Fenderson v. Franklin Light & Power Co.

• Citation: 113 A. 177
• Parties: FENDERSON v. FRANKLIN LIGHT & POWER CO.
• Decision Date: 05 April 1921
• Court: Supreme Judicial Court of Maine (US)

113 A. 177

FENDERSON

v. FRANKLIN LIGHT & POWER CO.

Supreme Judicial Court of Maine.

April 5, 1921.

Appeal and Exceptions from Supreme Judicial Court, Franklin County, in Equity.

Bill by Harriet N. Fenderson against the Franklin Light & Power Company. Decree for plaintiff, and the defendant appeals and excepts. Appeal dismissed, exceptions sustained, decree below annulled, and new decree to be executed in accordance with opinion.

Argued before CORNISH, C. J., and PHILBROOK, DUNN, WILSON, and DEASY, JJ.

McLean, Fogg & Southard, of Augusta, for plaintiff.

Frank W. Butler, of Farmington, for defendant.

PHILBROOK, J. The plaintiff in this bill of equity is the executrix of the last will and testament of her husband, Albion L. Fenderson, who, at the time of his decease, owned 2,151 shares of the capital stock of the defendant company. A special meeting of the stockholders of the company was held on the 25th day of April, A. D. 1917, to act upon the following matters:

"(1) To see if the stockholders will vote to sell to the Franklin Power Company, Inc., all its property, franchises and permits and if so, the terms and conditions of the sale.

"(2) So see if the stockholders will authorize the proper officers to make an application for and in behalf of said company to the Public Utilities Commission for authority to make such a sale."

Upon a majority ballot it was voted—

"To sell t6 the Franklin Power Company, Inc., all the property rights and franchises of the company subject to the outstanding bonds of the company amounting to $114,000 all of which outstanding bonds the said Franklin Power Company, Inc., assumes and agrees to pay for the sum of one dollar."

The plaintiff in her representative capacity as owner of 2,151 shares of the capital stock of the defendant company voted, "No," but there were 4,801 shares voting, "Yes." The plaintiff duly dissented from the vote and filed her dissent in accordance with the provisions of R. S. c. 51, § 60 et seq.

The statute just referred to is commonly known as the Minority Stockholder's Act, and is designed to protect the interests of minority stockholders in corporations when the majority votes to dispose of its franchises, entire property, or any of its property, corporate rights or privileges essential to the conduct of its corporate business and purposes, otherwise than in the ordinary and usual course of business. Section 61 of the act provides:

"If any stockholder in any corporation which shall vote to sell, lease, consolidate or in any manner part with its franchises, or its entire property, or any of its property, corporate rights or privileges essential to the conduct of its corporate business and purposes, otherwise than in the ordinary and usual course of its business, shall vote in the negative and shall file his written dissent therefrom with the president, clerk or treasurer of such corporation within one month from the day of such vote, the corporation in which he is a stockholder may, within one month after such dissent is so filed, enter a petition with the Supreme Judicial Court, sitting in equity, in the county where it held its last annual meeting, in term time or in vacation, setting forth in substance the material facts of the transaction, the action of the corporation thereon, the names and residences of all dissenting stockholders whose dissents were so filed, making such dissenting stockholders parties thereto, and praying that the value of the shares of such dissenting stockholders may be determined, and for other appropriate relief."

Section 62 of the act provides that if the corporation should fail to enter the petition mentioned in section 61, then the dissenting stockholder, within certain statutory time, may enter such petition and prosecute the same, making the corporation party defendant. In the case at bar, the corporation did not file its petition, and on July 16, 1917, the plaintiff filed her petition under the provisions of statute just referred to. Her dissent was dated May 19, 1917, and served on the treasurer of the corporation May 21, 1917. The time within which the corporation could file its petition, under the provisions of section 61, just above quoted, expired on June 21, 1917. So much...