Terrell v. Ringgold County Mutual Telephone Co.

Richards, J. — In their petition plaintiffs allege they are minority stockholders of the Ringgold County Mutual Telephone Company, an Iowa corporation. The petition designates the corporation, its officers and board of directors, and certain of the stockholders other than plaintiffs, as defendants. Further allegations of the petition are: that the time of the termination of the corporation as fixed by its articles was August 6, 1937; that at a special election of the stockholders, held on September 23, 1937, the defendant-stockholders voted for renewal of the franchise of the corporation, and plaintiff-stockholders objected to and voted against such renewal; that the president and secretary of the corporation executed a certificate purporting to show the proceedings had at the special election and the results thereof, and on October 20, 1937, filed same with the secretary of state; that thereupon that official issued to the corporation a certificate for the renewal of its corporate franchise for another period of 20 years from August 6, 1937; that by virtue of section 8365, Code 1935, and the matters alleged in the petition, the assets of the corporation became affected with an equitable right in favor of plaintiffs, and the relationship of purchaser and seller or debtor and creditor arose between the stockholders of the eorpo- *996 ration voting for such, renewal and plaintiff-stockholders; that defendant-stockholders who voted for said renewal became liable to plaintiff-stockholders for the real value of the shares of stock held by plaintiffs as of the date of the renewal .action with interest at eight per cent; that the assets of the corporation became a trust fund for the security and payment of the reíd value of the shares held by plaintiffs, and for the creditors of the corporation ; that plaintiffs are entitled to have the real value of their shares determined as of the date of said renewal action, and to have the amount thereof declared a first lien upon the assets of the corporation and to have and receive from defendant stockholders the amounts determined to be the real value of plaintiffs’ respective shares with eight per cent interest. Judgment was demanded by plaintiffs against the defendant-stockholders for the sum of $300.00 per share as the real value of each share of the stock held by plaintiffs, with eight per cent interest from September 23, 1937, and it was prayed that such judgment be declared to be a first lien on the assets of the corporation, and that a receiver be appointed. Other relief of an equity nature was sought. Defendants filed a motion to strike and dismiss the petition, in ruling on which the court ordered dismissal of the action. Plaintiffs electing to stand on their pleading judgment was rendered against them. Therefrom they have appealed. The statute, pled in the petition, pertaining to renewal of corporations, is in these words: “8365. Renewal' — conditions. In either case they may be renewed from time to time for the same or shorter periods, within three months before or after the time for the termination thereof, if a majority of the votes cast at any regular election, or special election called for that purpose, be in favor of such renewal, and if those voting for such renewal will purchase at its real value the stock voted against such renewal. Stockholders voting for renewal shall have three years from the date such action for renewal was taken in which to purchase the stock voted against such renewal, which purchase price shall bear interest at eight per cent per annum from the date of such renewal action until paid, and the provisions of this act [45GA, ch 143] shall not apply to any renewal voted before this act becomes operative.” The general substance of the first sentence of this section *997 8365 appeared in our statutes as early as the Code of 1851, though subsequently amendments were enacted. In 1933 the 45th General Assembly amended the section as it then stood by adding what is now the second sentence of the section as above quoted. One ground of the motion to dismiss the action, as against the defendant-stockholders voting for the renewal, was that any such action would not be maintainable within a period of three years from and after September 23, 1937. This portion of the motion appears to have been properly sustained. The question need not here be discussed whether or not the two things pleaded, i. e., the voting by defendant-stockholders for the renewal, and the issuance of the certificate for renewal of the corporation, ipso facto created a present personal obligation on part of such defendant-stockholders to purchase the stock voted against the renewal. For regardless of what may be the answer to that question the terms of the amendment of 1933 in any event effected an extension to September 23, 1940, of the time for mailing payment. We are construing this statute as we find it. In appellants’ argument is a brief discussion of the question whether the amendment of 1933, and the section as amended, are in contravention of section 1 of the 14th Amendment to the Federal Constitution ,and of that clause of section 9 of Article 1 of the Iowa Constitution relating to the tailing of property without due process of law. But no question respecting the constitutionality of the amendment or of the statute as amended appears to have been raised in the pleadings or issues as the case was tried in the district court. Consequently we refrain from considering the question on this appeal. The motion to dismiss the action against the corporation was also properly sustained. We fail to find in section 8365 an express creating of a liability on the part ,of the corporation to purchase plaintiffs’ stock. Nor do we find in this statute any express provision that the assets of the corporation became affected with an equitable right on part of plaintiff-stockholders to recover the value of their stock from the corporation’s assets. Plaintiff-stockholders say in argument that a legislative intent to impress the assets of the corporation in the manner they suggest should be inferred, in order that the amendment and the statute as amended may be saved from impeachment on account *998 of its alleged unconstitritionality. The difficulty with considering appellants’ theory in this respect is what has been already mentioned, the constitutional question is not before us. In the petition are allegations that plaintiffs have demanded of the officers and directors of the corporation, and have been refused, the right to inspect the corporation’s books and records, and the right to obtain a list of the stockholders and to ascertain the indebtedness of the corporation on the date of the renewal action; that the officers and directors have neither posted nor kept posted a statement of the amount of the company indebtedness or a list of the stockholders as required by law. Plaintiffs do not make claim that their petition in this case partakes of the nature of a mandamus action, to compel the doing of any of these things, nor do- we think it does, and the dismissal of their action was without prejudice to instituting appropriate proceedings with reference to these complaints. Finding no error the decree from which the appeal was taken is affirmed. — Affirmed. Sager, C. J., and Stiger, Hamilton, Donegan, Kintzinger, and Miller, JJ., concur.