173 N.W. 796 | N.D. | 1919
Lead Opinion
This is an appeal from a certain order overruling a demurrer by defendant to an application for an alternative writ of mandamus and the granting of the writ, which required the defendant, Thomas Hall, as secretary of state, to file in his office certain amended articles of incorporation of the plaintiff upon the payment of a filing fee of $5 and the further sum of $6 for recording the same.
The Equity Co-operative Packing Company was organized on about the 4th of October, 1916, and its articles of incorporation were filed in
At the time of the incorporation, a filing fee of $532 was paid. In January, 1919, the plaintiff decided to increase his capital stock from $1,000,000 to $3,000,000. It held a meeting of its stockholders January 17th; at that meeting 31,744 shares of stock, distributed among 5,994 stockholders, which constituted a majority of all the stockholders, voted to amend the articles of incorporation by increasing the capital stock from $1,000,000 to $3,000,000. On January 21, 1919, the plaintiff presented to the defendant, the secretary of state, a copy of the amendment and also the sum of $11, and requested the secretary of state to file and record such amendment, which the defendant refused to do on the ground that if the plaintiff was an ordinary, and not a co-operative corporation, the statutory filing fee for the amendment would be $1,000 and in addition thereto a recording fee of $6, in all $1,006, instead of the sum of $11 as claimed by plaintiff.
In the application for alternative writ of mandamus, the following allegations are set forth:
“That it was the intention and purpose of the original incorporators of the Equity Co-operative Packing Company, a corporation, and the persons who signed the articles' of incorporation of said corporation, to organize a co-operative corporation pursuant to chapter 92 of the Session Laws of North Dakota for the year 1915; and the attorneys who were employed by said incorporators for the purpose of preparing the articles of incorporation of said corporation were informed that the incorporators desired and intended to organize a co-operative corporation pursuant to chapter 92 of the Session. Laws of North Dakota*527 for the year 1915, and said attorneys were instructed to prepare articles of incorporation pursuant to chapter 92 of the Session Laws of North Dakota for the year 1915; that none of the original incorporators of said corporation or the persons who signed the articles of incorporation of said corporation are lawyers or versed in the law, and did not know that chapter 92 of the Session Laws of North Dakota for the year 1915 required the association together of not less than twenty-five persons to form a co-operative corporation pursuant to such statute, And were not informed by the attorneys who prepared the articles of incorporation for said corporation that at least twenty-five original incorporators were necessary under said statute to incorporate a corporation pursuant to said statute; and when said incorporators signed the articles of incorporation for said corporation, and filed said articles of incorporation in the office of the secretary of state for the state of North Dakota, they believed that they were incorporated' pursuant to chapter 92 of the Session Laws of North Dakota for the year 1915 And intended to form a corporation pursuant to said statute; but because said incorporators were not informed as to the number of persons necessary to form a co-operative corporation pursuant to said statute, .the articles of incorporation of said corporation were signed by only seven persons, and contains nothing indicating an intention to form a co-operative corporation; that the original by-laws adopted by the stockholders of said corporation provide for the distribution of profits of said corporation in part on the basis of and in proportion to the Amount of property bought from or sold to members of said corporation and to other customers, and of labor performed and other services rendered to said corporation, as is shown by a copy of the original "by-laws of said corporation hereto attached marked exhibit “A” and made a part of this affidavit and application; that all of the shares of the capital stock of said corporation which have been sold, have been ¡sold upon the statements and representations of the officers and agents ■of said corporation that the same was a co-operative corporation; and all of the stockholders of said corporation believed the same to be a ■co-operative corporation which will pay patronage dividends to cus•tomers and patrons.”
It also appeal’s from the application that a special meeting of the ¡stockholders of the corporation was had on the 29th day of October,
The claim of plaintiff and respondent is that, while the articles of incorporation were in form those of a general corporation, that it was in fact the purpose and intention of the incorporators to incorporate as a • co-operative corporation under chapter 92 of the Laws of 1915, and that it clearly appears that such business is of a co-operative character as disclosed by an examination of its by-laws and other sources of information; that therefore the plaintiff is permitted under chapter 97 of the Session Laws of 1917 to cure the error, if any, in its incorporation, by taking the proceedings for that purpose required by said chapter, and that plaintiff has taken all such proceedings and has therefore cured such error.
The defendant demurred to the application. He thus admits all the material allegations therein. He thus admits it was the intention of the incorporators of the Equity Co-operative Packing Company to organize a co-operative corporation pursuant to chapter 92 of the Session Laws of 1915; that when the incorporators signed and filed the articles of incorporation they believed they were incorporating pursuant to said chapter; admits whatever is contained in the by-laws of the plaintiff as they were made a part of the affidavit and application for the writ; admits that the different meetings of the stockholders for the purpose of voting and accepting-the benefits of chapter 97 of the Session Laws of 1917 were held, and that a majority of all the stockholders did vote to accept the benefits thereof; and all similar matters that are alleged are thus admitted; admits that the articles of incorporation were by mistake signed by seven instead of twenty-five signers as required by Session Laws of 1915.
• We are of the opinion that chapter 62 of the Laws of 1909 have no
After § 4606 was re-enacted, there being no limitation to the amount of capital stock for which a co-operative corporation might be organized, it became in this respect identical with § 92, in which there was no limitation as to the amount of capital stock. The only difference in this respect between the two sections is that in chapter 95 the amount of the capital stock must be stated. In chapter 92 there is nothing said about the capital stock, no limitation placed thereon, and it must follow that the capital stock thereunder could be any amount the incorporators saw fit to name. We do not believe there is any constitutional question presented in this case. There is no question presented in this case concerning the election of directors or managers of the corporation.' The sole question presented is to determine whether or not the plaintiff is an ordinary or a co-operative corporation. From the allegations in the application and affidavit for a writ of mandamus, and from the demurrer thereto, whi'ch admits all such allegations, we think it stands conceded that the plaintiff is a co-operative corporation; that
We have considered all the points presented in this appeal, and we find no necessity of further discussion of them. The order of the District Court that the peremptory writ of mandamus issue is in all things affirmed. .....
Dissenting Opinion
(dissenting). The purpose of this suit is to obtain a writ of mandamus commanding Thomas Hall, as secretary of state, to receive and file amended articles of - incorporation, increasing the capital stock from $1,000,000 to $3,000,000. The writ of mandamus may be issued to a person to compel the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station. Comp. Laws, § 8457. The question is: Was it the plain duty of Thomas Hall to receive and file the amended articles without receiving the regular incorporation fee of $5 for every $10,000 increase of the capital stock, as provided by statute? Sections 4509, 4510.
In October, 1916, the plaintiff filed with the secretary of state articles of incorporation signed by seven persons as directors, viz.: M. P. Johnson, Tolley, N. D.; A. M. Baker, Fargo, N. D.; F. J. Lee, Valley City, N. D.; Anthony Walton, Minot, N. D.; P. H. Casey, Lisbon, N. D.; J. C. Bergh, Hendrum, Minn.; J. C. Leum, Mayville, N. D.
The articles are in effect: (1) The purpose of the corporation is to do a general packing-house business, with its principal office at Fargo; (2) the number of directors shall be seven; (3) the amount of its capital stock shall be $1,000,000. The stockholders shall be entitled to receive a cumulative dividend of 8 per cent.
In accordance with the statute the plaintiff paid the secretary of state the sum of $533. Manifestly the plaintiff was incorporated under the general laws, and under such laws it was not entitled to in
The complaint is in the nature of a bill in equity, appealing to the court to excuse the carelessness of the plaintiff and its counsel, by which they incorporated under the general laws, when their purpose was to incorporate under chap. 92, Laws 1915, but it does not appear that any such excuse was presented to the secretary of state, or that the statute made it his plain duty to act the part of a clairvoyant or a mindreader so as to determine what the plaintiff intended to do, and to correct its mistakes. Furthermore, it does appear from a copy of the by-laws (§ 28), submitted as a part of the complaint, that it is not the purpose of the plaintiff to distribute its earnings in accordance with chapter 92. By said § 28 it is provided that, after a sinking fund has been provided and all running expenses and dividends paid, a sum not to exceed 10 per cent of the remaining net profits shall be paid to the American Society of Equity for educational purposes, which shall be prorated among the several states, and the remainder of the net
Concurrence Opinion
(concurring specially). This is a mandamus proceeding wherein the relator asks that the secretary of state be compelled to file certain amended articles of incorporation. The controversy arises over the amount of filing fee to be paid. The relator claims that it is a co-operative corporation, and is entitled to have these articles filed upon the payment of the sum of $11. The respondent contends that the relator has not shown itself entitled to be classified as a co-operative corporation and therefore is required to pay the fee exacted from general corporations. The relator interposed a general demurrer to the application for the writ, and the question presented is whether plaintiff’s application states facts sufficient to entitle it to the relief sought.
In 1909 the legislature of this state first provided for the incorporation and regulation of co-operative associations. See chap. 62, Laws 1909. In this act the amount of capital stock to be issued by such associations was limited to $50,000. The act also provided, that no member should own shares of a greater par value than $1,000. In 1915 the legislature enacted an act to define co-operative associations and to authorize their incorporation. Laws 1915, chap. 92. This statute defined a co-operative company, corporation, or association, to be one “which authorizes the distribution of its earnings in part, or wholly, on the basis of, or in proportion to, the amount of property bought from or sold to members, or to members and other customers, or of labor performed, or other services rendered to the corporation.” The act provided that “any number of persons not less than twenty-five may be associated and incorporated for the co-operative transaction of any lawful business.” The act further provided that “any co-operative [company], corporation, or association, being under the definition
It will be noted that there is a marked distinction between chapter 92, Laws 1915, and chapter 97, Laws 1917, as regards the right of existing corporations, and the powers and duties of the secretary of state as to such corporations when they endeavor to claim the benefit of laws applicable to co-operative corporations. Under the provisions of chapter 92, Laws 1915, any general corporation might become a co-operative corporation upon the assent of all of its stockholders, by filing the proper certificate with the secretary of state. Under that
The matter comes before us on a demurrer to the application for the writ. The articles of incorporation are not before us, except in so far as the contents thereof are averred in the application. I am by no means clear as to what the legislature meant by the language employed in the Act of 1917. And while I have considerable doubt upon the matter I am not prepared to say that the majority members are in error in holding that the facts alleged show that the incorporators of the relator “attempted” to organize a co-operative corporation.
Manifestly the questions involved are such that it is not at all strange that the secretary of state should have been in doubt as to the fee to exact from the relator. It is not denied that the secretary of state has acted in good faith in the matter. He has not questioned the propriety of the remedy employed by the relator, or placed any obstacles in the way of obtaining a speedy determination of the question involved. In his brief, relator’s counsel expresses his appreciation of the courtesies shown by the adverse party during the course of the litigation, and the assistance given to the end that a speedy determination might be obtained of the questions involved. Under the circumstances it is only right no costs whatever should be awarded against the respondent. See State ex rel. Baker v. Hanna, 31 N. D. 570, 579, 154 N. W. 704.