103 Ga. 666 | Ga. | 1898
This was a petition filed by It. H. Plant and W. E. McCaw as minority stockholders of the Macon Oil & Ice Company, a corporation, against that company, E. N. Jelks, It. J. Taylor, and the Southern Phosphate Works, for an injunction to prevent the corporation from making or carrying into effect a lease of its property and franchises, which petitioners contended was ultra vires. The petition alleged, in substance, that the Macon Oil & Ice Company was about to consummate
The Macon Oil & Ice Company answered, denying the material allegations of the petition, and alleging that the truth of the transaction complained of was as follows: The officers and -agents of the company had rented to E. N. Jelks and R. J. Taylor, and not to the Southern Phosphate Works, for the term of -one year, beginning October 1, 1897, the property of the company, for $2,500, payable quarterly in advance in four payments •of $625 each; and in addition to this rental, the tenants were to pay all taxes on the property for the year 1898, and the ground-rent due by the company to the Central Railroad, amounting to $131.86 per quarter, and .were to return the property at the •end of the year in the same condition as when received, usual wear and tear excepted, giving bond for the faithful perform.ance of the, contract. That the above was the entire transaction, and had been consummated between the parties before the filing of the suit. The application and order incorporating the Macon Oil & Ice Company on the hearing was intro
It was contended by counsel for the plaintiffs, that the ■enumeration of the powers granted to this corporation by the order of the judge of the superior court excluded the exercise ■of all powers not conferred by its charter; that the order of incorporation did not include the power to lease the entire plant ■of the corporation, or, in other words, to go out of business as ■a manufacturing concern. The general doctrine that the powers of a corporation, whether public or private, are such only as are conferred by its charter, either expressly or by fair implication, is too well settled to require discussion. The question, however, whether a private corporation, unless expressly restrained by statute, has an unlimited power of alienating or leasing its property i's one upon which the authorities do not ■apparently agree. A distinction must be drawn between the powers of a public corporation and those of a private corporation in this particular. Our attention has been called to the cases of Thomas v. Railroad Company, 101 U. S. 71, and Pa. R. R. Co. v. St. Louis etc. R. R. Co., 118 U. S. 290, in which that court ruled that a railroad company, unless specially authorized by its charter, or aided by some other legislative action, can not, by lease or other contract, for a long period of time, turn over to another company its appurtenances, franchises and powers. In Reese on Ultra Vires, § 137, it is stated: “ This rule is based upon the theory that public or quasi-public corporations, which possess and exercise the right of eminent domain or its equivalent, owe duties to the public as well as to their stockholders; and they can not sell or lease their corpo
In Taylor on Private Corporations, 3d ed., § 130, it is declared that a corporation may alienate, or lease, a portion or even the whole of its property; and may assign its property in trust for the benefit of its creditors. The author further says,, however, the proposition, that to accomplish the ends of its incorporation a corporation may deal with its property just as an individual, is too broad; and that a corporation can not alienate or assign its property regardless of the rights of its creditors, or of a dissenting minority of shareholders; and a corporation owing duties to the public can not, without special authority, alienate, lease, or mortgage its franchises, or do any act that may disable it from performing its public duties in the manner indicated by its constitution. In 1 Morawetz on Private Corporations, § 416, it is declared: “ A transfer of the assets of a corporation by a sale, or a long lease in consideration of an annual rent, is unauthorized, although made in good faith for the purpose of closing out the company’s business, unless provision be made for paying to dissenting shareholders the value of their shares in the whole property in cash.” The plaintiffs in error cite as authority for their position the dissenting opinion of Justice Story in the case of Beaston v. Farmers’ Bank, 12 Peters, 138, in which the learned Justice states that he exceedingly doubts “if any corporation, at least without the express assent of all the corporators, can rightfully dispose of all its property by such a general assignment, so as to render itself incapable in future of performing any of its corporate functions. That would be to say, that a majority of a corporation had a right to extinguish the corporation, by its own will, and at its own pleasure. I doubt that right; at least, unless under very special circumstances.” Even this dissenting opinion is pregnant with the
Upon a cursory glance at the authorities above cited, and a number of others we have investigated upon the subject, there would seem at first to be' an irreconcilable conflict upon the powers and rights of a majority and a minority of stockholders in a private corporation, touching its authority to alienate or lease its property and franchises. But we think that nearly if not quite all of the authorities upon the subject can be reconciled, and that from a careful consideration of all of them together can be deduced the following principles, about which there seems to be very little, if any, conflict: 1st. While a public or quasi-public corporation can not, without express authority, convey or lease its property and privileges, as a general rule
Judgment affirmed.