away all power of action.

The omission to choose directors clearly does not show a dissolution of the corporation. Although the proper officers may be necessary to enable the body to act, yet they are not essential to its vitality. Even the want of officers and the want of power to elect them, would not be fatal to its existence. It has a potentiality which might, by proper authority, be called into action without affecting the identity of the corporate body. Colchester v. Seaber, 3 Burr. 1870.

But here in fact was no lack of officers. Although no directors had been chosen for several years, yet by the by-laws of the corporation the directors, though chosen for one year, were to continue in office till others were chosen in their stead.

Affirmed.

Note. Modes of dissolution. In Swan Land, etc., Co. v. Frank, 148 U. S. 603, 611 (1893), Mr. Justice Jackson states the following methods of dissolution: (1) By expiration of charter; (2) by failure of an essential part that can not be restored; (3) by dissolution and surrender of franchise with consent of the state; (4) by legislative enactment within constitutional authority; (5) by forfeiture of franchises and judgment of dissolution declared in regular judicial proceedings, or by other lawful means.

In 9 Am. & Eng. Ency. of Law, p. 546, 2d ed., it is said: "A corporation may be dissolved: (1) By the repeal of its charter; (2) by the happening of a condition or contingency prescribed by the charter; (3) by the natural death of all its members or the loss of an integral part; (4) by the surrender of its franchises; (5) by expiration of the period of its existence as limited in its charter; (6) by judgment of forfeiture in a judicial proceeding.

Elliott Private Corporations, § 592, says dissolution may be effected (1) by the expiration of the statutory period of its existence; (2) an act of the legislature under a reserved power to repeal; (3) the surrender of the charter with the consent of the state; (4) the forfeiture of the charter for misuse or non-use of its powers; (5) the loss of an integral part without whose existence the functions of the corporation can not be exercised, and (6) compliance with whatever statutory requirements may exist in order to effect a voluntary dissolution.

Sec. 240. Expiration of charter.

BRADLEY v. REPPELL.'

1896. IN THE SUPREME COURT OF MISSOURI. 133 Mo. Rep. 545561, 54 Am. St. Rep. 685.

[Ejectment by Bradley to recover land claimed by Reppell by adverse possession. Plaintiff offered in evidence to show title a certified copy of a deed to the land executed by the West Kansas City Land 1 Statement much abridged, arguments and much of the opinion omitted.

This

Company, by its president and secretary, August 20, 1880. company was incorporated by special act of March 14, 1859, without any special provision as to its duration. The general law at the time 'provided that every corporation should have succession for the period limited in its charter, and when no period is limited, for twenty years, with power in the president and directors to settle up its affairs afterward. A demurrer to the plaintiff's evidence contained in the deed was sustained by the court on the ground that corporate life had ceased at the time of its execution, and there was a verdict for the defendant. Sustaining the demurrer is the error assigned. To the defendant's contention that the corporate life had ceased before the deed was executed, the plaintiff answered that a de facto corporation existed, and its acts could be questioned only by the state.]

BRACE, P. J. This answer does not meet the question, unless it be assumed that a corporation whose corporate existence has expired by the terms of the law which created it still exists as a de facto corporation as to all persons except the state, an assumption that we think is not sustained by the authorities cited, and is not "the settled law in this state."

On the contrary, in this state, as elsewhere, unless otherwise provided by statute, the law is, that where the term of the existence of a corporation is fixed by its charter or the general law, upon the expiration of that term the corporation becomes ipso facto dissolved; it can no longer act in a corporate capacity and its title to property ceases. 2 Beach Priv. Corp., § 780; 2 Morawetz Priv. Corp., § 1031. In such an event in this state the title to its property is by statute devolved upon trustees for the settlement of its affairs and the distribution of its assets. R. S. 1855, ch. 34, § 24; R. S. 1889, § 2513. And thereafter it has no power to make a legal contract or convey property in its corporate name and capacity; it ceases to be a corporation de jure et de facto, for the reason that there is no law in force authorizing its existence, and no law by virtue of which it might exist, and no person, unless estopped by his own action, ought to be, or can be, precluded from showing this fact, apparent on the face of the law itself, without the necessity of any judicial investigation, in an issue involving his own personal rights and interests.

An examination of the authorities cited by counsel for respondents, and of all the other cases touching this question, will show that it has never been otherwise ruled in this state, nor elsewhere so far as we have been able to discover.

The first case cited by counsel for respondent, McIndoe v. St. Louis, 10 Mo. 576, does not touch the question, side, edge, or bottom. The cases of Chambers v. St. Louis, 29 Mo. 543; Land v. Coffman, 50 Mo. 243; Shewalter v. Pirner, 55 Mo. 218, and Conn. Mutual Ins. Co. v. Smith, 117 Mo. 261, go no farther in the direction of our present inquiry than to hold that where an existing corporation has power to acquire, hold and dispose of land, the question whether such corporation has transcended the limits of such power in respect thereto can only be raised and determined in a direct proceeding by the state