O'Brien v. Socony Mobil Oil Co.

Citation152 S.E.2d 278,207 Va. 707
PartiesMarybelle Louise O'BRIEN v. SOCONY MOBIL OIL COMPANY, Successor, etc.
Decision Date16 January 1967
CourtSupreme Court of Virginia

James F. X. O'Brien, Newark, N.J., (Walter E. Rogers, Williams, Mullen & Christian, Richmond, on the brief), for appellant.

John S. Battle, Jr., Richmond (A. E. Dick Howard, Gordon H. Rosser, Jr., McGuire, Woods & Bettle, Richmond, on the brief), for appellee.

Before EGGLESTON, C.J., and BUCHANAN, SNEAD, I'ANSON, CARRICO and GORDON, JJ.

GORDON, Justice.

On September 28, 1962, the stockholders of Virginia-Carolina Chemical Corporation ('VC') approved an amendment to its certificate of incorporation, providing for the conversion of all outstanding shares of VC's 6% Cumulative Dividend Participating Preferred Stock (the 'Old Preferred') into newly authorized shares of stock and the cancellation of all dividend arrearages on the Old Preferred. On the same day, VC filed articles of amendment with the State Corporation Commission, and the Commission entered an order issuing a certificate of amendment. The Commission issued the certificate pursuant to § 59 of the Virginia Stock Corporation Act, which became effective January 1, 1957. 1

When the certificate of amendment was issued, Marybelle Louise O'Brien owned 100 shares of Old Preferred. On October 4, 1965, Miss O'Brien filed a notice of appeal from the Commission's order, and on the same day she filed a petition for appeal to this Court. In the petition she contested the validity of the certificate of amendment issued by the Commission, insofar as it affected her right to undeclared dividends that had cumulated before January 1, 1957. By order entered November 23, 1965, we granted her an appeal of right from the Commission's order of September 28, 1962.

Both Miss O'Brien and VC 2 filed briefs in this Court on the merits of the case. In these briefs they asked us to decide the case on the merits, even though the notice of appeal and petition for appeal had not been filed within the time specified by our Rules and the applicable Virginia statutes.

Our Rule 5:1 § 13 provides that no appeal shall be allowed from an order of the Commission unless the appellant files a notice of appeal with the clerk of the Commission 'within sixty days after final order or judgment'. That Rule also requires the clerk to file the certified transcript with the clerk of this Court 'within the time allowed by the statute', and requires the appellant to file a petition for appeal with the clerk of this Court 'within like time'. Code § 12--63 provides that an appeal from an order of the Commission 'shall be taken and perfected within four months from the date of such * * * order * * *' Va.Code Ann. § 12--63 (Repl. vol. 1964); see also Va.Code Ann. § 8--463 (Repl. vol. 1957) and Va.Code Ann. § 8--489 (Supp.1966). These requirements are mandatory or jurisdictional. See Condrey v. Childress, 203 Va. 755, 127 S.E.2d 150 (1962); Andrews, Executrix v. Cahoon, 196 Va. 790, 86 S.E.2d 173 (1955); Skeens v. Commonwealth, 192 Va. 200, 64 S.E.2d 764 (1951). Accordingly, before oral argument of the case we requested supplemental briefs dealing with our jurisdiction to entertain the appeal. The question now before us is whether we must dismiss the appeal because the appellant failed to comply with the time requirements of the Rules and statutes.

Before discussing reasons advanced by counsel why this Court has jurisdiction to entertain this late appeal, we will outline the nature of the controversy and the steps taken before the controversy reached us.

The record shows that Miss O'Brien acquired her 100 shares of Old Preferred before January 1, 1957. (The precise date of acquisition is not disclosed.) These shares were issued pursuant to VC's original certificate of incorporation, which became effective upon its organization in 1926. The pertinent provisions of the certificate of incorporation are copied in the footnote. 3

In 1956, the General Assembly of Virginia enacted the Virginia Stock Corporation Act, which was patterned on the Model Business Corporation Act of the American Bar Association. 4 (See Report by the Code Commission of Virginia for Revision of the Laws Relating to Corporations, H.D. 5, Virginia General Assembly (1956).) The Act became effective January 1, 1957. On that day, the cumulated undeclared dividends on the Old Preferred totaled $73.50 share, the arrearages having accumulated principally in the depression years of the 1930's.

Before the effective date of the Virginia Stock Corporation Act, Virginia law did not authorize VC to cancel a stockholder's cumulated undeclared preferred dividends, without the stockholder's consent. 5 However, § 55 of the Virginia Stock Corporation Act provided:

' § 13.1--55. Right to amend articles of incorporation.--A corporation may amend its articles of incorporation, from time to time, in any and as many respects as may be desired, provided that the amendment may contain only such provisions as might be lawfully contained in original articles of incorporation at the time of making such amendment.

'In particular, and without limitation upon such general power of amendment, a corporation may amend its articles of incorporation, from time to time, so as:

'(k) to cancel or otherwise affect the right of the holders of the shares of any class to receive dividends which have accrued but have not been declared (whenever accrued and whether or not earned).' 6

On August 6, 1962 VC's board of directors approved a plan of recapitalization, to be effected by amending the certificate of incorporation. The proposed amendment called for the creation of two classes of new preferred stock, 5% Prior Preferred Stock and 5% Convertible Preferred Stock. It provided that when the amendment became effective, 'each outstanding share of the presently authorized 6% Cumulative Dividend Participating Preferred Stock of the Corporation * * * (the Old Preferred) With all dividend arrearages thereon, shall be automatically changed and converted into the following: (i) One (1) share of Common Stock of the Corporation; plus (ii) One and three- tenths (1.3) shares of the new 5% Prior Preferred Stock of the Corporation; plus (iii) One (1) share of the new 5% Convertible Preferred Stock of the Corporation'. (Emphasis supplied)

At the annual stockholders' meeting on September 28, 1962, the proposed amendment was approved by the favorable vote of more than two-thirds of the total outstanding shares of stock and more than two-thirds of the outstanding shares of each class of stock of VC, including the Old Preferred. 7 (72.1% Of the shares of the Old Preferred were voted for the amendment.) As already stated, the State Corporation Commission issued a certificate of amendment on September 28, 1962.

Miss O'Brien received due notice of the stockholders' meeting, with a proxy statement and a copy of the proposed articles of amendment. She appeared at the meeting by proxy, objected to the plan of recapitalization and charter amendment, and cast a negative vote. Miss O'Brien recognized VC's right to recapitalize under the Virginia Stock Corporation Act, effective January 1, 1957, including the right under § 55(k) to eliminate dividends accruing after the effective date of the Act; 'but (she) refused to recognize that portion of the plan which called for the surrender of any rights to cumulated but undeclared dividends accruing prior to January 1, 1957'. So Miss O'Brien accepted the provisions of the recapitalization plan that entitled her to receive shares of Common Stock, new 5% Prior Preferred Stock and new 5% Convertible Preferred Stock; but she repudiated the provisions of the plan that cancelled pre-1957 cumulations on the Old Preferred.

On December 21, 1962 Miss O'Brien filed a civil action against VC in the Superior Court of New Jersey, Chancery Division, Essex County. That Court held that Miss O'Brien's right to 'unpaid, cumulative dividends accrued to January 1, 1957 in the amount of $73.50 per share on her shares of 6% Preferred Stock (the Old Preferred) * * * continue(s) to constitute a valid and subsisting property right owned by her and protected against confiscation or diminution by * * * (VC) until paid to her according to law * * *'

On appeal, the Appellate Division certified the case to the Supreme Court of New Jersey. The Supreme Court reversed the judgment of the Superior Court and dismissed Miss O'Brien's complaint, subject to conditions. O'Brien v. Virginia-Carolina Chem. Corp., 44 N.J. 25, 206 A.2d 878 (1965). The conditions were that VC waive any time limitation on the institution of proceedings in Virginia to review the State Corporation Commission's action in approving the amendment to VC's certificate of incorporation or to question the validity of the recapitalization plan, and that the appropriate Virginia court accept jurisdiction and render a decision on the merits. The Supreme Court of New Jersey dismissed the complaint as a matter of comity. 'In deference to the Commonwealth of Virginia, we feel the courts of New Jersey should withhold their hand on the issue in order to permit a relevant adjudication there.' Id. 44 N.J. at 41, 206 A.2d at 887.

VC executed a waiver as suggested by the Supreme Court of New Jersey and, as already mentioned, both it and Miss O'Brien have urged us to decide the issue on the merits. Counsel advance several grounds to support our jurisdiction.

Counsel for Miss O'Brien point out that § 156(d) of the Constitution and the statutes of Virginia permit an aggrieved person to appeal to this Court from an order of the State Corporation Commission, even though the aggrieved person was not a party to the proceeding before the Commission, citing Jones v. Rhea, 130 Va. 345, 107 S.E. 814 (1921). They point further to the fact that Miss O'Brien did not enter an appearance in the Commission before it entered the September 28, 1962 order issuing the certificate of a...

To continue reading

Request your trial
3 cases
  • Coleman v. Thompson
    • United States
    • U.S. Supreme Court
    • June 24, 1991
    ...not applied here, where it was Coleman's notice of appeal in the trial court that was late. And, although in O'Brien v. Socony Mobil Oil Co., 207 Va. 707, 709, 152 S.E.2d 278, 280, the Virginia court reviewed the merits of a constitutional claim before dismissing the case on the basis of an......
  • Wise v. Williams
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • December 16, 1992
    ...to the contrary. See Appellant's Br. at 34-35 (citing Tharp v. Commonwealth, 211 Va. 1, 175 S.E.2d 277 (1970); O'Brien v. Socony Mobil Oil Co., 207 Va. 707, 152 S.E.2d 278 (1967), cert. denied, 389 U.S. 825, 88 S.Ct. 65, 19 L.Ed.2d 80 (1967); Stokes v. Peyton, 207 Va. 1, 147 S.E.2d 773 (196......
  • Mason v. Mazzei
    • United States
    • U.S. District Court — Western District of Virginia
    • March 17, 2023
    ...be declared as the directors deemed prudent and that none should be declared if it would diminish the capital of the company); cf. O'Brien, 152, S.E.2d at 285 (noting that dividends are not a vested property right and that “[stockholder] was entitled to receive dividends on her shares . . .......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT