State ex rel. Ely & Walker Dry Goods Co. v. Swanger

BRACE, C. J. — This is a proceeding by mandamus instituted by the Ely & Walker Dry Goods Company, a business corporation, of the city of St. Louis, to compel the Secretary of State to receive and file a certified copy of a statement of. the increase of its capital stock, and to issue a certificate thereon as required by statute. At a meeting of the stockholders of said corporation, duly held on the 10th day of January, 1906, in pursuance of notice duly given and of the statutes in such cases made and provided, and at which all the stockholders were present in person or by proxy, all of the stock of said corporation was voted in favor of the following proposition, duly submitted, to-wit: “To increase the capital stock of said company from three million dollars to four million five hundred thousand dollars,” and “that all of the capital stock so increased, that is, one million five hundred thousand dollars, of the par value of one hundred dollars per share, should [543] be second preferred stock, bearing cumulative dividends at tbe rate of six per cent per annum, payable semiannually out of tbe net earnings of the company in any one year after tbe payment of cumulative dividends at tbe rate of seven per cent per annum on tbe first preferred stock of tbe company and before tbe payment of any dividend on tbe common or general stock of tbe company, and that upon dissolution or liquidation of said corporation said second preferred stock should be paid out of its assets at tbe face value to tbe holders thereof, after tbe payment of tbe first preferred stock of said company at its face value and before any payment is made of tbe common stock of said company.” On the same day a statement of tbe proceedings of said meeting, showing a compliance with tbe provisions of article 9, chapter 12, Revised Statutes 1899, was made out, as required by sections 1329 and 1333 of said article, signed and verified by tbe affidavit of tbe chairman and countersigned by tbe secretary, was duly acknowledged by tbe chairman and recorded as provided by section 1329 of said article, and, thereafter, on tbe 11th day of January, 1906, a certified copy of said statement was filed in tbe office of tbe Secretary of State, and the tax for said increase, amounting to $750, and tbe fees ’of the Secretary of State for issuing thereon tbe certificate required by said section 1329, was paid into tbe state treasury; and thereupon tbe respondent issued a certificate to tbe relator, setting forth that on that day there was filed in tbe office of tbe Secretary of State a duly certified copy of tbe proceedings of a meeting held for tbe purpose of increasing tbe capital stock of tbe Ely & Walker Dry Goods Company, and that said corporation bad in all things complied with tbe law made and provided for tbe increase of capital stock, and bad increased its capital stock from three million dollars to four million five hundred thousand dollars. Tbe statement aforesaid omitted from tbe proposition adopted tbe following provision, “that upon dis [544] solution or liquidation of said corporation said second preferred stock should be paid out of its assets at the face value to the holders thereof after the payment of the first 'preferred stock of said company at its face value and before any payment is made of the common stock of the company. ” Immediately upon the discovery of the said error in said statement, the chairman and secretary of said meeting, on the 13th of January, 1906, made a new and amended statement of the said increase of the capital stock of said company, which was duly verified by the affidavit of the said chairman, and acknowledged by the chairman and secretary of said meeting, setting forth correctly and in full the proposition adopted at said stockholders ’ meeting, which said statement of increase of stock was filed in the office of the recorder of deeds of the city of St. Louis on the 13th day of January, 1906, and a certified copy thereof made by said recorder of deeds on said 13th day of January, 1906, which said certified copy was delivered to the respondent, Secretary of State, on the 16th day of January, 1906, with the request that it be filed in his office in accordance with the statutes in such case made and provided, and that a new certificate be issued thereon by said respondent, Secretary of State, of the said increase of the capital stock of relator, in accordance with the statements in said certified copy of the statement of increase of stock so delivered to him, and at the same time there was tendered to respondent, Secretary of State, a check for one dollar and twenty-five cents, payable to the order of J. F. G-melich, State Treasurer, for the fees of the Secretary of State for the issuance of a certificate of increase of stock, in accordance with the statutes in such case made and provided. The Secretary of Sta,te declined to receive and file this amended statement and issue a certificate thereon, and a like request accompanied by a return of the first certificate by relator for cancellation having been again ? refused on the 18th of January, 1906, the alternative writ herein was sued out, for return to which the respondent demurs to the petition and the writ. By an act of the General Assembly, approved April 9, 1901 (Laws 1901, p. 91), section 1332, supra, was amended, so that it became necessary in increasing the relator’s capital stock that the stockholders should not only determine whether the increase should be preferred stock, the amount, number of shares, the price per share, and the character thereof; as required in the original section, but that they should also determine whether dividends “shall be cumulative or not, and what priority, if any, any class of such perferred stock shall have over the common stock or other preferred stock out of the assets of the corporation in case 'of its ■dissolution or liquidation. ’ ’ And section 1333, supra, was so amended that the statement required by section 1329 shall set forth not only the amount and number of shares, the price per share of such preferred stock, and the rate of dividend to be paid thereon, as required in the original section, but also “the preferences, priorities, classification and character thereof.” All the requirements of section 1332 as thus amended were complied with and appeared upon the face of the record of the proceedings of the stockholders ’■ meeting, and such compliance was made manifest to the Secretary of State by the statement delivered to him on the 16th of January, 1906, duly authenticated and recorded in the office of the recorder of deeds of the city •of St. Louis on the 13th of January, 1906; and having theretofore fully paid the tax on the increased stock and the fees therefor, the relator was entitled to have that statement filed and a certificate thereon issued. The fact that a prior certificate had been issued upon a partial and insufficient statement ought not to deprive the relator of rights acquired by the action of its stock [546] holders in strict conformity to the law, and such would be the effect of the Secretary of State’s refusal; for, unless his certificate was based upon a statement showing that the requirements of the statute had been complied with, no lawful increase of the relator’s capital stock would appear, and such lawful increase could not take effect until such certificate was issued. [Laws 1903, p. 123.] Hence, the peremptory writ should go, as prayed for, and it has been so ordered. All concur.