Simmons v. Norfolk & Baltimore Steamboat Co.

Shepherd, C. J.: This proceeding is brought for the purpose of obtaining a decree of dissolution against the defendant company, and the most important question to be considered is whether the complaint sets forth facts sufficient to entitle the plaintiff to the relief prayed for. The defendant was incorporated under the general act for the formation of corporations (The Code, ch. 16), and it is therein provided, among other things, that all corporations so created may be dissolved by “special proceedings” instituted by any corporator “for any abuse of its powers to the injury of the plaintiff or of the corporators; or of its creditors or debtors.” Section 694. The articles of incorporation provide that the business of the defendant shall be the “transportation of produce and *151 merchandise and all other kinds of freight and passengers to and from the various landings on the Roanoke river in North Carolina to and from the cities of Norfolk in Virginia and Baltimore in Maryland, and to and from said cities to the said landings, and to and from all other points intermediate between said river and said cities, and its principal place of business shall be at Williamston” in this State. The plaintiff, who is one of the corporators, alleges that in 1887 the control and management of the defendant corporation passed into the hands of non-resident stockholders, “since which time the original aim and purpose of said corporation has been departed from, the value of the company’s property greatly depreciated, the business fallen away and its general affairs gradually but steadily grown worse.” It is further alleged “ that for more than a year now past the defendant company has altogether ceased to operate said ports or any of them within this State; that no single agency or place of business has been maintained within this State, and that the town of Williamston has been absolutely discontinued as the principal place of business of said company, as required by said article of incorporation.” “It is a tacit condition of a grant to a corporation that the grantees shall act up to the end or design for which they are incorporated, and hence, through neglect or abuse of its franchises, a corporation may forfeit its charter as for condition broken, or for breach of trust. The duties assigned by an act of incorporation are conditions annexed to the grant of the franchises conferred (Angelí & Ames Corp., § 776), “and duties implied are equally obligatory with duties expressed, and their breach is visited by the same consequences.” Attorney General v. Railroad, 6 Ired., 456; Field on Corp., 456n. It has been held, without reference to any express provision of law or specific requirement of the charter, that it is the duty of a corporation to keep its principal place of business, its books and records and its principal officers within the *152 State which incorporated it, to an extent necessary to the fullest jurisdiction and visitorial power of the State and its courts, and the efficient exercise thereof in all proper cases which concern said corporation. State, etc., v. Railroad, 45 Wis., 579. In commenting upon this decision, Mr. Mora-wetz (Pr. Corp., 361) says: “This doctrine is correct only provided the Legislature has expressed the policy of the State by some special enactment, or by a general system of legislation regarding incorporated companies. There is no such rule at common law. It is always implied in the grant of a charter of incorporation, where there is no indication to the contrary, that the company shall have its central office or place of management in a State under whose laws it was organized. This, however, is merely a rule applicable to the construction of charters in determining the intention of the corporators and of the State, and is not an arbitrary rule of law.” Accepting the principle as thus modified, and applying it to a corporation doing business, like the defendant, exclusively under a charter granted in this State, it would seem very clear that by the policy of our laws, as indicated by “a general system of legislation,” the duty referred to is imposed upon the defendant. We have many statutes which plainly contemplate that such a corporation shall keep its principal place of business, certainly some of its agencies, within the limits of the State. Of such are sections 362 and 363 of The Code, relating to the attachment of shares of stock in corporations and the interest and profits thereon, and authorizing the service of a certified copy of the. warrant of attachment on “ the president or other head of the association or corporation, or with the secretary, cashier or managing agent thereof.” Of such also are the provisions of Section 694 of The Code, authorizing the dissolution of the corporation upon the return of an execution unsatisfied upon a judgment docketed in the Superior Court of the county “where it has its only or principal place of business.” *153 Reference may also be had to the visitorial powers conferred upon the Board of Railroad Commissioners, which, together with other provisions of the law, clearly show that a corporation of this character cannot entirely withdraw all of its offices and agencies from the State. The decision in State v. Railroad, 45 Wis., 579, supra, was based, to some extent, upon similar statutory provisions, and the general principle of that case has been here discussed for the purpose of showing that the express provision of the charter of the defendant, requiring its principal place of business to be at Williamston in this State, may well be sustained by the general polic}^ of our laws. The case is also direct authority that such a violation by a corporation of its charier is “an abuse and misuser of its corporate powers,” and is within the spirit and meaning of our statute upon the subject. Without considering, then, the other causes assigned in the complaint, we are of the opinion that the persistent violation of the charter in withdrawing, as alleged, the principal place of business from Williamston, and all of its agencies from the State, would authorize the Court to decree a dissolution of the defendant corporation. Attorney General v. Railroad, supra. The summons in this proceeding was improperly made returnable to the Superior Court in term, and his Honor remanded the proceeding with directions that the summons be amended so as to make it returnable before the Clerk on a day certain. This order, together with the other directions to the Clerk, is fully sustained by the principle laid down in Epps v. Flowers, 101 N. C , 158. The judgment must be Affirmed.