237 Mo. 338 | Mo. | 1911
The information is in quo warranto. The respondents are Missouri corporations; the business for which each was incorporated is indicated by its corporate name, a railroad company, two coal mining companies, and an elevator company.
The charge in the information is that the railroad company has acquired the capital stock- of the three other corporations and is engaged in conducting the business for which they were incorporated. More specifically stated, the charge is that the Western Coal & Mining Company was organized under the laws of this State in 1879, with a capital stock of $500,000, for the purpose of carrying on a general coal and mining business in Missouri, Kansas and elsewhere, with power to purchase, lease or otherwise acquire mineral and other lands for the purpose of •mrniug coal and other minerals, buying and selling coal, etc., and owning and operating machinery and appurtenances necessary to carry on that business; and that after its organization the corporation entered upon the business for which it was chartered and continued to conduct the same until the acquisition of its capital stock by the Missouri Pacific Railway Company, whereupon it ceased to perform its
Like specifications are made in relation to the Rich Hill Coal Mining Company, and, varying only in reference to the character of the business, relating also to the Kansas-Missouri Elevator Company. The conclusion from those facts drawn in the information is that the two coal companies and the elevator company have lost their integrity and individuality and are rendered incapable of exercising the franchises granted by their respective charters, that each had become a mere cover for the unlawful exercise of power by the railroad company, and their further existence is of injury to the people of the State.
The prayer is that the two coal companies and the elevator company be ousted of their charters, that the railroad company be ordered to cease operating the business of those three companies, and failing to heed such order, that it be ousted of the corporate rights granted by its charter.
The respondents filed a joint answer to the following effect: They admit the origination of each of the corporations as stated in the information and the purpose for which it was organized, and they admit that a majority of the capital, stock of the three other companies is owned by a trustee who holds the legal title thereto for the use and benefit of the railroad company, but aver that there are four other persons who each own at least one share of the stock. Referring to the averment in the information to the effect that the railroad company holds its charter from the State and has only the powers granted to it as a railroad company by the laws of the State, which are only such powers as are necessary, convenient and incident to the construction, maintenance and
To that answer the Attorney-General filed a reply in which, after denying that any persons other than the trustee for the railroad company owned any of the stock and denying that the stock was acquired for the purposes stated in the answer, went on to aver that, since the acquisition of the stock in the coal companies, the railroad company “through the management, conduct and control of the said coal
The State then moved for judgment on the pleadings and that is the form in which the cause is now submitted for final judgment.
For the purposes of this motion the statements in the answer (or return) of respondents must be taken as true, and the statements in the information admitted by the answer will also be taken as true; the legal conclusions that either party draws from those facts are open for discussion.
The organization of the corporations as stated in the information, and the several purposes for which they were respectively organized, are admitted, and it is also admitted that the majority of the stock in the coai companies and in the elevator company is held by a trustee for the railroad company.
Under the state of facts above mentioned the only question of law in this case is, may a railroad company own the majority of stock in a coal company adjoining or near its fine of road, or in an elevator company offering a convenient means to aid it in the handling and shipping of grain? The question is not, can a railroad company be held to account in a proceeding in quo warranto for an abuse of the power which the ownership of a majority of such stock gives? for perhaps no one would doubt that it would be amenable to such an inquiry, but where there has been no abuse of power, where the business of the corporation is being conducted in the usual way of such
The only written law to which we are referred as sustaining the contention tha't it is unlawful for a railroad company to own stock under such conditions is section 7 of article 12 of the Constitution, in which is the following: “No corporation shall engage in business other than that expressly authorized in its charter or the law under which it may have been or hereafter may be organized.” That clause in the Constitution does not refer to the ownership of stock in another company; the thing forbidden is the engaging in business not authorized by its charter. It would doubtless be a violation of that clause of the Constitution if a railroad corporation should acquire and use the stock of another corporation in whose business a railroad company could not lawfully engage, as a cover behind which to. carry on such business, that is, as a mere means of evading the letter of the law, still, in such case, the offense would be the carrying on of the business, not the owning of the stock.
It would perhaps not be contended that a railroad company could not lawfully own a coal mine and operate it if necessary for the sole purpose of obtaining fuel for its' own use, or that it could not own and operate an elevator in the handling of grain to be transported over its railroad. The business therefore of mining coal or operating an elevator is not business of such a character as the clause in the Constitution above quoted forbids. If the railroad company could do that business with its own means, why could it not secure itself in the matter of obtaining, coal for fuel or a convenience in handling grain by acquiring stock in a coal or elevator company, if it would be more convenient, and if the public was not injured thereby? The more stock a corporation owns' in another concern the more power it has in the elec
It is charged in the information that the charters of the coal companies and the elevator company have become a mere cover for the railroad company under which to hide its unlawful usurpation of the corporate franchises, that those companies by such unlawful usurpation by the railroad company have been rendered incapable of conducting their business, and that their businesses are being conducted by the railroad company. But those statements are denied in the answer of respondents. It is there stated that
There is no use for us to go further and decide whether or not a railroad company may lawfully acquire and hold any or all the capital stock of another corporation whose business has no influence in aiding it in operating its railroad, because there is no such question before us. ■ The court will take judicial knowledge of the fact that coal for fuel is a necessity in the operation of a steam railroad and that an elevator, although not an absolute necessity, is an assistance in the handling and shipping 'of grain, and we hold that a railroad company may acquire stock in coal and elevator companies when the purpose is, as in this case it is, to facilitate the business for which it was chartered.
Our judgment is that the ouster demanded in the information should be denied and the respondents discharged. It is so ordered.