Christian v. Shideler, 40093
| Citation | 382 P.2d 129 |
| Decision Date | 28 May 1963 |
| Docket Number | No. 40093,40093 |
| Parties | William N. CHRISTIAN, Secretary of State of the State of Oklahoma, Plaintiff in Error, v. Alfred M. SHIDELER and Charles E. Baker, Defendants in Error. |
| Court | Supreme Court of Oklahoma |
Syllabus by the Court
1. In construing an ambiguous statute, the Court may recur to the history of the times when it was enacted.
2. In ascertaining legislative intent, the language of an entire act should be considered, and that construction given which is reasonable and sensible.
3. Despite requirement of Business Corporation Act that a corporation have at least three directors, under the Oklahoma Professional Corporation Act, a professional corporation with only two physician members on its Board of Directors may be organized.
From the District Court of Garfield County, F. B. H. Spellman, Judge.
Defendants in error appealed to the District Court from the refusal of the Secretary of State of the State of Oklahoma to file their Articles of Incorporation under the Professional Corporation Act. The trial court ordered and directed such official to accept said Articles for filing and to issue a certificate of incorporation to said corporation. From such judgment the Secretary of State appeals.
Mac Q. Williamson, Atty. Gen., Fred Hansen, First Asst. Atty. Gen., for plaintiff in error.
Wright & Sawyer, by Will T. Wright, Enid, for defendants in error.
This is an appeal by the Secretary of State of the State of Oklahoma from a judgment of the trial court ordering and directing such official to accept for filing, certain Articles of Incorporation tendered to him by defendants in error and to issue a certificate of incorporation. The parties will be designated respectively, as plaintiffs and defendant according to their standing in the trial court.
The plaintiffs are medical doctors licensed in the State of Oklahoma. In February, 1962, they mailed to the defendant certain Articles of Incorporation for the purpose of forming a corporation under the Professional Corporation Act, 18 O.S.1961, §§ 801-819. Upon receipt of such, the defendant wrote plaintiffs that he declined to file said articles for the reason that such provided for only two directors and that the law requires that the Board of Directors consist of at least three members. The plaintiffs thereupon appealed to the district court.
The pertinent sections of the Professional Corporation Act here involved are as follows:
'(a) the profession to be practiced through the professional corporation;
'(b) the names and residence addresses of all of the original shareholders, directors, and officers of the professional corporation;
'(c) A certificate by the regulating board of the profession involved that each of the incorporators, directors, and shareholders are duly licensed to practice such profession.
The sections of the Business Corporation Act, Title 18 O.S.1961, which have a bearing on this controversy are as follows:
' § 1.10 Incorporators.----
'Three (3) or more persons legally competent to enter into contracts may form any corporation which may be incorporated under this Act by complying with the requirements hereof.
' § 1.34 Directors: powers, duties, qualifications.----
' § 1.35 Directors: election, number, term, salary.----
' § 1.208 Articles of incorporation: execution and contents.----
.
The principal question to be resolved is whether a proposed professional corporation having only two directors may be organized under the laws of this State.
Bouv. Law Dict., Rawles Third Revision, p. 682, contains the following definition of the word 'corporation':
'A body, consisting of one or more natural persons established by law, usually for some specific purpose. * * *'
In 18 C.J.S. Corporations § 36, p. 415, is the following language:
'In the absence of constitutional restriction the legislature may undoubtedly create either by special act or under general laws corporations consisting of a single member only, or authorize a single individual to become incorporated and leave it optional with him whether he will have associates. * * *'
In the case of Sneed v. Tippett, 114 Okl. 173, 245 P. 40, the Court in the first and second paragraphs of the syllabus said:
'Under chapter 34, Comp.St.1921, corporations are creatures of the law, deriving their powers and their existence from the law, and having such powers only as are conferred by legislative grant.
'Under sections 38, 47, art. 9 of the Constitution, the Legislature is given power to authorized the creation of corporations, to define their powers, and determine their period of existence.'
We determine that the Legislature has the authority to permit the organization of a corporation with only two members on the board of directors.
This Court in the case of Chicago, R. I. & P. Railroad Co. v Gist, 79 Okl. 8, 190 P. 878, 879, in paragraphs ten, eleven and twelve of the syllabus held:
'Courts, in construing a statute, may with propriety recur to the history of the times when it was passed; and this is frequently necessary in order to ascertain the reason as well as the meaning of particular provisions in it.
'The history of the times during which a law was enacted tends strongly to disclose the reasons for the act, and therefore the evils sought to be remedied.
'Whenever light can be derived from such sources, the courts will take judicial notice of the facts of contemporaneous history, the prior state of the law, the particular abuse or defect which the act was meant to remedy, and will then apply the language of the act to such state of affairs.'
See also Silmon v. Rahhal, 178 Okl. 244, 62 P.2d 501, and Atlantic Refining Co. v. Oklahoma Tax Commission, Okl., 360 P.2d 826, wherein the above case was cited with approval.
In the smaller communities of our State professional persons are usually sole practitioners. Seldom do more than two associate together. To require three directors per professional corporation would necessitate that other...
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