Judgment rendered November 3, 1911, reversed and remanded June 20, 1916.
Rehearing on Original Appeal,
(158 Pac. 175.)
Mr. Justice Beandelivered the opinion of the court.
After the opinion rendered in this case by Mr. Justice McBride on October 22, 1915, counsel for defendant submitted a motion to dismiss the cause and questioned the authority of the court to substitute the stockholders of the plaintiff corporation as parties plaintiff.
In its motion the defendant raises two main questions, namely:
(1) “Substitution is unknown except in cases where legal title to the interest of a party in the subject matter of a suit descends and devolves, upon the death of the party, upon the person to be substituted; and the assets, whether realty, personalty or choses in action, of a corporation, do not pass at law on the dissolution of the plaintiff to the stockholders; (2) substitution cannot be permitted except by statute, and there is no statute in Oregon permitting the substitution of stock*48holders in place of a corporation which dies pending suit to which it is a party.”
It is contended in behalf of plaintiff that upon the death of the corporation without creditors, and without provision being made for the distribution of its assets, the same descends by operation of law to the stockholders, who are the beneficiaries under the trust, and the only persons who have any interest in the property, and that thereby the stockholders become tenants in common of the corporate property and are entitled to all the remedies that the latter have in asserting their ownership to such property.
Section 38, L. O. L., declares that:
“No action shall abate by the death, marriage, or other disability of a party, or by the transfer of any interest therein, if the cause of action survive or continue. In case of the death, marriage, or other disability of a party, the court may, at any time within one year thereafter, on motion, allow the action to be continued by or against his personal representatives or successors in interest.”
Long v. Thompson, 34 Or. 359, 362 (55 Pac. 978), is authority for the proposition that the disability of a party, pending an appeal to the Supreme Court, does not abate the appeal, notwithstanding no application be made for a substitution within a year as required by this section, the statute not applying where death occurs after an appeal has been perfected. "We do not understand that the learned counsel for defendant question the right of the stockholders to any property formerly belonging to the defunct corporation, but their contention in its final analysis is that in order to prosecute the action which was properly commenced and in which a judgment was rendered in the lower court during the existence of the corporation, a suit in equity is necessary to authorize the same. The fact *49that parties may enforce their rights to property by a suit in equity does not show that they are not the owners thereof, but rather the reverse. The provisions of Section 38 intended to carry out fully the first declaration that no action shall abate by the disability of a party, and that those who succeed to the interest of the plaintiff are by virtue of this section entitled to prosecute the action. The claim the plaintiff once had against the defendant has not been annihilated. The stockholders of the corporation have an equitable, beneficial interest in the corporate property during the life of the corporation, and when it dies such interest ripens into a legal title and necessarily vests in the only persons having any interest in the corporate property who, in the absence of creditors, are the stockholders.
In Baldwin v. Johnson, 95 Tex. 85 (65 S. W. 171), the corporation, the John Henry Shoe Company, was dissolved and the stockholders attempted to appoint commissioners to wind up their affairs. The commissioners brought an action to recover certain real property, and the court held that they had no capacity to maintain the action. Thereupon the plaintiffs amended their complaint by averring that they were stockholders of the defunct corporation. The trial court instructed the jury that plaintiffs as stockholders had no such title or interest in the property as would permit them to recover, and directed a verdict for defendant. On appeal the court used this language:
"The judge of the District Court correctly instructed the jury that the plaintiffs could not recover as com-, missioners of the John Henry Shoe Company, * * But the property itself, upon the dissolution of the corporation, became the property of the stockholders, each one of whom owned an undivided interest in it in the proportion that his stock bore to the whole capital stock: Harbor Co. v. Manning [94 Tex. 558] (63 S. W. *50627). In the case cited, Chief Justice G-aines, for the court, said: ‘But in its last analysis the stockholders are the beneficial owners of the assets of the corporation. This proceeding is instituted upon the theory— which we think a correct one—that the shareholders are the ultimate owners of the corporate property, and when the corporation is dissolved, and its creditors are satisfied, they hold title to the assets in proportion to their respective shares.’ The proposition quoted is well sustained by authority and by sound reasoning”—■ citing 2 Perry on Trusts, § 920; How v. Waldron, 98 Mass. 281.
See, also, Pewabic Mining Co. v. Mason, 145 U. S. 349 (36 L. Ed. 732, 12 Sup. Ct. Rep. 887); Lauman v. Lebanon Valley R. R. Co., 30 Pa. 42 (72 Am. Dec. 685).
7-9. There being no creditors of the Service & Wright Lumber Company, the stockholders thereof hold the corporate property of the defunct corporation as tenants in common. They are its legal successors in interest. Section 27 of the Code directs that every cause shall be prosecuted in the name of the real party in interest except as otherwise provided in Section 29. It appears that the stockholders of the plaintiff corporation are the only parties interested as plaintiffs, and have a sufficient interest in the result of this action to prosecute the same. The motion to dismiss is overruled.
The defendant’s contention that there is no authority for the substitution of the stockholders as parties plaintiff in accordance with the opinion heretofore rendered is not well taken. For the reasons set forth in the opinion of Mr. Justice Burnett of September 30, 1913 (67 Or. 63 (135 Pac. 539), and the opinion of Mr. Justice McBride, announced October 22,1915 (152 Pac. 262), the first judgment in this action in the lower *51court rendered November 3,1911, will be reversed and tbe cause remanded for a new trial.
Reversed and Remanded.
Mr. Justice Eakin absent.