Equity Co-operative Packing Co. v. Hall

Grace, J. This is an appeal from a certain order overruling a demurrer by defendant to an application for an alternative writ of mandamus and the granting of the writ, which required the defendant, Thomas Hall, as secretary of state, to file in his office certain amended articles of incorporation of the plaintiff upon the payment of a filing fee of $5 and the further sum of $6 for recording the same. The Equity Co-operative Packing Company was organized on about the 4th of October, 1916, and its articles of incorporation were filed in — 526 — the office of the secretary of state, October 25, 1916. The purpose of the incorporation was to build and operate packing plants, slaughterhouses, stockyards, etc., and to buy, sell, 'and deal in cattle,- hogs, sheep, poultry, etc. It was also the purpose of the corporation to carry on a business of wholesale and retail dealers in meat products, etc. Its principal place of business was at Fargo, North Dakota; the term of its existence was twenty years. The number of directors was fixed at ¡seven. The articles of incorporation further named certain persons who were appointed to serve until the successors were elected and qualified, and they signed the articles of incorporation. The amount of capital stock was fixed at $1,000,000 divided into 40,000 shares of par value of $25 each. At the time of the incorporation, a filing fee of $532 was paid. In January, 1919, the plaintiff decided to increase his capital stock from $1,000,000 to $3,000,000. It held a meeting of its stockholders January 17th; at that meeting 31,744 shares of stock, distributed among 5,994 stockholders, which constituted a majority of all the stockholders, voted to amend the articles of incorporation by increasing the capital stock from $1,000,000 to $3,000,000. On January 21, 1919, the plaintiff presented to the defendant, the secretary of state, a copy of the amendment and also the sum of $11, and requested the secretary of state to file and record such amendment, which the defendant refused to do on the ground that if the plaintiff was an ordinary, and not a co-operative corporation, the statutory filing fee for the amendment would be $1,000 and in addition thereto a recording fee of $6, in all $1,006, instead of the sum of $11 as claimed by plaintiff. In the application for alternative writ of mandamus, the following allegations are set forth: “That it was the intention and purpose of the original incorporators of the Equity Co-operative Packing Company, a corporation, and the persons who signed the articles' of incorporation of said corporation, to organize a co-operative corporation pursuant to chapter 92 of the Session Laws of North Dakota for the year 1915; and the attorneys who were employed by said incorporators for the purpose of preparing the articles of incorporation of said corporation were informed that the incorporators desired and intended to organize a co-operative corporation pursuant to chapter 92 of the Session. Laws of North Dakota — 527 — for the year 1915, and said attorneys were instructed to prepare articles of incorporation pursuant to chapter 92 of the Session Laws of North Dakota for the year 1915; that none of the original incorporators of said corporation or the persons who signed the articles of incorporation of said corporation are lawyers or versed in the law, and did not know that chapter 92 of the Session Laws of North Dakota for the year 1915 required the association together of not less than twenty-five persons to form a co-operative corporation pursuant to such statute, And were not informed by the attorneys who prepared the articles of incorporation for said corporation that at least twenty-five original incorporators were necessary under said statute to incorporate a corporation pursuant to said statute; and when said incorporators signed the articles of incorporation for said corporation, and filed said articles of incorporation in the office of the secretary of state for the state of North Dakota, they believed that they were incorporated' pursuant to chapter 92 of the Session Laws of North Dakota for the year 1915 And intended to form a corporation pursuant to said statute; but because said incorporators were not informed as to the number of persons necessary to form a co-operative corporation pursuant to said statute, .the articles of incorporation of said corporation were signed by only seven persons, and contains nothing indicating an intention to form a co-operative corporation; that the original by-laws adopted by the stockholders of said corporation provide for the distribution of profits of said corporation in part on the basis of and in proportion to the Amount of property bought from or sold to members of said corporation and to other customers, and of labor performed and other services rendered to said corporation, as is shown by a copy of the original "by-laws of said corporation hereto attached marked exhibit “A” and made a part of this affidavit and application; that all of the shares of the capital stock of said corporation which have been sold, have been ¡sold upon the statements and representations of the officers and agents ■of said corporation that the same was a co-operative corporation; and all of the stockholders of said corporation believed the same to be a ■co-operative corporation which will pay patronage dividends to cus•tomers and patrons.” It also appeal’s from the application that a special meeting of the ¡stockholders of the corporation was had on the 29th day of October, — 528 — 1918, for the purpose of voting upon accepting the benefits of chapter 97 of the Session Laws of North Dakota for the year 1917, and a majority of all the stockholders did vote to accept the benefits thereof, and to be bound by the provisions of said act pursuant to § 16 thereof; that on the 30th day of October, 1918, said corporation filed in the office of the secretary of state of the state of North Dakota a written declaration signed and sworn to by the president and secretary of said corporation, stating that at said special meeting of stockholders, said corporation had by majority vote of all the stockholders decided to accept the benefits of and be bound by the provisions of said chapter 97. The claim of plaintiff and respondent is that, while the articles of incorporation were in form those of a general corporation, that it was in fact the purpose and intention of the incorporators to incorporate as a • co-operative corporation under chapter 92 of the Laws of 1915, and that it clearly appears that such business is of a co-operative character as disclosed by an examination of its by-laws and other sources of information; that therefore the plaintiff is permitted under chapter 97 of the Session Laws of 1917 to cure the error, if any, in its incorporation, by taking the proceedings for that purpose required by said chapter, and that plaintiff has taken all such proceedings and has therefore cured such error. The defendant demurred to the application. He thus admits all the material allegations therein. He thus admits it was the intention of the incorporators of the Equity Co-operative Packing Company to organize a co-operative corporation pursuant to chapter 92 of the Session Laws of 1915; that when the incorporators signed and filed the articles of incorporation they believed they were incorporating pursuant to said chapter; admits whatever is contained in the by-laws of the plaintiff as they were made a part of the affidavit and application for the writ; admits that the different meetings of the stockholders for the purpose of voting and accepting-the benefits of chapter 97 of the Session Laws of 1917 were held, and that a majority of all the stockholders did vote to accept the benefits thereof; and all similar matters that are alleged are thus admitted; admits that the articles of incorporation were by mistake signed by seven instead of twenty-five signers as required by Session Laws of 1915. • We are of the opinion that chapter 62 of the Laws of 1909 have no — 529 — application to the facts in this case; that chapter 92 of the Session Laws of 1915 is not an amendment thereof, bnt is a separate and distinct law under which the plaintiffs could incorporate; in it there is no limitation of the -amount of capital stock for which incorporation may be made. Under said chapter 92, such co-operative association or corporation may be incorporated for the co-operative transaction of any lawful business including the construction of canals, railways, irrigation ditches, bridges, and other works of internal improvement. There is thus no limitation as to the kind or character of business that may be engaged in; it is a much broader and different law to that of 1909. Chapter 92 repealed all acts or parts of acts in conflict with it. Section 4 of chapter 62 of the Laws of 1909, relative to the limitation of the amount of capital stock for which a co-operative corporation may be organized, is in conflict with it and was by it repealed. Under chapter 92 there was no limitation upon the amount of capital stock. Section 4 of chapter 62 of the Laws of 1909, which is the same as § 4606 of Compiled Laws of 1913, was re-enacted in chapter 95 of Compiled Laws of 1917, with the exception that there was no limitation placed upon the amount that might.be designated as the capital stock thereof, under chapter 95 the amount of capital stock was required to be stated in the articles of incorporation. After § 4606 was re-enacted, there being no limitation to the amount of capital stock for which a co-operative corporation might be organized, it became in this respect identical with § 92, in which there was no limitation as to the amount of capital stock. The only difference in this respect between the two sections is that in chapter 95 the amount of the capital stock must be stated. In chapter 92 there is nothing said about the capital stock, no limitation placed thereon, and it must follow that the capital stock thereunder could be any amount the incorporators saw fit to name. We do not believe there is any constitutional question presented in this case. There is no question presented in this case concerning the election of directors or managers of the corporation.' The sole question presented is to determine whether or not the plaintiff is an ordinary or a co-operative corporation. From the allegations in the application and affidavit for a writ of mandamus, and from the demurrer thereto, whi'ch admits all such allegations, we think it stands conceded that the plaintiff is a co-operative corporation; that — 530 — it attempted to organize under chapter 92 of the Session Laws of 1915. This being true, it comes under and is entitled to all the benefits and privileges set forth in chapter 97 of the Session Laws of 1917, and especially to § 16 thereof; that, being a co-operative corporation, the filing fee of $5 and recording fee of $6 was the proper amount to tender the secretary of state, the defendant herein, for the purpose of having the amendment of its articles of incorporation filed and recorded. We have considered all the points presented in this appeal, and we find no necessity of further discussion of them. The order of the District Court that the peremptory writ of mandamus issue is in all things affirmed. .....