Tomow v. Menominee Enterprises, Inc.
| Decision Date | 29 June 1973 |
| Docket Number | No. 508,508 |
| Citation | 60 Wis.2d 1,208 N.W.2d 824 |
| Parties | Henry L. TOMOW, Sr., et al., Plaintiffs-Respondents, v. MENOMINEE ENTERPRISES, INC. et al., Defendants-Respondents, N. E. Isaacson & Associates, Inc., Defendant-Appellant. |
| Court | Wisconsin Supreme Court |
Welsh, Trowbridge, Planert & Schaefer, Green Bay, for defendant-appellant.
Joseph F. Preloznik and Mary E. Van Gemert, Madison, for plaintiffs-respondents.
Foley & Lardner, Milwaukee, for defendants-respondents.
Three issues are presented on this appeal.
1. Did the trial court err in holding that the Menominee Common Stock and Voting Trust was not invalid because it was contrary to controlling federal and state law and the United States Constitution;
2. Did the trial court err in holding that Article XII of the Articles of Incorporation of 'MEI' was ambiguous and, therefore, a proper matter for judicial construction; and
3. Did the trial court err in holding that the unsold land which was conveyed by 'MEI' to 'LOM' without the approval of the individual tribal members was subject to plaintiffs' lis pendens and an injunction prohibiting its sale?
The 'Termination Act' which mandated the complete withdrawal of federal supervision and control over the Menominee Tribe called for the formulation of a plan for the future control of tribal property and service functions by the tribe itself. 25 U.S.C. § 896 of the federal statute provided that the plan, when completed, was to be submitted to the Secretary of the Interior who '. . . shall accept such tribal plan as the basis for the conveyance of the tribal property if he finds that it will treat with reasonable equity all members on the final roll of the tribe prepared pursuant to Section 893 of this title, and that it conforms to applicable Federal and State law.' (emphasis added)
Contrary to the contentions of the plaintiffs who are as to this issue appellants on appeal, both the Secretary of the Interior and the trial court were satisfied that the mandate of 25 U.S.C. § 896 was complied with. After a review of the various arguments which the plaintiffs have raised, this court reaches the same conclusion.
The plaintiffs' first contention in support of their conclusion that the Voting Trust here involved is invalid is that Wisconsin's Voting Trust Statute, Sec. 180.27, Stat. was not complied with. Section 180.27, Stats., as originally enacted by Sec. 7 of Ch. 731, Laws of 1951, provides:
'Voting trusts and agreements among shareholders. (1) Any number of shareholders of a corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their shares by entering into a written voting trust agreement specifying the terms and conditions of the voting trust, by depositing a counterpart of the agreement with the corporation at its registered office and by transferring their shares to such trustee or trustees for the purposes of the agreement. Such trustee or trustees shall keep a record of the holders of voting trust certificates evidencing a beneficial interest in the voting trust, giving the names and addresses of all such holders and the number and class of the shares in respect of which the voting trust certificates held by each are issued, and shall deposit a copy of such record with the corporation at its registered office. The counterpart of the voting trust agreement and the copy of such record so deposited with the corporation shall be subject to the same '(2) Agreements among shareholders regarding the voting of their shares shall not be subject to the provisions of this section regarding voting trusts.' 7
right of examination a shareholder of the corporation, in person or by agent or attorney as are the books and records of the corporation, and shall be subject to examination by any holder of a beneficial interest in the voting trust, either in person or by agent or attorney, at any reasonable time for any proper purpose.
Under the above statutes, pursuant to an agreement, shareholders transfer their shares to the voting trustees which transfers are in turn recorded on the corporation's books, thereby making the trustees the record holders. During the period of the trust and pursuant to the trust agreement, the trustees vote the shares. In exchange for the shares, voting trust certificates which represent the equitable interest in the shares transferred, and any shares which might be awarded as dividends are issued by the trustees to the original shareholders.
In material part, Sec. 180.27, Stats. provides that 'Any number of shareholders of a corporation may create a voting trust . . . by entering into a written voting trust agreement . . .' The thrust of the plaintiffs' argument is that the individual enrolled members and not the C. N. Committee whose members signed as incorporators of 'MEI' and who also signed the Voting Trust Agreement were the 'shareholders' of the corporation for purposes of entering into the agreement.
Under the articles of incorporation, 'MEI' was granted the authority to issue shares of stock and the 'MEI' directors accepted the subscription of the C.N. Committee which was originally created by the General Council to develop the Termination Plan. The Secretary of the Interior then advanced $327,000.00 of the funds he was holding in trust and this money was used to pay for the stock. 'MEI' issued a single stock certificate to the committee for 327,000 shares of stock. The C.N. Committee signed the Voting Trust Agreement and named as trustees those individuals previously approved by a General Council and transferred the stock 'MEI' held in their name to the Voting Trust. The trustees then issued voting trust certificates to the enrolled Menominees as evidence of their interests in the stock the trustees held, with each certificate representing 100 shares of stock in 'MEI.'
The defendants contend that the voting trust was formed in exact compliance with Sec. 180.27, Stats. Shares in 'MEI' were issued to members of the C.N. Committee who then transferred the stock to the trustees on the basis of a written instrument. The shareholders thus created the trust by 'entering into a written voting trust agreement' as required by statute. Likewise, this procedure conformed exactly to the provisions in the Termination Plan which was agreed upon by the Menominees.
Plaintiffs contend that the vote of the General Council in January of 1959 which approved the Termination Plan--including the voting trust agreement--could not be a substitute for individual 'shareholder' approval. This argument, together with the cases which are cited by the plaintiffs, are all predicated on the proposition that individual Menominees had been issued 'shares' of stock in 'MEI' prior to the formation of the trust.
While it is clear that 25 U.S.C. § 893, referring as it does to the 'rights or beneficial interests' of each of the enrolled Menominees, 'shall constitute personal property . . . evidenced by a certificate of beneficial interest which shall be issued by the tribe' gave to each enrolled Menominee at the very least an undivided 1/3,270 interest in the assets of 'MEI,' such an interest cannot be analogous to a 'share of stock.' Section 896 of Title 25, U.S.C., relating to the Termination Plan which the tribe was to formulate, states that '(t)o the extent necessary, the plan shall provide for such terms of transfer pursuant to Section 897 of this title, by trust or otherwise, as shall insure the continued fulfillment of the plan.' (emphasis added) Section 897 provides that '(o)n or before April 30, 1961, the Secretary (of the Interior) is authorized to transfer to the tribal corporation or to a trustee of the Secretary's choice . . . the title to all property real and personal, held in trust by the United States for the tribe.' (emphasis added)
The two deeds by which the United States convey what now constitutes Menominee County were conveyed to 'MEI', not to the individual enrolled Menominees. Likewise, the Secretary of the Interior advanced the $327,000.00 of the funds held in trust, not to each enrolled Menominee, but rather to the committee who in turn used it to pay for the stock it had previously subscribed to. Prior to termination, individual enrolled Menominees never had certificates or control over their interests in tribal assets. Indeed, the assets were held in trust by the federal government and were subject to tribal and federal law and not corporate law as the plaintiffs contend.
While it is clear that the original draftees of Sec. 180.27, Stats. never contemplated a factual situation like the one presented in this case, it likewise is manifestly clear that the procedures here employed did not run counter to the statute. The trial court agreed and stated:
Plaintiffs next contend that the Certificate of Beneficial Interest representing tribal members' rights or beneficial interests in tribal property was issued, transferred and cancelled in violation of 25 U.S.C. § 893. Section 893 of Title 25, U.S.C., after setting forth a very precise procedure for determining who will be considered an enrolled Menominee with the initial decisions by the tribe, followed by an appeal right to the Secretary of the Interior, provides:
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