
    UNLIQUIDATED CLAIMS AGAINST A DISSOLVED CORPORATION.
    Common Pleas Court of Montgomery County.
    Mary Roberts v. George F. Krug et al.
    
    Decided November 15, 1922.
    
      Corporations■ — Dissolution and Distribution of Assets — Not a Bar to Assertion of Unliquidated Claims — Publication of Notice of Meeting to Dissolve — Without Effect on Claims of Creditors.
    
    1. Tbe bolder of an unliquidated claim against a corporation, wbicb bas
    been dissolved and its assets distributed among its stockholders, may upon reducing bis claim to judgment follow such assets in ■satisfaction of tbe claim so established.
    2. Publication of notice to stockholders of a meeting, called for the pur-
    pose of surrendering corporate authority and dissolving the corporation, is for the benefit of the stockholders, and is no.t constructive notice to creditors of the corporation, and in no way constitutes a bar to the subsequent assertion of claims or affects in any way the liability of the corporation for payment of just claims.
    
      
      Affirmed by the Court of Appeals.
    
   Snediker, J.

This case is before the court on the merits. Oh May 4, 1918, this plaintiff was seriously injured in- a collision which occurred between herself and an automobile belonging to the Krug Baking Company of Dayton, Ohio. On November 12, 1919, she filed a petition in this court charging, negligence against the defendant company and asked damages in the sum of ten thousand dollars. Such proceedings were had that on January 15, 1920, a jury of this court returned a verdict in favor of the plaintiff and against the defendant in the sum of four thousand dollars.

On July 29, 1920, the Court of Appeals sitting in this county found the verdict was excessive in the sum of one thousand dollars, remitted that amount and affirmed the judgment as modified. In the meantime, on March 15, 1920, this plaintiff had filed the case now at bar in which she alleged that on January 20, 1920, she recovered a judgment in tort in' the court of common pleas of this county, against the Krug Baking Company, an Ohio corporation, in the sum' of four thousand dollars, and that on execution it was unsatisfied. She then went forward and alleged that on July 1st, 1918, about two months after the accident in which she was injured, the Krug Baking Company of Ohio sold its real estate and all its physical tangible assets for the sum of $200,Q00, which amount was distributed by it to the defendants as stockholders, 94 per cent, of it to G-eorge F. Krug and the balance, or substantially all thereof, to George A. Krug and Albert Krug, and plaintiff prayed that these defendants be required to account to her to the extent necessary to pay her judgment.

Thereafter the Krug Baking Company (the Ohio corporation), which had not been originally made a party, was added to the list of defendants and service was had upon it and an amendment was filed to the petition, which, among other things, restated the allegations of the petition with respect to the sale of its assets and the distribution of the fund arising therefrom. Answers of a denial of liability on the part of the several defendants were filed. On the date of filing of the petition in the ease an affidavit in garnishment was filed against the Dayton Savings & Trust Company, trustee, to whpm the mortgage securing the bonds made by the purchaser Krug Baking Company, was given.

The position taken by counsel for the defendants is that at the time of the attempted dissolution of the Krug Baking Company and of the sale of its assets and of the distribution, this plaintiff was not its creditor and fraud not being charged in the petition, she, therefore, has no claim upon the funds in the hands of the distributees. On June 6, 1922, this court rendered an opinion in a decision on a demurrer to the petition and to the amendment to the petition, which covers this identical question. Referring to Section 8740 of the G-eneral Code which recites “When a majority of the directors or other officers having the management of the concerns of a corporation for profit, which has completely closed its business and paid all the debts and liabilities incurred by it, desire to surrender its corporate authority and franchises, etc. ” we held that “the term ‘liability,’ used in its broadest and most comprehensive sense, included any obligation which a party was bound in law or justice to perform and was synonomous witb responsibility; that liability in a legal sense is a state or condition of one who is under obligation to do at once, or at some future time, something which might be enforced by action. It may exist without the right of immediate payment. And so holding, the decision of the court was that the petition and amendment both stated a case. The payment of the debts and liabilities of a corporation of which either its directors or other officers desire to surrender its corporate authority, is a condition precedent and constitutes such an obligation of the corporation as entitles one in whose favor a liability exists to payment before such surrender, or in the event that the assets of the company were not exhausted.in its settlement with its creditors and those to whom it is under an obligation of liability, to payment out of any fund remaining in its hands or in the hands of those to whom it may have made distribution. The fact that the dlai-m of this plaintiff was unliquidated at the time of the attempted dissolution, therefore makes no difference as to her right to recover. Whether a creditor or one to whom a liability is due, her privileges are the same.

The state of this case is that not only are these individaul defendants before the court but the Ohio corporation and its board of directors have been so served as to be brought in, and the trustee of the fund is here. We have, therefore, before us all the parties necessary to make such an order as will offer this plaintiff the relief to which she is entitled.

The language of the Supreme Court of the United States, 255 U. S., at page 402, 403 is surely pertinent to this case:

“It is contended that the right to bring a creditor’s bill did not exist, because the judgment against the company was not entered in the trial’ court until a year after the company had divested itself of the property sought to be reached in this suit; and the government did not become a creditor, at all events until after its claim for penalties had ripened into a judgment. But when a corporation divests itself of all its assets by distributing them among the stockholders, those having unsatisfied claims against it may follow the assets, although the claims were contested and unliquidated at the time when the assets were distributed. It is true that the bill to reach and apply the assets distributed among the stockholders can not, as a matter of equity jurisdiction and procedure, be filed until the claim has been reduced to judgment and the execution thereon has been returned unsatisfied, 150 U. S., 371; but, as a matter of substantive law, the right to follow the distributed assets applies not only to those who are creditors in the commercial sense, but to all who hold unsatisfied claims. A corporation can not by divesting itself of all property leave remediless the holder of a contingent claim, or the obligee of an exeeutoory contract, 54 Fed. Rep., 50, or the holder of a claim- in tort, 76 N. Y. 9, 157 Fed. Rep., 407.”

If this language does not fit this case, especially under the peculiar provisions of our Code, we know not how it should be expressed to do so.

Counsel have argued among other things that it would be a hardship on the baking company to require it to hold in its hands a fund sufficient to meet the obligation which here arose out of its negligence; that it could not anticipate either that there would be a suit filed, or the amount that would be claimed in that suit. This is neither here nor there. The Code requires that all the liabilities of the corporation shall be met and it makes no exception.

Another point made by counsel was with regard to the fact that a notice had been given by publication for four weeks in a newspaper and a written notice addressed to each of the stockholders whose residence is known of the object, time and place of the meeting at which the surrender of the corporate authority was to be discussed and passed upon. We do not understand that the giving of this notice was intended to be for the benefit of the creditors and of those to whom the corporation was under liability. This notice is to the stoockholders, and the publication is required for the benefit of those who by transfer and assignment may own stock.and of whose residences the board of directors 'is ignorant. The notice, therefore, would not be constructive as to a creditor or to one to whom the corporation is liable and no obligation would therefore rest on .such a one to file a claim against the corporation before its dissolution, or if he neglected to do so his claim would be lost. There is no doubt that under the law of Ohio the Krug Baking Company of Ohio had a right to make a sale of all its assets to another, but by such sale the selling company was not relieved of its obligation to pay, and there arose as against those who became the recipients of its assets a duty like that of the company itself to respond to any damages which this plaintiff was adjudged entitled to in her action on account of negligence.

Our finding is that the prayer of the plaintiff should be granted.  