Beyer v. Woolpert
| Decision Date | 14 December 1906 |
| Docket Number | 15,005 - (116) |
| Citation | 109 N.W. 1116,99 Minn. 475 |
| Parties | JOHN F. BEYER v. D. C. WOOLPERT and Others |
| Court | Minnesota Supreme Court |
Appeal by petitioner in the matter of the application for dissolution of the corporation known as the North American Coal & Mining Company from an order of the district court for Hennepin county, Dickinson, J., vacating and setting aside the proceedings. Affirmed.
The petitioner, John F. Beyer, commenced proceedings in the district court for the dissolution of the North American Coal & Mining Company, a stock corporation organized under the laws of this state. The petition alleges the organization of the corporation, its principal place of business; when, by whom, and under what law, it was incorporated, the names and addresses of the stockholders, the amount of its indebtedness, the amount and description of its real estate that it owns no personal property and has never transacted any business; and alleges that there has been issued two thousand shares of stock, of which the petitioner owns four hundred shares. It is further alleged that said corporation was formed at the solicitation of said Herbert Williams, and upon the agreement, entered into prior to, and at the time of, the formation thereof, between your petitioner and the said Herbert Williams, that, if your petitioner would furnish sufficient money to acquire title to the lands above described, said Williams would furnish sufficient means to operate the coal mines thereon, and the same corporation would at once begin to operate the same, and all of the steps taken by said corporation and all of the money furnished by him to acquire title to said lands, and all other acts and things done by him with reference to said corporation were done pursuant to the said agreement and not otherwise; that immediately upon the organization of said corporation, the said Herbert Williams caused himself to be elected president and his wife, Lyra E. Williams, secretary thereof, and thereupon the said president and secretary issued a large amount of stock, to wit: about two thousand shares to various parties, four hundred shares of which were issued to your petitioner, and your petitioner alleges, upon information and belief, that no consideration whatever was paid for the issue of any of said shares excepting only by your petitioner for the issue to him of four hundred shares of said corporate stock; that said Herbert Williams has at all times controlled all of the shares of stock so issued as aforesaid, excepting only those issued to your petitioner; that the stock so controlled by said Williams constitutes a majority of the shares of stock of said corporation, and he has been able to and actually has, controlled and conducted all of the acts of said corporation in his own interest and for his own personal benefits; that he caused a note of said corporation for the sum of $3,000 to be executed by the officers thereof, and delivered to the Investors' Syndicate, a corporation of Minneapolis, Minnesota, and a mortgage upon said above-described lands as security therefor, to be executed and delivered to said Investors' Syndicate, which note and mortgage still remain outstanding against said North American Coal & Mining Company, and said mortgage constitutes a cloud upon the title of said corporation to said land; that said corporation and said Williams have failed and neglected to open up and operate the mines upon said lands, or to do any other act or thing toward opening up and operating such mines, and have failed and neglected even to pay the taxes upon said lands, and your petitioner has been obliged to pay the same from year to year to protect the said property from tax sales.
Dissolution of Corporation.
Section 3175, R.L. 1905, which provides for the dissolution of a corporation upon the petition of a majority in number or interest of the members of the corporation, applies to stock corporations and to certain corporations without capital stock. The petition may be made by a majority of the members of a nonstock corporation, or by the holder or holders of the majority of the stock of a stock corporation.
Dissolution of Corporation -- Petition.
In proceedings for the dissolution of a corporation under this statute, the court cannot determine the validity of outstanding stock of the corporation. The petition must be made by the owner or owners of a majority of the stock which has been regularly issued by the corporation and not in proper proceedings adjudged invalid.
Surrender of Charter.
A private business corporation cannot surrender its charter and effect a dissolution without the consent of the state expressed by previous authorization or subsequent acceptance of the surrender.
F. H. Peterson, for appellant.
Savage & Purdy, for respondents.
ELLIOTT, J. (after stating the facts as above).
The appellant contends that the power to surrender its charter is inherent in the shareholders of every corporation, that they can do so without statutory authority, and that the petition here presented complies with the statutes of this state.
1. There is some authority for the rule that the stockholders of a private corporation may surrender the charter without the consent of the state, but the cases are not well considered and are unsound in principle. The grant of the franchise to be a corporation is an exercise of the sovereign power of the state. The acceptance of the grant imposes obligations which may not voluntarily be abandoned at will.
It is conceded that this is true in respect to corporations of a public or quasi public character, but it is contended that private business corporations are of such a character that the stockholders only are interested in their perpetuation. This idea ignores the contract which exists between the state and the corporation and its members....
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