In re Dorris Motor Car Co.

• Citation: 270 S.W. 339,307 Mo. 137
• Decision Date: 12 March 1925
• Docket Number: 25612,25832
• Parties: IN MATTER OF DORRIS MOTOR CAR COMPANY v. WEBSTER COLBURN, Plaintiff in Error. WEBSTER COLBURN, Appellant, v. DORRIS MOTOR CAR COMPANY, F. C. THOMPSON, H. B. KRENNING and PARKER H. WOODS
• Court: United States State Supreme Court of Missouri

270 S.W. 339

307 Mo. 137

IN MATTER OF DORRIS MOTOR CAR COMPANY v. WEBSTER COLBURN, Plaintiff in Error. WEBSTER COLBURN, Appellant, v. DORRIS MOTOR CAR COMPANY, F. C. THOMPSON, H. B. KRENNING and PARKER H. WOODS

Nos. 25612, 25832

Supreme Court of Missouri

March 12, 1925

Writ of Error to and Appeal from St. Louis City Circuit Court Hon. A. B. Frey, Judge.

Writ of error dismissed. Order denying appeal affirmed.

Leahy Saunders & Walther for plaintiff in error and appellant.

(1) Sections 9756, 9757 and 9759, Revised Statutes 1919, of the corporation dissolution statute as amended by Act of 1921 Laws 1921, p. 264, are unconstitutional and void, because the title of the act does not conform to the requirements of Section 28 of Article IV of the Constitution. St. Louis v. Weitzel, 130 Mo. 600; City v. Payne, 71 Mo 159; Nalley v. Ins. Co., 250 Mo. 452; State v. Sloan, 258 Mo. 305; State v. Crites, 209 S.W. 863; St. Louis v. Wortman, 213 Mo. 121; Williams v. Railroad, 233 Mo. 666; Hardware Co. v. Fisher, 269 Mo. 271. (2) The said act is unconstitutional as applied to the Dorris Motor Car Company, which was organized in 1905, for a period of fifty years. (a) Stockholders have a contractual right to have a corporation continued during the entire period of its incorporation. 2 Cook on Corp. (2 Ed.) secs. 492-4; Tanner v. Lindell Railway Co., 180 Mo. 16; Feld v. Roanoke Inv. Co., 123 Mo. 603; Luehrmann v. Lincoln Trust Co., 192 S.W. 1032. (b) If applicable to the Dorris Motor Car Company, such contractual right is impaired by the statute, and the statute is, therefore, violative of the provisions of the Missouri and Federal constitutions. Secs. 15, 20, 30, art. 2, Mo. Constitution; Sec. 19, art. 12, Mo. Constitution; Sec. 1 of 14th Amend. U.S. Constitution; Sec. 10, art. 1, U.S. Constitution; Trustees Dartmouth College v. Woodward, 4 Wheat. 520; In re Newark Library Assn., 64 N. J. L. 217; Einstein v. Raritan Woolen Mills, 74 N.J.Eq. 624; State ex rel. Haeussler v. Greer, 78 Mo. 188; Farrington v. Tennessee, 95 U.S. 679; Clearwater v. Meredith, 68 U.S. 39; Covington v. Sandford, 164 U.S. 578, 593; State Bank v. Knoop, 57 U.S. (16 How.) 369, 380; Wilmington Railroad v. Reid, 80 U.S. (13 Wall.) 264; Tucker v. Russell, 82 F. 263; Abbott v. Rubber Co., 33 Barb. (N. Y.) 578; Hays v. Commonwealth, 82 Pa. St. 518; N. O. J. & G. Railroad v. Harris, 27 Miss. 536. (3) The dissolution petition in this case does not comply strictly with the terms of the statute, and, therefore, no jurisdiction over the subject-matter was conferred upon the circuit court. It is the well-settled law that a statute for voluntary dissolution of a corporation upon a vote of less than the entire outstanding stock, being as to opposing or non-consenting stockholders an involuntary proceeding, must be strictly construed and all requirements thereof strictly followed. Luehrmann v. Trust & Title Co., 192 S.W. 1031; In re Packer City Tire & Rubber Co., 162 N.W. 897; Re Application Binghampton Elec. Co., 143 N.Y. 261; St. Louis v. Gleason, 93 Mo. 33; In re George Ringler & Co., 127 N.Y.S. 934; In Matter of the Mart, 22 Abb. (N. Y.) 227; Theis v. Spokane Falls Gas Light Co., 34 Wash. 23; In re Rattan Sales Co., 201 N.Y. 420; Economy Building Co. v. Paris Mfg. Co., 113 Ky. 246. (4) The statute requires the petition to contain "a full and true inventory of all the books, vouchers and securities relating thereto." No such inventory was contained in the petition in this case. The averment in the petition with respect to books is not an inventory. Bouvier's Law Dic. (Rawle's Rev.), p. 1119; 23 Cyc. 347; Roberts v. Ins. Co., 19 Tex. Civ. App. 338. The petition is also required by the statute to set forth "a clear and concise statement of the reasons which induced the stockholders to desire a dissolution of the corporation," where, as here, the dissolution is upon a two-thirds vote. There is no such allegation in the petition in this case. (5) The bona-fides of dissolution proceedings under the statute is to be inquired into by the court. The evidence in this case overwhelmingly established that it is not a bona-fide dissolution proceeding, such as is authorized by the statute, and the dissolution should, therefore, have been denied. Doe Run Lead Co. v. Maynard, 283 Mo. 646. (6) The evidence overwhelmingly establishes that the dissolution proceedings are not being conducted in good faith, but were initiated, and are being prosecuted, for the purpose of effecting a reorganization. The dissolution statute may not be used for such purpose. Doe Run Lead Co. v. Maynard, 283 Mo. 646.

Thompson & Thompson for defendant in error and respondents.

(1) The petition for dissolution sufficiently complies with the statute. Laws 1921, p. 265, sec. 9757. (2) The dissolution was voted and instituted in good faith. Laws 1921, p. 264, secs. 9756, 9759; Doe Run Lead Co. v. Maynard, 283 Mo. 646, 685. (3) The provisions of Section 28 of Article IV of the Constitution of Missouri in reference to title of enactments are liberally construed with a view of sustaining legislation. Asel v. City of Jefferson, 229 S.W. 1048; Booth v. Scott, 205 S.W. 603. (4) Where the subject of legislation is stated in general language the title is sufficient, and need not descend to an enumeration of details or subordinate matters. State v. Hurley, 258 Mo. 275; Lynch v. Murphy, 119 Mo. 163; Asel v. City of Jefferson, 229 S.W. 1046. (5) Amendments to sections of the Revised Statutes may be validly made by acts whose titles refer only to the numbers of the sections amended, revised or repealed. Asel v. City of Jefferson, 229 S.W. 1046; Ex parte Hutchens, 246 S.W. 186. (6) At the time of the incorporation of the Dorris Motor Car Company in 1905 there were statutes in force in Missouri providing for dissolution by judicial decree. Therefore the company received its charter subject to same being lost by decree of dissolution upon resolution of its stockholders. R. S. 1899, secs. 976 to 981; R. S. 1909, secs. 2995 to 3000. (7) The Act of 1921 impairs no vested right, but merely changes a preexisting mode of procedure for the dissolution of private corporations, and hence does not violate any constitutional inhibition against retrospective laws. 8 Fletcher's Cyclopedia of Corporations, sec. 5410, p. 9020; Clark v. Railroad, 219 Mo. 524; Roenfeldt v. Railroad, 180 Mo. 554. (8) For the same reason the Act of 1921 does not impair the obligations of a contract nor deny due process of law. 7 Fletcher's Cyclopedia of Corporations, sec. 4394, p. 7690; Henley v. Myers, 215 U.S. 373, 54 L.Ed. 240. (9) Abolishing the right of appeal from a judgment of dissolution is not a denial of due process of law. The constitutional guaranty is satisfied by a single hearing, and if one hearing is not due process doubling it will not make it so. 12 C. J. 1239; Railroad v. Backus, 154 U.S. 423, 38 L.Ed. 1031; Snyder v. Buel, 236 Ill. 429, 19 L. R. A. (N. S.) 377, and note.

Ragland, J. All concur except Walker, J., absent, and Atwood, J., not sitting.

OPINION

RAGLAND

On December 5, 1923, the Dorris Motor Car Company, a corporation organized under the laws of this State and having its principal office in the city of St. Louis, instituted in the circuit court a proceeding for voluntary dissolution, under the provisions of Section 9756-9759, Revised Statutes 1919, as amended by the Act of 1921 (Laws 1921, p. 264). On that day it filed its petition which complied substantially with said Section 9757, as amended, and which set forth, among other things, that the authorized capital stock of the corporation was $ 1,000,000; that 1,000 shares of preferred stock and 7,160.68 shares of common stock, each of the par value of $ 100, had been issued and paid up in full; and that on December 3, 1923, at a stockholders' meeting duly called for the purpose, a resolution favoring the dissolution of the corporation on the ground that its business had shown a loss for many months and its continuance in active business would result in further loss and ultimate insolvency, had been adopted by a vote of more than two-thirds in amount of all the issued and outstanding shares of stock. The petition further specified the names of the stockholders, together with their respective residences and the number of shares owned by each, from which it appeared that one H. B. Krenning was the holder of the entire issue of preferred stock.

Upon the filing of the petition an order was made requiring all persons interested in the corporation to show cause, if any they had, on or before January 2, 1924, why the corporation should not be dissolved. Thereupon the holders of more than two-thirds of the stock entered their voluntary appearance and consented to a dissolution. Summons issued for the others and a general notice was given by publication, all as required by said Section 9758.

A return was made to the order to show cause by Scott, Magill and Colburn, non-consenting stockholders. The allegations of their return may be epitomized as follows:

(1) That the Act of 1921, heretofore referred to as amendatory of Section 9756 et seq., Revised Statutes 1919, is void because violative of both State and Federal constitutions (the particulars of which are fully set forth) (2) that the petition upon which the order to show cause is based is insufficient in respect to a jurisdictional matter, in this, that it "fails to contain a full and true inventory of all books, vouchers and securities relating to the estate, both real and personal, in law and equity, of such corporation;" (3) "that the said corporation is, and was at the time . . . of the adoption of said resolution, wholly solvent, and the par value of the common stock of said corporation but slightly impaired; that the said H. B. Krenning is...