150 Tenn. 53 | Tenn. | 1923
delivered the opinion of the Court.
This case was decided at a former day of the term. By an oversight the opinion of the court was published before disposition of a petition to rehear which was filed some time after.the decision.
The petition presents nothing new, being -but a reargument of the points of law originally presented to the court. The basis for urging the petition, aside from the alleged errors of the former decree, is the importance of the decision itself, by reason of the petitioner entailing loss to stockholders and possibly to its creditors, and its effect upon all other pbrons who have permits under the “Blue
This really affords no ground for rehearing. All cases are important; the court cannot, for the mere sake of the effect of a decision upon other cases, fail to give proper consideration and to decide each case according to the law and the facts in the case. If the decision is unfortunate in its effect upon other transactions, the result of a particular case cannot be moulded to meet such a situation. The legislature has enacted Avhat is called the “Blue Sky Law,” and, regardless of its consequences, it must be enforced. If the act of an investment corporation falls within the condemnation of the law, it is a misfortune which the court cannot be influenced by.
In the former decision of the case it was held that the complainant had failed to file with the secretary of State certain documents required by the act to be filed by investment companies with the secretary of State before offering or attempting to sell any stock, bonds, or other securities of any kind or character, and providing that any contract for the sale of securities of such investment company is illegal and void if made without compliance with this prerequisite of the statute.
It had previously been decided in Goodyear v. Meux, 143 Tenn., 287, 228 S. W., 57, that a subscription contract taken by a corporation which was in default with reference to filing the statements exacted of it by the Blue Sky Law was illegal and could not be enforced against the
To escape this conclusion, it was argued at the original hearing, and reargued in the petition, that the fact that the secretary of State had issued a permit to the complainant to do business in Tennessee was conclusive that the complainánt had in all respects complied with the law.
The petitioner does not contend that the assumption of power 'by an officer is conclusive, but the argument is that the secretary of State is granted certain discretionary and quasi judicial powers under the Blue Sky Law and that
Tbe correct principle for application in this case on this point is that stated by the court in Insurance Co. v. Craig, 106 Tenn., 621, 62 S. W., 155.
“However, where tbe official is authorized by an effective law to do or not to do a given thing- upon his own investigation or otherwise, the courts cannot coerce or restrain his action ip reference thereto; but jnust permit him, in the sphere which the law has assigned to him, to exercise a free and untrammeled judgment and discretion.
“It is even his prerogative, in the first instance, to construe the law under and within which he acts, and the courts, although of the opinion that his construction is incorrect, will not interfere by mandamus or injunction. Decator v. Paulding, 14 Pet., 515; American Casualty Ins. & Sec. Co. v. Tyler, 60 Conn., 448.
“The rule of noninterference, on the part of the courts, with the free exercise of discretionary functions by public officials has been applied in cases too numerous to mention. . . .
“But, it must always be remembered that the public functionary of the class under consideration can act independently of the courts only to the extent that the law gives him that power. The law is the source of his authority, and he has no discretion beyond that conferred. All of his acts must be within the limits of that authority, and of this the courts must finally judge. Though he may undoubtedly and in every instance construe the law for himself as to -discretionary matters actually within the law, he cannot by interpretation, however conclusive to*59 his own mind, bring within his discretion any matter that is not in fact so placed by the law when rightly interpreted by the courts. His domain is prescribed by the law, and within that domain the discretion given him is beyond the control of the courts; however, it is the province of the courts to determine the limits of that domain and keep him within its real bounds and to construe the law and define the limits of his authority in all proper cases.
“Then, it is the province of this court, and not that of the insurance commissioner, to determine finally whether or not the action proposed by him, in the present instance, is within the scope of his authority.” Insurance Co. v. Craig, 106 Tenn., 640, 641, 642, 643, 62 S. W., 159, 160.
The statute makes it the duty of the secretary of State to examine the statements and documents so filed; he has the authority to have made a detailed examination of the investment company’s affairs. He is given discretionary power upon investigation if he find the investment company solvent and its articles of incorporation, its bylaws, plan of business, and proposed contracts provide for a fair, just, and equitable plan for the transaction of business and if, in his judgment, it promises a fair return on the stock, he should issue the permit. The secretary of State is also given general supervision and control over these investment companies, but the act nowhere provides for any discretion on the part of the secretary of State in regard to the filing of the specified documents. He has no power to exercise any discretion or judgment with respect to it until these documents have been filed. Any doubt upon this subject must necessarily be removed when we find that the act expressly provides that no investment company can offer or attempt to sell any stock until after
It is again urged upon us that there was substantial compliance with the statutory requirements. We are unable to find anything in the petition to induce a change from the opinion that material and essential documents required by the statute were not in fact filed. There was no pretense of the filing of a statement showing in detail the full plan upon which this company proposed to transact business. There was no copy of the laws of the State under which the complainant was incorporated filed. The importance of the filing of such law is emphasized when the articles of incorporation are examined. These articles of incorporation do not specify the rights and powers of the corporation. It simply says:
“The rights and powers that may be exercised by this corporation are those confirmed by the provisions of chapter 24, Miss., Code of 1906, and all laws amendatory thereof.”
Without the filing of these laws, the charter which was filed would be absolutely meaningless so far as furnishing knowledge of the rights and powers of the corporation. It will not do to say that these laws were in the State Library or at some other point where they could be read and ascertained, because the statute requires that a copy of the law shall be filed with the secretary of State along with the application to do business.
The argument is again advanced that complainant was at least a de facto corporation. There is no contention
Petition to rehear is denied.