Corporation Commission of the State of Arizona v. Consolidated Stage Company, a Corp., Civil 4754
| Decision Date | 14 July 1945 |
| Docket Number | Civil 4754 |
| Citation | 161 P.2d 110,63 Ariz. 257 |
| Parties | THE CORPORATION COMMISSION OF THE STATE OF ARIZONA and AMOS A. BETTS, WILLIAM PETERSEN, and WILSON T. WRIGHT, as Members of the Corporation Commission of the State of Arizona, Appellants, v. CONSOLIDATED STAGE COMPANY, a Corporation, Appellee |
| Court | Arizona Supreme Court |
APPEAL from a judgment of the Superior Court of the County of Maricopa. Dudley W. Windes, Judge.
Judgment affirmed.
Mr. Joe Conway, Attorney General, and Mr. Thomas J. Croaff, Assistant Attorney General, for Appellants.
Messrs Struckmeyer & Struckmeyer, and Mr. Claude E. Spriggs, for Appellee.
The appellee is a corporation doing business as a motor carrier of passengers and property for hire under a certificate of convenience and necessity issued by the appellant Arizona Corporation Commission. See Chapter 66, Article 5, Regulation of Public Highway Transportation, Sections 66-501 to 66-533, Arizona Code Annotated 1939. A Mr. Hood, owning a share of stock in the appellee corporation, filed an application with the commission for permission to transfer or assign his share of stock and "his interest" in the corporation to a Mr. Fix. The applicant shareholder proceeded upon the theory that he was one of the joint owners or associates or copartners in the ownership of the assets of the company, and disregarded the legal entity of the corporation. His apparent purpose was to transfer physically what he considered to be his interest in the certificate of convenience, completely disregarding that the corporation and not he owned the certificate of convenience and all other assets of the company. It is elementary that a corporation is for most purposes an entity distinct from its individual members or stockholders. By the very nature of a corporation the corporate property is vested in the corporation itself and not in the stockholders. The natural persons who procured its creation and have pecuniary interest in it are not the corporation. A portion of the commission's order reads as follows:
"It is hereby ordered that the rights of Paul Hood shall be transferred to S. B. Fix."
The pleadings show that the commission ordered the transfer of a share of stock in the appellee corporation from one shareholder to a prospective shareholder.
Upon the application being filed for the transfer of this share of stock, the appellee appeared before the commission and resisted the petition upon the ground that the commission had no jurisdiction under its power granted by law to transfer stock in a private corporation from one party to another. Notwithstanding the protest, the commission made and entered its order that the transfer of said stock be made.
A rehearing was requested as authorized by Section 69-248, Arizona Code Annotated 1939, and was denied. Thereafter the appellee brought this action in the superior court, as provided by Section 69-249, Arizona Code Annotated 1939, to have said order of the appellant set aside for the reason that the order or decision of the commission was unlawful and not within its jurisdiction.
The sole issue presented to the trial court by appellant, as submitted by its counsel, was "whether or not the corporation commission has the power to transfer any stock of any corporation from one party to another." At the trial of the matter the commission moved for judgment upon the pleadings, which motion was denied. The appellee then moved for judgment upon the pleadings, which motion was granted and judgment entered thereon setting aside the order, and thereafter this appeal was perfected by the commission.
The shareholder Hood and the prospective shareholder Fix filed a motion in the superior court for leave to intervene and tendered a proposed answer to plaintiff's complaint. The motion for leave to intervene was denied. The attempted interveners filed an appeal to this court from the order denying their motion for leave to intervene. Their appeal was dismissed by this court on motion upon the ground that they were without authority to appeal in this matter, not being parties to the judgment and not affected thereby.
When the commission assumed the power of transferring stock in a private corporation from one party to another party, it was infringing upon the power given by the legislature to private corporations. The order for the transfer made by the commission was the exercise of a power granted exclusively to the corporation, and interfered directly and materially with its business and its relationship with its stockholders.
In the case of Wylie v. Phoenix Assurance Co., Ltd., 42 Ariz. 133, 22 P.2d 845, 846, there appears the following brief dissertation relative to the creation of the commission and its powers and duties:
We have examined Sections 1, 2, and 3 of Article 15 of the state Constitution relative to the powers of the commission over public service corporations. We have also examined Chapter 66, Article 5, Sections 66-501 to 66-533, Arizona Code Annotated 1939, relating to the regulation of public highway transportation. The foregoing chapter provides for the licensing and regulation of common motor carriers. Their regulation and supervision is vested in the corporation commission. The commission has power to fix and regulate rates, facilities, time schedules, territory to be traversed; to prescribe uniform systems of accounts; to require reports, tariff schedules; and "to supervise and regulate such...
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...Ariz. at 113 ¶ 64, 83 P.3d at 591 ; Miller , 227 Ariz. at 26 ¶ 19, 27 ¶ 23, 251 P.3d at 405, 406. But see Corp. Comm'n v. Consol. Stage Co. , 63 Ariz. 257, 260–63, 161 P.2d 110 (1945) (stating in a non-ratemaking case that the Commission lacks authority to interfere with management decision......
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