Court Opinion

ID: 3934213
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:59:02.535185+00
Date Added: 2024-06-11T13:38:55.537890
License: Public Domain

Stating the propositions in different order and words, the majority opinion in this case holds, substantially:
1. That unless the purpose set forth in the proposed articles of incorporation or charter is clearly one which is authorized by law we are without authority to compel the Secretary of State to file it. In that statement of the law I heartily concur.
2. That subdivision 36 of our general incorporation law, Revised Statutes, article 1121, which authorizes the creation of corporations "to support and maintain bicycle clubs, and other innocent sports," does not attempt to confer legislative authority upon the Secretary of State. In that conclusion, also, I concur.
3. That the doctrine of ejusdem generis does not apply to said subdivision 36; or, in other words, that the clause, "other innocent sports," as used in the statute, should not be restricted to innocent sports produced or indulged in by means of a mechanical agency belonging to the same genus or class as bicycles. In that conclusion, also, I heartily concur, for the reason so clearly stated in the majority opinion, and also for other reasons which involve the well known origin and historical application of the rule of ejusdem generis.
4. That, nevertheless, the "purpose" of the proposed corporation, which the proposed charter declares shall be "to support and maintain an automobile club, the purpose and object of which shall be to promote *Page 111 
innocent sport by means of automobiles," is not set forth in said charter with sufficient particularity or certainty to enable the Secretary of State to determine what the corporation is to do, or whether that which such corporation is to support and maintain is or is not an innocent sport. In that conclusion of my associates I can not concur.
Revised Statutes, article 1122, provides: "A charter must be prepared setting forth:
"1. The name of the corporation.
"2. The purpose for which it is formed."
So the real question is as to the proper construction of this subdivision 2.
Section 2 of the Final Title of our Revised Statutes declares that their provisions "shall be liberally construed with a view to effect their objects and to promote justice."
It is generally held by courts and by text-writers that a substantial compliance with general incorporation acts, and particularly with provisions thereof requiring that the charter shall state the "purpose" of the proposed corporation, is all that is necessary; and especially is this true as to corporations which are not formed for profit.
So I think that a fair and reasonable rather than a harsh and rigorous interpretation and construction should be given to this word "purpose," and thus conclude that the purpose clause of the proposed charter substantially meets the requirements of law; while my associates, in determining the force and meaning of the word "purpose," resort to what seems to me to be a very strict and entirely too technical rule of construction, and thus they conclude that the purpose clause of said charter is not sufficiently specific to meet the demands of said subdivision.
The statutory requirement that the "purpose" of the corporation shall be stated in its charter was intended for the protection of the incorporators and stockholders, and the public, in order that they may be advised as to the character of its corporate activities, and to enable the State, through its proper officers, to collect proper filing fees and franchise taxes, and to supervise and control the use and to punish the non-use of its franchise to do. All of these purposes are sufficiently subserved and conserved, it seems to me, by the purpose clause which is set out in the charter before us. It expressly declares, in effect, that the purpose of the proposed corporation shall be to support and maintain an automobile club; that the purpose and object of such club shall be to promote sport; that such sport shall be limited to such as may be produced or indulged in by means of automobiles, and shall be further restricted to sport which is innocent. The very fact that the contemplated sport is to be by means of automobiles only sufficiently differentiates this proposed corporation from any which might legally be created under the clause "to support and maintain bicycle clubs"; and the fact that the purpose and object of such proposed automobile club is "to promote innocent sport," sufficiently indicates that the charter is based upon the concluding clause of said subdivision 36.
The word innocent as applied to sports has a well known and general *Page 112 
signification. "Innocent" means "lawful; permitted; as, an innocent trade." Webster's New International Dictionary. It means "free from legal or specific or moral wrong." Century Dictionary.
Said subdivision 36 is somewhat confusing in that it treats in the same way "bicycle clubs," which expression conveys a concrete idea, and "other innocent sports," which expression carries an abstract idea. But the "club" idea seems to have been prominent in the legislative mind in connection with "innocent sports," and I think that subdivision 36 should be construed just as if it read: "To support and maintain bicycle clubs for innocent bicycle sports and other clubs for other innocent sports."
The majority opinion concedes that there are "certain sports commonly recognized and classed as innocent sports," and that "the obvious intention of the Legislature in the enactment of subdivision 36 of article 1121 was to provide for the formation of corporations for the purpose of supporting and maintaining" them. It also concedes, in effect, that subdivision 36 should be construed just as if it read: "To support and maintain bicycle sports and other innocent sports." But the denial by the majority of this court of the writ of mandamus in this case, is based, as I understand their opinion, upon the failure of the proposed charter to make "a designation by name of the sport or sports contemplated in the charter." I think that view of the matter leaves out of consideration the fact that the purpose clause in the charter does practically make a designation by name of the proposed sport, towit, automobile sport.
Under the proposed charter any and all automobile sports which are innocent are within the statutory and charter powers of the proposed corporation; while all sports produced otherwise than by means of automobiles, and even all automobile sports which are not "innocent," if such there be, are barred by the statute and by the charter as well. In the absence of a statute calling expressly for a more specific statement of the corporate purposes in the charter why should one be demanded as a condition precedent to filing the charter?
Is not automobile sport as definitely "a designation by name" as is "bicycle sport"? I think it is. And it seems to me to involve a strained and very technical construction to hold (as I understand my associates do), that in order to come within the law it is necessary for a charter under the "other innocent sports" clause of said subdivision 36, to go further and specifically designate, by some additional name or names, the particular kind or kinds of innocent automobile sports which the corporation proposes to promote; as, for instance, automobileracing. I can not believe that our statute in its present form makes so rigid and drastic a requirement. After a diligent and painstaking search which has embraced all accessible authorities I am unable to find that any court or text-writer in the United States has ever before held that a general incorporation law should be construed so strictly; and no such authority has been cited in the exhaustive brief of the Attorney General, or in the argument at bar, or in the majority opinion. *Page 113 
There is another view of this matter which tends to confirm my conclusion as to the proper disposition of this case, and that is the construction which the Secretary of State who was in office when our general incorporation Act first became a law, and his successors in office for more than a generation have placed upon it. Not all, by any means, but several subdivisions of said statute are couched in language which, it seems to me, was intended, and should be permitted, to serve as sufficient expressions of corporate "purpose"; for instance, subdivision 24, which reads thus: "The purchase and sale of goods, wares and merchandise," etc. So far as I am advised such has been the uniform rule of construction and the custom of that office with regard to various such subdivisions of said statute, including subdivision 36. Have all such charters, many of which are still active, been improvidently issued, and should they, for that reason, be canceled in suits by the State?
In Galveston, H.  S.A. Ry. Co. v. State, 81 Tex. 602, this court, speaking through Mr. Associate Justice Gaines, afterward its distinguished Chief Justice, said: "We recognize the rule that in cases of doubt the contemporaneous construction of any department of the government is entitled to great weight, and is sometimes given a controlling influence."
In Tolleson v. Rogan, 96 Tex. 432, this court, speaking through Mr. Associate Justice Williams, said of a construction which the head of another executive department had placed upon a certain statute: "While, as this court has frequently held, actions of such officers in plain opposition to law can not be upheld, it is equally true that they are entitled to great weight in determining the true construction of doubtful and indefinite regulations made for their guidance."
"The construction given to a statute by the officers appointed to execute it, and acted upon for a long term of years, though not conclusive, is entitled to great consideration by the court." Ency. Dig. of Texas Reports, C.C., 974, and cases cited; Endlich, Interpretation, sec. 357, and cases cited; Black, Interpretation, 221-223, and cases cited.
Upon the whole, I think the writ of mandamus should be awarded, as prayed for. However, what I have said should be understood as restricted to the facts of this particular case, and not as intended to approve or encourage looseness in the preparation or in the filing of charters. On the contrary, I have long thought that the proper practice is to make the purpose clause of a charter as full and complete as is practicable. But this case involves a status which has already become fixed, and must be determined, one way or the other, upon the question of law which it presents. *Page 114