Alford v. Pierno

CourtCalifornia Court of Appeals
Writing for the CourtDEVINE, P.J., and RATTIGAN
Citation104 Cal.Rptr. 110,27 Cal.App.3d 682
Parties, Blue Sky L. Rep. P 71,076 L. E. ALFORD et al., Plaintiffs and Appellants, v. Anthony R. PIERNO, Commissioner of Corporations of the State of California, Defendant and Respondent; MARCOM, INC., Real Party in Interest and Respondent. Civ. 30439.
Decision Date12 September 1972

Page 110

104 Cal.Rptr. 110
27 Cal.App.3d 682, Blue Sky L. Rep. P 71,076
L. E. ALFORD et al., Plaintiffs and Appellants,
v.
Anthony R. PIERNO, Commissioner of Corporations of the State of California, Defendant and Respondent;
MARCOM, INC., Real Party in Interest and Respondent.
Civ. 30439.
Court of Appeal, First District, Division 4, California.
Sept. 12, 1972.
Hearing Denied Nov. 9, 1972.

Page 112

[27 Cal.App.3d 685] Robert B. Freedman, Weiss & Wald, Oakland, for plaintiffs and appellants.

Evelle J. Younger, Atty. Gen., Mervin R. Samuel, Deputy Atty. Gen., San Francisco, for defendant and respondent.

Thelen, Marrin, Johnson & Bridges, San Francisco, for Marcom, Inc., real party in interest.

BRAY, * Associate Justice.

Plaintiff and appellants appeal from an order and judgment denying their petition for writ of mandamus.

27 Cal.App.3d 686

Questions Presented

1. May a curative permit, pursuant to Corporations Code section 25802, be issued to a corporation in process of dissolution?

2. Did respondents' findings support the judgment?

3. Did granting of the curative permit work a fraud on appellants?

4. Did the trial court err in denying findings of fact and conclusions of law?

Record

On August 10, 1970 plaintiffs filed in Alameda County Superior Court a petition for writ of mandamus ordering defendant Commissioner of Corporations to set aside his decision granting real party in interest, Marcom, Inc. (hereinafter, Marcom) the curative permit hereinafter discussed. At the hearing in the trial court, plaintiffs moved for an extension of time to obtain a transcript of the proceedings before the Commissioner of Corporations. The motion was denied. Plaintiffs' request for findings of fact and conclusions of law was first granted and then the order granting was vacated and the request denied. Order and judgment was entered denying the petition for peremptory writ of mandamus.

Page 113

Facts

Marcom was incorporated in the State of California on September 17, 1962. Its business was the manufacture and sale of a device operated in connection with the telephone and known as a 'call diverter.'

A total of 238 shares of stock was issued in contravention of Marcom's permit issued by the commissioner, in that such shares were issued for cancellation of prior indebtedness rather than for cash as required by the permit. In addition, Marcom issued a total of 14 additional shares to two of the plaintiffs without any permit whatsoever.

On April 18, 1969 Marcom entered into an agreement with Ford Industries whereby Ford agreed to buy all of the assets from Marcom to be liquidated.

On June 27, 1969 an action was filed in the Superior Court of Alameda County, whereby plaintiffs sought to recover the consideration paid by them to Marcom on the grounds that the issuance of the aforementioned stock was either without permit or in contravention of the terms of the existing permit.

[27 Cal.App.3d 687] Thereafter, Marcom obtained an order from the Superior Court of the City and County of San Francisco, whereby that court assumed judicial supervision of the windup of Marcom's corporate affairs subsequent to Marcom's filing of a Certificate of Election to Wind-Up and Dissolve with the California Secretary of State on June 6, 1969.

On January 16, 1970 Marcom filed an amended application for a curative permit authorizing the sale and issuance of securities previously sold and issued without a permit or in nonconformity with the permit previously obtained.

On June 3, 1970 the commissioner issued his decision adopting the proposed decision of the hearing officer, which recommended the requested curative permit be granted.

On August 10, 1970 plaintiffs filed in the Alameda County Superior Court this petition for writ of mandate ordering the commissioner to set aside the issuance of the curative permit.

At the hearing before the trial court, plaintiffs stated the application for relief was based on the ground that the findings were not supported by the record, and asked for time to obtain the necessary funds for a transcript of the proceedings before the hearing officer. On the ground that plaintiffs had already been given reasonable time for that purpose, the court denied the request. The matter was then heard on the findings of the Corporations Commissioner, plaintiffs contending that the findings did not support the commissioner's decision granting the curative permit.

1. A curative permit may be issued to a corporation in the process of dissolution.

Corporations Code section 25802 provides: 'Upon application in accordance with this division, the commissioner may issue a curative permit authorizing the issuance and sale of any security previously issued or sold without a permit, or in nonconformity with any provision of a permit previously obtained. The commissioner shall issue a curative permit only if he finds that the plan of business of applicant and the issuance of the curative permit are fair, just, and equitable and that the applicant is transacting and intends to transact its business fairly and honestly and that in his opinion the issuance of the curative permit will not work a fraud upon the holders of any of the issued and outstanding securities of applicant.'

Plaintiffs contend that while engaged in dissolution and windup of its corporate affairs, Marcom was not transacting or intending to transact business and thus is not entitled to the relief provided by section 25802.

[27 Cal.App.3d 688] There is no case law interpreting Corporations Code section 25802. Consequently, this is a case of first impression necessitating an interpretation and construction of the aforementioned statute.

Page 114

One of the cardinal rules of construction requires that words be given such interpretation as will promote rather than defeat the General purpose and policy of the law. City of L.A. v. Pac. Tel. & Tel. Co. (1958) 164 Cal.App.2d 253, 256, 330 P.2d 888.) A statute should be interpreted so as to produce a result that is reasonable. (Ivens v. Simon (1963) 212 Cal.App.2d 177, 181, 27 Cal.Rptr. 801.) If two constructions are possible, that which leads to the more reasonable result should be adopted. (In re Kernan (1966) 242 Cal.App.2d 488, 491, 51 Cal.Rptr. 515.)

In construing a statute, the court should ascertain the intent of the Legislature so as to effectuate the purpose of the law. (Select Base Materials v. Board of Equal. (1959) 51 Cal.2d 640, 645, 335 P.2d 672.) The courts must look to the context of the law, and where uncertainty exists, consideration should be given to the consequences that will flow from a particular interpretation. (Ivens v. Simon, Supra, 212 Cal.App.2d 177, 181, 27 Cal.Rptr. 801.) The court should take into account matters such as context, the object in view, the evils to be remedied, the history of the times and of legislation upon the same subject, public policy, and contemporaneous construction. (Estate of Jacobs (1943) 61 Cal.App.2d 152, 155, 142 P.2d 454.)

The apparent purpose of a statute will not be sacrificed to a literal construction. (Select Base Materials v. Board of Equal., Supra, 51 Cal.2d 640, 645, 335 P.2d 672; Ivens v. Simon, Supra, 212 Cal.App.2d 177, 181, 27 Cal.Rptr. 801.)

Lastly, 'Remedial statutes such as (the one) under consideration are to be liberally construed. (Citation.) They are not construed within narrow limits of the letter of the law, but rather are to be given liberal effect to promote the general object sought to be accomplished. (Citation.)' (California Grape etc. League v. Industrial Welfare Com. (1969) 268 Cal.App.2d 692, 698, 74 Cal.Rptr. 313, 316.)

With the aforementioned principles in mind, we must now determine whether Marcom, while in the process of windup and dissolution, was entitled to a curative permit pursuant to Corporations Code section 25802.

Under the oid law, Corporations Code...

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  • People v. Teron, Cr. 20538
    • United States
    • United States State Supreme Court (California)
    • 11 Enero 1979
    ...(In re Marriage of Bouquet (1976) 16 Cal.3d 583, 587-588, 128 Cal.Rptr. 427, 429, 546 P.2d 1371, 1373, quoting Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. In criminal cases generally, but in death penalty cases especially, we have tended to lose sight of the "evils to be r......
  • Martis Camp Cmty. Ass'n v. Cnty. of Placer, C087759
    • United States
    • California Court of Appeals
    • 17 Agosto 2020
    ...to/from the community.We also consider the context in which the conditions of approval were adopted. ( Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110 ; Baldwin v. City of Los Angeles (1999) 70 Cal.App.4th 819, 838, 83 Cal.Rptr.2d 178.) In approving the project, the County......
  • People v. Monroe, No. A053694
    • United States
    • California Court of Appeals
    • 27 Enero 1993
    ...be given such "interpretation as will promote rather than defeat the general purpose and policy of the law." (Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110 [original emphasis].) Where uncertainty exists, consideration should be given to the consequences that will flow fr......
  • Dyna-Med, Inc. v. Fair Employment & Housing Com., DYNA-ME
    • United States
    • United States State Supreme Court (California)
    • 2 Noviembre 1987
    ...exists consideration should be given to the consequences that will flow from a particular interpretation. (Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110.) Both the legislative history of the statute and the wider historical circumstances of its enactment may be considere......
  • Request a trial to view additional results
92 cases
  • People v. Teron, Cr. 20538
    • United States
    • United States State Supreme Court (California)
    • 11 Enero 1979
    ...(In re Marriage of Bouquet (1976) 16 Cal.3d 583, 587-588, 128 Cal.Rptr. 427, 429, 546 P.2d 1371, 1373, quoting Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. In criminal cases generally, but in death penalty cases especially, we have tended to lose sight of the "evils to......
  • Martis Camp Cmty. Ass'n v. Cnty. of Placer, C087759
    • United States
    • California Court of Appeals
    • 17 Agosto 2020
    ...to/from the community.We also consider the context in which the conditions of approval were adopted. ( Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110 ; Baldwin v. City of Los Angeles (1999) 70 Cal.App.4th 819, 838, 83 Cal.Rptr.2d 178.) In approving the project, the County......
  • People v. Monroe, No. A053694
    • United States
    • California Court of Appeals
    • 27 Enero 1993
    ...such "interpretation as will promote rather than defeat the general purpose and policy of the law." (Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110 [original emphasis].) Where uncertainty exists, consideration should be given to the consequences that will flow f......
  • Dyna-Med, Inc. v. Fair Employment & Housing Com., DYNA-ME
    • United States
    • United States State Supreme Court (California)
    • 2 Noviembre 1987
    ...exists consideration should be given to the consequences that will flow from a particular interpretation. (Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110.) Both the legislative history of the statute and the wider historical circumstances of its enactment may be considere......
  • Request a trial to view additional results

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