Woodbury v. McClurg

• Decision Date: 18 March 1901
• Citation: 29 So. 514,78 Miss. 831
• Court: Mississippi Supreme Court
• Parties: MADISON W. WOODBERRY ET AL. v. MONROE MCCLURG, ATTORNEY-GENERAL

29 So. 514

78 Miss. 831

MADISON W. WOODBERRY ET AL. v. MONROE MCCLURG, ATTORNEY-GENERAL

Supreme Court of Mississippi

March 18, 1901

FROM the circuit court, first district, of Hinds county. HON ROBERT POWELL, Judge.

The appellants, Woodberry and others, were plaintiffs in the court below; McClurg, attorney-general, the appellee, was defendant there. The facts are stated in the opinion.

Judgment affirmed.

Shannon & Street and Frank Johnston, for appellants.

The clause, sec. 5, ch. 88, laws 1900, "If such other corporation be engaged in the same kind of business and be a competitor therein," applies to both of the clauses preceding it--that is to say, it applies as well to the clause against a corporation, acquiring the capital stock of other corporations, as to the clause against a corporation acquiring the franchise, plant or equipments of other corporations. It is one entire sentence, with simply a comma before the word "nor." Ordinary grammatical construction of the sentence will demonstrate this.

Bearing in mind that the law under consideration was passed to define trusts and combines, and to provide for the suppression thereof, and to preserve to the people of this state the benefits derived from competition; and remembering that a trust or combination could not be created by one corporation engaged in a certain kind of business, acquring part or all of the capital stock of another corporation, engaged in a different kind of business, the unsoundness of the attorney-general's contention is apparent.

If the attorney-general's construction of this law is correct, a corporation may purchase the franchise, plant and equipments of a noncompetitive corporation, thereby getting absolute control of the whole thing with full power to dictate its full policy, and yet he would not allow the same corporation to purchase one share of stock in a noncompetitive corporation, in which latter event, its interest would be so small that it would have no control over its policy.

The effect of the construction contended for by the attorney-general will be looked to by the court in construing the statute. This is more extensive and far reaching than may appear at first view. Upon such construction an incorporated bank could not invest its surplus in the stock of any railroad company or other corporations, whose stock is quoted and sold every day in the stock exchanges of the country.

No insurance company could invest its surplus or earnings in the stock of any other corporation whatever. Savings banks incorporated, would be restricted in their business investments to bonds or mortgages, and the stock exchanges of the world would be closed against them. In a word, every corporation in this state incorporated by the state, would be shut out of every stock exchange in the world, so far as dealings in stocks are concerned.

The interest of the individual stockholder would be seriously and injuriously affected by such a construction. No stockholder could sell his stock to a Mississippi corporation, but could only sell to individuals. Nor could any stockholder borrow money from any incorporated bank or financial institution in the state on his stock as collateral security, for no bank would take as collateral security a certificate of stock that it could not own.

The purpose to effect such extensive and radical changes in the business in the state cannot reasonably be attributed to the legislature.

Monroe McClurg, attorney-general, pro se.

An attorney-general, in giving his opinions to the governor as to whether a proposed charter is violative of the constitution and laws of the state, should resolve all doubts against the proposed charter for the same reason that the courts determine doubtful questions as to whether corporations possess certain powers against the corporation. All grants of power by the sovereign are to be strictly construed against the grant. The best interpretation of the law is the law itself. Section 8 of chapter 88 of the laws of 1900 is too plain and unambiguous to call for aids of construction outside of its own clear and logical language and meaning. The clear purpose and intent of the statute, as gathered from its own language, is (1) to deny the right to any corporation, as such, to purchase or...