FRANK J. LANGER and WILLIAM LANGER, Plaintiffs v. FARGO MERCANTILE CO., a corporation dissolved, T. A. Quirk, C. O. Follett, and Croil Hunter, directors and trustees of Fargo Mercantile Company, a corporation dissolved; Fargo Mercantile Co., a corporation, T. A. Quirk, C. O. Follett and Croil Hunter, directors of said Fargo Mercantile Co., a corporation, Defendants.
(186 N. W. 104.)
Corporations—directors of dissolved corporation continuing after expiration of charter held trustees for stockholders.
1. In an action for an accounting brought by two stockholders in a dissolved corporation against the directors as trustees, where it appeared that the charter of the corporation had expired by limitation; that with- out actual knowledge of this fact the business was conducted for more than three years in the same manner as before; that dividends were declared and paid from time to time; that upon discovery of the fact that the charter had expired, and that the directors were liable as trustees under § 4567 of the Comp. Laws for 1913, three of the directors, to avoid the expense and sacrifice incident to liquidation, agreed to and did form a new corporation under substantially the same name; that, without notice to the plaintiff stockholders, they caused the assets to be appraised and purchased by the new corporation; that the stock of the new corporation was allotted to stockholders in the old, other than the plaintiffs; and that the defendants caused to be deposited in payment for plaintiffs’ stock par value, plus 6 per cent. interest from the date of last dividend, which plaintiffs refused to accept—it is held:
Under § 4567 of the Comp. Laws of North Dakota for 1913 the defendant directors became trustees for the stockholders of all the assets of the dissolved corporation.
Corporations—where business is continued after expiration of charter, dividends distributed held stockholders’ property, and not to be applied on liquidation claims to reduce res of the trust.
2. Where a corporate business is conducted for a period of time after the expiration of the charter without knowledge of that fact, and dividends are declared and distributed in the usual course, such dividends are the property of the stockholders, and are not, by operation of law, applied on liquidation claims to reduce the res of the trust.
Corporations—good will attaches to corporate business the same as to partnership business, and trustees on dissolution must account therefor.
