State ex rel. Minneapolis, St. P. & S. S. M. Ry. Co. v. R.R. Comm'n

• Decision Date: 29 September 1908
• Citation: 117 N.W. 846,137 Wis. 80
• Parties: STATE EX REL. MINNEAPOLIS, ST. P. & S. S. M. RY. CO. v. RAILROAD COMMISSION.
• Court: Wisconsin Supreme Court

137 Wis. 80

117 N.W. 846

STATE EX REL. MINNEAPOLIS, ST. P. & S. S. M. RY. CO.

v.RAILROAD COMMISSION.

Supreme Court of Wisconsin.

Sept. 29, 1908.

Syllabus by the Judge.

The legislative intent in passing a law governs as to the scope thereof, whether such intent is unambiguously expressed or is discoverable by the aid of rules for judicial construction.

The rules for judicial construction permit of looking at a legislative enactment as a whole, to the subject with which it deals, to its reason and spirit, of giving words a broad or narrow construction going either way to the limits of their reasonable scope, of supplying omitted words clearly in place by implication, of changing one word for another in case of the wrong one being clearly used, and of thus reading out of the enactment and giving effect to the real intent though it may be found to be contrary to the letter thereof.

For the purpose of clearing up obscurities in a legislative act it should be read with reference to the leading idea thereof, that being regarded as such limitation upon particular words or clauses and expansion of others, within the scope thereof, in connection with that of words clearly implied, and the law be thus, if reasonably practicable, brought into harmony with such idea.

The leading idea of section 1753-3 of the statutes (Laws 1907, pp. 411, 412, c. 576), is that a public service corporation shall not do any of the things conditionally prohibited except upon the authority of the commission first obtained: the word “authority” not being used as suggestive of a delegation of power to determine what the corporation may do within its corporate powers, but of authority to determine whether the thing proposed to be done is within such powers.

The Legislature cannot properly delegate authority to a commission to determine what power a corporation shall possess. It may clothe a commission with authority to determine whether the facts exist rendering the corporation competent to exercise its corporate powers in a given case.

A legislative grant of authority to a commission to determine whether a corporation may do a particular thing proposed by the latter to be done implies authority to determine corporate competency in that regard tested by the charter.

Section 1774, St. 1898, relative to amending articles of incorporation, refers only to corporations organized under chapter 86 of the Statutes, which excludes railroad corporations.

A change of the authorized capital stock of a railway corporation is one of a fundamental character requiring an amendment to the articles of organization.

Such a change under section 1826 of the Statutes of 1898, though not called an amendment, when effected is one in fact.

When by the policy of the written law the articles of organization of a corporation are required to be made a matter of public record and there is no express provision for making an amendment to such articles a like matter, by necessary implication such amendment, to be valid, must substantially follow, as regards publicity, the course of the original articles.

Notwithstanding the written law makes no express provision for making a change in the fundamentals of a corporation a matter of public record, the provision in section 1820, St. 1898, to the effect that such a corporation shall pay a prescribed fee for filing amendments to its articles of organization, recognizes that such filing is essential to the validity of such an amendment and in view of the unwritten law in respect to the matter is equivalent to a legislative declaration in harmony therewith.

The railroad commission of this state has authority under section 1753-3 of the Statutes (Laws 1907, pp. 411, 412, c. 576), to pass upon the competency of a railroad corporation to increase its capital stock and to refuse permission in that regard in case the articles of incorporation shall not have been so broadened as to cover the subject by a valid amendment which requires a public record of the change to be made in the office of the Secretary of State and compliance with the conditions precedent thereto in respect to the payment of fees.

Appeal from Circuit Court, Dane County; E. Ray Stevens, Judge.

Application by the state, on the relation of the Minneapolis, St. Paul & Sault Ste. Marie Railway Company, for writ of mandamus to the Railroad Commission of Wisconsin. From an order overruling a motion to quash the writ, defendant appeals. Reversed and remanded.

Mandamus proceedings to require the State Railroad Commission to furnish the relator with a certificate of authority to issue stock in addition to that originally authorized in its articles of organization. The commission refused to furnish such certificate because the relator had not filed the amendment to its articles of organization increasing its capital stock with the Secretary of State. The relation showed facts essential to favorable action upon its request for the certificate unless filing of an amendment to its articles of organization increasing its capital stock was necessary. There was a motion to quash the alternative writ, which was denied upon the ground that the relator's petition showed that it was entitled to the certificate demanded because a railroad corporation, in order to increase its authorized capital stock, is not required to file an amendment to its articles of organization covering the subject or evidence thereof, with the Secretary of State. The appeal is from the order overruling the motion to quash.

F. L. Gilbert, Atty. Gen., and Russell Jackson, Deputy Atty. Gen., for appellant.

Sanborn & Blake (Alfred H. Bright, of counsel), for respondent.

MARSHALL, J. (after stating the facts as above).

This appeal involves questions of much importance to corporate and general interests, viz.: What is the scope of the Railroad Commission's power relative to the issue of stock, stock certificates, bonds or other evidences of indebtedness by railroad corporations and is such a corporation, like corporations in general, required as a condition precedent to increasing its capital stock originally provided for, to amend its articles of organization and to that end file a properly authenticated copy of the amendment with the Secretary of State and pay $1 for each $1,000 of the increase as a fee for such filing? It would seem that matters of such great moment ought to be readily determinable by the plain unmistakable letter of the written law instead of being involved, as they seem to be here, in language so ambiguous as to require a reading thereof in the light of rules for judicial construction, not called into activity except in cases of necessity, in order to enable one to see sufficient sense in the enactment as to indicate satisfactorily the legislative purpose and determine that such purpose is sufficiently expressed to warrant effective recognition thereof.

The first question suggested is raised by counsel for respondent challenging the jurisdiction of the commission to determine any question of fact as regards the legal capacity of a railroad corporation to issue new stock and permit or refuse to permit such issue according to whether the status disclosed satisfies statutory requirements. That turns on the meaning of this language in section 1753-3 of the Statutes (pages 411, 412, c. 576, Laws of 1907):

“No public service corporation shall hereafter issue any stock, stock certificates, bonds or any other evidences of indebtedness payable in more than one year from date, until it shall have first obtained authority for such issue from the Railroad Commission as herein provided. The proceedings for obtaining a certificate of such authority from said commission and the conditions of its being granted by said commission shall be as follows:

(a) In case the stocks, certificates of stock, bonds or other evidences of indebtedness are to be issued for money only the corporation shall file with the commission a statement, signed and verified by its president and secretary, setting forth (1) the amount and character of the proposed stocks, certificates of stock, bonds or other evidences of indebtedness, (2) the purposes for which they are to be issued, (3) the terms on which they are to be issued, and (4) the total assets and liabilities of the corporation in such detail as the commission may require. The commission may also require the corporation to furnish any further statements of fact or evidence that it may deem pertinent to the inquiry. The commission shall thereupon issue to the corporation a certificate stating the amount, character, purposes and terms on which such stocks, certificates of stock, bonds, or other evidences of indebtedness are proposed to be issued.”

That the quoted language is ambiguous and so a subject for judicial construction does not admit of reasonable controversy. It is ambiguous in its literal sense, in that a corporation as a condition precedent to the right to issue new stock is required to “have first obtained authority for such issue from the Railroad Commission” to be evidenced by “a certificate of authority from such commission” and by specified proceedings and upon specified conditions, yet no such certificate in terms is required to be issued but only one “stating the amount, character, purposes and terms on which the stock,” etc., is proposed to be issued. No conditions are in terms expressed except that there shall be placed before the commission certain specified evidence and such other “statements of fact or evidence” as the commission “may deem pertinent to the inquiry.”

It will be seen that the literal sense of the law might be complied with as regards every duty on the part of the corporation precedent to that of the commission to furnish the certificate, without a disclosure showing legal capacity to issue new stock and even though it might show incapacity in that regard. Taking the law literally, compliance with the special requirement if any,...