Superior Oil & Refining Syndicate v. Handley

• Decision Date: 01 February 1921
• Court: Oregon Supreme Court
• Parties: SUPERIOR OIL & REFINING SYNDICATE, LIMITED, v. HANDLEY, CORPORATION COMMISSIONER.

195 P. 159

99 Or. 146

SUPERIOR OIL & REFINING SYNDICATE, LIMITED, v. HANDLEY, CORPORATION COMMISSIONER.

Supreme Court of Oregon

February 1, 1921

In Banc.

Original proceeding in mandamus by the Superior Oil & Refining Syndicate, Limited, organized under the laws of Texas against T. B. Handley, Corporation Commissioner. Peremptory writ denied, and proceeding dismissed.

This is an original proceeding in mandamus to require defendant, T B. Handley, as corporation commissioner of the state of Oregon, to act upon the application of plaintiff, the Superior Oil & Refining Syndicate, organized under the laws of the state of Texas, for a permit to sell in this state what plaintiff denominates capital shares, or certificates in a common-law business syndicate organized for the purpose of making brick and refining crude petroleum and disposing of the products. The corporation commissioner declined to act upon the application, for the reason that the application did not come under his jurisdiction as corporation commissioner but that the business proposed to be done by the plaintiff in the state of Oregon under the application and permit would constitute the doing of a trust business, under chapter VI, title XXXV, Or. L., providing for the incorporation and regulation of trust companies, and consequently under the supervision of the superintendent of banks. Plaintiff submitted with its application a copy of its articles of association, or declaration of trust, and various other documents, which are made a part of the alternative writ.

The authorized capital of this syndicate is shown by the declaration to be $500,000, divided into 500,000 shares of $1 each, $180,000 of which has been subscribed. Article IV of the declaration reads thus:

"All property, real, personal and mixed, acquired by this syndicate, or by its trustees, under this declaration of trust, shall belong to the Superior Oil & Refining Syndicate, Limited, of Ft. Worth, Texas, and shall be taken and held in its name, for the use, benefit and behalf of the shareholders of said syndicate, but the legal title shall, by the use of said syndicate name, vest in the five trustees and their successors in office, hereinafter to be named, and shall be under the exclusive control management, ownership and direction of said trustees, and their successors in office, who shall have absolute and exclusive power, right, ownership and authority to make all contracts, for and in the name of said syndicate, and all purchases of every description, and all sales, either as a body, or by duly authorized agents. But all contracts shall refer to this declaration of trust and be signed in the name of said syndicate, limited, by order of the board of trustees, and the chairman of said board, naming his official capacity, countersigned by the secretary treasurer, who shall attach the seal of the syndicate, and when so signed and sealed shall bind only the said syndicate and all its property, but said board of trustees and its members, and the shareholders in said syndicate, shall never be personally liable thereon, nor for any acts or indebtedness, created in the name of said syndicate by said trustees, or their agents, except to the extent of their unpaid subscriptions, respectively, for shares of its capital; nor shall said trustees, or any shareholders in this syndicate, ever be liable for any debt or damages, created or caused, or incurred by said syndicate, or its trustees, officers, managers, employés, or agents, whether arising ex contractu or ex delicto, unless caused or occurring by his own personal act or default or fraud."

Articles V and VI define the powers and duties of the trustees. Article VI reads in part as follows:

"* * * And said trustees now acting and speaking for themselves, as well as for all future successors in this trust, hereby declare to such subscribers and shareholders, present and future, and to the world, that they will hold in trust all of the property of this syndicate, now in its possession, or to be hereafter acquired by it, together with the profits, proceeds and increase thereof, and income therefrom, for the shareholders of this syndicate during the period of their trusteeship, as aforesaid; to hold the same, and to manage, control, apply and use and dispose of the same, absolutely in the manner and subject to, and in accordance with, the conditions, terms, and stipulations herein contained. The acceptance of this trust is evidenced and signified by their acceptance of shares in this syndicate, as well as becoming signatory thereto, to wit: * * *."

Section 5, under the title "Trustees' Meeting," provides that:

"All investments shall be made and title to all moneys, choses in action and properties shall be held, and all property managed, controlled, and disposed of absolutely by said trustees and their successors under this declaration of trust, absolutely and free from all limitations, save and except those specifically set out herein, and said trustees shall have power and authority in conducting the business of this syndicate, to do the following, among other things, to wit: * * *"

After which follows a long list of the powers of the trustees. A copy of the certificate proposed to be sold is set forth in section 2 of article VII, and reads thus:

"Capital, $500,000.

Shares, 500,000.

$1.00 Each

"Superior Oil and Refining Syndicate, Limited, of Fort Worth, Texas.

"Certificate ______. Number of Shares, ______.

"This is evidence that ______ is the owner of ______shares of the capital of the Superior Oil & Refining Syndicate, Limited, of Fort Worth, Texas, he having subscribed the sum of $______ and fully paid the same to the trustees of said syndicate, to be exclusively for the purposes expressed in the declaration of trust, filed by said syndicate in the office of the clerk of the county court of Tarrant county, Texas, on the ______ day of November A. D. 1919, and duly recorded in Book 639 on page 177, of the deed records of Tarrant county, Texas.

"The shares named in this certificate are fully paid and nonassessable, and entitle the holder thereof, when duly transferred on the books of said syndicate, to one vote for every share of stock as expressed herein, and no shareholder in this syndicate shall ever be liable personally for any debt, damages, judgment or decree of any court, incurred or occasioned by said syndicate, but only the funds and property of said syndicate can be looked to by creditors, for the payment of their claims.

"In witness whereof, the chairman of the board of trustees of said syndicate has hereunto signed his name, and caused the seal of said syndicate to be hereto affixed, on this, the ______ day of ______, A. D. 19--.

"_________, [L. S.]

"Chairman Board of Trustees.

"_________, Secretary-Treasurer."

Section 3 of article VII provides that:

"The shareholders in this syndicate shall have no right to the trust property, whether personal, real or mixed, and the ownership of the shares hereunder shall not entitle the owner thereof to any title, possession, custody, or control of the trust property, nor shall they have the right to call for a partition, or a division of the same, or a dissolution of the syndicate, or for an accounting; but shares issued hereunder, evidenced by seal as aforesaid, shall be personal property, giving only the rights to a division of the declared net profits, when and as the same may be distributed by the trustees; and at the termination of the trust hereby created, whether at the expiration of the period fixed for its existence or by voluntary dissolution, or otherwise brought about, to a division of the assets and property of this syndicate; it being fully understood and agreed that absolute control, dominion over and right to dispose of said property, its increase and revenue thereof, so held in trust by said board of trustees, is hereby vested in them and their successors during the period of their trusteeship as hereinbefore stated."

Section 4 of article VII declares in part that:

"The death, insolvency or bankruptcy of any shareholder, the transfer of his or her interest by sale, gift, descent or otherwise, during the continuance of this trust, shall not operate as a dissolution, nor terminate the trust. * * *"

Section 8 of article VII provides:

"All contracts made by persons, corporations, firms or associations with this syndicate, are required to take notice, by reason of the word "Limited" in the name of said syndicate, and by reason of the record of its declaration of trust, and by reason of their contracting with said syndicate name, as is set forth herein, must know and understand that only the funds and property of said syndicate can ever be looked to by creditors for the payment of their claims or debts; and that the trustees of said syndicate, and its officers, managers, agents and servants and shareholders shall never be personlly liable for any debt or obligation, express or implied, or for any tort, or negligence sounding in damages, or any injury whatever, occasioned by said syndicate, or its officers, agents, servants or shareholders, nor shall their property ever be subject to the payment of such claims, and the fact of their contract with said syndicate, in its syndicate name, shall be conclusive evidence that they have agreed to waive and do thereby waive, all rights and claims against the shareholders, officers, servants and agents of said syndicate, for the payment of their debts, and agreed to look only to the funds...