ne power conferred upon them as trus- as trustees (see § 99 supra), were tees is to be exercised collectively, and in their aggregate capacity as a body, and not as individuals. To give to each of the directors distinct and independent power to wind up and settle the business of the company would evidently lead to confusion and a conflict of action, which would be injurious to the interest of the parties for whose benefit they are made trustees; nor would it be consistent with reason or justice that the trustees should be made jointly and severally responsible for property coming into their hands, unless it come to them in their collective capacity. It seems to us quite evident that the powers and responsibilities given and imposed upon trustees of a sold-out railroad company, by this statute, could not be thrust upon them merely by reason of their being directors of the company when sold out; and therefore it must be shown in some way that they have accepted the trust thus conferred upon them, before they can be held responsible for the discharge of the duties of such trustees." The point actually determined was that "a judgment founded upon service on only two of the trustees, where there are ten, and the presumption is as great that all have accepted and are as competent to act as the two served, will not warrant the seizure and sale of the property of the company not in the possession or under the immediate control of the trustees who were cited." 1 as follows: "The existence of every corporation may be continued for three years after its dissolution from whatever cause for the purpose of enabling those charged with the duty to settle up its affairs; and, in case a receiver is appointed by a court for this purpose, the existence of such corporation may be continued by the court so long as, in its discretion, it is necessary to suitably settle up the affairs of such corporation." By the Act of July 28, 1919, the following clauses were added: "Provided that the dissolution of a corporation shall not operate to abate, not be construed as abating any pending suit in which such corporation is a defendant, but such suit shall continue against such corporation and judgment shall be rendered as though the same was not dissolved, and in case no receiver has been appointed for said corporation, suit may be instituted on any claim against said corporation, as though the same had not been dissolved, and service of process may be obtained on the president, directors, general manager, trustee, assignee, or other person in charge of the affairs of the corporation at the time it was dissolved by whatever name they may be known in law, and judgment may be rendered as though the corporation had not been dissolved and the assets of said corporation shall be liable for the payment of such judgment just as if said corporation had not been dissolved." b. Constitutionality. In the case cited below, the court rejected the contention that the amending provision is unconstitutional, as being retroactive and operating so as to impair the obligation of contracts. 1 Tex. Civ. App., 247 S. W. 652. Discussing the provision in these points of view, the court said: "It did not operate to take away or confer any substantive right; it only supplied a form of procedure that, without retrospection, might apply in pending or future cases from the date of the act forward. Everything it did could have been accomplished in the present case without it, though with less ease. Un c. Effect, generally. By the Supreme Court of the United States the article set out in subsec. a, supra, was construed in its original form as one which imported that an action pending against a corporation at the time of its dissolution did not abate.2 In arriving at this con der the authorities already cited it was, therefore, not retroactive. If contractual obligations were involved, this law did not impair them, for the reason that it only had the effect of continuing the corporate entity for the special and formal purpose of liquidation and of aiding the payment of its just obligations, as the stockholders should have contemplated ought to be done in some appropriate way. A corporation under this statute is not really extended or relaunched as a business concern, to the prejudice of those having a right to dissolve it; the assets are merely personified so as to be made responsible, as they should be, to suit." 2 Pease v. Rathbun-Jones Engineering Co. (1917) 243 U. S. 273, 61 L. ed. 715, 37 Sup. Ct. Rep. 283, Ann. Cas. 1918C, 1147, affirming (1915) 142 C. C. A. 565, 228 Fed. 273. The same view was adopted in White v. Texas Motorcar & Supply Co. (1918) Tex. Civ. App. 203 S. W. 441 (affirmed as to this point in (1921) Tex., 228 S. W. 138), and Lyon-Gray Lumber Co. v. Gibralter Life Ins. Co. (1923) Tex. Civ. App., 247 S. W. 652. In the second of these cases, the court, after having adverted to the fact that the amendment of the article was enacted more than a year after the corporation had been legally dissolved, continued thus: "Appellant contends, however, that even under the terms of the original law the existence of the corporation was perpetuated for three years after its dissolution for such purposes as would prevent an abatement in suits of this character; clusion the court considered both the portion of the article relating to trustees, and the portion relating to the continuance of corporate existence. The decisions of the state courts which bear upon the subject are conflicting with regard to the doctrine thus laid down. 3 Manifestly the question which has elicited this differthat before that period expired the Amendment of 1919 became effective, and should control all the proceedings subsequently occurring. That might be true if it is correct to say that the corporate entity itself had not become totally extinct with its dissolution. The law, as it originally stood, did make provision for the settlement of claims against dissolved private corporations and the distribution of the assets on hand among the stockholders. To accomplish that end the president, directors, or managing officers, at the time of dissolution, were made trustees of the creditors and stockholders. These trustees were given certain powers, and only such as were essential to wind up the corporate affairs and distribute the assets among the proper parties. They were authorized to use the corporate name in making conveyances, but they, as trustees, not as corporate agents, were the custodians of the power that was being exercised. This was a post-mortem service which must be done by someone other than the defunct corporation." - In Corsicana Transit Co. v. Walton (1916) Tex. Civ. App. —, 189 S. W. 307, the appeal of a corporation from a judgment rendered against it after its dissolution, in a suit brought against it before the dissolution, was dismissed on the ground that "the necessary legal effect of the dissolution was to abate the suit." The supreme court approved the ruling, in (1920) Tex., 222 S. W. 979. The following comments were made upon this decision in Gamer Co. v. Gamage (1922) Tex. Civ. App. 241 S. W. 736: "It does not appear directly from the opinion of this court or that of the supreme court whether in so holding consideration was given or not to the statute enacted in 1907. [Vernon's Rev. Stat. art. 1206.] ... It would seem that the provisions in the statute authorizing the manager of a corporation, where a receiver has not been appointed, to 'maintain or ence of opinion was a merely technical one, because any given action, even if it were assumed to have abated so far as the corporation itself was concerned, could be revived by bringing in the trustees as parties. So far as Texas is concerned the controversy has been definitely settled by the amendment referred to in subsec. a, supra. Other points which have been determined are that the amending provision is applicable to actions pending when it came into force, and that a judgment may be rendered against a corporation after its dissolution. 6 d. Procedural capacity of corporation after expiration of prolonged period of existence. There is explicit authority for the doctrine that the power of a corporation to sue and be sued ceases entirely at the termination of the prolonged period allowed by the original provision as set out in subsec. a, supra.7 defend judicial proceedings' in its name, and declaring that the existence of the corporation 'may be continued for three years after its dissolution' for the purpose of settling its affairs, called for a different holding in that case, unless the ruling made was justified by the fact that more than three years had elapsed between the time (July 7, 1913) when the corporation was formally dissolved and the time (October 19, 1916) when its appeal was dismissed. If that was the ground upon which the holding was based, and it should be assumed it was, as otherwise it was unwarranted, then the effect of the ruling ruling was to construe the statute as meaning that the formal dissolution of a corporation becomes final and operative for all purposes at the expiration of three years from the time the formal dissolution occurs, and the corporation thereafter cannot further either maintain or defend a suit to which it was a party. It follows from such a construction of the statute that the Gamer Company's appeal in this case should be dismissed, for it long ago ceased to exist for any purpose whatever." On the other hand, the position that the enactment prevents the abatement of pending actions was taken in $ 102. Utah. General provision prolonging corporate existence. a. Contents. Section 870 of Comp. Laws 1917 (Comp. Laws 1907, § 323, as amended by Laws 1909, chap. 50, § 1, and Laws 1914, chap. 10, § 1). "Any corporation, organized under the laws of the territory or state of Utah, whose franchise has heretofore expired or may hereafter expire by limitation or by forfeiture, may nevertheless continue for the purpose of winding up its affairs; and to effect this purpose may sell, or otherwise dispose of, real and personal property, sue and be sued, contract, and exercise all other incidental and necessary powers." b. Powers of directors. In a case in which the charter of a corporation had been forfeited for nonpayment of taxes it was held that, having regard to the above provision and the one set out in the following Farmers' Mill & Elevator Co. v. Hodges (1923) Tex. Civ. App. 248 S. W. 72 (reversed on other grounds in (1924) Tex. 260 S. W. 166); Butcher v. J. I. Case Threshing Mach. Co. (1918) Tex. Civ. App. -, 207 S. W. 980. In the Butcher Case, the decisions in Orange Lumber Co. v. Toole and Corsican Transit Co. v. Walton, supra, were distinguished on the ground that the suits involved were commenced after the dissolution. 4 The operation of that amendment in regard to preventing the abatement of pending suits was the ratio decidendi in Ferguson-McKinney Goods Co. v. Garrett (1923) Dry Tex. 252 S. W. 738, reversing (1921) – Tex. Civ. App. 235 S. W. 245 (action on judgment obtained in Oklahoma for price of goods). Lyon-Gray Lumber Co. v. Gibraltar L. Ins. Co. (1925) Tex. —, 269 S. W. 80, reversing (1922) Tex. Civ. App. 247 S. W. 652, with regard to this point. 6 Chevrolet Motor Co. v. Morris Auto Co. (1925) Tex. Civ. App. —, 269 S. W. 872. directors section, the acts of the in authorizing a confession of judgment to be entered on a corporate debt secured by a mortgage, in assenting to a foreclosure sale of the corporate property subject to the lien, in selling the company's equity of redemption, and in distributing among the stockholders the surplus remaining after the outstanding indebtedness of the company had been discharged, were not illegal, and consequently could not be impeached by stockholders, in the absence of proof of fraud or collusion.1 $ 103. Utah (continued). Provision concerning directors a8 trustees in statute relating to forfeiture of charters for nonpayment of taxes. a. Contents. Laws 1909, p. 228, § 9. "In case of forfeiture of the charter and of the right to transact business thereunder, all the property and assets of the domestic corporations shall be held in trust by the directors of such corporation as in case of insolvent corporations, and the same proceeding may be had with respect thereto as is applicable to insolvent corporations." b. Powers of trustees. One of the points determined in the reported case (HOUSTON v. UTAH LAKE LAND, WATER & P. Co. ante, 1282) was that a proclamation of the governor of the state, forfeiting the charter of a corporation constituted "notice to all of the world, that, thereafter, unless reinstated within the time by law provided, that corporation had no right rested its decision upon the ground that there is no such abatement in equitable actions. 1 Henriod v. East Tintic Development Co. (1918) 52 Utah, 245, 173 Pac. 134. There the contention of the plaintiffs was that immediately upon the forfeiture of the charter the corporation ceased to exist, and therefore the board of directors also ceased to exist as such; and that, therefore, all that was done by the board after the charter was forfeited was void and of no force or effect; and that all the board of directors was empowered to do was to hold the property in trust. They prayed for the appointment of a receiver to take and no power to engage in any business whatever, except such as would be necessary for the purpose of winding up its affairs." In this point of view, the purchase of stock in another company was held to be an illegal and void transaction. See also § 102, b, supra. c. Preference of creditors by trustees. It has been laid down that the only fair interpretation which can be placed on the statute is "that, where a corporation has, under its provisions, forfeited its charter, in the winding up of its affairs and in the disposition of the assets, it may make preference, by assignment or otherwise, among some of its creditors to the exclusion of others, so long as not interfered with in a proper equitable proceeding for the purpose of subjecting its property and assets to the possession of a court of equity, to be administered upon equally and impartially among all of its creditors." 1 d. Procedural capacity of corporation during prolonged period. The above provision must have escaped the notice of a California court which, proceeding upon the commonlaw rule as to the effect of a dissolution in nullifying all subsequent proceedings by or against it, set aside a judgment obtained against a Utah company about six months after its charter had been forfeited for nonpayment of taxes.2 $ 104. Vermont. Provision prolonging corporate existence. Gen. Laws 1917, § 4956; Rev. Laws charge of all of the said property, and to wind up the affairs of the company as though nothing had been done after the charter was forfeited. The court was of opinion that "the statute clearly contemplates that the board of directors shall wind up the affairs of the corporation in case its charter and its right to conduct business are forfeited." 1Passow & Sons v. Wetherbe (1917) 50 Utah, 243, 167 Pac. 350. 2 Sharp v. Eagle Lake Lumber Co. (1923) 60 Cal. App. 386, 212 Pac. 933, holding that a stockholder's motion to set aside a judgment against the corporation should be granted. 1868, 3272; (Vt. Stat. 1895, § 3699; Pub. Stat. 1906, § 4276). "Corporations whose charters or articles of association expire by their own limitation, or are annulled by forfeiture or otherwise, shall continue bodies corporate to enable them gradually to close their concerns, to dispose of and convey their property, to divide their capital stock, and to prosecute and defend suits for three years and until such suits and the subject-matter thereof are fully disposed of, but not for the purpose of continuing the business for which they were established." $105. Virginia. Provision designating directors as trustees. Code 1919, § 3812 (Laws 1902-3, chap. 270, § 31). "Upon the dissolution of any corporation under the provisions of this chapter, the directors or other governing body, by whatever name it may be known, unless action to the contrary be taken as provided. in § 3813 shall be trustees thereof, with full power to settle the affairs, collect the outstanding debts, sell and cause to be conveyed property, real and personal, and divide the money and other property among the stockholders according to their respective rights, after paying its debts." § 3813. It is provided that, when a corporation shall be dissolved in any manner whatever, a court may, on application of a creditor or stockholder, either continue the directors as trustees or appoint a receiver or receivers to take charge of the estate and effects thereof. $ 106. Virginia (continued). Provisions prolonging corporate existence. a. Contents. The existing provision is that contained in the Code of 1919, § 3810 (Laws 1902-3, chap. 270, § 30, as amended by Laws 1906, chap. 327), which provides as follows: "All corporations, whether they expire by their own limitation or are otherwise dissolved shall, nevertheless, be continued for such length of time, not exceeding three years, from such dissolution or expiration, as may be necessary for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, and to divide their capital, but not for the purpose of continuing the business for which said corporations shall have been established. If the affairs of any such corporation shall not be wound up by its directors within three years from such dissolution or expiration, they shall be wound up in the manner provided by section thirty-eight hundred and thirteen." The above enactment supersedes § 1103 of the Code of 1887, which provided as follows: "When any corporation shall expire or be dissolved, or its corporate rights and privileges shall have ceased, all its works and property and debts due to it shall be subject to the payment of debts due by it, and then to distribution among the members according to their respective interests; and such corporation may sue and be sued as before for the purpose of collecting debts due to it, prosecuting rights under previous contracts with it, and enforcing its liabilities, and distributing the proceeds of its works, property, and debts among those entitled thereto." (This provision, which was originally enacted in 1837, was re-enacted in Code 1849, chap. 56, § 28; Code 1860, chap. 56, § 30; Code 1873, chap. 56, § 31). In the Revision of 1887 a clause was added to the effect that "notice to or process against such corporation to answer in any suit or civil proceedings shall be sufficiently served by publication thereof," etc. All the cases cited in the following subsections were decided with reference to the earlier enactment. b. Corporate powers, extent of, during prolonged period of existence. The construction placed upon the above provision was that, as the corporation, "notwithstanding it might have ceased the prosecution of the objects for which it was organized, could still proceed in the collection of debts, the enforcement of liabilities, and the application of its assets to the payment of its creditors, all corporate powers essential to these ends remained unimpaired." In this point of view it was |