Edwards v. Denver & R.G.R. Co.

• Decision Date: 07 June 1889
• Citation: 21 P. 1011,13 Colo. 59
• Parties: EDWARDS, Secretary of State, v. DENVER & R. G. R. CO.
• Court: Colorado Supreme Court

21 P. 1011

13 Colo. 59

EDWARDS, Secretary of State, v. DENVER & R. G. R. CO.

Supreme Court of Colorado

June 7, 1889

Appeal from district court, Arapahoe county.

The fifth general assembly adopted the following statute 'That from and after the passage of this act all corporations, either domestic or foreign, organized for pecuniary gain under any of the provisions of chapter 19 of the General Laws of the state of Colorado, shall pay to the secretary of state, upon the issuing of the certificate, as provided in said chapter, the sum of ten dollars: provided the par value of the capital stock shall not exceed one hundred thousand dollars; but, in case the capital stock of said corporation shall be in excess of said one hundred thousand dollars, the secretary of state shall collect the further sum of ten cents on each and every thousand dollars of such excess.' Sess. Laws 1885, p. 153. Subsequent to the passage of this act the Denver & Rio Grande Railroad Company, with a capital stock of $73,500,000, tendered its certificate of incorporation to appellant, who was then secretary of state. Appellant demanded the sum of $7,341.50 as a filing fee, in pursuance of the foregoing law. Appellee deposited the amount under protest, claiming that it was only required to pay $8.50, the sum required by a former statute. It immediately instituted an action for the purpose of enjoining the secretary of state from paying the amount of this deposit into the state treasury; also for the purpose of compelling this officer to refund the same, save and except the sum of $8.50 above mentioned. Upon trial in the district court the position of appellee was sustained, and judgment entered according to the prayer of its complaint. To reverse that judgment the present appeal was taken.

Theodore H. Thomas, Atty. Gen., for appellant,

Wolcott & Vaile, for appellee.

HELM C.J., ( after stating the facts as above.)

Four distinct propositions are advanced by counsel for appellee in support of the judgment rendered in this case. We will consider these propositions separately, though not in the exact order of presentation by the briefs.

First. That the statute under consideration is a nullity, because its application rests wholly upon the performance of an act nowhere directed or authorized, viz., the issuing of certificates of incorporation by the secretary of state to corporations organized for pecuniary profit. The statute in question provides that from and after its passage all corporations organized for pecuniary gain shall pay to the secretary of state, 'upon the issuing of the certificate as provided in said chapter,' the fee designated. But 'said chapter,' being chapter 19 of the General Statutes, does not require the issuing of certificates by the secretary of state where the corporation 'is organized for pecuniary gain.' Hence giving the word 'issuing' its ordinary signification, and the provision a literal construction, would render the enactment a mere idle collection of phrases, without force or effect. The question here presented, therefore, is not which of two or more views as to the meaning and effect of a statute shall be taken. It is, rather, shall the statute be regarded as wholly meaningless and ineffective for any purpose whatever? The rules of construction in the two cases may be different. When two legislative purposes, each of which renders the law effective, are suggested, the courts may not ordinarily supply a word or substitute one word for another; but where the alternative is presented of attributing to the enactment a rational purpose and effect, or of regarding it as a dead letter upon the statute-book, the courts, when necessary, exercise great latitude in the endeavor to avoid the latter contingency. The view that a solemn legislative provision is a useless and lifeless thing should only be entertained when no reasonable intendment can be fairly deduced therefrom after diligent and industrious search, aided by all pertinent rules of statutory interpretation. Upon this subject courts and law-writers use language much stronger than the above. The learned author of Potter's Dwarris on Statutes and Constitutions, at page 128, quotes with approval the following maxim laid down by Vattel: 'The interpretation which renders a treaty or statute null and void cannot be admitted. It is an absurdity to suppose that after it is reduced to terms it means nothing. It ought to be interpreted in such a manner as that it may have effect, and not to be found vain and illusive.' When a statute would otherwise fail of its object, words may be treated as surplusage. U.S. v. Stern, 5 Blatchf. 514; Simmons v. Powder Works, 7 Colo. 285, 3 P. 420. An act referring in terms to one section may be held to refer to another, if it would otherwise be a nullity. People v. King, 28 Cal. 265. An act misdescribing a prior act, upon which it depends, may be given effect; and, 'where a statute would operate unjustly, or absurd consequences would result from a literal interpretation of terms and words used, the intention of the framers, if it can be fairly gathered from the whole act, will prevail.' Murray v. Hobson, 10 Colo. 66, 13 P. 921. Words are to be supplied, if necessary to give the statute force and effect. Nichols v. Halliday, 27 Wis. 406.

We are obliged to assume that in adopting the statute before us the legislature meant to accomplish some rational and sensible purpose; and we must, if possible, discover and effectuate this purpose. It is evident, however, that this body erred in the selection of a word to express the legislative intent, for the fee prescribed is to be paid upon the performance of a specified act, 'as provided in said chapter,' when no such act is therein mentioned; but that the legislature intended to designate the fee for some act coupled with the formation of corporations, and required by chapter 19, admits of no doubt; that it is something to be done by the secretary of state in connection with the certificate of incorporation, is likewise put beyond question by the language employed. Where uncertainty as to the meaning of a particular section exists, the whole act in which it is found should be considered. Upon turning to chapter 19 we find that an essential step in the formation of corporations for pecuniary gain is the filing of certificates of incorporation with the secretary of state. For the filing of such certificates a fee has always been exacted; and, construing the provisions of the chapter together with those of the amendatory act, we cannot escape the conclusion that the word 'issuing,' used in the latter, was inadvertently substituted for the word 'filing,' employed in the former. The intent to fix a larger fee or charge for the filing of certificates of incorporation with the secretary of state, where the corporation is organized for pecuniary gain, appears with sufficient clearness to forbid our declaring the statute a nullity. 'The object to be accomplished, or the mischief to be remedied or guarded against,' may be considered in construing doubtful statutes. Aside from securing a material increase of the public revenue, the statute before us will discourage the organization of corporations for fraudulent purposes. The good name and credit of the state has suffered through the sale of stock by manipulators who have no serious expectations that there will be a return upon the investment. The capital stock is put at a fabulous sum, and sold at a figure so surprisingly low as to tempt the unwary. The comparatively large advancement in cash as a filing fee made prerequisite by the statute will operate, to some extent, as a wholesome restraint.

Second. That since the statute under consideration is an amendment of chapter 19, § 1416, which is a part of chapter 38, is not affected thereby, and the secretary of state should have demanded but $8.50, in accordance with the terms of said section 1416, instead of $7,341.50 under this provision. The...