Sisk v. Old Hickory Motor Freight, Inc.

Seawell, J. The defendant corporation, on which it was sought to serve process in this action, was created under the laws of this State, and carried on the business authorized by its charter until 1 May, 1942, when it was adjudged a bankrupt, and its charter became forfeited by operation of C. S., 1190. Its principal office was located in Thomasville, Davidson County. Thereafter, plaintiff brought this action; and, the sheriff of Davidson County, to whom summons was directed, having made a return upon the summons that after due diligence and search he had been unable to find any person designated as process agent of defendant, or any other officer, director or agent of the defendant, and that none of these were to be found in the county, caused service to be made on the Secretary of State under the provisions of chapter 133, Public Laws of 1937 (Michie’s Code, 1939, sec. 1137-a). The defendant entered a special appearance and moved to dismiss the action for lack of service and consequent want of jurisdiction. The motion was denied and defendant appealed. *632 No question has been presented for our consideration except tbe validity of tbe service. We examine tbe contentions of tbe parties in tbe light of tbe pertinent statutes. Tbe cited statute — chapter 133, Public Laws of 1937, secs. 1 and 3— provides as follows: “Every corporation chartered under tbe laws of North Carolina shall have an officer or agent in tbe county where its principal office is located upon whom process can be bad, and shall at all times keep on file with tbe secretary of state tbe name and address of such process officer or agent, and upon tbe return of any sheriff or other officer of such county that such corporation or process officer or agent cannot be found, service may be bad upon such corporation by leaving a copy with tbe secretary of state, who shall mail tbe copy so served upon him to tbe process agent or officer at tbe address last given and on file with him, or if none, to tbe corporation at tbe address given in its charter; and any such corporation so served shall be in court for all purposes from and after tbe date of such service on tbe secretary of state. “This section shall not be in derogation of any other act or law pertaining to tbe service of summons or process, but shall be in addition thereto.” Tbe defendant contends that tbe mode of service provided in tbe statute is inapplicable to a corporation whose charter has become forfeited by reason of an adjudication in bankruptcy, as provided in tbe statute — O. S., 1190. Tbe pertinent provision reads as follows: “When a corporation chartered finder tbe laws of this state is adjudged bankrupt under tbe laws of tbe United States . . ., tbe charter of tbe corporation is forfeited without further action, unless tbe stockholders determine by appropriate resolutions to continue tbe corporate existence of tbe corporation after the adjudication in bankruptcy, . . .” Defendant insists that upon forfeiture of tbe charter tbe corporation becomes “defunct” or “dissolved” — at least pro tempore, citing VonGlahn v. DeRosset, 81 N. C., 467, 474-476, and Dobson v. Simonton, 86 N. C., 492—and that it bad not tbe power to appoint a process agent or any officers upon whom process could be served. However, this statute must be read in pari materia with C. S., 1193, tbe application of which also is necessary to determine tbe status of a corporation suffering a forfeiture of its charter under C. S., 1190, by reason of bankruptcy: “All corporations whose charters expire by their own limitation, or are annulled by forfeiture or otherwise, shall continue to be bodies corporate for three years after tbe time when they would have been so dissolved, for tbe purpose of prosecuting and defending actions by or *633 against them, and of enabling them gradually to settle and close their concerns, to dispose of their property, and to divide their assets; but not for the purpose of continuing the business for which the corporation was ■established.” By virtue of this Act, the immediate dissolution of the defendant corporation in the sense contended for by counsel for the defense was obviated. General Electric Co. v. West Asheville Improvement Co., 73 Fed., 386, 388. The corporate existence of defendant was continued for three years from the forfeiture — after the time when it “would have been dissolved”- — for the purpose of prosecuting and defending actions and for winding up its affairs. Its disability applies to continuing the business for which the corporation was established. Under such circumstances — that is, where provision is made for continuing corporate existence for purposes of suit — the rule generally applied is that service may be made on such persons as are designated for that purpose by the statute prior to the forfeiture of the charter. 19 C. J. S., 1567, sec. 1776, and cases noted. In point is Hould v. Squire, 91 N. J. L., 103, 79 Atl., 282, in which, -construing a statute identical with ours, the Court held that the continuance of corporate existence for the purpose of prosecuting and defending suits preserved the statutory mode for serving process existing at the time of the forfeiture. Incidentally, this was an action in tort brought after the forfeiture and discontinuance of the charter, as in the present case. The provision for service upon the Secretary of State is not in the nature of a penalty upon the corporation for not having an agent upon whom process could be had, and not keeping the name of such agent on file with the Secretary of State, which might be condoned because of the alleged inability of the corporation to comply with the statute. It is a device for public convenience and is sustained upon the theory that it is reasonably adequate notice, either to be employed alternatively or where other forms of notice are unavailable. The Secretary 'of State is required to mail the copy of the process served upon him to the process agent or officer at the address last given and on file with him, or if none, to the corporation at the address last given in its charter. This provision is questioned by the defendant as not constituting reasonable notice, because of the uncertainty of relaying the notice to a defendant under the circumstances here. presented. The constitutionality of similar statutory provisions as due process of law was upheld in Smith v. Finance Co., 207 N. C., 367, 368, 177 S. E., 183; Lunceford v. Association, 190 N. C., 314, 315, 129 S. E., 805; Goodwin v. Glaytor, 137 N. C., 224, 232, 49 S. E., 173; Fisher v. Insurance Co., 136 N. C., 217, 222, 48 N. C., 667. The objectionable feature, however, *634 might have been obviated by proper attention of the defendant to the provisions of the statute. We are unable to accommodate the supposed finality of the VonGlahn case, supra, to the facts at issue here. In that case, the corporation and its directors were exonerated because no action whatever had been taken within the three years of grace following the expiration of the charter. This action does not concern any of the assets of the corporation, presently or prospectively, in the hands of the trustee in bankruptcy, but C. S., 1193, covers cases of forfeiture not nearly so horrendous as bankruptcy. We do not think that it was the intention of the cited statutes to bring about a situation in which a corporation could be alive to its assets, but dead to its obligations, or enjoy the security of an indefeasible non esk inventus during the time corporate existence is continued by statute for the purpose of suing and being sued. We regard the service as legally sufficient, and the judgment of the court below is Affirmed.