The opinion
I am unable to concur in the majority opinion.
The ordinary mind would find no difficulty in apprehending the meaning of the phrase, "no public service company engaged in intrastate business in this state," used in § 11 of the act. The majority, however, discover that the legislature did not intend what these plain words import, and materially change and limit *Page 37
the scope of the law by interpolating the word "only." Now, I suppose that, if the legislature intended to so limit the operation of the act, it would have said so by using the word "only," or some other appropriate word.
The purpose of the law is obvious enough. It was intended to safeguard the public against the dissipation of a utility company's resources through the payment to the stockholders of unearned and unauthorized dividends. The law is sustainable as to domestic corporations, either as an amendment to the enabling act under which they are organized or as an exercise of the police power.
I can see some practical difficulties in the administration of the act in so far as it relates to foreign corporations doing business within the state. The limiting construction placed upon the act by the majority does not obviate these difficulties, because a foreign corporation may be engaged solely in intrastate business. However, we are not concerned here with the difficulty of administering the act as to foreign corporations, because the relator is a domestic corporation, wholly a creature of law and subject to the limitations prescribed in the statutes and constitution of the state.
Section 1, article XII, of the constitution, authorizes the formation of corporations under general laws, and provides that all laws relating to corporations may be altered, amended or repealed by the legislature at any time.
Rem. Rev. Stat., § 3823 [P.C. § 4524], in effect long before the relator was organized, is as follows:
"It shall not be lawful for the trustees to make any dividend except from the net profits arising from the business of the corporation, nor divide, withdraw, or in any way pay to the stockholders, or any of them, any part of the capital stock of the company, nor to reduce the capital stock of the company unless in the *Page 38
manner prescribed in this chapter, or the articles of incorporation or by-laws; and in case of any violation of the provisions of this section, the trustees, under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large on the minutes of the board of trustees at the time, or were not present when the same did happen, shall, in their individual or private capacities, be jointly or severally liable to the corporation and the creditors thereof in the event of its dissolution, to the full amount so divided, or reduced, or paid out . . ."
It will thus be seen that the unauthorized payment of dividends forbidden by the act now under consideration has already been made unlawful. The present act is preventive in character, while § 3823 provides only for the liability of the trustees after the unlawful diversion has taken place.
We are not concerned, of course, with the public policy involved in this law. That question was for the legislature. It is sufficient for us that the legislature was acting within its power.
It is not apparent how the relator will be in any way embarrassed by the law. It cannot be assumed that the department of public works will act arbitrarily or capriciously in denying permission to pay dividends actually earned. If the department should act arbitrarily or capriciously, relator will have its remedy in court.
BLAKE and BEALS, JJ., concur with GERAGHTY, J. *Page 39