State ex Inf. Atty-Gen. v. Long-Bell Lumber Co.
| Decision Date | 07 December 1928 |
| Docket Number | No. 27342.,27342. |
| Citation | 12 S.W.2d 64 |
| Parties | THE STATE EX INF. NORTH TODD GENTRY, Attorney-General, v. LONG-BELL LUMBER COMPANY. |
| Court | Missouri Supreme Court |
North T. Gentry, Attorney-General; Chas. M. Mayer and R.R. Brewster of counsel.
(1) A business or manufacturing corporation cannot be formed under the laws of Missouri for the purpose of carrying on every conceivable business for which corporations may be formed; the purposes for which a corporation may be formed must be cognate and related. Sec. 10151, R.S. 1919; Ramsay v. Todd, 95 Tex. 614; Johnson v. Townsend, 103 Texas, 122; Neces Hotel Co. v. Weil Bros., 243 S.W. 731; Staacke v. Routledge, 175 S.W. 444; State ex rel. v. Togler, 55 Ohio St. 61; State v. Stock Co., 38 Ohio St. 347; Consumers Gas Trust Co. v. Quimby, 137 Fed. 898; Burke v. Meale, 159 Ind. 252; Williams v. Citizens Enterprise Co., 25 Ind. App. 357; 14 C.J. 130, sec. 121; Fletcher's Cyc. Corp., 200, sec. 117; Dancy v. Clark, 24 App. Cas. (D.C.) 487; State ex rel. v. Corkins, 123 Mo. 65. (2) If a corporation may not be organized under the laws of Missouri to conduct businesses of all kinds or character, this object may not be accomplished by setting forth one purpose in the original articles of incorporation and by thereafter amending the charter to include all other purposes. Dancy v. Clark, 24 App. Cas. (D.C.) 503; Sec. 9736, R.S. 1919; People ex rel. v. Beach, 57 How. Prac. 336; Hollender v. Food Products Corp., 207 N.Y. Supp. 319; Clements Executors v. Dickey, 5 Fed. Cases, 1025, 1027; In re Western Trust Co., 194 Fed. 720; Sylvester-Watts-Smyth Realty Co. v. American Surety Co., 238 S.W. (Mo.) 494; State v. Taylor, 44 N.E. (Ohio) 515; Ramsey v. Todd, 69 S.W. (Tex.) 135; 14 C.J. 170; 7 R.C.L. 49, sec. 26. (a) The Legislature has seen proper to provide in separate acts, articles or sections of Revised Statutes 1919 for corporate organizations for: Railroads (Sec. 9849); Union station (Sec. 10002); Interurban railroad (Sec. 10012); Street railway (Sec. 10121); Telephone and telegraph (Sec. 10127); Gas and electric (Sec. 10172); Water (Sec. 10174); Bridge (Sec. 10183); Merchants' or mechanics' exchange (Sec. 10187); Building and loan association (Sec. 10196); Training school for minors (Sec. 10290); Booming and rafting (Sec. 10309). In each one of those the Legislature used the words "for the purpose of" or "for that purpose." It is clear that under the above-mentioned sections, a single corporation cannot be created to do all of the above-mentioned business, nor can each be created to do any other business than the single business which the specific section under which it is organized authorizes. Williams v. Citizens Enterprise Co., 57 N.E. (Ind.) 582; State ex rel. Walker v. Corkins, 123 Mo. 56. (b) That it was the intention of the Legislature that a corporation could not be formed for manufacturing or business purposes to conduct two or more separate and distinct businesses, is further shown by Sections 10165 and 10167. The former provides for consolidation of any two corporations, "whose objects and business are in general of the same nature" and the latter as amended by Laws 1921, page 268, provides that the provision of Section 10165 shall apply only to private corporations organized for some or all of the purposes permitted to manufacturing and business corporations by subdivisions one, two, four, five and eleven of Section 10151. (c) The word "any" as used in the phrase "may be created for any of the following purposes" in Section 10151, means any one of the purposes enumerated. Thurston v. State, 43 Tenn. 115; Fenet v. McCuistian, 147 S.W. (Tex.) 869; Cooper v. Light & Railway Co., 102 Pac. (Utah) 206. (3) The language of the amendment obtained by the lumber company cannot be construed to give the company authority to purchase fourteen thousand acres of land, build a city, not only for its own purposes but a city to which all industries are invited, maintain and operate public service bus and ferry lines, operate railroads, hotels, newspapers, loan and investment companies, public service electric-light and water plants, general wholesale and retail real estate business, dredging and diking companies, and to expend upwards of $500,000 in advertising the business opportunities presented by the "Model City," nor has the company such incidental powers. People v. Pullman Co., 175 Ill. 125. Respondent had the right to exercise its incidental powers, but those are powers directly and immediately appropriate to the execution of the specific powers granted, not powers that have some slight or remote relation to it. 7 R.C.L. 528, sec. 513; Hood v. Railroad Co., 22 Conn. 1; State v. Thrasher Mfg. Co., 40 Minn. 213; National Bank v. Frisk-Turner Co., 74 N.W. 162; Western Maryland Road Co. v. Hotel Co., 62 Atl. 353; 10 Cyc. 1097-1098; 7 Am. & Eng. Ency. Law (2 Ed.) 780; People ex rel. Neely v. Railroad Co., 233 Ill. 378; Chicago Gas Co. v. Peoples Gas Co., 121 Ill. 530; Rockhold v. Benefit Co., 129 Ill. 440; Canal v. Conkling, 272 Ill. 318; Orpheum Theatre Co. v. Brokerage Co., 197 Mo. App. 661; State ex rel. Barnett v. Bank, 249 S.W. 619; Matthews v. Skinner, 62 Mo. 339; State ex inf. v. Lincoln Trust Co., 144 Mo. 586; Accountants v. United States, 292 Fed. 268; State ex inf. v. Mo. Athletic Club, 261 Mo. 599. (4) The Constitution and laws of the State not only do not authorize a manufacturing and business corporation to own and vote stock in another business and manufacturing corporation or to promote the same, but deny such right. Sec. 7, Art. 12, Constitution; Sec. 2990, R.S. 1919; Sec. 3346, R.S. 1909. The rule is well established, both in Missouri and elsewhere, that the charter and laws under which a corporation is organized or licensed will be strictly construed and that the corporation will not be allowed to exercise powers not specifically granted by its charter, or the laws under which it is authorized to do business. Blair v. Perpetual Ins. Co., 10 Mo. 560; Matthews v. Skinker, 62 Mo. 329; Correll v. Campbell, 108 Mo. 550; State ex rel. Light Co. v. Murphy, 130 Mo. 10; State ex rel. Crow v. Lincoln Trust Co., 144 Mo. 587; Watson Seminary v. County Court, 149 Mo. 70; Prairie Slough Club v. Kessler, 252 Mo. 434; 1 Morawetz, Private Corp., sec. 431; Parsons v. Tacoma Co., 25 Wash. 492; Thomas v. Railroad, 101 U.S. 82; Franklin Bank v. Commercial Bank, 36 Ch. 350; Schwab v. Potter Co., 194 N.Y. 415; Franklin Co. v. Bank, 68 Me. 43; Milbank v. Railroad Co., 64 How. Prac. (N.Y.) 30; Converse v. Emerson-Talcott & Co., 242 Ill. 619; Pa. Railroad v. Canal Commrs., 21 Pa. St. 22; Black v. Canal Co., 24 N.J. Eq. 455; Central Life Securities Co. v. Smith, 236 Fed. 175; First Nat. Bank v. Converse, 200 U.S. 425. The exercise of such power is against public policy, except when specifically granted under regulations provided by the Legislature. Hanlon Millinery Co. v. Trust Co., 251 Mo. 553; State ex rel. v. Bank, 157 Mo. App. 557; Newland Hotel Co. v. Furniture Co., 73 Mo. App. 135; State ex inf. v. Lincoln Trust Co., 144 Mo. 562; Anglo-American Land Co. v. Lombard, 132 Fed. 736; Central Life Securities Co. v. Smith, 236 Fed. 175; Franklin Co. v. Lewiston Savings Bank, 68 Me. 43; People ex rel. Peabody v. Gas Trust Co., 130 Ill. 268; Converse v. Emerson-Talcott & Co., 242 Ill. 619; Dunbar v. Tel. Co., 224 Ill. 1; Irvine v. Chicago Co., 200 Fed. 953; Central Railroad Co. v. Collins, 40 Ga. 628; Kean v. Johnson, 9 N.J. Eq. 401; Black v. Canal Co., 24 N.J. Eq. 455; DelaVergne Co. v. German Savings Inst., 175 U.S. 54.
Jesse Andrews, Cyrus Crane, Joseph A. Guthrie and George H. Combs, Jr., for respondent.
Argument under first proposition. (1) The activities at Longview are within the incidental powers of The Long-Bell Lumber Company as a lumber manufacturing corporation. (a) In its relation to the purchase of the land. Putnam v. Shoe Corp. (Mo.), 269 S.W. 597; Jessup v. Ill. Cent. Railroad, 43 Fed. 483; Louisville Property Co. v. Comm. (Ky.), 143 S.W. 416; Dickman v. Light & Power Co. (Ill.), 136 N.E. 790; Hodges v. Tel. Co., 133 N.C. 225; American Tel. Co. v. Smith, 71 Md. 535; Dodge v. Ford Motor Co., 3 A.L.R. 413; Jackson Lumber Co. v. Trammell (Ala.), 74 S.E. 469; Central Ohio Gas Co. v. Dairy Co., 60 Ohio St. 96; Hollis Co. v. Marrs & Lake (Tex. Civ. App.), 297 S.W. 367; Thompson on Corp. (1 Ed.) sec. 5642; Realty Co. v. Surety Co., 292 Mo. 438; City Trust & Surety Co. v. Mfg. Co., 68 N.Y. Supp. 1004; Interior Woodwork Co. v. Prasser, 84 N.W. 833; 1 Morawetz on Corp. (2 Ed.) sec. 365; Clark v. Farrington, 11 Wis. 306; Fort Worth City Co. v. Bridge Co., 151 U.S. 294; Virgil v. Practice Clavier Co., 68 N.Y. Supp. 335; H. Koehler & Co. v. Reinheimer, 49 N.Y. Supp. 755; Watts v. Equitable Life Assn., 82 N.W. 441. The admission by informant of respondent's right as an incidental power, to develop a townsite, was forced upon informant, for the authorities are uniform on the subject. Steinway v. Steinway & Son, 40 N.Y. Supp. 718; Armstrong Cork Co. v. H.A. Maldrum Co., 285 Fed. 58. (b) The right that respondent had to build a town, established by the authorities and conceded by informant, necessarily included its right, within reasonable limits, to determine the kind and character of town it would build. (c) In its relation to the organization of subsidiary companies. If the Long-Bell Lumber Company, within its incidental powers as a lumber manufacturing company, can carry on the activities at Longview, it may do so through subsidiary companies. State ex inf. v. Mo. Pac. Ry. Co., 237 Mo. 338, 241 Mo. 144; Nat. Enamel Co. v. Granite City Railroad (Mo.), 199 S.W. 238. (d) In its relation to the guaranty of the diking and improvement bonds. Being rightfully the owner of the diking bonds, the company could guarantee them, if in the opinion of its board of directors that was desirable in order to sell them at the best price obtainable. The guaranteeing of...
To continue reading
Request your trial