Court Opinion

ID: 6485320
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:08:34.716227+00
Date Added: 2024-06-11T15:54:12.777378
License: Public Domain

CONCURRING OPINION OP
WATSON, J.
I concur in the conclusion that the decree of the lower court should be affirmed. I also concur in so much of the reasoning contained in the opinion of the chief justice as is *405germane to what I conceive to be the sole issue involved, i. e., the right of the company to increase its capital stock to the sum of $1,600,000. I agree that the rule noscitur a sociis should not be applied in construing the word “extensions” as used in paragraph 1 of section 17 of the franchise act, and that the company had the right under the statute to use its income in the making of the extensions in and to its line of road; that the proceeds of bonds invested in property may properly be included in computing the actual cost of the property to the company, and may be capitalized under section 37 of the act; and that the company has not the right to capitalize excess income invested in property, which excess income would otherwise have been payable to the Territory under the provisions of paragraph 4 of section 17 of the act. It is made plain by the provisions of section 37 of the act (which section is quoted at length in the principal opinion) — and this was the view taken by the circuit judge — that the right of the company to increase its capital stock is dependent, not upon the present value of the property of the company but upon the actual cost of such property. The circuit judge, without making any specific finding as to the actual cost of the company’s property, held generally that upon the showing made such cost was more than sufficient to authorize the company, under the terms of the franchise act and of its charter, to increase its capital stock to $1,600,000, and thereupon a decree was entered dismissing complainant’s bill and dissolving the temporary injunction theretofore issued. Holding, as we do, that the cost of the property was not less than $1,937,631.05, and accepting as correct the figures contained in the reply brief of counsel for the appellant showing that on April 30, 1915, the date of the filing of the bill, the amount of excess profits invested, to which the Territory would otherwise have been entitled under section 17 of the franchise act, amounted to $278,131.95, it is obvious that, deducting this last men*406tioned amount from the total cost, the actual cost of the company’s property which it may rightfully capitalize amounts to more than $1,600,000; and this without taking into consideration the provisions of section 37 of the franchise act which would seem to authorize the issuance of capital stock to the amount of the actual cost of the property of the company and not over twenty-five per cent, of such cost in addition thereto.
When complainant stipulated in the court below that of the items aggregating $2,171,976.11, submitted by the company as capital expenditures representing the original cost of the property, items to the extent of $1,603,056.68 were correctly stated, I am of the opinion that upon the issue raised by the pleadings the complainant was virtually out of court.
The contention of the attorney general in his brief and oral argument that the company has not the right to issue stock to its shareholders without consideration raises a point which is wholly without the case made by the pleadings and one that was not considered or passed upon by the lower court. The rights of creditors are not involved in this proceeding (Handley v. Stutz, 139 U. S. 417; Christenson v. Eno, 106 N. Y. 97, 60 Am. Rep. 429). The sole issue made by the pleadings is as to the right of the company to increase its capital stock, and this was the only question passed on by the circuit judge. At this time to permit complainant to interject into the case an entirely new issue as to what disposition the company may lawfully make of its shares, even if it has the right to increase its capital stock and issue them, is, as I view it, wholly inappropriate, not warranted by the pleadings, and should not be permitted. This court should not decide a moot question where it is apparent that the object of the parties is not the vindication of a right, but a desire to obtain an interpretation of a statue. Sennette v. Police Judge, 129 La. 728, 56 So. 653. *407If the company has the right to increase its capital stock, the disposition of the shares after such increase would in no wise affect complainant’s right to the injunctive relief sought by the bill. In my opinion the question is not open for consideration in this case. National Bank v. Commonwealth, 9 Wall. 353; Harding v. Giddings, 73 Fed. 335, 341 ; Stevenson v. Henkle, 100 Va. 591, 42 S. E. 672; Union Bank v. City of Richmond, 94 Va. 316; 26 S. E. 821. To consider and determine this question would, in my opinion, as was said by the supreme court in Supervisors v. Lackawana Iron and Coal Co., 93 U. S. 619, 624, “involve the exercise on our part of original instead of appellate jurisdiction. This is not permitted to us.” “The supreme court of this Territory is primarily a court of appeal and has such original jurisdiction only as has been expressly, or by necessary implication, conferred upon it by law.” In re Pringle, 22 Haw. 589.
In my opinion, under the stipulation entered into by the parties as to the cost of the property of the company, and under all the evidence in the case, the decree of the lower court should be affirmed.