Ramsey v. Tod, Secretary of State , 95 Tex. 614 ( 1902 )

This is a petition for a writ of mandamus to compel the Secretary of State to file a charter under articles 642, 643, and 644 of the Revised Statutes. The cause has been submitted for final determination upon demurrers to the petition.

It is alleged in the petition, in substance, that the relators had prepared a charter in compliance with articles 643 and 644; that they had presented the same to the respondent with the request that he receive and record it in accordance with article 645. A copy of the alleged charter is made a part of the petition, and it appears therefrom that it designates two purposes of the proposed corporation: (1) "The purchase and sale of goods, wares, and merchandise and agricultural and farm products;" and (2) "the accumulation and loan of money in carrying out said purpose." The sole ground upon which the demurrers are urged are that the proposed charter specifies two of the distinct purposes for which corporations may be formed, and that the statute permits an incorporation for one of such purposes only.

In considering the question so presented, a brief history of the statutes in question may be useful.

At the adjourned session of the Twelfth Legislature, in 1871, a bill was passed by both houses and approved by the Governor, which was intended to provide, by a general law, for the creation of private corporations for certain specified purposes. This bill, it seems, was a copy of the statute of the State of Kansas upon the same subject, and had no enacting clause. Acting upon the theory, as we presume, that the law was invalid for want of the enacting clause, the Thirteenth Legislature, for the purpose of giving validity to the act, passed a law amending the first section thereof by prefixing thereto such clause; but did not expressly re-enact the subsequent sections. Again, the Fourteenth Legislature, in 1874, re-enacted the entire act with some slight changes, — one especially in relation to the amendments of charters. Section 4, which declared that corporations could be formed for certain purposes, and section 5, which designated the purposes, and section 6, which prescribed the requisites of the articles of incorporation, which were to constitute the charter, were re-enacted without change. The Act of 1874 was incorporated in the Revised Statutes of 1879, without material amendment so far as the question before us is concerned. Sections 4 and 5 of the act appear in the revision as articles 565 and 566, and section 6 as a part of article 567. Article 566 has been frequently amended, and with its amendments appears in the Revised Statutes of 1895 as article 642. Articles 565 and 567 have never been amended, and are now articles 641 and 643 of the Revised Statutes now in force. The amendments to article 566 of the Revised Statutes of 1879 have been mainly by way of adding specifications of additional purposes for which corporations may be formed, so that the original specifications, twenty-seven in number, have been swelled to fifty-four in the Revised Statutes of 1895.

Since the original sections 4 and 6 have never been changed, and since section 4 has been amended only as to the subdivisions which specify the objects for which corporations are permitted to be created, we think that in order to determine whether a corporation may be formed for more than one of the designated purposes, we should go back to the original act. Our reason for this conclusion is, that if the intent of the original law was to permit an incorporation for one of the specified purposes only, and a subsequent Legislature had desired to change the law in so important particular, and to permit an incorporation for two of the purposes, they would have expressed their intention in clear language, and not have left it to be implied by questionable inferences.

The following are the sections of the original law which bear upon the question:

"Sec. 4. Private corporations may be created by the voluntary association of three or more persons, for the purposes and in the manner mentioned in the following sections of this article.

"Sec. 5. The purposes for which the corporations mentioned in the last section may be formed, are:

"1. The support of public worship.

"2. The support of any benevolent, charitable, educational, or missionary undertaking.

"3. The support of any literary or scientific undertaking, the maintenance of a library, or the promotion of painting, music, or other fine arts.

"4. The encouragement of agriculture and horticulture.

"5. The maintenance of public parks, and of facilities for skating and other innocent sports.

"6. The maintenance of a public or private cemetery.

"7. The purchase, location and subdivision of lands, and the sale and conveyance of the same, in lots and subdivisions or otherwise.

"8. The construction and maintenance of any species of road, except a railroad, and of bridges in connection therewith.

"9. The construction and maintenance of a bridge.

"10. The construction and maintenance of a telegraph line.

"11. The establishment and maintenance of a ferry.

"12. The establishment and maintenance of a line of stages.

"13. The building and navigation of steamboats, and carriage of persons and property thereon.

"14. The supply of water to the public.

"15. The manufacture and supply of gas, or the supply of light, or heat, to the public by any other means.

"16. The transaction of any manufacturing, mining, mechanical, or chemical business.

"17. The transaction of a printing and publishing business.

"18. The establishment and maintenance of a hotel.

"19. The erection of buildings, and the accumulation and loan of funds for the purchase of real property.

"20. The improvement of the breed of domestic animals by importation, sale or otherwise.

"21. The transportation of goods, wares and merchandise, or any valuable thing.

"22. The promotion of immigration.

"23. The construction and maintenance of sewers.

"24. The construction and maintenance of a street railway.

"25. The erection and maintenance of market houses and market places.

"26. The construction and maintenance of canals for the purpose of irrigation, or manufacturing purposes.

"27. For any other purpose intended for mutual profit or benefit not otherwise specially provided for, and not inconsistent with the Constitution and laws of this State.

"Sec. 6. A charter may be prepared setting forth:

"1. The name of the corporation.

"2. The purpose for which it is formed.

"3. The place or places where its business is to be transacted.

"4. The term for which it is to exist.

"5. The number of its directors or trustees, and the names and residences of those who are appointed for the first year; and,

"6. The amount of its capital stock, if any, and the number of shares into which it is divided."

Considering these provisions together, we are of the opinion that it was the intention of the Legislature to authorize a corporation to be formed for any one or more of the purposes as specified in any one of the subdivisions, and not for two or more purposes as designated in two or more subdivisions. Section 4 throws no light upon the question. As to this matter, language could hardly have been employed which would have been more indefinite. The words "private corporations may be created * * * for the purposes * * * mentioned in the following sections," may mean literally that a corporation may be formed for one of the purposes only, or for any one or more of the purposes, or for all of the purposes mentioned in the section. So the language in section 5, "the purposes for which corporations * * * may be formed are," is equally indeterminate. But where we come to consider the requirements as to the contents of the charter as prescribed in section 6, the legislative intent becomes more apparent. One of these is that the charter must state "the purpose" for which the corporation "is formed." For the reason that if it had been intended that a corporation might be created for two or more of the purposes specified in the preceding section, it would have been appropriate to have said "the purpose or purposes for which it is formed." The use of the word "purpose" in the singular number tends strongly to show that it was the intention of the Legislature to authorize the creation of a corporation for only one purpose, or for two or more of the purposes mentioned in one subdivision. It may be true that the use of the singular number may not be conclusive of the question, and that if there were other provisions in the act which, either by express declaration or clear implication, indicate that it was intended to authorize an incorporation for two or more of the designated purposes, whether in the same subdivision or not, we should so hold. But no provisions in the act which show satisfactorily such intention have been pointed out, nor have we found any. On the contrary, the structure of section 5 tends to show that it was only one purpose that was to be mentioned in the charter. If such was not the intention, why did the Legislature specify each purpose in a separate subdivision of the section, and number them from 1 to 27 successively? It is at least suggestive that two purposes when not embraced in the same subdivision were not to be conjoined in a charter, but that they were to be severed and one alone adopted.

Further in this connection it is to be noted that we are not dealing with a hastily prepared legislative enactment. Unlike many others, the statute under construction is comprehensive in its scope, elaborate in its details, and bears evidence upon its face that it was thoroughly considered and carefully prepared by a person or persons learned in the law. In such a statute the designation of the purposes for which corporations were authorized to be created, in numbered subdivisions, together with the provision that the charter should set forth "the purpose for which it was formed," ought, in the absence of provisions indicating a different intent, to be deemed to show that the Legislature had in mind the creation of a corporation for one of the purpose or purposes specified in one subdivision only.

But there are also provisions in section 5 which support the construction which we give to the act. Subdivision 8 specifies one of the purposes as follows: "The construction and maintenance of any species of road, except a railroad, and of bridges in connection therewith." Subdivision 9 reads: "The construction and maintenance of a bridge." The question suggests itself, if it was intended to authorize an incorporation for two or more of the purposes named in two or more of the subdivisions, why, in a carefully prepared act like this, provide in subdivision 8 for the construction and maintenance of bridges in connection with roads, when bridges were provided for separately in the next subdivision? Again, why provide in subdivision 13 for "the carriage of * * * property" in connection with "the building and navigation of steamboats," when subdivision 21 specifies "the transportation of goods, wares, and merchandise, or any valuable thing," as one of the purposes for which a corporation may be formed?

So, also, under the amended law, as it appears in article 642 of the Revised Statutes of 1895, subdivision 17 provides for an incorporation for the purpose of "the erection and repair of any building or improvement, and for the accumulation and loan of money for said purposes," etc., and subdivision 27 authorizes a corporation for "the accumulation and loan of money." Again we ask, if the purpose specified in two distinct subdivisions may be combined, why specify the "accumulation and loan of money" in subdivision 17, when that purpose is separately provided for in subdivision 27?

But it is argued that, for the reason that some of the subdivisions of section 5 provide for more than one purpose, it is to be inferred that it was intended that two or more of the purposes named in different subdivisions may be combined. For the reason that the structure of the section suggests that it was framed upon the theory that a corporation could be created under one subdivision only, the reasonable deduction from the fact that some of the subdivisions specify more than one purpose is that it was the intention to permit a combination of two or more purposes when named in the same subdivision, but in that case only.

But it is insisted that there are other clauses in the statute which show that a corporation could be formed for two purposes, provided for in separate subdivisions. The Act of 1874 made an addition to the original Act of 1871 as attempted to be passed, by providing for the amendment of charters, and in that connection this provision is found: "No changes or amendments shall be of any force or effect which are not germane to the original objects or charter of incorporation, and calculated to carry out and effect the same." This provision was carried into the Revised Statutes of 1879, the only change being the substitution of the word "purposes" for the word "objects." It is now article 649 of the Revised Statutes of 1895. So, also, by section 11 of the Act of 1874, now article 651 of the Revised Statutes now in force, corporations, among other things, are empowered "to hold, purchase, sell, mortgage, or otherwise convey such real and personal estate as the purposes of the corporation shall require," etc. The contention is that the word "purposes" shows that it was contemplated that corporations might be created for more than one purpose. When we consider that some of the subdivisions provided for an incorporation for more than one purpose, it is apparent that the use of the plural "purposes" is entirely consistent with our construction of the law, and the argument loses its force.

It is alleged in the petition, in effect, and it is, of course, admitted by the demurrer, that since the passage of the law, successive secretaries of state have construed it in accordance with the construction of the relators. But we do not think that the construction of the statute is of such doubtful character that the action of the secretaries of state should be given controlling effect. Nor do we think the fact that the law has been amended by the Legislature since such construction by the executive officers of the State, without change as to the matter under consideration, affects the question. It is not such a matter as was likely to be called to the attention of the Legislature in amending the law in other particulars.

Our conclusion is that the statute does not authorize an incorporation for two distinct purposes, each of which is mentioned in a separate subdivision of article 642 of the Revised Statutes, and that, therefore, the writ of mandamus applied for in this case must be denied. What is the status of a charter which combines two purposes not authorized to be conjoined, and which has been accepted, filed, and recorded by the Secretary of State, is a question not before us.

The writ of mandamus is denied.

Motion denied.