Flowing Wells Co. v. Culin

• Decision Date: 27 March 1908
• Docket Number: Civil 1048
• Parties: FLOWING WELLS COMPANY, a Corporation, Defendant and Appellant, v. FRANK L. CULIN, Plaintiff and Appellee
• Court: Arizona Supreme Court

95 P. 111

11 Ariz. 425

FLOWING WELLS COMPANY, a Corporation, Defendant and Appellant, v. FRANK L. CULIN, Plaintiff and Appellee

Civil No. 1048

Supreme Court of Arizona

March 27, 1908

APPEAL from a judgment of the District Court of the First Judicial District, in and for Pima County. John H. Campbell, Judge. Reversed and remanded, with instructions.

This case comes to this court upon an agreed statement of facts. The plaintiff in the court below filed his petition on October 23, 1907, under the provisions of Act No. 82, page 147, Session Laws of 1903, alleging that the defendant had failed to appoint an agent as provided by said act, and praying for its dissolution and disincorporation. Thereafter on October 29, 1907, the court issued a citation to show cause, in response to which the defendant, on January 4 1908, appeared and filed its answer and return, setting forth therein that it had always believed that a duly authorized agent had been appointed, and that it had no intention or design to disobey the law, and that the failure to appoint an agent was an inadvertence and oversight; that immediately upon the filing of the petition by the plaintiff, and five days before the order to show cause was issued, the defendant had appointed an agent, and filed the notice of such appointment with the territorial auditor; and at the time of the hearing or trial the defendant had a duly appointed agent, as provided by the statutes. To this answer and return the plaintiff presented a general demurrer, which was sustained by the court. The defendant, electing to stand upon its answer and return, the court thereupon entered judgment dissolving and disincorporating the defendant corporation from which judgment the defendant appeals, and has assigned as errors: "(1) The court erred in sustaining the demurrer of the plaintiff to the defendant's answer and return. (2) The court erred in entering a judgment dissolving and disincorporating the defendant corporation."

Wm. M Lovell, and S. L. Kingan, for Appellant.

The general proposition of law that the state does not favor the forfeiture of the charter or franchise of a corporation is so well established that it is no longer an open question.

"It may be collected not only from what the courts have judged but what the judges have said, that the courts are disinclined to forfeit the charters of corporations, especially those created for purposes of public utility, which it is the policy of the state to encourage and foster. The reasons for declaring such a forfeiture must be solid, weighty and cogent; there must have been a violation of a positive prohibitory statute; or a plain abuse of power, by which the corporation fails to fulfill the design and purpose of its creation; some act of misuser or nonuser touching matters which are of the essentials of the contract between the sovereign and the corporation, and the act or neglect must be willful and repeated." 10 Cyc. 1279; State v. St. Paul etc., 92 Ind. 42, 48.

And in construing a statute, the court will not give that meaning to the words used which will result in dissolving or disincorporating a corporation, unless it plainly and unequivocally appears that such was the intention of the legislature. "A close construction should be given to statutes which work forfeitures or confiscation of property." United States v. Athens Armory, 35 Ga. 344, Fed. Cas. No. 14,473. "Congress may declare a forfeiture for nonpayment of taxes that will take effect ipso juri; but a statute will not be so construed unless such intention clearly appears." Schenck v. Pray, 1 Dill. 267, Fed. Cas. No. 12,451. As in the construction of contracts and wills, so in the construction of statutes, the intention of those who have drawn the instrument is to be sought and declared. City of Evansville v. Summers, 108 Ind. 189, 9 N.E. 81.

To give to the statute the meaning contended for by the plaintiff would require the court to change the plain language of the act and make the word "exists" read "existed." "Every clause and word of a statute shall be presumed to have been intended to have some force and effect." Opinion of Justices, 39 Mass. (22 Pick.) 571. "Meaning and effect are to be given to all the words of a statute unless there appears clear and controlling reasons for omitting to give them significance." Lacy v. Moore, 6 Cold. (46 Tenn.) 348; Everett v. Wells, 2 Scott (N.C.), 531. Instead of straining the language so as to result in a construction favorable to the corporation, the lower court disregarded the general rule of law, and deliberately strained the language to destroy the corporation. "A court has no authority to extend a law beyond the fair and reasonable meaning of its terms because of some supposed policy of the law, or because the legislature did not use proper words to express its meaning." Tompkins v. First National Bank, 18 N.Y.S. 234.

But Act No. 82, Session Laws of 1903, is both remedial and penal. "If a statute be both remedial and penal, it must be construed strictly." Abbott v. Wood, 22 Me. 541.

Benton Dick, for Appellee.

The words "bring, prosecute and maintain" indicate that the word "exists" does not relate only to the time when the case comes on for hearing, but that an action once begun, the attempted remedying of the delinquency of the corporation by the filing of an appointment of an agent after commencement of suit will not avail the corporation as a defense against dissolution. "Maintain" is a broader word than "bring," and includes it. To maintain an action is to carry it to final judgment. Carlisle Bank v. Brown, 5 Ohio C.D. 94, 95. "Maintain" in pleading has a distinct, technical signification. "'Maintain' means to support what has already been brought into existence, so that to maintain an action is not the same as to commence an action." California Sav. Soc. v. Harris, 111 Cal. 133, 43 P. 525; Carson-Rand Co. v. Stern, 129 Mo. 381, 31 S.W. 772, 32 L.R.A. 420; Moore v. Durden, 2 Welsb. H. & G. 22-30. "To prosecute a suit is to continue a demand which has been made by the institution of process in a court of justice." Cohens v. Virginia, 6 Wheat. 264, 5 L.Ed. 257. "To prosecute an action is to follow it up, to carry on such action or suit." Inhabitants of Knowlton v. Read, 11 N.J.L. 320.

OPINION

DOAN, J.

-- As the second assignment of error stands or falls with the first, the two will be considered...