Summary
In Dodier Realty Investment Co. v. St. Louis National Baseball Club, 361 Mo. 981, 238 S.W.2d 321, 324, this Court, sitting en banc, pointed out that the two words are not the same; that a consolidation exists where a new corporation comes into existence to assume the liabilities of the former corporations and the former corporations are dissolved and cease to exist, while a merger, which means something more than a mere consolidation, exists where one corporation is continued and the others are merged in it without the formation of a new corporation.
Summary of this case from Ackerman v. Globe-Democrat Publishing CompanyOpinion
No. 42067.
February 16, 1951. Rehearing Denied, April 9, 1951.
The merger of the St. Louis National Baseball Club with another corporation did not violate a clause against assignment of its baseball park lease. After a notice of forfeiture was filed because of failure to pay disputed rent defendant lessee paid plaintiff lessor the undisputed amount and paid the balance into court, filing a counterclaim therefor. Since no motion for new trial was filed the findings of the trial court on the counterclaim that there should be no forfeiture; that the money deposited in court should be paid to plaintiff, but without prejudice to another action by defendant, are binding on the Supreme Court.
1. LANDLORD AND TENANT: Forfeitures Not Favored. Forfeitures of leaseholds are looked upon with disfavor and will not be enforced unless the breach is unequivocal.
2. LANDLORD AND TENANT: Corporations: Merger of Lessee Corporation: Clause Against Assignment of Lease Not Violated. When the lessee corporation was merged into another corporation which became the surviving corporation, the lessee corporation was dissolved by operation of law. The merged corporation having succeeded to the rights of the original lessee by operation of law, there was no assignment of the lease within the prohibition of the covenant against assignment.
3. LANDLORD AND TENANT: Appeal and Error: Rent Dispute: Payment Into Court: Counterclaim Denied Without Prejudice: Motion for New Trial Not Filed: Findings of Trial Court Binding on Appeal. There was a dispute as to certain rent credits and after a notice of forfeiture defendant deposited the disputed amount into court and counterclaimed therefor. The trial court found against the claim of forfeiture and that plaintiff was entitled to receive the amount paid into court, but without prejudice to the issues raised in the counterclaim being litigated in another action. Plaintiff filed a motion to modify the decree on the counterclaim, but neither party filed a motion for a new trial on said counterclaim. The findings of the trial court on the counterclaim are binding on the Supreme Court and the decree upon the counterclaim must be affirmed.
Appeal from Circuit Court of City of St. Louis; Hon. Robert L. Aronson, Judge.
AFFIRMED.
Lon Hocker for appellants; Jones, Hocker, Gladney Grand and William O. De Witt of counsel.
(1) The court erred in voiding and enjoining appellant's declaration of forfeiture of February 25, 1949, on the ground that the articles of merger did not constitute an assignment in violation of the lease-license agreement of 1937. The intention of the parties, gathered from the words used, in the light of the contemporary law, controls. Meyer v. Christopher, 176 Mo. 580, 75 S.W. 750; Chater v. Carter, 238 U.S. 572; Swabey v. Boyers, 274 Mo. 332, 203 S.W. 204; 17 C.J.S. 702. (2) The intention of the parties was to prevent a voluntary transfer to another corporate entity. "Assign" means "transfer". Century Dictionary; Black's Law Dictionary; Webster's International Dictionary; St. J. St. L. Ry. Co. v. St. L., I.M. S. Ry. Co., 135 Mo. 173, 36 S.W. 602; 51 C.J.S. 553, 554; Mutual Drug Co. v. Sewall, 353 Mo. 375, 182 S.W.2d 575; Ecker v. Chicago, B. Q.R. Co., 8 Mo. App. 223. (3) "Will not" means "not voluntarily". Sinclair v. Sinclair, 224 Ill. App. 130; Medinah Temple Co. v. Currey, 162 Ill. 441, 44 N.E. 839; Pappas v. Broad East Jersey Realty Co., 137 A. 417; Buddon Realty Co. v. Wallace, 238 Mo. App. 900, 189 S.W.2d 1002. (4) "Successor in Interest" means "involuntary transferee". Claim of Turano, 23 N.Y. Supp.2d 213. (5) Under contemporaneous Missouri law, mergers and consolidations had always been held to extinguish the merging or consolidating corporations and to effect a transfer to the merged or consolidated corporation. Evans v. Interstate Rapid Transit Co., 106 Mo. 594, 17 S.W. 489; State ex rel. Wine v. Keokuk W.R. Co., 99 Mo. 30, 12 S.W. 290; Thompson v. Abbott, 61 Mo. 176; State ex rel. Consolidated School Dist. v. Smith, 343 Mo. 288, 121 S.W.2d 160; State ex rel. Wilson v. Garroutte, 67 Mo. 445; Eans v. Exchange Bank, 79 Mo. 182; Kinion v. K.C., Ft. Scott M. RR. Co., 39 Mo. App. 382; Wells v. Missouri-Edison Electric Co., 108 Mo. App. 607, 84 S.W. 204; Lincoln Safe Deposit Co. v. Continental Life Ins. Co., 213 Mo. App. 561, 249 S.W. 677; Berthold v. Land Lumber Co., 91 Mo. App. 233; Springfield Light Co. v. Hobart, 98 Mo. App. 227, 68 S.W. 942. (6) The devolution accomplished by any merger or consolidation is voluntary. All the Missouri cases so hold. The designation of the survivor was a deliberate choice. Kinion v. K.C., Ft. Scott M. RR. Co., supra; State ex rel. Wine v. Keokuk W.R. Co., supra; New York Central R. v. C. E.I. Ry. Co., 360 Mo. 885, 231 S.W.2d 174; Bazley v. Commissioner, 331 U.S. 737. (7) Under the 1943 merger statute there was a transfer. Missouri Corporation Code, Sec. 70; Jones, Collector, v. Noble Drilling Co., 135 F.2d 721; Koppers Coal Transportation Co. v. U.S., 107 F.2d 706; Niagara Hudson Power Corp. v. Hoey, 117 F.2d 414; certiorari denied 313 U.S. 571; State ex rel. Wilson v. Garroutte, supra; 12 U.S.C.A. 34a; U.S. v. Northwestern Natl. B. T. Co., 137 F.2d 761. (8) The non-reversion clause of the 1943 merger statute does not alter the effect of the merger under the 1937 agreement. Pearcy, Missouri Corporation Law, pp. 406-407; Fisher v. Patton, 134 Mo. 32, 34 S.W. 1096; Wells v. Missouri-Edison Electric Co., supra. (9) The result is what matters — not the names employed. Johnson v. United Rys. Co., 281 Mo. 90, 219 S.W. 38. (10) The court erred in failing to dismiss the counterclaim without qualification. This court should now do so. Respondent could have paid under protest the account demanded within the grace period and sued for recovery of the payment on ground of duress. American Brewing Co. v. St. Louis, 187 Mo. 367, 86 S.W. 129; National Enam. Stamp. Co. v. St. Louis, 328 Mo. 648, 40 S.W.2d 593. (11) Having refused, for reasons of its own, to follow this safe course, respondent must suffer the consequences of its refusal to fulfill its contract. Phoenix Trust Co. v. Holt, 312 Mo. 563, 279 S.W. 714; Smith v. Citizens Bank of Gerald, 232 Mo. App. 906, 106 S.W.2d 45. (12) Respondent's payment into court was for its own benefit and credit. It was conditional upon appellant's successful defense of the counterclaim and did not constitute a tender. It tendered a lawsuit; not money. Bridges v. Smith, 213 S.W. 858; Lortz v. Rose, 346 Mo. 1212, 145 S.W.2d 385; Harbough v. Ford Roofing Products Co., 281 S.W. 686; St. Louis v. Senter Comm. Co., 343 Mo. 1075, 124 S.W.2d 1180. (13) If the judgment be regarded as making a retroactive tender, it is still conditional, it is too late by a year, and it is insufficient in amount. St. Louis v. Senter Comm Co., supra, l.c. 1082. (14) The judgment ordering payment of the deposit to appellant "without prejudice" to respondent's right to relitigate the issues of the counterclaim is void and a violation of Sec. 99 of the Code of Civil Procedure. Laws 1943. p. 384; Sec. 111. R.S. 1939; State ex rel. Grace v. Connor, 219 S.W.2d 867; Lawyer's Co-Op Pub. Co. v. Gordon, 173 Mo. 139, 73 S.W. 155; Thompson v. Wendling, 219 S.W. 671; Nordquist v. Armourdale State Bank, 225 Mo. App. 186, 19 S.W.2d 553; Offenstein v. Gehner, 223 Mo. 318, 122 S.W. 715; Hunter v. Delta Realty Co., 350 Mo. 1123, 169 S.W.2d 936; Faulkenberry v. Boyd, 356 Mo. 267, 201 S.W.2d 400; Summet v. City Realty Brokerage Co., 208 Mo. 501, 106 S.W. 614. (15) The case of Blank, Inc., v. Lennox Land Company, the only authority cited by the court to sustain its unprecedented judgment, has no application to this case, because there is no ambiguity in the present lease. The counterclaim failed to establish any color of right to the withheld amount. J.E. Blank, Inc., v. Lennox Land Co., 351 Mo. 932, 174 S.W.2d 862. (16) In depriving appellant of the fruits of its successful litigation of this issue, i.e., a final judgment of dismissal, and in enjoining the forfeiture, which was the legal consequence of the findings and judgment on the facts, the court has deprived appellant of due process of law in violation of Amend. XIV, Const. U.S., and has denied appellant the equal protection of the law in violation of Amend, XIV, Const. U.S., and it has impaired the obligation of appellant's contract, in violation of Art. I, Sec. 10, clause 1, of Constitution of U.S. This court should dissolve the injunction and dismiss the counterclaim in conformity with Sec. 140 (c) of Code of Civil Procedure. Thompson v. Lindsay, 242 Mo. 53, 145 S.W. 472.
Rhodes E. Cave, Thomas S. McPheeters and George W. Simpkins for respondent; Bryan, Cave, McPheeters McRoberts of counsel.
(1) Our Missouri Statutes, both those in effect when the lease was executed in 1937 and also when the merger here involved took place in 1948, by their very terms, expressly provided that, upon such consolidation or merger becoming effective, the consolidated or merged corporation shall succeed to and retain all rights in property of the predecessor corporations. R.S. 1929, sec. 4954; R.S. 1939, sec. 5361; General and Business Corporation Act of Missouri, sec. 171; General and Business Corporation Act of Missouri, secs. 62 to 70, incl. (2) The lease prohibits any assignment by the tenant under the lease, but expressly contemplates that there may be a successor which is not an assignee. There is a clear legal distinction between the position of an assignee of a leasehold and a successor in interest whether by merger or otherwise. Sec. 14 of the Lease, dated April 10, 1937; General and Business Corporation Act of Missouri, sec. 70; McDonald v. May, 96 Mo. App. 236; Tyler Estate v. Geisler, 85 Mo. App. 278; Dean v. Lee, 227 Mo. App. 206, 52 S.W.2d 426; 36 C.J., sec. 1240, Landlord and Tenant, p. 377; In re Murray Realty Co., 35 F. Supp. 417; In re Clerc Chem. Corp., 142 F.2d 672; Miss. Valley Trust Co. v. Southern Trust Co., 261 F. 765. (3) A restriction in a lease against any assignment thereof, while valid, nevertheless constitutes a restraint against alienation, is not looked upon with favor and must be strictly construed, and will not be given a construction which will permit the restraint to go beyond the express stipulation of the parties. General and Business Corporation Act of Missouri, sec. 70; Haeffner v. A.P. Green Firebrick Co., 76 S.W.2d 122; J.E. Blank, Inc., v. Lennox Land Co., 174 S.W.2d 862, 351 Mo. 932; Frank v. Dodd, 130 S.W.2d 210; 13 C.J., sec. 512, Contract, p. 541; 17 C.J.S., sec. 320, Contract, p. 742; 51 C.J.S., sec. 33-B, Landlord and Tenant, p. 541; 32 Am. Jur., sec. 327. Landlord and Tenant, p. 296; Bobb v. Frank L. Talbot Theater Co., 221 S.W. 372. (4) The passing of this leasehold title to the merged corporation was by operation of law resulting from the corporate merger, it does not constitute an assignment, and hence is not prohibited by the clause in the lease prohibiting an assignment. U.S. v. Seattle-First National Bank, 321 U.S. 583; Seaboard Airline R.R. v. United States, 256 U.S. 655; Turner-Farber-Love Co. v. Helvering, 68 F.2d 416; American Gas Elect. Co. v. Commissioner, 33 B.T.A. 471, affirmed 85 F.2d 527; New York Central Railroad Co. v. Commissioner, 79 F.2d 247, certiorari denied 296 U.S. 653; Commissioner of Internal Revenue v. Oswego Falls Corp., 71 F.2d 673; Electric Bond Share v. State of New York, 293 N.Y.S. 175, 249 A.D. 371; Rockefeller Foundation v. State of New York, 144 Misc. 460, 258 N.Y.S. 812; Proprietors of Locks Canals on Merrimack River v. Boston Maine R., 139 N.E. 839. (5) Even if the transfer of this leasehold estate can be said to be in any way a voluntary transfer and not wholly by operation of law, still under the great weight of authority such transfer is not an assignment in violation of a general covenant not to assign. U.S. v. Seattle-First Natl. Bank, 321 U.S. 583; In re Child's Co., 64 F. Supp. 282; In re Willow Cafeterias, 111 F.2d 83; Miller v. Fredeking, 101 W. Va. 643, 46 A.L.R. 842; Paddell v. Janes, 145 N.Y.S. 868; Chesnut v. Master Laboratories, 27 N.W.2d 541, 148 Neb. 378; Hunt v. Shell Oil Co., 116 F. 598; Burleson v. Blankenship, 76 P.2d 614; Morris Glick, Inc., v. Gurbman, 56 N.Y.S.2d 324; Roosevelt v. Hopkins, 33 N.Y. 81; Sinclair v. Sinclair, 224 Ill. App. 130; Miller v. Pond, 183 N.W. 24; Adelstein v. Greenberg, 77 Cal.App. 458, 247 P. 520; Buddon Realty Co. v. Wallace, Administrator, 238 Mo. App. 900. (6) The merger did not terminate the existence of St. Louis National Baseball Club, but continued it in the merged corporation. General and Business Corporation Act of Missouri, sec. 70; DeKerwin v. First Natl. Bank, 179 F.2d 347; Bank of Long Island v. Young, 91 N.Y.S. 849-51, 101 A.D. 88; Adams v. U.S. Distributing Corp., 184 Va. 134, 162 A.L.R. 1227; First Minneapolis Trust Co. v. Lancaster Corp., 185 Minn. 121, 240 N.W. 459; National Banking Act, Title 12, Chap. 2, secs. 33, 34, 34a; Defoe v. Board of Public Instruction of Alachua County, Florida, 132 F.2d 971; Cannon v. Dixon, 115 F.2d 913; Zollman on Banks and Banking, (Perm. Ed.), sec. 157; Springfield Lighting Co. v. Hobart, 98 Mo. App. 227; Lincoln Safe Deposit Co. v. Continental Life Ins. Co., 212 Mo. App. 561. (7) Appellants are not entitled to any relief on this appeal because the alleged grounds of relief were not presented to or expressly decided by the trial court. Laws 1943, p. 353, Civil Code, sec. 140; Ebeling v. Fred J. Swaine Mfg. Co., 357 Mo. 549, 209 S.W.2d 892; Kansas City v. Reed, 358 Mo. 532, 216 S.W.2d 514. (8) A court of equity has jurisdiction to enjoin the forfeiture of a lease because of non-payment of rent. Pomeroy, Equity Jurisprudence, sec. 453; Taylor v. City of Carondelet, 22 Mo. 105; Woodson v. Skinner, 22 Mo. 13; J.E. Blank, Inc., v. Lennox Land Co., 351 Mo. 934, 174 S.W.2d 862; Abrams v. Watson, 59 Ala. 524; Brewer v. Forest Gravel Co., 172 La. 828, 135 So. 372; Tyson v. Surf Oil Co., 195 La. 248, 196 So. 336; Rudnick v. Union Producing Co., 209 La. 943, 25 So.2d 906; Darnall v. Day, 37 N.W.2d 277; Sheets v. Seldon, 74 U.S. 416; In re Hool Realty Co., 2 F.2d 334, certiorari denied 266 U.S. 633; Ostenberg v. Scotts Bluff Inv. Co., 183 N.W. 95; Galvin v. Southern Hotel Corp., 154 F.2d 970; 63rd Halstead Realty Co. v. Chicago City Bank Trust Co., 299 Ill. App. 297, 20 N.E.2d 162: Note 16 A.L.R., l.c. 449; Taylor, Landlord and Tenant, sec. 495. (9) St. Louis National Baseball Club, Inc., could not have paid the amount in controversy and later sued to recover it back. Wolfe v. Marshal, 52 Mo. 167; Illinois Merchants Trust Co. v. Harvey, 355 Ill. 284, 167 N.E. 69. (10) The entry of a judgment without prejudice to future litigation was not reversible error. 21 C.J. 591; 30 C.J.S. 909.
Dodier Realty Investment Company, a corporation (hereinafter referred to as Dodier), the owner-lessor of premises in the City of St. Louis known as Sportsman's [322] Park, brought ejectment against St. Louis National Baseball Club, Inc., to recover possession and for $222,500 damages for defendant's alleged wrongful withholding thereof. Defendant filed answer with which was coupled a counterclaim whereon American League Baseball Company of St. Louis, a corporation, was made a cross-defendant. On the theory that the answer raised purely equitable defenses and sought purely equitable relief, the cause was, on defendant's motion transferred to an equity division where the issues raised by the petition and answer and those raised by the counterclaim and reply were separately tried. Such separate hearings eulminated in a single judgment or decree denying ejectment, and finding for defendant (in part) on the counterclaim from which both plaintiff and the cross-defendant on the counterclaim appeal.
Sportsman's Park is the playing field for both of the major league baseball teams of St. Louis, the National League "Cardinals" and American League "Browns". The instrument evidencing the agreement under which respondent, as the owner of the Cardinals uses the part (and out of which this action arose) is referred to by Dodier as a "lease-license." and by respondent as a "lease". Its precise nature need not be determined because our questions neither involve, nor are they affected by, such distinctions, so for brevity and convenience, the term "lease" will be used throughout this opinion. It was entered into between Dodier, as lessor, and a corporation bearing the name "St. Louis National Baseball Club," as lessee, for a term of 14 years from January 1, 1937, renewable at the option of the lessee for an additional term of 10 years; rental at $35.000 per year, plus one-half of the cost of maintenance. The lease provided for exclusive possession in the lessee of certain office quarters, and intermittent possession of the playing field, grandstands, etc.
This litigation concerns the validity of two declarations of forfeiture of that lease, made by Dodier at different times and for different reasons (one for an alleged breach of a covenant not to assign without lessor's consent, and the other for an alleged default in the payment of rent), so that two separate and distinct controversies are involved, one designated by the parties as the "assignment controversy" and the other as the "rent controversy". This separateness is maintained in this court by dividing the briefs into sections severally bearing those designations, and which are complete in themselves, in that each contains a statement of the relevant facts, points relied on with citation of authorities, and an argument touching one such particular aspect of the case. This opinion disposing of the appeal will, therefore, follow a similar pattern of division.
THE ASSIGNMENT CONTROVERSY
The facts giving rise to the assignment controversy are not in dispute. In January, 1948, the lessee, St. Louis National Baseball Club, was merged into another Missouri corporation, National Sports, Incorporated. The latter had acquired all except a fraction (less than 1%) of the preferred and common stock of the former. The merger was effected pursuant to our General Business and Corporation Act. (Laws 1943, p. 410; § 4997.1 et seq., Mo. R.S.A.) A "plan of merger" having been previously submitted to, and approved by, the stockholders of both corporations, as required by the statute (§ 65), articles of merger were entered into in which National Sports, Incorporated, was designated as the "surviving corporation" under § 62 of the act. Such articles also provided for a change in name from "National Sports, Incorporated," to "St. Louis National Baseball Club, Inc." The merger, as well as the change in name, became effective January 10, 1948, upon the issuance by the Secretary of state, under § 68, of a certificate of merger (and of change in name), which was duly recorded in the Office of the Recorder of Deeds of the City of St. Louis on February 19, 1949. We need not further particularize the facts respecting the merger because the single question presented under the "assignment controversy" is one of law; that is, whether merger, under the facts outlined. [323] operated as, or constituted an assignment of the lease in violation of paragraph 14 thereof so as to entitle Dodier to declare a forfeiture under paragraph 15.
(14) "The second party covenants and agrees that it will not assign the right hereby granted to it, without the previous written consent of the first party, and that the assignee or successor in interest of the second party, from time to time, shall be and remain liable for the due and faithful performance of all the covenants, agreements, conditions and stipulations hereof, to be kept, observed and performed by the second party, it being further understood that such assignment shall not release the second party from the responsibility herein contained."
(15) "* * * every failure * * * to keep and perform any of the covenants, agreements, conditions and stipulations herein contained, shall, at the option of the first party, make and create a forfeiture of said right hereby granted and a termination of the time for which said premises are to be used by the second party," etc.
We have been cited to no case holding devolution through corporate merger, as here involved, to be within the prohibition of a covenant against assignment without the lessor's consent. That precise question does not appear to have been at issue in any of the adjudicated cases. Forfeitures of leaseholds are looked upon with disfavor. They will not be enforced unless the breach is unequivocal. J.E. Blank, Inc. v. Lennox Land Co., 351 Mo. 932, 174 S.W.2d 862, 868-869. In construing restraints, courts are careful not to go beyond express stipulations.
Plaintiff spells out an intention to limit the right granted to the particular corporate entity named in the lease by ascribing to the word "assign" its broad sense or meaning "transfer," coupled with the circumstance that another paragraph of the lease prohibited lessee from using the premises for any other purpose than that of playing championship baseball games in the National League, and so negatived the idea that the nonassignability clause was to prevent the use of the park for some other purpose. It is then argued that the vesting of the rights of the merging, tenant corporation in the surviving corporation was "entirely voluntary, and not (in the sense of involuntary) by operation of law;" that under the 1943 act, there was an extinguishment of the merging corporation, and by the very wording of the statute, the merger "transferred" the lessee's rights in the lease, and hence there was a violation of the covenant for which forfeiture was provided.
Respondent, conceding that any assignment by the tenant without the landlord's consent was prohibited, urges that by the use of the words "successor in interest" in the covenant in question, it was expressly contemplated that there might be a successor who was not an assignee, and contends that the passing of the leasehold title to the merged corporation was by operation of law resulting from the merger, and did not constitute an assignment.
Dodier's claim of voluntariness is based on the fact that the directors and stockholders approved and brought about the merger. They took all the steps necessary to bring the statute into operation, but we do not regard this circumstances as determinative of the question of whether the transfer of the leasehold (as an asset of the merging corporation) was by operation of law. It was said in United States v. Seattle-First National Bank, 321 U.S. 583: "But in a broad sense, few if any transfers ever take place `wholly by operation of law,' for every transfer must necessarily be a part of a chain of human events, rarely if ever other than voluntary in character. Thus to give any real substance to the exemption, we must take a more narrow view and examine the transfer apart from its general background. We must look only to the immediate mechanism by which the transfer is made effective. If that mechanism is entirely statutory, effecting an automatic transfer without any voluntary action by the parties, then the transfer may truly be said to be `wholly by operation of law.'
[324] "Here the actual transfer to respondent of the legal and beneficial title to the securities owned by the state bank was not effected by or dependent on any of the voluntary acts relating to the consolidation agreement or the ratification or approval thereof. Nor was any voluntary deed, conveyance, assignment or other instrument utilized. Rather the transfer occurred solely and automatically by virtue of § 3 of the National Banking Act."
§ 70 specifies the effect of merger, in pertinent part, thus:
"(a) The several corporations parties to the plan of merger * * * shall be a single corporation, which * * * shall be that corporation designated in the plan of merger as the surviving corporation, * * *
"(b) The separate existence of all corporations parties to the plan of merger * * *, except the surviving * * * corporation, shall cease.
"(c) Such surviving * * * corporation shall have all the rights, privileges, immunities, and powers and shall be subject to all the duties and liabilities of a corporation organized under this Act.
"(d) Such surviving * * * corporation shall thereupon and thereafter possess all the rights, privileges, immunities, and franchises, as well of a public as of a private nature, of each of the merging * * * corporations; and all property, real, personal, and mixed, and all debts due on whatever account, including subscriptions to shares, and all other choses in action, and all and every other interest, of or belonging to or due to each of the corporations so merged * * *, shall be taken and deemed to be transferred to and vested in such single corporation without further act or deed; and the title to any real estate, or any interest therein, under the laws of this State vested in any of such corporations shall not revert or be in any way impaired by reason of such merger * * *.
"(e) Such surviving * * * corporation shall thenceforth be responsible and liable for all the liabilities and obligations of each of the corporations so merged * * *. Neither the rights of creditors nor any liens upon the property of any of such corporations shall be impaired by such merger or consolidation."
Dodier says that the fundamental question upon which this appeal must be decided is whether, under the statute above set out, the merging corporation (St. Louis National Baseball Club) ceased to exist, its theory being that such merging corporation was dissolved and did cease to exist, so that there was necessarily a transfer (and, therefore, an "assignment") of the leasehold.
The former statute (in effect at the date of the execution of the lease, § 5361, R.S. '39, and Mo. R.S.A., then § 4954, R.S. '29, and Mo. St. Ann.), merely provided that "any two corporations (of the kind therein mentioned) may amalgamate, unite and consolidate said corporations and form one consolidated corporation," etc. The provisions of the 1943 act, in which merger and consolidation are separately treated, do not appear to have undergone judicial construction in this jurisdiction. They are, of course, not the same. Distinctions to be drawn between the two are thus noted in 19 C.J.S., Corporations. § 1604: "A true consolidation, which exists where a new corporation springs into existence to assume the liabilities of the former corporations and the prior corporations are dissolved and cease to exist, should be distinguished from a merger, which `means something more than a mere consolidation' and which exists where one corporation is continued and the others are merged in it without the formation of a new corporation."
And in 13 Am. Jur., Corporations, § 1176, it is said: "As the term [consolidation] is correctly used, there can never be a consolidation of corporations except where all the constituent companies cease to exist as separate corporations and a new corporation, the consolidated corporation, comes into being. * * *
"The second of such groups [transactions whereby the interests of two or more [325] corporations become identified] comprehends a merger which consists of a combination whereby one of the constituent companies remains in being — absorbing or merging in itself all the other constituent corporations. It is therefore not the equivalent of consolidation."
The principle is epitomized in Freeman v. Hiznay, 349 Pa. 89, 36 A.2d 509, 154 A.L.R. 423: "It is true that while, in the case of a merger, one of the combining corporations continues in existence and absorbs the others, in a consolidation all of the combining corporations are deemed to be dissolved and to lose their identity in a new corporate entity which takes over the properties, powers, and privileges, as well as the liabilities, of the constituent companies: Buist's Estate, 297 Pa. 537, 541, 147 A. 606, 607."
It will be recalled that § 70 provides in (a) that "The several corporations parties to the plan of merger * * * shall be a single corporation" — that one "designated in the plan of merger as the surviving corporation;" and in (b) that "The separate existence of all corporations parties to the plan of merger * * *, except the surviving * * * corporation, shall cease." We think these provisions are to be construed as working a dissolution of the merging corporation, and we so hold. Such consequence is solely by force of the statute, and hence by operation of law. By the same token, it must be held that the transfer of assets, as an incident of the merger, is effectuated under and by force of the statute itself (§ 70 (d) providing that "all property * * * shall be taken and deemed to be transferred to and vested in such single corporation without further act or deed"). The same is true, of course, as to liabilities under (c). Such was the construction put upon a merger statute quite similar to ours in the recent case of Wisconsin Electric Power Co. v. Wisconsin Dept. of Taxation, 251 Wis. 346, 29 N.W.2d 711. The merged corporation having succeeded to the rights of the original lessee by operation of law, it follows that there was no assignment within the prohibition of the covenant in question, and the trial court was correct in so holding.
THE RENT CONTROVERSY
After the assignment controversy arose, Dodier and the merged corporation (hereinafter sometimes referred to as the Cardinals) entered into a stipulation dated March 30, 1949, providing that until the termination of litigation to resolve the assignment controversy, the merged corporation, or Cardinals, should continue to exercise and enjoy all of the rights and privileges granted the original lessee, and in the same manner and upon the same terms and conditions.
American League Baseball Company of St. Louis (hereinafter called the Browns) was also a tenant of the park under a lease from Dodier, by the terms of which the Browns were required to maintain the premises, with a provision that Dodier should reimburse them "for one-half of such cost and expenses or cause the same to be done." One of the obligations of the Cardinals under § 6 of the lease in question was that of reimbursing Dodier (upon monthly statements to be rendered by it) for one-half of the cost and expenses of maintenance, which Dodier had, in turn, agreed to pay or cause to be paid to the Browns.
In April, 1949, Dodier presented such a statement to the Cardinals showing the sum of $12,744.30 as the balance due by them on account of such maintenance cost and expenses. The Cardinals claimed they were entitled to a credit of $4767.68 because of the use at certain Negro exhibition games of the lighting system which was jointly owned by the Cardinals and the Browns. Dodier refused to recognize the validity of the claimed credit, and on May 9, 1949, served on defendant a notice of forfeiture. The Cardinals had 30 days in which to cure any such default, and so on May 10 they tendered to Dodier and the Browns the full amount due according to the aforesaid statement, except the item of $4767.68. Thereafter, on June 8, 1949, the Cardinals filed their counterclaim and paid the disputed sum of $4767.68 into the registry of the court under the following [326] allegations:
"12. Defendant further states, however, that in view of the claim of forfeiture and so as to avoid irreparable damage to defendant, defendant hereby tenders into court the balance of $4,767.68 here in controversy so that if the court should determine that all or any part thereof is due and owing to plaintiff, or to said American League Baseball Company of St. Louis, the amount thereof may be paid to said American League Baseball Company of St. Louis."
The counterclaim prayed that the plaintiff be enjoined from asserting any forfeiture of the lease; that title be quieted in the merged corporation as lessee under the lease, and for other relief.
The decree ordered and adjudged that the clerk pay over to the plaintiff the disputed sum of $4767.68 theretofore deposited in the registry of the court, "but that such payment shall be without prejudice in any way to the right of defendant St. Louis National Baseball Club, Inc., to assert in any other litigation it may determine to bring, any claims not specifically adjudicated herein, which it may have against either the plaintiff or the cross-defendant American League Baseball Company of St. Louis on account of the profits of the exhibition games played on said premises during 1948 including the profits from the `concession business' in connection with the said exhibition games, and including the division of profits from any exhibition games which were played after the 1948 season, or may be hereafter played, and the `concession business' in connection therewith, or any claims it may have for the reasonable value of said St. Louis National Baseball Club, Inc.'s, interest in the lights and lighting system, turnstiles, cushions and whatever other equipment of any kind is used in connection with the operation of Sportsman's Park, and which may have been furnished or is now owned by said St. Louis National Baseball Club, Inc., in conjunction with American League Baseball Company of St. Louis." The decree further ordered and adjudged the declaration of forfeiture in question to be void and of no effect; enjoined plaintiff from asserting any forfeiture of the lease on account of said declaration, or otherwise interfering with defendant's possession under said lease; adjudged the same to be in full force and effect, and defendant to be entitled to all of the rights of lessee thereunder.
Plaintiff and the cross-defendant on the counterclaim did not file a motion for new trial, but did file a motion to amend the judgment and opinion "in the following respects and for the reasons set out:
"1. To render judgment in favor of the plaintiff and cross-defendant on the counterclaim because the findings thereon compel such judgment under the law.
"2. To delete from the finding that plaintiff was on June 8, 1949, and still is, entitled to the disputed $4767.68, the declaration that this finding is without prejudice to the right of defendant to bring another action to relitigate this question, because under the findings and the law this declaration is illegal and violative of the Code of Civil Procedure, Sections 10 and 14 of Article I of the Constitution of Missouri, and Amendment XIV of the Constitution of the United States.
"3. To delete from the judgment and opinion (a) the order that the notice or declaration of forfeiture dated May 9, 1949, is void, (b) the injunction against asserting a forfeiture under such notice, and (c) the declaration that the lease is in full force and effect and defendant entitled to the rights of the lessee thereunder, because under the findings and the law these orders, injunctions and declarations are illegal and violative of the Code of Civil Procedure, and Sections 10 and 14 of Article I of the Constitution of Missouri, and Article I, Section 10. Clause 1, and Amendment XIV of the Constitution of the United States."
It is obvious that appellants' motion to amend accepts the findings of the court as correct, and seeks amendment of the decree solely on the basis that such findings compel it. No question arises as to the jurisdiction of the court over the subject matter, nor as to the sufficiency of the counterclaim to state a claim upon which relief can be granted, and so because not [327] presented to or expressly decided by the trial court, as required by § 140 (a) of the Civil Code, Laws 1943, p. 353, § 512.160 (1), RSMo 1949, we do not consider such assignments appearing in appellants' brief as that the respondent could have paid under protest the account demanded within the grace period and sued for recovery for the payment on the ground of duress, and so must suffer the consequences of its refusal to fulfill its contract; and that respondent's payment into court was for its own use and benefit, was conditioned upon a successful defense of the counterclaim, and did not constitute a tender, etc. With those matters eliminated, the whole burden of plaintiff's complaint is that the court "having found that plaintiff was entitled to the payment withheld, the counterclaim should have been dismissed." But this contention disregards the conditional nature of such award, and fails to take into account the controlling effect of still another finding made in that same connection, all of which appears in § 8 of the decree, as follows:
"The Court finds that under the pleadings and the proof it is not able to adjudicate what part of said sum of $4,767.68 defendant St. Louis National Baseball Club, Inc., is entitled to receive, and that said question may, without prejudice to the rights of said St. Louis National Baseball Club, Inc., be adjudicated in a new suit or by amendment of the pleadings in this cause and further proof on the questions involved. But the Court further finds that plaintiff has no right to declare a forfeiture on account of the facts and circumstances presented on the counterclaim and that said defendant St. Louis National Baseball Club, Inc., has demonstrated its good faith in asserting its claims as hereinabove set forth by paying the disputed sum into the registry of this Court and by making such payment within the time prescribed in the notice of forfeiture and therefore plaintiff is not entitled to declare any forfeiture of said lease on account of the facts and circumstances hereinabove set forth. And the Court further finds that defendant St. Louis National Baseball Club, Inc., having indicated to the Court its intention not to amend its pleadings herein or to offer further proof herein, but that it intends to further litigate the questions involved in the counterclaim in a separate proceeding, and the Court finds that plaintiff is entitled to receive the said sum of $4,767.68 heretofore paid into the registry of this Court, but without prejudice to the right of said St. Louis National Baseball Club. Inc., to litigate such questions in another proceeding."
Under the form of review, as cast by the motion to modify, the express finding of the court that, under the pleadings and the proof, it was unable to adjudicate what part of the disputed sum of $4767.68 the defendant was entitled to receive, and that Dodier had no right to declare the forfeiture, is binding. This necessarily disposes of the same objection as affecting the "without prejudice" provisions of the decree awarding the disputed fund to Dodier, as well as to the granting of the injunction, and other features of the relief granted.
The judgment is affirmed. All concur.