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M.A.S., INC. v. VAN CURLER BROADCASTING CORP.

April 12, 1973

M.A.S., INC., Plaintiff,
v.
VAN CURLER BROADCASTING CORP. et al., Defendants


Flannery, District Judge.


The opinion of the court was delivered by: FLANNERY

Flannery, District Judge.

 In this action the plaintiff corporation alleges disturbance of possession, conversion and interference with the conduct of business. There is not complete diversity of citizenship, but the court has jurisdiction over this local matter because the action was filed before the effective date of the District of Columbia Court Reorganization Act of 1970. *fn1"

 The defendants Read and R.K.O. Stanley Warner Theaters filed a motion to dismiss which raises the issue whether a District of Columbia corporation whose articles of incorporation have been revoked for failure to pay the required annual report fee may maintain an action which was instituted prior to the revocation. In a decision dated November 19, 1972, York and York Construction Co. v. Alexander, *fn2" the District of Columbia Court of Appeals held that D.C. Code ยง 29-941(b) (1967) *fn3" precludes the maintenance of such an action until the necessary fees are paid. Sound policy requires the utmost deference to that decision because it represents the interpretation of a local statute by the highest court of the District of Columbia. However, if the District of Columbia Court of Appeals were confronted with the circumstances of the present action, it probably would reach a conclusion contrary to the York decision. Consequently, in the present case this court need not follow the York decision, and the plaintiff corporation may maintain its action without paying the annual report fee.

 I

 In September 1971 the plaintiff's articles of incorporation were revoked for the plaintiff's failure for two consecutive years to file an annual report and pay the annual report fee of ten dollars. *fn4" Although a dissolved corporation may be reinstated upon filing of the past due reports and payment of the fees, *fn5" the plaintiff does not wish to be reinstated because the corporation is no longer in business. Apparently, a petition for reinstatement is the only procedure by which past due fees may be paid.

 The question whether the plaintiff corporation can maintain this action after its articles of incorporation have been revoked requires close examination of the interplay between three provisions of the District of Columbia Code. Section 29-938 describes the basis and procedure for revocation of the articles of incorporation. Subsection (d) of that section provides:

 Another provision relating to revocation of the articles of incorporation appears in Section 29-931i which provides:

 
Survival of remedy after dissolution.
 
The dissolution of a corporation . . . by proclamation of the Commissioners for failure to pay annual report fees or file annual reports as provided in the chapter, . . . shall not take away or impair any remedy available to or against such corporation, . . . or any right or claim existing, or any liability incurred, prior to such dissolution if suit or other proceeding thereon is commenced within two years after the date of such dissolution. Any suit or proceeding by or against the corporation may be prosecuted or defended by the corporation in its corporate name. . . . *fn7"

 And finally there is Section 29-941(b) which provides:

 
(b) No corporation required to pay a fee, charge, or penalty under this chapter shall maintain in the District of Columbia any action at law or suit in equity until all such fees, charges, and penalties have been paid in full. *fn8"

 Without referring to Section 29-931i, the District of Columbia Court of Appeals in York & York Construction Co. v. Alexander *fn9" confronted the apparent inconsistency between Sections 29-938(d) and 29-941(b). The court held, first, that these two statutes are not inconsistent because Section 29-938(d) merely preserves corporate status for certain limited purposes, whereas Section 29-941(b) precludes the maintenance of an action by any corporation which has not satisfied its statutory financial obligations. *fn10" Even if the statutes were inconsistent, the court held, the "more specific mandate" of Section 29-941(b) would prevail over the general language of Section 29-938(d). *fn11" ...


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