In re Dissolution of Packer City Tire & Rubber Co.

McCOY, J. The Packer City Tire & Rubber Company is a corporation existing under the law's of the state of South Dakota. In May, 1915, certain stockholders and directors of said corporation made application to the circuit court of Hughes county for an order dissolving said ¡corporation under the provisions of the statute relating to the Voluntary dissolution of corporations. Thereafter on the 2d day ¡of July, 1915, an order was made and entered dissolving said corporation'. Thereafter on the 5th day of November, 1915, certain other stockholders and officers of sa'id corporation moved the said circuit court to- vacate and set aside the said order of dissolution theretofore made ¡on July 2d, on the ground that said order of dissolution was obtained by fraud and misrepresentations practiced upon the court. Thereafter the circuit court made an order vacating and setting aside the said order of dissolution and restored said corporation to its corporate • existence. Erom this last order vacating the former order of dissolution appeal has been taken by the parties who procured the first odder,. [1] The question is raised that the circuit court had no jurisdiction to vacate the order of dissolution by' means of a motion; that the only remedies then open to those who objected to said order of- -dissolution were by an- appeal from said order or by a motion to ¡open the default -on the ground of mistake, inadvertence, or exeus'eable neglect. We are of the opinion that under the Circumstances Of this case a motion to vacate was proper. In Beach v. Beach, 6 Dak. 371, 43 N. W. 701, it was, held that where a judgment is void for want of jurisdicton it may be vacated by a motion made in the original action. It seems to be generally held that courts of record possess inherent power [51] to vacate and set aside judgments obtained by means of fraud and deceit practiced upon toe -count in the procuring of such judgment. Freeman v. Wood, 11 N. D. 1, 88 N. W. 721; Kohl v. Lillienthal, 81 Cal. 378, 20 Pac. 401, 22 Pac. 689, 6 L. R. A. 520; Yorke v. Yorke, 3 N. D. 343, 35 N. W. 1095; Nichells v. Nichells, 5 N. D. 125, 64 N. W. 73, 33 L. R. A. 515, 57 Am. St. Rep. 540; Garr, Scott Co. v. Spaulding, 2 N. D. 414, 51 N. W. 867; Norton v. Atchison R. R. Co., 97 Cal. 388, 30 Pac. 585, 32 Pac. 452, 33 Am. St. Rep. 198, and exhaustive note 60 Am. St. Rep. 633. In this last cited case from California it is held that under the common-law rule courts -of record always had toe inherent power to set aside and vacate their -own judgments on motion -during the term at which the judgment was entered, but as there were no commion-law terms known or in existence in California, th-e motion to vacate -could be properly entertained within a reasonable time-after the rendition of the original judgment. Th-is decision was rendered under a provision of the Code of Civil Procedure to the effect that th-e superior courts- (which correspond- to our circuit 'courts') are always -open for the transaction of court business, substantially toe same as is provided by section 33 of our Code of Civil Procedure. [2,3] We 'are of the view that the facts disclosed1 on the motion ito vacate the -order dissolving said corporation were sufficient to sustain the pro-position -that -said ds-solution order was obtained by means of fraud and -deceit; that toe applicants for said order of -dissolution did not in go'od faitin truthfully show to the circuit court such facts as would -authorize or give the court jurisdiction to make said- -o-rder for dissolution. Section 446 of toe Civil Code provides toe manner and! condition upon which the court m-ay dissolve a -corporation upon- the voluntary application of its stockholders an-d officers. This is purely a statutory procedure, -and the requirements thereof must be comp-li-ed with in order to give the court jurisdiction to dissolve a corporation. In order to confer jurisdiction upon the- court to- order -dissolution it must be shown that at a legal meeting the stockholders ha-d voted by a Vote of two-thirds to voluntarily dissolve -such corporation. The application for such dissolution) must be signed by a majority of the board of directors, and- toe statute further declares that if all to-e statements- contained' in toe -application [52] are shown.' to be true the -court must 'declare the corporation dissolved. It apipe-ars in this casé that the call for th-e meeting of stockholders for the purpose of considering dissolution designated the 25-tb day of April, 1915, as the time for holding such meeting. It • appears- -that saidl -date w-asi on -Sunday. None- -of the stockholders -of said- -corporation were legally .bound to. -appear -and attend such meeting. It also appears that two-thirds of the stockholders never did vote to dissolve said .corporation, and that the aipipli-catoo for such dissolution was not signed by a maj-o-rity -of the directors, -and as a matter -of fact there was no truth in the material statements o-f the application -upon which’ the court based the -order for dissolution. In this -case the fraud and deception goes to the very question of jurisdiction, and we are of the' view that jurisdiction cannot toe acquired by fraud. The attempted or assumed jurisdiction having been acquired1 by fraud and deception was void -and- constituted noi jurisdiction at all. The- jurisdictional, facts never existed. We are of the -o-piinom that the motion to vacate was pro-perly granted. Tire fo-llo-win-g authorities sustain this view: 10 Cyc. 1303; Cook on Corporations, vol. 2, § 629; Watson v. Roller Skating Co., 177 Ill. 203, 52 N. E. 317; Chamberlain v. Rochester Co., 7 Hun (N. Y.) 577; In re Pyrolusite Co., 29 Hun (N. Y.) 429; In re Dolgeville Light Co., 160 N. Y. 500, 55 N. E. 287; In re Hale’s Estate, 121 Cal. 123, 53 Pac. 429; In re Hawgood, 159 N. W. 117. The order appealed from is affirmed.