State on Inf. Huffman v. Sho-Me Power Co-op.

• Decision Date: 14 January 1946
• Docket Number: 38883
• Citation: 191 S.W.2d 971,354 Mo. 892
• Parties: State of Missouri at the Information of M. J. Huffman, Prosecuting Attorney of Wright County, Missouri, ex officio, and at the Information of M. J. Huffman, Prosecuting Attorney of Wright County, Missouri, at the Relation of W. D. Freeman and C. H. Cramer, Informant, v. Sho-Me Power Cooperative, a Corporation, Respondent, Arkansas-Missouri Power Corporation, Empire District Electric Company and Missouri Utilities Company, Intervenors
• Court: Missouri Supreme Court

191 S.W.2d 971

354 Mo. 892

State of Missouri at the Information of M. J. Huffman, Prosecuting Attorney of Wright County, Missouri, ex officio, and at the Information of M. J. Huffman, Prosecuting Attorney of Wright County, Missouri, at the Relation of W. D. Freeman and C. H. Cramer, Informant, v. Sho-Me Power Cooperative, a Corporation, Respondent, Arkansas-Missouri Power Corporation, Empire District Electric Company and Missouri Utilities Company, Intervenors

No. 38883

Supreme Court of Missouri

January 14, 1946

Quo Warranto.

Conditional writ of ouster issued.

F R. Collier, Prosecuting Attorney of Wright County, for informants.

(1) The charter powers of a co-operative association, such as Sho-Me cannot exceed the powers granted by the statute authorizing its creation. Such associations are mere creatures of the law. They cannot exercise any power or authority, other than those expressly granted by their charters or necessarily incident to the power and authority thus granted. Mo Constitution, Art. XII, Sec. 7; St. Louis v Russell, 9 Mo. 507; Theatre v. Brokerage Co., 197 Mo.App. 661, 199 S.W. 257; State ex inf. v. Mo. Athletic Club, 261 Mo. 576, 170 S.W. 904; Julian v. K.C. Star Co., 209 Mo. 35, 107 S.W. 496; Millinery Co. v. Trust Co., 251 Mo. 553; Carroll v. Campbell, 108 Mo. 550; Clark v. Railroad Co., 319 Mo. 865. (2) The enumeration of certain granted powers to cooperative agricultural associations, such as Sho-Me, excludes all other powers not so named. Expressio unius est exclusio alterius. There was no power granted in the Act under which Sho-Me was organized authorizing such a cooperative to own, operate and maintain a public utility system, including water and ice plants. State ex inf. v. Lincoln Trust Co., 144 Mo. 562; Thomas v. Railroad Co., 101 U.S. 71, 25 L.Ed. 950; Millinery Co. v. Trust Co., 251 Mo. 553. (3) No implied power to engage in the public utility business follows from the wording of the Act. It is a settled rule of construction that legislative grants of power to corporations, public or private, include only such powers as are clearly comprehended within the words of the act of their creation or may be derived therefrom by necessary implication, regard being had to the objects of the grant. State ex inf. v. Mo. Athletic Club, 261 Mo. 576, 170 S.W. 904; State ex inf. v. Lincoln Trust Co., 144 Mo. 562. (4) If the Agricultural Co-operative Act grants to agricultural associations the right to engage in the electrical, water and ice business, as contended for by Sho-Me, then the Act is unconstitutional, in that the title is defective. It violates Section 28 of Article IV of the Missouri Constitution, providing that no bill ". . . shall contain more than one subject, which shall be clearly expressed in its title." There is no mention made in the title of the Act indicating that an association formed under it might engage in owning, operating and maintaining, utility, water and ice plants. Mo. Constitution, Art. IV, Sec. 28; State v. Sloan, 258 Mo. 305, 167 S.W. 500; State v. Hurley, 258 Mo. 275, 167 S.W. 965; State ex rel. School District v. Hackman, 292 Mo. 27, 237 S.W. 742; Fidelity Adjustment Co. v. Cook, 339 Mo. 45, 95 S.W.2d 1162. (5) The legislative history of the Act in question shows conclusively there was no intention to go beyond the organization of a pure and simple agricultural co-operative similar to others then in the statutes. (6) Had the Legislature ever intended or considered that it had previously granted power to an Agricultural Co-operative to engage in the electrical utility field, why did it in 1939 enact the Rural Electric Co-operative Act, Laws 1939, p. 298; Art. 7, Chap. 33, Sec. 5386 et seq., R.S. 1939?

R. B. Oliver, Jr., R. K. McPherson, Ludwick Graves, Roscoe P. Conkling and A. Z. Patterson for intervenors.

(1) Quo warranto is the proper remedy to oust a corporation from the exercise of powers not granted by law to it. State ex inf. v. Standard Oil Co., 218 Mo. 1; State ex inf. v. Mo. Utilities Co., 98 S.W.2d 607. (2) The Sho-Me may not constitutionally lawfully engage in any business other than that expressly authorized by the law under which it is organized. Sec. 7, Art. XII, Mo. Constitution; Joseph Schlitz Brewing Co. v. Mo. Poultry Game Co., 237 Mo. 400, 229 S.W. 813; Orpheum Theatre & Realty Co. v. Seavey & Flarsheim Brokerage Co., 197 Mo.App. 661, 199 S.W. 257; Fishing & Hunting Club v. Kessler, 252 Mo. 424. (3) The general rule is that corporate charters are strictly construed against the corporation. 13 Am. Jur., pp. 218, 774; 14a C.J. 260; 7 Fletcher, Cyc. Corporations, Chap. 42. (4) Interveners are proper parties to the proceeding. Objection by respondent to the intervention of the three interveners is untimely, since the proper time for objection was when the parties petitioned for leave to intervene. Furthermore, any private person, though interested, may call to the attention of the State's officers the usurpation of a franchise, and the State's officers may avail themselves of such person's aid. State v. Cupples Station L., H. & Pwr. Co., 222 S.W. 75, 283 Mo. 115. (5) The Commissioner has properly construed Section 14406, in holding that one who generates, transmits and deals in electricity is not engaged in "mercantile" business within the meaning of such statute. In re Hudson River Electric Power Co., 173 F. 934; In re Wilkes-Barre Light Co., 224 F. 248; In re N.Y. & W. Water Co., 98 F. 711. (6) Since Sho-Me was shown to have engaged in the electric utility business on a large scale including the exercise of municipal electric franchises, it was charged with duties to the public which are not part of the duties of an ordinary corporation engaged in mercantile pursuits, and may not claim right to engage in such electric utility business under mere power to engage in "mercantile" business. (7) Section 14406 authorizes the "buying, selling, manufacturing, storage, transportation, or other dealing in or with by associations of agriculturists of agricultural, dairy or similar products." Such Section limits (1) the kind of commodities which may be dealt in and (2) the type or character of the group which may deal in such commodities. Electricity clearly is not an agricultural, dairy or similar product, and the cities, towns and customers which Sho-Me professes to supply are clearly not associations of agriculturists. (8) The use of the word "all" in Section 14406 does not preclude the application of the rule of ejusdem generis. State ex rel. Wear v. Business Men's Club, 178 Mo.App. 548.

Henry C. Salveter, Gregory C. Stockard, Wilbur L. Morse and Virginia Morsey for respondent.

(1) Respondent is engaged in a mercantile business and in selling an article of merchandise. In re Cameron Town Mut., etc Ins. Co., 96 F. 756; People v. Federal Sec. Co., 255 Ill. 561, 99 N.E. 668; H. H. Kohlsaat & Co. v. O'Connell, 255 Ill. 271, 99 N.E. 689; Broad River Power Co. v. Query, 288 U.S. 178, 77 L.Ed. 685; Utah Power & Light Co. v. Pfost, 286 U.S. 165, 76 L.Ed. 1038; State ex rel. Spillman v. Interstate Power Co., 118 Neb. 156, 226 N.W. 427; Curry v. Alabama Power Co., 8 So.2d 521; Sixty-Seven South Munn v. Board of Public Utilities Comm., 106 N.J.L. 45, 147 A. 735, affirmed 107 N.J.L. 386, 152 A. 920, certiorari denied 283 U.S. 828, 75 L.Ed. 1441; Miller v. Roswell G. & E. Co., 22 N.M. 594, 166 P. 1177; Re Gair Realty Corp., P.U.R. 390; G.E. Lothrop Theatres Co. v. Edison Electric I. Co., 290 Mass. 189, 195 N.E. 305; In re Charles Town Light & Power Co., 183 F. 160; affirmed 184 F. 986; In re Suburban Electric Co. (unreported; D. C. Kan. 1900), cited in Loveland, Bankruptcy (3 Ed.), p. 178; In re Grafton Gas and Electric Light Co., 253 F. 668. (2) The authority granted by Sec. 14406 to engage in a mercantile business is not limited by the words "Including the Buying, Selling . . . of Agricultural, Dairy or Similar Products." 31 C.J. 395; Lynch v. Gleaner Combine Harvester Corp., 223 Mo.App. 196, 17 S.W.2d 554; Prairie Oil & Gas Co. v. Motter, 1 F.Supp. 464; United States v. Natl. City Bank of New York, 21 F.Supp. 791; Kennedy v. Industrial Accident Comm., 50 Cal.App. 184, 195 P. 267. (3) The rule of ejusdem generis does not preclude an interpretation of the Cooperative Companies Act allowing organization for the purpose of doing an electrical business. Crawford, Statutory Construction (1940), sec. 165; Dodd v. Independence Stove & Furnace Co., 330 Mo. 662, 51 S.W.2d 114; Danciger v. Cooley, 248 U.S. 319, 63 L.Ed. 266; Commonwealth v. Werth, 116 Va. 604, 82 S.E. 695; St. Louis v. Bowler, 94 Mo. 630, 7 S.W. 434; Natl. Bank of Commerce v. Estate of Ripley, 161 Mo. 126, 61 S.W. 587; United States v. Mescall, 215 U.S. 26, 54 L.Ed. 77; Mason v. United States, 260 U.S. 545, 67 L.Ed. 396; Mid-Northern Oil Co. v. Walker, 268 U.S. 45, 69 L.Ed. 841; Ruckert v. Grand Avenue Ry. Co., 163 Mo. 260, 63 S.W. 814; State v. Smith, 233 Mo. 242, 135 S.W. 465; Aetna Casualty and Surety Co. v. Kimball, 206 Iowa 1251, 222 N.W. 31; City of Chicago v. Arbuckle Bros., 344 Ill. 597, 176 N.E. 761; State v. Angelo, 71 N.H. 180, 51 A. 905; Cochran v. Harvey, 88 Ga. 352, 14 S.E. 580; Commonwealth v. Caldwell, 190 Mass. 355, 76 N.E. 955; Posey v. Rome Oil & Fertilizer Co., 157 Ga. 44, 121 S.E. 205; Butler v. Shiver, 79 Ga. 172, 4 S.E. 115; Succession of Moise, 107 La. 717, 31 So. 990. (4) The generation and transmission of electric energy is within the purview of the Co-operative Companies Act. State v. Whitaker, 33 Mo. 457; State v. Richeson, 45 Mo. 575; Kansas City v. Ferd Heim Brewing Co., 98 Mo.App. 590, 73 S.W. 302; Sec. 11327, R.S. 1939; In re Wilkes-Barre Light Co., 224 F. 248; H. H. Kohlsaat & Co. v. O'Connell, 255 Ill. 277, 99 N.E. 689. (5) The historical background of the Cooperative Companies Act supports an...