State v. Montgomery Light Co.

• Decision Date: 11 April 1894
• Parties: STATE EX REL. PERKINS v. MONTGOMERY LIGHT CO.
• Court: Alabama Supreme Court

15 So. 347

102 Ala. 594

STATE EX REL. PERKINS v. MONTGOMERY LIGHT CO.

Supreme Court of Alabama

April 11, 1894

Appeal from city court of Montgomery; Thomas M. Arrington, Judge.

Quo warranto by the state of Alabama, on the relation of B. F Perkins, against the Montgomery Light Company. From a judgment for defendant, plaintiff appeals. Affirmed.

The information alleged that the relator, Perkins, was a resident citizen of Jefferson county, in the state of Alabama; that the Montgomery Gaslight Company was incorporated by a special act of the general assembly of Alabama, passed at its session of 1853-54; that, by the terms of the charter so granted, the place of business of said company was in the city of Montgomery, and the said company was authorized to furnish the said city and its inhabitants with gas for illuminating purposes, and that it was only authorized to exist for that end and purpose; that for many years prior to 1889 the Montgomery Gaslight Company carried out the provisions of its charter, but that in 1889 the said corporation, acting by and through a majority of those in interest therein, obtained upon a petition filed in the probate court of Montgomery county, an amendment to its charter, changing its name to Montgomery Light Company, and giving it authority to manufacture and furnish electricity to the city of Montgomery and its inhabitants for purposes of illumination, and authorizing it to increase its capital stock to $200,000, and execute bonds to the amount of $250,000, which were to be secured by mortgage on all of its property. The information further alleged that the probate court of Montgomery county was without any authority to make such amendment, but that it did undertake to do so, and that ever since that time the corporation has exercised the additional franchises and powers by operating an electric-light plant, and furnishing electricity to the city of Montgomery and its inhabitants and increased its capital stock, issuing certificates therefor, and issued bonds to the amount of $250,000, which were secured by mortgage on all of its property; and that the attempt to change its charter was without authority of law and void. It was finally averred in said information that the said Montgomery Light Company had offended against the laws of its creation, in this: (a) In unlawfully increasing its capital stock. (b) In creating a bonded indebtedness of $250,000, secured by a mortgage on all of its property. (c) In exercising a franchise not conferred by law, by operating an electric-light plant, and charging and taking toll for the same. A writ was issued upon this information, reciting the facts alleged in the information, and citing the Montgomery Light Company to appear before the court, and show cause, if it had any, why its charter should not be revoked, and its corporate existence annulled. In response to said writ the respondent moved to quash the same, on various grounds, chief among which were the following: (1) Because said B. F. Perkins, on whose information the writ was sued out, was not joined as plaintiff with the state. (2) Because it was not shown or averred in the information on which the writ issued, or in the recitals of the writ, that the said Perkins had any interest in the subject-matter of the proceedings. (3) That it was not averred that the alleged acts by which it amended its charter were not done pursuant to the provisions of the law authorizing it to make such amendment. (4) That neither the information nor the writ averred facts which showed that the probate court was acting without authority in granting the amendment to its charter. (5) That a copy of the act of the legislature incorporating respondent was not attached to the information. (6) That it did not appear that the capital stock of the corporation was not increased in the mode and manner provided by law. (7) That it did not appear that the bonded indebtedness was not increased in the mode provided by law. (8) That it does not appear but that the respondent acted in good faith, and with the honest belief that it had the right to do the acts complained of. On the submission of the cause, judgment was rendered, dismissing the proceedings, as is shown by the following extract from the judgment entry: "It is ordered and adjudged by the court that the application filed in this case be, and is hereby, dismissed (1) because, the questions involved being the constitutionality of a statute, relator should show that he is a stockholder, or has some right affected by the statute; (2) the amendment complained of is auxiliary to the original purpose of the corporation."

Lea & Bell and Brooks & Brooks, for appellant.

Tompkins & Troy, for appellee.

HEAD J.

This is a proceeding in the nature of quo warranto, to vacate the charter of the respondent corporation, under Code 1886, § 3167 et seq. It has its basis mainly in subdivision 5 of section 3167, which authorizes judgment of forfeiture when a corporation "exercises a franchise or privilege not conferred on it by law." The statute prescribes two methods of procedure to enforce these forfeitures: One is that the judge of the circuit, wherein the corporation is located, whenever he has reason to believe any of the acts or omissions can be proved, and it is necessary for the public good, must direct the solicitor to bring the action. When so done the proceeding is alone in the behalf of the state, for the public good. The other is that the action may be brought on the information of any person giving security for the costs, to be approved by the clerk of the court, in which case the informant must be joined as plaintiff with the state. If the informant dies pending suit, another, giving security for costs, may be substituted in his place, but if no person is so substituted the action abates. The present proceeding is of the latter class, except that the requirement that the informant be joined as plaintiff with the state seems to have been overlooked, and was not conformed to; the action being instituted in the name of the state, alone, "on the relation of B. F. Perkins."

The respondent corporation was chartered by special act of assembly in the year 1853, by the name of the Montgomery Gaslight Company, with the city of Montgomery, Ala., as its place of business, and was empowered to furnish that city and its inhabitants gas for illuminating purposes, which was the sole object and end of the incorporation. The business of the company was legitimately carried on, within corporate powers, until the year 1889, when the grievances complained of in the information began. On December 12, 1888, the general assembly of Alabama passed an act "To authorize corporations organized under the general incorporation laws of the state, or which have been chartered by an act of the general assembly prior to the enactment of the general incorporation laws of this state, of 1867, to alter and amend their charter;" and in this act it is provided that not less than three-fourths in number of the stockholders of any such corporation, holding not less than two-thirds in value of the stock thereof, may, in...