ARk.] HAMMETT V. MOTOR EXPRESS, INC. 595 HAMMETT V. MOTOR EXPRESS, INC. 4-4018 Opinion delivered November 4, 1935. 1. CORPORATI ONS— RDORGANIZATION.—Evidence disclosing merely that a new corporation was organized to transact business similar to that of an old corporation, that only one stockholder of the old corporation held stock in the new and that the only asset of the old corporation acquired by the new was a license of the old corporation and certain permits for operating transportation facilities, held insufficient to establish that the new corporation was a reorganization of the old. 2. CORPO RA TIO NS— REORGANIZATION.—Proof that the secretary of a new corporation agreed to , assume certain liabilities of an old corporation if the president of the latter corporation turned over his interest in the old held insufficient to establish the liability of the new corporation for other liabilities of the old corporation. • Appeal from Pulaski Circuit Court, Third Division; Marvin Harris, Judge ; affirmed. Action hy Curtis Hammett and others against the Motors Express, Inc. From judgment for defendant. plaintiffs have appealed. John E. Coates, Jr., for appellants. House, Moses ce Holmes, for appellee. BUTLER, J. The appellants brought suit against the appellee to recover on a judgment theretofore obtained against J. E. Thompson Motor Express Company, on the allegations, (1) that appellee company was merely a reorganization or continuation of the J. E. Thompson Motor Express Company, and (2) that appellee had assumed the. liabilities of the former . company. Issue was
596 HAiM-IVIETT v. MOTOR EXPRESS, INC. [191 joined and evidence adduced: At the conclusion of the testimony the trial court instructed the jury to return a verdict in favor of the defendant. judgment was entered in accordance with the verdict, frOm which judgment this appeal has been duly prosecuted. • • Counsel for ap p ellant bases his argument on the theory that, under a merger or consolidation or a continuation or reorganization, the successor corporation is liable for the debts of the old company, and cite authorities which amply sustain that contention. He also contends that the assets of a corporation are a trust fund for the payment of its debts, hnd may be followed into the hands of any person—other than a bona fide purchaser in due course of business. The authorities cited sustain that Contention. • • • •• • ! • When we examine the evidence, however, we find a total lack:of any testimony to which the principles of law cited by the appellants would be applicable. There is no evidence -that we can discoVer tending tO §how a reorganizatiOn o r continuation of , the J E: Thompson Motor EXpress Company in Motor Express; , Inc. While Motor Express, Inc.; was organized to transact business similar in nature-to that , pursued formerly -by the J. E. Thompson Motor Express Company, only one of the owners of the capital stock of the 'former comPany was a . shareholderfn the succeeding coMpany, and he ,owned only ten shares , of its capital stock. Purther than this there • appears to•ibe • no cennection between the:two companies. The only assets of the . foimer compaiiy shown to have been purchased by the latter was the' license of the Thompson Motor Express Company and certain per= mits for the operation of motor . truck transportation facilities. In regard to the purchase of the assets of the former company, the only evidence offered • was' a letter of Mr. _C. H. Moses, the secretary and treasurer of Motor Express; Inc., written to cOmisel for the appellants, in. which the statement is. made that the old.Motor Express Company had . gone out . of bnsiness More than a year previous to the writing of the letter, and that an entirely new.corporation took over the routes and probably some of the other assets. In this connection; J. E. Thompson,
ARK.] 597 who had been the president of the J. E. Thompson Motor Express Company, testified that Mr. Moses" agreed to assume his . (Witness') liability in the .. compariy if witness turned loose his interest io Mr. Moses, which be did. Witness stated that the Thompson Company owed an outstanding mortgage.' of $3,000 to Abe .. Kernpner and around $9,000 to the Federal Bank which witness Was informed Mr. Moses had paid ; that this paythent'Was for the cOnsideration . of turning over : witnes g ' interest to Mr:Moses. • This was all the eYidenCe in lhe This falls far short of showing that the appellee company wag not a bona fide purcha:ser, or that the appellee company assumed the liabilities . of.. the• 'Thompson Motor Express Company.. If any one assumed these. liabilities, it was Mr. Moses, and he, only to the extent of •paying the Kempner and Federal Bank-debts. . . - In testing the action of the trial court in directing the verdict, we recognize . and adhere - to . the rule announced in Plunkett v. Hayes,,180 Ark. 505, 21. S. W. (2d) 851, and Smith v. AlcEackin,186 Ark..1132, 57. S. W. (2d) 1043. But, as we ..find . mo evidence- tending.to establish the allegation of tbe appellant.'s complaint, we. conclude that :the lower court,properly directed 'a verdict for the appellee, and ..its judgment will 'therefore • be affirmed. :•
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