Kelley v. Miss. Cent. R. R. Co.

be allowed to plead. The question here raised usually arises in some collateral way, and when it has been directly presented, as in this case, the courts are always beset with technical difficulties. On the one hand it is urged that a dead party cannot speak; that a non-existing thing cannot, without admitting the very question in dispute, plead in the manner it might if it did exist; while on the other it is said. with equal force, that one not a party to a suit cannot be heard to interfere with it. In Bronson v. LaCrosse R. Co., 2 Wall. 283, 292, it is said that generally other persons are not permitted to plead for a corporation, because of the inequality that would exist between the parties. The corporation not being before the court would not be bound by any judgment rendered on such pleas. But lest there should be a reproach to the law, stockholders were permitted to plead for themselves, where the corporation had abandoned its defense and its trust.

Every corporation has officers who speak and act for it by authority of law, and process must be served on the proper officer or the judicial proceeding is not binding. Alexandria v. Fairfax, 95 U. S. 774. Under the Tennessee Code a failure to elect officers does not dissolve corporations, and those last in office continue, and process may be served upon them; so, after dissolution, they continue for five years for the very purpose of prosecuting and defending suits. T. & S. Code, secs. 1481, 1493, 2831, 2834. If the defendant here has a qualified existence under these provisions of the statute, there should be a plea by the corporation itself. In the absence of such statutes, the tendency of modern decisions is to treat a corporation once existing as continuing to exist for the purpose of suing and being sued in winding up its affairs. Pomeroy v. Bank, 1 Wall. 23; R. Co. v. Evans, 6 Heisk. 607; Shackelford v. R. Co., 52 Miss. 159.

But we are met at the threshold with the question whether

Kelley v. Miss. Cent. R. R. Co.

this defendant exists at all for any purpose, as a question of fact to be ascertained in determining whether the plaintiff is entitled to a judgment by default. He insists that he has the right to take his judgment, at the peril of its being void if there be in fact no corporation. In England there can be no judgment by default without appearance, and if the defendant refuses to appear, the plaintiff must enter appearance for him, and in doing so, must make affidavit of proper service on the defendant; this may be contested by cross-affidavits and motions to quash the service and the writ. 3 Chit. Prac. 264, 277, 280. In Alabama and other States the court will not give a judgment by default against a cor. poration, without a judicial finding, recited on the record, that the service has been of a character to bring the corporation into court. Oxford Co. v. Spradley, 42 Ala. 24; Talladega Co. v. McCullough, Id. 667. But we have no such reasonable requirements in Tennessee. The sheriff may simply return the process "executed," and the presumption is that it is regular, and on the proper officer. Any party aggrieved has his remedy by action for a false return against the sheriff, or by bill in equity to set aside the judgment. Wartrace v. Turnpike, Co., 2 Coldw. 515; Ridgeway v. Bank, 11 Humph. 522; Bell v. Williams, 1 Head, 230; Baxter v. Ervin, Thomp. Cases, 175; Gardner v. Barger, 4 Heisk. 669, 671. But even in Tennessee one is not put to an action for a false return or a bill in equity to avoid a wrongful judgment. In Graham v. Roberts, 1 Head, 55, a writ against Garret Graham was served on Jared Graham and the bill in equity of the latter to avoid the judgment was dismissed, because he did not appear to contest the judgment by default in the first instance. In Bank v. Skillern, 2 Sneed, 698, a judgment by default was set aside on the affidavit, and in Jones v. Cloud, 4 Coldw. 236, 239, on the motion of one not a party to the record; and in both cases

Kelley v. Miss. Cent. R. R. Co.

it was held not to be error. No Tennessee case has been found which shows how the alleged extinction of a corporation may be contested in a suit against it in its corporate name; and until modified by the statutes above cited, the law was settled, that upon the civil death of a corporation it could no longer sue or be sued, and could have neither offcers nor stockholders; and the same would doubtless be the rule under these statutes after the five years of qualified post mortem existence have elapsed. White v. Campbell, 5 Humph. 37; Hopkins v. Whitesides, 1 Head, 33; Ingraham v. Terry, 11 Humph. 571; Blake v. Hinkle, 10 Yerg. 217; Nashville Bank v. Petway, 3 Humph. 522. It is said in R. R. Co. v. Evans, 6 Heisk. 607, that the question of extinction must be raised "by a plea in abatement, motion or other proceeding," but there is nothing to indicate by whom these may be taken. In this case, and uniformly, it is held that a failure to make the question by some proper proceeding admits the corporate existence. The necessity, then, for some proceeding to abate the suit is obvious. If there be any appearance, except to make that contest, the matter is ended in favor of the existence, for afterwards all parties are estopped to deny it. Muscatine v. Funk, 18 Iowa, 469. The marshal cannot safely assume to determine the question and refuse to execute the writ, particularly in a case like this where there has been a corporation which has issued bonds and built a railroad, and as to which there are outward and tangible evidences of continued existence.

The plaintiff may take a judgment at his peril, and if there be no corporation, it is void, as we have seen. Thornton v. Railway, 123 Mass. 32. But I do not see that he is entitled to this as a matter of right, nor that the stockholders or others interested should be compelled to submit to such a judgment without a preliminary contest over the fact of corporate existence; because, if there be a corporation,

Kelley v. Miss. Cent. R. R. Co.

the judgment by default is binding, and all opportunity to make other defenses is gone. This throws on all interested the peril of determining the important question of existence for themselves, without the aid of judicial inquiry into the disputed facts, and is an immense advantage to a plaintiff; and it would, in my opinion, be a reproach to the law to permit it upon any technical theory that the officers and stockholders are not parties, and therefore cannot plead in the suit. That they are not parties even when served with process cannot be denied. Bronson v. LaCrosse R. Co., supra; French v. Bank, 7 Ben. 488, S. C. 11 N. B. K. 189; Apperson v. Ins. Co., 38 N. J. L. 272; Blackman v. R. Co., 58 Ga. 189.

How, then, can the defense be made? It is said in Oxford Co. v. Spradley, 46 Ala. 98, that there is no precedent for a plea by a corporation of its own non-existence, that it is an inappropriate plea and an inconsistency in itself; but it is intimated in McCullough v. Ins. Co., Id. 376, that such a plea is permissible in cases of misnomer and dissolution. In W. U. Tel. Co. v. Eyser, 2 Col. 141, Mr. Justice BELFORD says that such a plea by the corporation itself is not anomalous, and is abundantly established by many respectable courts, and he concludes it is a plea in bar and may be joined with the general issue; but the majority of the court held it could be pleaded by the corporation neither in abatement nor bar, that such a plea was felo de se. See, also, Gulf R. R. Co. v. Shirley, 20 Kas. 660. Notwithstanding this it will be found that the plea has been made by the alleged corporation itself in many cases. Foster v. White Cloud, 32 Mo. 505; Hobich v. Folger, 20 Wall. 1; Boyce v. M. E. Church, 46 Md. 359; Greenwood v. Railroad Co., 10 Gray, 373; Dooley v. Gloss Co., 15 Gray, 494; Thornton v. Railway, 123 Mass. 32; Gatt v. Adams Exp. Co., 100 Mass. 320; Inman v. Allport, 65 Ill. 540; Pilbrow v. Railway Co., 5 M. G. & S. (57 E. C. L.) 440.

Kelley v. Miss. Cent. R. R. Co.

In Massachusetts it is held that the plea must be by the corporation, and that an officer or stockholder cannot make defense. Townsend v. Free Will Baptist, 6 Cush. 281; Byers v. Franklin Co., 14 Allen, 470; Robbins v. Justices, 12 Gray, 225. Yet in Buck v. Ashuelot Co., 4 Allen, 357, and Foster v. Essex Bank, 16 Mass. 245, the fact of nonexistence was otherwise made to appear in the one case by one having no right to plead, and in the other by suggestion of counsel.

In Callender v. Painesville Co., 11 Ohio St. 516, the question was directly adjudicated. An officer not even served with process, was allowed to file his affidavit and move to dismiss the suit, because the defendant had no corporate existence, the court holding that he was not an intruder; that a judgment against the company would be against all the members collectively, including him as an individual, and that any member under the circumstances, might make the motion to dismiss and be heard upon it. And in Pilbrow v. Railway Co., 54 E. C. L. 730, the right of the person served to make the defense was upheld. See, also, Stevenson v. Thorn, 13 M. & W. 149; Stewart v. Dunn, 12 Id. 655.

The defense was made by the persons served with process pleading in abatement in Rand v. Proprietors, 3 Day, 441, Evarts v. Killingworth Co., 20 Conn. 447, and Express Co. v. Haggard, 37 Ill. 465; and in Elliott v. Holmes, 1 McLean, 466, it was held that a person served with process against another might make the defense either by such plea or suggestion of counsel. In Quarrier v. Peabody Co., 10 West Va. 507, it is said that a plea in abatement by a corporation should not be by attorney, but by the president individually, to avoid the effects of appearance by the corporation; that a corporation should never plead in abatement in its corporate name.