Narragansett Electric Lighting Co. v. Sabre

• Decision Date: 11 June 1930
• Docket Number: Nos. 572, 573.,s. 572, 573.
• Citation: 150 A. 756
• Parties: NARRAGANSETT ELECTRIC LIGHTING CO v. SABRE et al. NARRAGANSETT CO v. NARRAGANSETT ELECTRIC LIGHTING CO.
• Court: Rhode Island Supreme Court

150 A. 756

NARRAGANSETT ELECTRIC LIGHTING CO

v. SABRE et al. ^*

NARRAGANSETT CO

v. NARRAGANSETT ELECTRIC LIGHTING CO.

Nos. 572, 573.

Supreme Court of Rhode Island.

June 11, 1930.

Case Certified from Superior Court, Providence and Bristol Counties.

Two separate petitions in equity by the Narragansett Electric Lighting Company against George W. Sabre and others, and by the Narragansett Company against the Narragansett Electric Lighting Company. On separate motions to dismiss each petition, the superior court certified constitutional questions for determination. On motion to dismiss.

Motion granted. Decision certified, and case remitted for further proceedings.

See also 50 R. I. 288,146 A. 777; 147 A. 668.

Edwards & Angell, of Providence, for Narragansett Companies.

John P. Beagan, Joseph E. Beagan, and Robert P. Beagan, all of Providence, for respondents Beagan and Gray.

Charles R. Easton, of Providence, for respondents Sabre.

Ropes, Gray, Boyden & Perkins, of Boston, Mass., for certain bondholders.

RATHBUN, J.

These two causes are petitions in equity. In the superior court separate motions were made to dismiss each petition. Each motion raised upon the record constitutional questions which were certified to this court for determination. See General Laws 1923, c. 348, § 1.

The Narragansett Electric Lighting Company, a public service corporation, acting upon purported legislative authority, transferred all of its franchises and other assets to the United Electric Power Company, a public service corporation, the name of which has since been changed to the Narragansett Electric Company. We will hereafter refer to the firstmentioned corporation as the old company and to the lastmentioned corporation as the new company. The old company filed the first petition, which prays: (1) That an appraiser be appointed to appraise the value of the stock owned in said company by stockholders who objected to said transfer; (2) that a decree be entered ordering the petitioner, the old company, to pay such dissenting stockholders the appraised value of their shares. The second petition which was filed by the Narragansett Company, a stockholder in the old company, prays for a dissolution of the old company.

Said motions to dismiss were filed by dissenting stockholders, who contend that the acts purporting to sell and transfer the assets of the old company to the new company violated rights guaranteed to said stockholders by the Constitution of this state; said dissenting stockholders, by their said motion? oppose the petition seeking an appraisal of the value of their stock and also oppose the petition to dissolve the old company.

The charter of the new company, granted by the General Assembly, purports to authorize said company to purchase all of the assets, property, rights, privileges, and franchises of any corporation organized to carry on a similar business in this state, and also purports to authorize any company so organized to sell all of its assets, property, rights, privileges, and franchises to the new company. Said charter further provides that:

"Any such sale shall be approved by vote of at least two-thirds in interest of the stockholders of the vendor corporation entitled to vote, at a meeting of the stockholders of such corporation duly called."

"Upon consummation of any such sale the purchasing corporation shall become vested with all the rights, privileges, powers and franchises held or enjoyed by the vendor corporation."

"If a sale be effected in accordance with the foregoing provisions hereof, any stockholder of the vendor corporation, who shall not have voted in favor of said sale either in person or by proxy, shall be entitled to the rights, and such vendor corporation shall be subject to the duties, obligations and liabilities set forth in section 56 of chapter 248 of the General Laws with respect to dissenting stockholders and to corporations which sell, lease and exchange their entire assets, respectively."

Said section 56 provides the procedure for a judicial determination of the value of the stock of the minority nonconsenting stockholders, and provides that when the decree fixing such value has become final an execution shall be issued thereon. The act incorporating the new company—under its original name—was amended by an act which provided that when said company has received from the old company a "conveyance of all or substantially all of its assets, property, rights, privileges and franchises, which conveyance has been approved by vote of the holders of not less than two-thirds of its outstanding stock," at a meeting duly called to consider such propositions, the new company may change its name to the "Narragansett Electric Company."

These petitions have been here once before on constitutional questions raised by said dissenting stockholders, whom we will hereafter refer to as the "respondents" (see Narragansett Electric Lighting Co. v. Sabre et al., 50 R. I. 288, 146 A. 777, 781), and we held that "the legislative intent as expressed in said amended act of incorporation was to permit the old company to take by eminent domain the respondents' stock and their several undivided interests represented thereby in the franchises and other assets of said company." We held also that the provisions of said act did not violate any one of the numerous constitutional provisions brought in question at that time. The papers in each cause were sent back to the superior court for further proceedings.

The next proceeding of importance was the filing by said respondents of another motion in each cause to dismiss, based on allegations that the procedure in adopting said act of incorporation and the amendment thereto was in violation of article 9, § 1, of the Amendments of the Constitution of Rhode Island. Thereupon the petitioners filed in the superior court, and again in this court, motions to dismiss said respondents' motions to dismiss these petitions and alleged as grounds therefor that "Said respondents are not entitled to have the questions raised by their motions heard on the merits—because they have been guilty of such laches as bar them effectively from the relief which they seek by said motion"—the facts on which the allegation of laches was based were set forth in detail—and that said respondents are barred from raising further constitutional questions because they have heretofore raised such constitutional questions, ("approximately twenty-nine" in number), as they apparently desired to raise and could, before the petitions were certified here the first time, have raised the constitutional questions which they now seek to raise.

When these petitions were certified to us the first time for hearing on constitutional questions, based upon respondents' motions to dismiss, the petitioners filed in this court motions, based on allegations of facts constituting laches, to dismiss said motions to dismiss said petitions. At that time the truth of the facts alleged and relied upon to constitute laches had not been established; we therefore refused to pass upon the question of laches and considered the constitutional questions upon the merits. The truth of the facts now relied upon to constitute laches is established by a stipulation filed by the parties in this court.

The respondents urge that these petitioners should not be permitted to set up laches against the respondents, because, as they contend, they are not seeking affirmative relief. The old company is not seeking affirmative relief other than performing the duty, set forth in said act, to seek to obtain a judicial determination as to the amount which said company should pay to the respon dents as the value of their stock. The respondents' opposition is merely preliminary to asking for affirmative relief. The respondents by their motions to dismiss are asking this court to declare that the legislative act, pursuant to which the assets of the old company were transferred to the new company, was illegal and that the transfer was void.

Assuming that the legislative procedure in adopting said act of incorporation was insufficient to authorize a valid transfer by the old company of all of its assets to the new company—but upon this question we express no opinion—said respondents must meet the question of their own laches before they can obtain an order for a retransfer of assets to the old company and for the re-establishment of said company. The question of laches is so vital that it should be settled at the first opportunity. Furthermore, courts do not pass upon constitutional questions when it is unnecessary for the determination of the case. See Blais v. Franklin, 30 R. I. at page 421, 75 A. 399, 403, where Sweetland. J., said: "we do not consider it to be the intent of the Legislature that this court shall pass upon the question of the constitutionality of an act of the General Assembly that is not germane to the case in which it is raised, or in a case which is clearly without standing in court, or when the determination of the question is entirely unnecessary." Said justice quoted from the opinion of Chief Justice Marshall in Ex parte Randolph, 2 Brock. 447, Fed. Cas. No. 11558, as follows: "No question can be brought before a judicial tribunal of greater delicacy than...