Sunset Oil Co. v. Marshall Oil Co.

SHENK, J. The defendant, Marshall Oil Company, appealed from a judgment in an action to quiet title to real property. The plaintiff moved to dismiss the appeal on the ground that the corporate powers of the defendant had been suspended in 1922 by the forfeiture of its charter for non-payment of the corporate license tax, and that it had no power to prosecute an appeal under the powers reserved to it by the statute. The plaintiff presents a certificate of the Secretary of State showing that the defendant had, on March 4, 1922, forfeited its charter for non-payment of its license tax pursuant to the provisions of the Corporation License Act (Stats. 1915, p. 422, revised by Stats. 1917, p. 371, as amended; see Deering’s General Laws, 1937, Act 1743, p. 876). The material portions of section 11 of that act (Stats. 1917, p. 377) provided and now provide: “After six o’clock p. m. of the Saturday preceding the first Monday in March in any year, the corporate rights, privileges and powers of every domestic corporation which has failed to pay the tax and money penalty for nonpayment thereof imposed by this act shall, from and after said hour of said day, be suspended, and incapable of being exercised for any purpose or in any manner except to execute and deliver deeds to real property in pursuance of contracts therefor made prior to such time, and to defend in court any action brought against such corporation, . . . Every person who attempts or purports to exercise any of the rights, privileges or powers of any delinquent domestic corporation except as permitted by this act . . . shall be guilty of a misdemeanor . . . Every contract made in violation of this section is hereby declared to be void.”

The legislature thus preserved to the corporation whose powers were suspended under said section, the right or power “to defend in court any action brought against such corporation.” It apparently is conceded that the right “to defend [653]in court any action brought against” the corporation extends to any action which may be brought against the corporation subsequent to the forfeiture or suspension, and that the reservation of power to defend is not limited to actions pending at the time of the forfeiture or suspension. In short, it is the contention of the plaintiff that the right to defend does not include the right to give notice of, perfect, or prosecute an appeal from an adverse judgment. The contention is without merit.

The plaintiff does not present any authority to the effect that a suspended corporation which has the right to defend actions in court has not the right to appeal. The legislative history of the corporation license act, beginning with the Statutes of 1905, page 493, the changes and revisions therein, and the effect thereof upon the exercise of corporate rights and powers, is set forth in various decisions. (See Kaiser Land & Fruit Co. v. Curry, 155 Cal. 638 [103 Pac. 341]; Brandon v. Umpqua Lumber and Timber Co., 166 Cal. 322 [136 Pac. 62]; Rossi v. Caire, 174 Cal. 74 [161 Pac. 1161] ; Anthony v. Janssen, 183 Cal. 329 [191 Pac. 538]; California National Supply Co. v. Flack, 183 Cal. 124 [190 Pac. 634]; Rossi v. Caire, 186 Cal. 544 [199 Pac. 1042]; Ransome-Crummey Co. v. Superior Court, 188 Cal. 393 [205 Pac. 446] ; Van Landingham v. United Tuna Packers, 189 Cal. 353 [208 Pac. 973]; Southern Land Co. v. McKenna, 100 Cal. App. 152, 159 [280 Pac. 144].) For present purposes it is sufficient to note that the courts of this State have recognized that where, under forfeiture clauses, the right to defend actions in court was reserved to the corporation, such right included also the right to appeal. In Brandon v. Umpqua Lumber & Timber Co., supra, a motion was made by the plaintiff to dismiss the defendant corporation’s appeal on the ground “that the forfeiture took away the right of the corporation to give notice of, perfect, or prosecute an appeal.” The forfeiture in that ease had occurred on November 30, 1912, for failure to pay the corporation license tax. The statute there involved permitted the directors of a corporation whose charter had been so forfeited to settle its affairs and to maintain or defend actions pending. The court denied the motion, holding that “the right of defense includes the right to prosecute an appeal in the name of the corporation.” In the case of Nelson v. Marsh, 100 Cal. App. 578