People ex rel. Watseka Tel. Co. v. Emmerson

• Decision Date: 05 April 1922
• Docket Number: No. 14122.,14122.
• Citation: 302 Ill. 300,134 N.E. 707
• Parties: PEOPLE ex rel. WATSEKA TELEPHONE CO. v. EMMERSON, Secretary of State.
• Court: Illinois Supreme Court

302 Ill. 300

134 N.E. 707

PEOPLE ex rel. WATSEKA TELEPHONE CO.

v.EMMERSON, Secretary of State.

No. 14122.

Supreme Court of Illinois.

Feb. 22, 1922.

Rehearing Denied April 5, 1922.

Original petition for mandamus by the People, on the relation of the Watseka Telephone Company, against Louis L. Emmerson, Secretary of State. On demurrer to petition.

Writ denied.Cutting, Moore & Sidley, of Chicago, for petitioner.

Edward J. Brundage, Atty. Gen. (Clarence N. Boord and James W. Gullett, both of Springfield, of counsel), for respondent.

CARTER, J.

By leave of court an original petition for mandamus was filed in this court in June, 1921, praying that the Secretary of State be commanded to issue a certificate to the Watseka Telephone Company permitting it to increase its capital stock and issue preferred stock containing certain conditions. The Secretary of State demurred to the petition, and the question is before us for consideration as to whether or not the writ should issue against the Secretary of State.

The petition filed herein sets up that the petitioner was incorporated under the laws of Illinois, and authorized to conduct a telephone and electrical and signal business, enumerating certain franchises, privileges, and incidental rights given to conduct such business, and representing that its capital stock now consisted of 350 shares of $100 each, par value, paid in full and outstanding, and that since 1907 it has been conducting a general telephone business in Watseka, Illinois; that in 1921 the board of directors of the company, desiring to increase the capital stock, and issue new stock containing certain conditions, passed a resolution increasing the capital stock to $70,000, consisting of 700 shares, of $100 par value; that, pursuant to the resolution, and in accordance with a notice to the stockholders, the matter was submitted at the annual meeting held June 15, 1921; that at said meeting all but two stockholders were present or represented, and the resolution, substantially as theretofore adopted by the board of directors, was submitted to the stockholders and adopted by them. This resolution provided that preferred stockholders should not have the right to vote as to any election or to consent to or refuse to consent to any corporate action; that such right was waived by the owners and holders of such preferred stock as a condition and in consideration of its being issued by the company. The resolution also provided as to other matters not here in point. A statement containing this resolution was communicated to the Secretary of State with the offer to pay a statutory fee of $60.84, but he declined to receive the same, on the ground that the proposed amendment to the articles of incorporation was not in conformity with the provisions of the Constitution of 1870.

The question presented in this case is whether the company has the right and power, under the Constitution and laws of the state, to provide for preferred stock the owner of which is expressly deprived of the right to vote for directors. This question depends upon the construction that should be given to section 3 of article 11 of the Constitution of 1870, which reads as follows:

‘The General Assembly shall provide, by law, that in all elections for directors or managers of incorporated companies, every stockholder shall have the right to vote, in person or by proxy, for the number of shares of stock owned by him, for as many persons as there are directors or managers to be elected, or to cumulate said shares, and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock shall equal, or to distribute them on the same principle among as many candidates as he shall think fit; and such directors or managers shall not be elected in any other manner.’

Paragraph 28a22 of the General Incorporation Act contains practically the same provisions as does section 3, just quoted, as to the shareholders voting for directors or managers. Hurd's Stat. 1919, p. 730. Paragraph 4 of section 6 of the General Incorporation Act passed in 1919 provides that stock may be divided ‘into such classes, with such preferences, rights, values and interests as may be provided in the article of incorporation, or any amendment thereof.’ Hurd's Stat. 1919, p. 723.

Counsel in this case seems to agree that at common law preferred stockholders, or any other class of stockholders, might be deprived of the right to vote for directors and that said paragraph 4 of section 6 might be construed in accordance with the common-law provisions were it not for the wording of section 3 of article 11 of the Constitution.

It is argued by counsel for respondent that section 3 of the Constitution was intended to provide at least two things: That in all elections for directors or managers every stockholder should have the right to vote one vote for each share of stock for each office of director or manager to be filled, and that every stockholder should have the right to vote, in person or by proxy, for the number of shares of stock owned by him by cumulating such shares and giving to one candidate as many votes as the number of his shares multiplied by the number of candidates shall equal, or distribute them among the candidates; while counsel for petitioner insist that this construction contended for by counsel for the state requires the use of the word ‘and’ in place of ‘or’ between these two portions of said section, and that the main, if not the only, purpose of the constitutional convention in inserting said section 3 was to confer upon the stockholders the right of cumulative voting for directors or managers; that by the use of the word ‘or’ in this section it was intended to provide for alternativemethods of voting by the stockholders, and that to give the construction to ‘or’ as contended for by the state would practically defeat the main purpose of the constitutional convention.

In Cooley's Constitutional Limitations (7th Ed.) p. 89, the author states:

‘The object of construction, as applied to a written constitution, is to give effect to the intent of the people in adopting it. In the case of all written laws it is the intent of the lawgiver that is to be enforced. But this intent is to be found in the instrument itself. It is to be presumed that language has been employed with sufficient precision to convey it, and unless examination demonstrated that the presumption does not hold good in the particular case nothing will remain except to enforce it. * * * ‘Whether we are considering an agreement betweenparties, a statute or a constitution with a view to its interpretation, the thing which we are to seek is the thought which it expresses. To ascertain this, the first resort in all cases is to the natural signification of the words employed, in the order of grammatical arrangement in which the framers of the instrument have placed them. If, thus regarded, the words embody a definite meaning, which involves no absurdity and no contradiction between different parts of the same writing, then that meaning, apparent on the face of the instrument, is the one which, alone, we are at liberty to say was intended to be conveyed. In such a case there is no room for construction. That which the words declare is the meaning of the instrument, and neither courts nor legislatures have a right to add to or take away from that meaning.’'

Again, on page 92 of same volume, the author says:

‘In interpreting clauses we must presume that words have been employed in their natural and ordinary meaning. As Marshall, C. J., says, the framers of the Constitution, and the people who adopted it, ‘must be understood to have employed words in their natural sense and to have intended what they have said.’ This is but saying that no forced or unnatural construction is to be put upon their language.'

In Sturges v. Crowinshield, 4 Wheat. 122, 202 (4 L. Ed. 529), the Supreme Court of the United States laid down a similar doctrine, and also said:

‘Although the spirit of an instrument, especially of a Constitution, is to be respected not less taan its letter, yet the spirit is to be collected chiefly from its words. It would be dangerous in the extreme to infer from extrinsic circumstances, that a case for which the words of an instrument expressly provide shall be exempted from its operation. Where words conflict with each other, where the different clauses of an instrument bear upon each other, and would be inconsistent unless the natural and common import of words be varied, construction becomes necessary and a departure from the obvious meaningof words is justifiable. But if, in any case, the plain meaning of a provision, not contradicted by any other provision in the same instrument, is to be disregarded, because we believe the framers of that instrument could not intend what they say, it must be one in which the absurdity and injustice of applying the provision to the case, would be so monstrous, that all mankind would, without hesitation, unite in rejecting the application.’

In Burke v. Snively, 208 Ill. 328, 340, 70 N. E. 327, 329, this court was considering the construction that was put upon the Illinois Constitution, and stated:

‘The Constitution of a state derives its force and authority from the vote of the people adopting it. For that reason it is a general rule that in construing the provisions of a Constitution the words employed therein shall be given the meaning which they bear in ordinary use among the people. The natural and ordinary meaning of the words is to be accepted except where a word is used the meaning whereof is established by statute or by judicial construction.’

In People v. Stevenson, 281 Ill. 17, 25, 117 N. E. 747, 749, this court, in construing the Illinois Constitution, quoted with approval from the case of City of Beardstown v. City of Virginia, 76 Ill. 34, as follows:

‘The Constitution does not derive its force from the...