Opinion
No. 34206.
June 10, 1940.
1. EVIDENCE.
Judicial notice can be taken of documents in the office of the Secretary of State.
2. CORPORATIONS.
The charter of a Delaware corporation should be construed under the laws of Delaware.
3. CORPORATIONS.
Grants to corporations should be strictly construed, and every doubt should be resolved against the corporation.
4. WAREHOUSEMEN.
In charter of Delaware corporation having the prime object of operating cotton compresses and warehouses, the broad powers enumerated affected only powers incidental to and related to specific grants of powers, and right to operate conveyances for transportation of goods referred only to corporation's own business and customers, and did not authorize operation of motor trucks as a restricted common carrier of cotton for the public generally (Laws 1938, chap. 142, secs. 3, 4 (f) 8, 28, 29).
5. AUTOMOBILES.
A corporation's transportation to its own warehouse of cotton to which the actual producer had title would not be that of a "common carrier by motor vehicle" or "restricted common carrier by motor vehicle," and was exempted from requirement of certificate of public convenience and necessity (Laws 1938, chap. 142, sec. 4(f)).
6. AUTOMOBILES.
A certificate of convenience and necessity for operation of motor-trucks as restricted common carrier of cotton was properly denied where corporation seeking the certificate had no charter power to conduct the business of carrier for hire, even if corporation had previously been permitted to act as carrier for hire (Laws 1938, chap. 142, secs. 3, 4(f), 8, 28, 29).
APPEAL from the circuit court of Hinds county; HON. J.P. ALEXANDER, J.
Eaton Eaton, of Gulfport, for appellant.
The Commission erred in dismissing the application of the appellant upon the alleged ground that the charter of incorporation of appellant did not authorize the operation sought by appellant in its application. At the outset, it is at once obvious that the ruling of the attorney general upon which the Commission based its ruling does not hold that the appellant had no authority to operate as a restricted common carrier of cotton only, but holds that its charter does not authorize the applicant to become a common carrier under the Motor Carrier Regulatory Act. The difference between a restricted common carrier of a certain commodity and a common carrier is clearly defined by the Act itself. The functions and duties of the two types of carriers are entirely different, so that the opinion of the attorney general upon which the Commission based its ruling is no authority for holding that the appellant had no authority under its charter to operate.
14A C.J. 252.
The appellant operates a cotton compress and warehouses. It is clearly within its powers, as well as the duty of the corporation to its stockholders, to obtain as much cotton for the warehouses as it is possible to get. The obtaining of such cotton is just as much a part of its business as the actual storing and compressing of it. If no cotton can be obtained, then the purposes of the corporation fail, and any lawful means employed by the corporation to obtain cotton are within the implied powers of the company to operate a cotton warehouse and compress business.
14A C.J. 252-257; Keating v. Am. Brewing Corp., 62 App. Div. 501, 503, 71 N.Y.S. 95; Sales-Davis Co. v. Henderson-Boyd Lbr. Co., 193 Ala. 166, 170, 69 So. 527; Calloway, etc., Mining Co. v. Clark, 32 Mo. 305.
It is obvious that upon the theory of implied powers there is no doubt as to the authority of the appellant in this case to operate as a restricted carrier of the commodity of cotton only. Such operation has a direct relation to the business of conducting a cotton compress and warehouse, and without the transportation operation the compress and warehouse business would inevitably suffer.
The Commission erred in denying to appellant an opportunity to present evidence of the nature of its business, such denial amounting to a denial of due process of law contrary to Section 14 of the Constitution of the State of Mississippi and contrary to the 14th Amendment to the constitution of the United States. The Commission erred because the nature of appellant's business would be a decisive factor in determining whether or not its operation as a restricted common carrier of cotton only was beyond the scope of its charter.
The Commission erred in using a document not in the record before it and never introduced in evidence at the time of its ruling, to-wit: appellant's charter of incorporation, as the sole ground of dismissing appellant's application.
The Commission erred in allowing a protestant to obtain an opinion of the attorney general with reference to appellant's charter without giving appellant an opportunity to be heard before such opinion was given.
The Commission erred in denying appellant the opportunity to present evidence before the Commission tending to show its bona fide operation as a restricted common carrier of cotton only, as alleged in its application, such denial amounting to a denial of due process of law, contrary to Section 14 of the Constitution of the State of Mississippi and contrary to the 14th Amendment to the Constitution of the United States.
U.S. v. L. N.R.R. Co., 272 U.S. 88, 57 L.Ed. 431; State of Washington ex rel. Oregon R.R. Navigation Co. v. Fairchild, 56 L.Ed. 510, 868, 224 U.S. 510; Morgan v. U.S., 304 U.S. 1, 82 L.Ed. 1129; Sec. 8 (b), Motor Carrier Regulatory Act, 1938.
The Commission erred in deciding that the charter of incorporation of the appellant does not authorize its operation as a restricted common carrier of cotton only.
The Commission violated the Motor Carrier Regulatory Act, 1938, under which the Commission was created. Flowers, Brown Hester, J.N. Ogden, May, Byrd, and Stevens Stevens, all of Jackson, for appellee.
Under the Mississippi Motor Carrier Regulatory Act, persons engaged in the business of a common carrier over irregular routes or hauling a restricted class of commodities are classified and defined as "restricted common carriers." They are common carriers because doing business as carriers for hire for the public in general, but are clasified as being "restricted common carriers" because not engaged in the business of hauling commodities generally or not engaged in regular route operations. The most common example for such carriers are those engaged in the business of moving household goods, who hold themselves out to serve the public in general, but who only haul household goods as household movers and who do not operate over regular routes, but instead will serve any point within the territory in which they are engaged in business. Appellant is therefore in error in saying that it does not propose to do business as a common carrier since the business is that of a common carrier, but restricted by the limitation of the commodity hauled, to-wit, cotton only, and distinguished from ordinary common carrier operations because not conducted over a regular route or between fixed termini. The business of operating mills, gins, compresses and warehouses, compress systems, patents, warehousing in cold storage, wharfage, piers and docks, lending money on property stored or otherwise, to improve property on lands and personal effects, and to adopt copyrights, trade marks, names, etc., and all incidental powers thereto, does not, we submit, authorize the appellant to engage in any public utility business except that of warehouse or wharfinger.
Calloway Mining Company v. Clark, 32 Mo. 305, fully illustrates the proposition that what was meant by the provision in appellant's charter, upon which it relies, is that the appellant was granted the power to own conveyances necessary to haul such commodities as it might store in its warehouse. The right to own or invest money of the stockholders in certain property is vastly different from the right to carry on a particular kind of business through the use of certain property.
People ex rel. Healy v. I.C.R.R. Co., 233 Ill. 378, 84 N.E. 368, 16 L.R.A. (N.S.) 604; Haugh Keenan Storage Transfer Co. v. Pa. Public Utilities Com., 2 A.2d 548.
In instances such as this where this court has had no occasion to pass on the specific question here presented, it is not often that the court is so fortunate as to have the benefit of the opinion from another jurisdiction on the precise question. Particularly is that true since the business of carrying for the public by motor vehicle is what might be called a new business in this country. However, the Keenan Storage Transfer Company case, supra, is as nearly like the case at bar as could be possible or probable under the circumstances.
We feel that this court will encounter no particular difficulty in construing this charter to mean that the appellant is authorized by its terms to engage in the business of operating a warehouse and compressing cotton and that it is not authorized to operate the business of a public carrier for hire.
6 Fletcher's Cyclopedia on Corporations, Sec. 2488.
About the only recognized exception to the general rule that a corporation may not embark on a business different from that for which it was incorporated is where the new business or different business is merely casual, temporary, or incidental, or where it is to secure or collect a debt due the corporation.
6 Fletcher's Cyclopedia on Corporations, Sec. 2490(3).
However, in this case, there is no pretense on the part of appellant that this proposed public carrier business is either casual, temporary, or incidental, or that it is for the purpose of securing or collecting a debt.
A separate business activity, such as operating motor trucks as a public carrier, is such an entirely new, different and separate line of business that it could not, under any theory, be regarded as incidental to the business of compressing and warehousing cotton. The fact that the attorney-general based his opinion on the language of the certificate of incorporation itself, rather than on a statement of facts regarding the business actually being engaged in by appellant, is immaterial because appellant under its charter could not engage in the business of a public carrier under the guise of a power incident to its main objectives. We respectfully submit that the Commission acted within its proper province in referring the matter to the attorney general for an opinion, and that the attorney general was entirely justified in examining the charter at the request of the Public Service Commission, and in rendering the opinion which was delivered.
The Public Service Commission of Mississippi, as a quasi-judicial body, exercising judicial functions in this instance, was authorized to take judicial notice of the records in the office of the Secretary of State, a coordinate department of state, and the record reflects that the Commission did obtain a copy of appellant's charter of incorporation and caused the same to be made a part of the record, together with the opinion of the attorney general.
In the exercise of its functions, such a commission is not required to make a record containing all of the facts considered by it, but it is authorized to look to its own expert knowledge, and take judicial notice of matters in the scope of its functions more widely than would a court. However, even if limited to the rules of evidence applicable in court, the Commission was justified in looking to the appellant's charter.
51 C.J. 59, Par. 110; Steamboat Canal Co. v. Garson (Nev.), 185 P. 801; Briscoe v. Buzbee, 163 Miss. 574, 143 So. 387; Gully, Tax Collector, v. Lumbermen's Mutual Casualty Co., 176 Miss. 388, 168 So. 609.
The duty resting upon the Public Service Commission, formerly the Mississippi Railroad Commission, to inquire into and give effect to the charters of carriers subject to its regulations is firmly intrenched in both legislative and judicial pronouncements.
N.O.M. C.R.R. Co. v. State, 110 Miss. 290, 70 So. 355; Stone et al., Railroad Commissioners v. Y. M.V.R.R. Co., 62 Miss. 607; Stone et al., Railroad Commissioners v. Natchez, Jackson and Columbus R.R. Co., 62 Miss. 646; Miss. R.R. Com. v. G. S.I.R.R. Co., 78 Miss. 750, 29 So. 789.
If appellant had any right under its charter to engage in the business of a public carrier, then the Commission should, and it doubtless would, receive its evidence and judge its case on the facts submitted. However, appellant has no charter power to engage in the business proposed, and the Commission was justified in dismissing the application upon that sole ground.
Pittsburgh R.R. Co. v. Public Service Commission et al. 115 Pa. Super. 58.
Russell Wright, Assistant Attorney-General, amicus curiae.
It seems to me that the right of the appellant to obtain a charter as a restricted common carrier of cotton only must, of necessity, be based upon express powers granted in its charter of incorporation.
Haugh Keenan Storage and Transfer Co. v. Penn. Public Utilities Com., 2 A.2d 548.
In this case it was not a question of anything else except corporate power upon which this office based its ruling and upon which the Public Service Commission and the lower court affirmed the ruling of this office.
Pollitz v. Public Utilities Com., 96 Ohio St. 49, 117 N.E. 149, L.R.A., 1918D, 166; Commercial Bank v. Nolan, 7 How. 530; 13 Am. Jur. 744, par. 741; Bacon v. Ins. Co., 31 Miss. 116.
I submit to the court that in my opinion the incorporators of this corporation never had any idea of getting authority, under the charter, to operate a fleet of trucks for transportation as a common carrier of property over the highways of Mississippi, and this operation not to be limited in any way.
Argued orally by B.E. Eaton for appellant and John Morgan Stevens for appellee and Russell Wright, amicus curiae.
Mississippi-Gulfport Compress Warehouses, Inc., appellant, filed its application for a certificate of convenience and necessity in order that it might operate motor trucks as common carriers or restricted common carriers in this state before the appellee, Public Service Commission of the State of Mississippi, under Chapter 142, Laws of Mississippi, 938.
From the order of the appellee dismissing appellant's petition, and after numerous protests from interested parties, under the Statute, the circuit judge granted a supersedeas. The cause was then heard on filing of the record in the circuit court, which being heard in that court the order of the utility Commission was affirmed by that court, and from that judgment the applicant appeals to this Court.
The substantial question presented here is, Did the applicant have the power, under the grants in its charter to operate the common carrier business, general or restricted, and if that was not true ought the Commission to have heard evidence as to the business conducted by it prior to this application?
Appellant was granted a charter under the laws of Delaware. It had its office at Gulfport in this state, and was engaged generally in compressing cotton and as a cotton warehouse.
We will assume at the outset that the appellant's petition in form and substance complied with the Statute and rules adopted by the Utility Commission.
After the matter was at issue before the Utility Commission and the several protestants, the Commission ordered a transcript of its record and file submitted to the Attorney General of the state, who was by the controlling act constituted its legal adviser, seeking from him his opinion as to whether or not the charter of the appellant authorized it to carry on the business of common carrier or restricted common carrier.
The Attorney General transmitted his written opinion with the file and a certified copy of appellant's charter from the office of the secretary. His opinion was to the effect that applicant's charter did not grant the powers sought to be carried on by it.
The route proposed was irregular and the commodity it proposed to transport was cotton and was not limited to its own bona fide customers, but it sought to operate as a carrier for hire.
The act controlling here is very comprehensive and conferred generally upon the appellee Commission the power to regulate and supervise motor carriers operating upon the public highways of this state, such motor vehicles being classed therein as common carriers, restricted common carriers, and motor vehicle contract carriers.
Section 3, Laws 1938, Chapter 142, defines restricted common carriers as follows: "The term `Restricted common carrier by motor vehicle' means any person who or which undertakes, whether directly or by a lease or other arrangement, to transport passengers or property of any restricted class or classes for the general public by motor vehicle for compensation, whether over regular or irregular routes, or to transport passengers or property for the general public by motor vehicle for compensation over irregular routes."
Section 8 of said Acts is as follows: "No common carrier by motor vehicle or restricted common carrier by motor vehicle not herein exempted shall engage in intrastate operation on any highway within the state unless there is in force with respect to such carrier, a certificate of public convenience and necessity issued by the commission authorizing such operation; provided, however, that if any such carrier or predecessor in interest was in bona fide operation as a common carrier or restricted common carrier by motor vehicle on January 1, 1938, over the route or routes, or within the territory for which application is made and has so operated since that time, or if engaged in furnishing seasonal service only, was in bona fide operation on January 1, 1938, during the season ordinarily covered by its operation, except in either instance as to interruptions of service over which the applicant or its predecessor in interest had no control, the commission shall issue such certificate without requiring further proof that public convenience and necessity will be served by such operation, and without further proceedings, if application is made to the commission as provided in paragraph (b) of this section, and within six months after this act shall take effect. Pending determination of any such application, the continuance of such operation shall be lawful."
The appellant had operated prior to the final order under a temporary order or certificate, but the final order here under review revoked the temporary compliance order. The appeal to the circuit court from this final order, dated April 5, 1939, is authorized by Sections 28 and 29 of the Act.
The charter of appellant gave it the right to construct, purchase, and maintain gins, compresses, and warehouses with many powers incident thereto.
It is or must be contended by appellant that these clauses in the charter expressly or by clear implication granted it the right to operate the business it had applied to the Commission to carry on.
"To construct, hire, purchase, operate and maintain all or any conveyances for the transportation in cold storage or otherwise by land or by water of any and all products, goods or manufactured articles;"
"To do all and everything necessary, suitable and proper for the accomplishment of any of the purposes or the attainment of any of the objects or the futherance of any of the powers hereinbefore set forth, either alone or in association with other corporations, firms or individuals, and to do every other act or acts, thing or things incidental or appurtenant to or growing out of or connected with the aforesaid business or powers or any part or parts thereof, provided the same be not inconsistent with the laws under which this corporation is organized."
This charter was before the Commission as shown by the judgment of the circuit court. However, there can be no doubt that the rule is that judicial notice can be taken of documents in the office of the Secretary of State as one of its departments from which judicial knowledge may be acquired. Briscoe v. Buzbee, 163 Miss. 574, 143 So. 407, 887, and especially Witherspoon v. State, 138 Miss. 310, 103 So. 134. This charter is to be construed under the Laws of Delaware.
In the case of Williamson v. Gordon Heights Ry. Co., 8 Del. 192, 40 A. 933, 934, its rule is thus stated: "There is no rule of construction more fixed and unyielding than that requiring strict construction of grants to corporations." That case approved this statement: "In the construction of a charter, to be in doubt is to be resolved; and every resolution which springs from doubt is against the corporation. This is the rule sustained by all the courts in this country and in England."
In our own state this rule obtains as announced in Abby v. Billups, 35 Miss. 618 at page 630, 72 Am. Dec. 143.
This charter taken in its entirety has as its prime object the operation by the corporation of compresses and warehouses. The broad powers enumerated only affect those powers incidental to and related to these specific grants of power.
The authority sought by the appellant from the appellee was to do the business of a common carrier for hire without any regular route and not confined to producers, but necessarily included dealers in cotton, and if the application had been granted the receipt for transportation would not have been limited as to classes of shippers nor would deliveries in Gulfport have been delivered by its trucks to its own warehouse.
The authority to own and operate conveyances for the transportation by land and water for the conveyance of all products or manufactured goods could not be converted into the power to operate a public utility — i.e. a common carrier or a restricted one, nor would the operation of such a public utility be regarded incidental to the warehouse or compress business.
The transportation referred to in the quoted paragraph has reference to its dealing with its own business and customers and not to the public generally.
If appellant only intended to transport cotton to its own warehouse, the title to which was in the actual producer, then it needed no certificate from the appellee because such shipments are exempted. See Chapter 142, Laws 1938, Section 4(f). That kind of an operation would not be that of a common, or restricted common, carrier.
There is such a vast difference between the transportation rights granted in its charter and the operation of a restricted common carrier as a public utility as that it seems to us to be beyond legitimate discussion.
The appellant's construction of its charter would mean that thereunder it could operate a railroad. The arguments fall of their own weight. The argument advanced that the power or right it seeks here is found in the blanket provision which it now says authorizes it to engage in "any other business which may from time to time seem to the directors capable" must be held to relate to the precise purpose and grant of the charter.
The position contended for would lead to the inevitable unthinkable conclusion that the directors would determine what other business would in some slight degree enhance its real or prime business and thus put the directors on an equal or higher plane than the Sovereign, the creator of the corporate rights. That construction would mean that the corporation could operate a banking, a telegraph, a telephone, or any other business it saw proper.
In common parlance such construction would permit "the tail to wag the dog."
We are of the opinion that the Utility Commission properly refused the certificate applied for herein, because this corporation had no charter power to conduct the business of a carrier for hire either common or restricted, and if it had shown by its evidence the business it had theretofore done, the Commission could not by its certificate bless, forgive, or condone its past sins.
If authority is wanted for our position, we cite as illuminating and instructive the case of Haugh Keenan Storage Transfer Co. v. Penn. Public Utilities Comm., 133 Pa. Super. 175, 2 A.2d 548.
It would be idle to say that the appellee here, the Commission, should confer upon the appellant the authority to conduct a business which it had no power under its charter to operate. It was a question of charter powers which stood at the door of inquiry and was properly disposed of by the appellee and the circuit court.
Affirmed.