Case Name: Louisiana Oil Refining Company v. Rainwater
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1931-02-23
Citations: 183 Ark. 482
Docket Number: 
Parties: Louisiana Oil Refining Company v. Rainwater.
Judges: Mr. Justice Butler joins in the dissent.
Reporter: Arkansas Reports
Volume: 183
Pages: 482–491

Head Matter:
Louisiana Oil Refining Company v. Rainwater.
Opinion delivered February 23, 1931.
Barber eg Henry and Troy W. Leíais, for appellant.
Rose, Hemingway, Cantrell & Loughborough, for appellee.

Opinion:
Hart, C. J.,
(after stating the facts). Section 1735 of Crawford & Moses' Digest is § 32 of the act of April 32, 1869, which provides for the formation and regulation of business corporations. It provides that the president and secretary of every corporation organized under the provisions of the act shall annually make a certificate showing the condition of the affairs of the corporation in the manner provided in the section. Section 1726, which ivas a part of the act of May 6, 1909, provides that if the president or secretary of any such corporation shall neglect, fail or refuse to comply with the provisions of § 1715, he shall be liable to- an action founded on the statute for all debts of such corporation contracted during the period of any such neglect or refusal.
It is conceded that, if these provisions of the Digest are still in force, Ihe president was liable because the default is admitted. Our cases hold that where there has been a default in making the reports required by the statute during a particular time, and during that time a debt is contracted, there is liability to a creditor as upon contract. It is said that the object of the statute is to require corporations to make such a public showing .of their affairs as will enable those dealing with them to determine whether they can safely give them credit, and that the mischief at which it is aimed is not done unless the credit is actually given during the period of default. Griffin v. Long, 96 Ark. 268, 131 S. W. 672, 35 L. R. A. (N. S.) 855, Ann. Cas. 1912B, 622; Hughes v. Kelley, 95 Ark. 327, 129 S. W. 784; McDonald v. Mueller, 123 Ark. 226, 183 S. W. 751; and Taylor v. Dexter, 126 Ark. 122, 189 S. W. 1060.
It is sought to uphold the judgment, however, on the ground that these sections of the Digest have been repealed by act 250, passed by the Legislature of 1927, providing for the formation of corporations and the regulation thereof. Acts of 1927, p. 854.
It is a well-settled principle of statutory construction that repeals by implication are not favored. A statute may, however, be repealed by the express provisions of a subsequent statute, or by implication when the provisions of the earlier and later statutes are repugnant to each other and irreconcilable, or when the subsequent statute covers the whole subject-matter of the former and is manifestly intended as a substitute for it. This rule is so well settled that only a few of our cases on the subject need be cited. Bank of Blytheville v. State, 148 Ark. 504, 230 S. W. 550; Ouachita County v. Stone, 173 Ark. 1004, 293 S. W. 1021; and State v. Standard Oil Company of Louisiana, 179 Ark. 280, 16 S. W. (2d) 581.
It is the contention of counsel for appellees in the present case that the act of 1927 covers the whole subject of the earlier act relating to the formation and regulation of business corporations and embraces numerous new provisions. It is insisted that the act plainly shows that it was intended not only as a substitute for the earlier act but to cover the whole subject of the forma tion of business corporations and to prescribe the only rules in respect thereto. Hence it is contended that it operates as a repeal of all former statutes relating to the formation and regulation of business corporations, even if the former act or some of its provisions are not in all respects repugnant to the new act. A careful comparison of the earlier act with the later one does not, in our opinion, show that the later act was intended to be a revision of and substitute for the earlier one. As we have already seen, under the construction placed upon the provisions of § 1715 and 1726 by this court, the Legislature had a definite purpose in enacting this statute. It is true that the later statute is very comprehensive. It contains 57 sections and provides in detail for the manner of incorporating- business corporations, defines their corporate powers, regulates the manner for issuing stock, and the powers of directors and other matters deemed necessary for the management of such corporations, but it contains no provision looking to the filing of an annual report showing the condition of the corporation so that creditors may be advised of the condition of their affairs and intelligently determine whether they can safely give them credit. The provisions of the earlier statute looking to this end fits in with the aim and scope of the later statute just as well as they do with the earlier one. There is nothing to indicate that .it was the intention of the Legislature to repeal them. They are not in any wise inconsistent with the scope and purposes of the later act and serve the same purpose, so far as that act is concerned; as they did with the earlier act.
In this respect, it is different from the act which was held to be repealed in the ease of Ouachita County v. Stone, 173 Ark. 293 S. W. 1021, relied upon by counsel for appellee. In that case, the provisions of the earlier act were wholly out of harmony with the scope and purposes of the later act, and for that reason the court held that the earlier act was repealed by the provisions of the later one. When the scope and purposes of the later act in that case were considered, there seemed to be no place for the provisions of the earlier act, which was considered repealed.
We think the present case is more like that of Bank of Blytheville v. State, 148 Ark. 504, 230 S. W. 550. Therefore, we are of the opinion that the court erred in overruling the demurrer to the answer, and for that error the judgment will be reversed, and the cause will be remanded for further proceedings according to law7 and not inconsistent with this opinion.