Jones v. Rhea

• Decision Date: 23 June 1921
• Parties: JONES et al. v. RHEA, Chairman of State Corporation Commission.
• Court: Virginia Supreme Court

107 S.E. 814

JONES et al.

v.RHEA, Chairman of State Corporation Commission.

Supreme Court of Appeals of Virginia.

June 23, 1921.

[Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Business.]

Petition by Meriwether Jones and others for writ of mandamus against William F. Rhea, Chairman of the State Corporation Commission. Petition granted, and order of Corporation Commission reversed.

S. A. Anderson and E. P. Cox, both of Richmond, for plaintiffs.

Munford, Hunton, Williams & Anderson and J. C. Taylor, all of Richmond, for defendant.

SAUNDERS, J. This is a petition for a mandamus, filed by Meriwether Jones, Edward V. Valentine, and others, petitioners, asking for a peremptory writ of mandamus against Hon. William F. Rhea, chairman of the State Corporation Commission of Virginia. Petitioners make the following allegations:

I. That petitioners are members in good standing of the Westmoreland Club.

II. That there are two clubs in the city of Richmond, organized "for the promotion of social intercourse, and for the purpose of maintaining a library and reading room, " known respectively as the Westmoreland Club and Commonwealth Club. That these clubs were organized by acts of the General Assembly of this state that took effect prior to the act of the General Assembly concerning corporations, effective as of May 21, 1903. That since that date neither of these clubs has asked for any amendment to its charter. That the charter of the Westmoreland Club is an act approved March 20, 1877, and an amending act approved April 2. 1902.

III. That in July, 1920, the officers of the Westmoreland Club, proceeding without authority of law, presented a petition to the State Corporation Commission, praying an order authorizing the merger of the Commonwealth Club and the Westmoreland Club; the club established by this consolidation, to be known as "Westmoreland Club."

IV. That at the time the application for merger was presented to the commission the petitioners appeared by counsel before said commission, and asked to be heard. That the application was set down for hearing on July 20, 1920, and on that day petitioners presented a petition conforming to the rules prescribed by said commission for persons seeking to intervene in proceedings before that tribunal, in which they prayed to be allowed to intervene in the proceedings for merger. An agreed statement of facts was filed at the same time.

V. That counsel for petitioners, as well as counsel for applicants, were heard on July 20, and the matter taken under advisement by the commission.

VI. That on October 7, 1920, an opinion (adverse to the petitioners) was delivered in the case, and on the same day petitioners requested, and were afforded, a copy of the same.

VII. That on October 8, 1920, counsel for petitioners appeared before the commission, and prayed a suspension of the order of merger, in view of an appeal proposed to be taken by petitioners. That on said day an order confirming the proposed merger was entered, but no order of suspension was included.

VIII. That thereupon petitioners gave notice of an application for an appeal, and a request for a supersedeas, and request was made for a transcript of the record of the proceedings before said commission in relation to the proposed merger.

IX. That on October 26, 1920, the commission entered the following order:

"In the Matter of the Merger of Commonwealth Club and the Westmoreland Club, with and into the Westmoreland Club. "This day came counsel for Meriwether Jones, Edward V. Valentine, and others, and presented a petition, requesting the commission to furnish a transcript of the record for appeal in the proceedings in relation to the merger of the Commonwealth Club and the Westmoreland Club, into Westmoreland Club, and the commission, having duly considered the request to furnish such record, is of the opinion that the said petitioners are not entitled to such transcript of the record for appeal, and it is so ordered."

Basing their request upon the foregoing allegations, and others not necessary to be recited, petitioners conclude their petition with a prayer for a peremptory writ of mandamus, directed to Hon. William F. Rhea, chairman of the State Corporation Commission, commanding and directing him to furnish petitioners with a copy of the record of the proceedings in the matter of the merger of Commonwealth Club and the Westmoreland Club into the Westmoreland Club for the purposes of an appeal to this court from the order of the commission confirming the merger agreement between the clubs aforesaid.

The Westmoreland Club, one of the respondents to the foregoing petition, filed on its part a separate demurrer and a separate answer. The grounds of demurrer, in abridged form, are given below:

I. That petitioners were not parties to the merger proceedings, which were taken under the statute laws of this state, fixing the procedure, and establishing the appropriate parties thereto. That these statutes do not permit minority stockholders, or members, to become parties to proceedings for the merger of corporations before the State Corporation Commission, or provide for, or permit, the intervention of such stockholders, or members in such proceedings.

That the said statute laws do not authorize minority stockholders, or members of such merging corporations, to appeal from an order of the commission certifying a merger, as provided by the statute, and do not afford authority to the commission to furnish a transcript of the record of such proceedings for an appeal, or give authority, to the Supreme Court of Appeals of Virginia, to grant an appeal from the order of the commission in such proceedings.

II. That the statute laws of Virginia permit an appeal, or writ of error, to be granted by the Supreme Court of Appeals only to a party to a cause in a tribunal from which such appeal, or writ of error, will lie, who is aggrieved by the decision of such court, or tribunal, and as petitioners were not, and could not have become parties to said merger proceedings, said Supreme Court is not authorized to grant to petitioners, or to any of them, an appeal from said order.

That the said statute laws do not authorize said commission to furnish to petitioners the transcript desired, nor authorize said Supreme Court to compel the commission by mandamus, or otherwise, to afford such transcript, or to grant an appeal, or writ of error, to said petitioners.

III. That the petition shows on its face that petitioners were not parties to the merger proceedings. Hence they are not entitled to a transcript of the record of said proceedings, or to an appeal from the order

of the Corporation Commission.

The allegations of respondent's answer need not be recited, since there are practically no issues of fact between the parties that require determination, the substantial facts being agreed. The answer insists upon its objections to the defects of the petition, and asserts that in all respects the proceedings, in respect to the merger, followed and complied with the requirements of law, and that the order of the commission was valid.

The answer admits that the essential facts in the matter "were agreed, " and further that over objection of respondents the commission heard petitioners at length; but with respect to the first admission it is asserted in said answer that the agreement was with the "express provision that such agreement was not a waiver of any of the rights of respondent to object to the intervention of the petitioners in said proceedings, " and with respect to the second admission, that the commission "expressly reserved its decision as to the right of petitioners to intervene, or to be heard thereon, counsel for petitioners having been heard as a matter of courtesy." The essential questions to be decided are raised by the demurrer. There is also pending a petition for an appeal and supersedeas from the order of the commission.

It was agreed by counsel that if it should be determined that the petitioners are entitled to a writ of mandamus, and an appeal, these issues being necessarily interwoven, this court, in the same decision, should dispose of the appeal on the merits. This may be very readily done, as all the matters arising in these proceedings on the preliminary questions, and the merits, have been very elaborately and ably argued by counsel for the respective parties, with abundant citations of authority.

The essential questions of law raised by the demurrer to the petition for a mandamus are:

I. That the social clubs concerned having proceeded in strict conformity with the statutes, the order of merger is unassailable by appeal.

II. That minority members, or stockholders, have no right to intervene, or be heard in such proceedings.

III. That not being parties, nor entitled to be made parties, petitioners do not belong to the class of aggrieved persons (i. e., parties) who are afforded an appeal by law.

IV. That, petitioners having no right of appeal, they are not entitled to a transcript of the merger proceedings before the com. mission, for the purposes of appeal.

In the brief for the Westmoreland Club on the petition for mandamus, it is said:

"The petition in one aspect proceeds upon the necessary theory that the action of the com mission complained of was purely administrative, or ministerial, and that a mandamus will lie. In the other aspect it proceeds upon the theory that the action complained of was judicial and discretionary, from which an appeal will lie. The two theories are entirely inconsistent, and, the prayers of the petition being based upon conflicting theories of the case, it cannot be maintained."

The contention of petitioners is that they—

"have an undoubted right to appeal from the order of said honorable State Commission merging said clubs, which order, if valid, would directly affect the social and property rights of your petitioners."

If petitioners are entitled to appeal...