Court Opinion

ID: 6821678
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:08:02.844809+00
Date Added: 2024-06-11T08:45:26.526612
License: Public Domain

Holt, C. J.,
dissenting.
The United States Distributing Corporation, a Virginia corporation with its principal office in Richmond, desired to merge with The Pittston Company, a Delaware corporation. *348Their plans for merger were submitted to the proper authorities of both States. They were approved and a new corporation, known as The Pittston Company, took over the holdings of both parent corporations. At the date of the merger, The Pittston Company held most of the stock of the United States Distributing Corporation. Stock not so held stood in the name of individuals. Some of them came into the new company under the terms tendered them in the merger; others dissented. A number of these dissenters were advised that Code, section 3822, was but cumulative, and that the power of a court of equity to pass upon the value of their stock stood unimpaired. They thereupon instituted a suit in the Law and Equity Court of the city of Richmond in which they asked that the value of their stock be determined and claimed that each share of preferred stock was worth $184.00. The Pittston Company had been advised that the provisions of said Code, section 3822, were exclusive and thereupon brought its suit in the Chancery Court of the city of Richmond.
This difference of opinion finally reached us and was decided in Adams v. United States Distributing Corp., 184 Va. 134, 34 S. E. (2d) 244, 162 A. L. R. 1227, in which we held that the statutory provision governing mergers was exclusive. The net result of that decision is that the Chancery Court of the city of Richmond held that the fair cash value of the preferred stock held by these dissenters was $55.00 and not $184.00 per share. We there said:
“It is inconceivable, we think, that the legislature ever intended that dissenting stockholders of the same corporation and of the same class should receive different values for their shares. On the contrary, we think the design of the Virginia statute is to assure to the dissenting stockholder that he will be fully compensated for the value of that of which he has been deprived by the merger, and no more.”
This statement needs no construction, for construction lies in the domain of ambiguity. A wayfaring man can understand what was meant. But to make assurance doubly sure, *349we went ahead and set out the reason which led to that - conclusion, and said:
“To adopt the contention of the appellants and hold that the remedy afforded by the statutes is merely cumulative and not exclusive would lead to confusion and to inequitable results among various dissenting stockholders, even where the identical corporation is involved and the sole question is that of the value of the dissenters’ shares. For example, in the case at bar, those preferred stockholders, other than the appellants, who dissented from the merger and pursued the statutory remedy for the appraisal of the ‘fair cash, value’ of their stock, in the Chancery Court of the city of Richmond, would have such value determined by the appraisers appointed by that court and subject to its approval, while the appellants in the present proceeding would have the value of their stock determined by a commissioner in chancery, subject to the approval of the Law and Equity Court of the city of Richmond. Unless the two tribunals worked in close harmony they might arrive at entirely different results, although the ultimate purpose is precisely the same.
“But that is not all. If the appellants are sound in their view, then they would be free to pursue their equitable remedy in any court, State or Federal, in which they might acquire jurisdiction of the parties. Under this theory the dissenting stockholders could institute actions for the value of their share in State and Federal courts throughout the country, provided, only, that proper service of process could be effected.”
For reasons stated, to give to courts of equity general jurisdiction would lead to intolerable confusion. The construction which we are now giving to the statute is even more bewildering, for the same court is asked, with a straight face, to hold that this stock has more than one fair cash value.
We have once said each certificate of stock has a fair cash value of $55.00. That was a judicial determination, and we are now asked to hold by another judicial determination of the same court that it has a cash value of $184.00, or more.
There are fifteen of these dissenting stockholders. They *350were not required to bunch their hits. Each of them might have filed a petition in substance like that filed by the fifteen. Under each petition, appraisers would have been appointed. If their findings had been adopted, we might find fifteen judicial determinations of the fair cash value of this stock. But that is not all. We cannot say as a matter of law that-there are no other dissenters who have not yet come in. One of them might be an infant. Shall we wait until he grows up?
Moreover, we have held that the common stock has no value at all. These common stockholders might answer “Not so,” and they might come forward and ask for other appraisals. Other judicial determinations might follow, and we would have the same court solemnly declaring that the fair cash value of these stocks varied with the judgments of the appraisers. If there is one thing certain, it is that each share of this stock on any given date should have the same value.
The dissenters, in their petition for appeal, appear to concede that taking it at its face value, the Adams Case is against them but reheve themselves from that burden by charging that it is dicta, while we now say that we never said it, or at least that we never meant to say it.
We might approach this proposition from another angle. These dissenting stockholders were parties by representation to the findings heretofore made. They need not have been served with process.
In Morrow v. Vaughan-Bassett Furniture Co., 173 Va. 417, 4 S. E. (2d) 399, it was held to be unnecessary that a non-resident stockholder be made a party defendant when levied upon for a proper share of corporate debt since he might be a party by representation and that there need be no personal service of process. If a judgment can be given against them, for their share of indebtedness, by the same token a judgment may be given in their favor for their proportion of their company’s assets if the company is to be dissolved. We may restate the bog into which our construction of this statute has led us:
*351The multiplicity of varying judgments of different courts of equity was one of the possibilities which the Legislature foresaw and undertook to correct by Code, section 3822. But plainly that is an instance of misplaced legislative confidence. It is now true that different courts of equity no longer have the power to enter varying judgments, but the same court now not only has the power to enter varying judgments, but it may have to do so under our judgment in the instant case. To hold that a statutory court, vested with exclusive jurisdiction, may find that the just cash value of one share of stock differs from the just cash value of another share of stock on a given date when both stocks are part of one issue is, in the language of the Adams Case, “inconceivable.” There is no limit to the number or variety of possible judgments which may be entered under the rule approved in the instant case. Here we have once held that the value of each of the shares of stock is $55.00; we are now being asked to hold that it is $184.00, or more.
Of course the purpose of our statute is to treat all stockholders alike and to put an end to litigation—sit finis litum.