Court Opinion

ID: 9545705
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:17:55.088871+00
Date Added: 2024-06-11T15:15:23.525564
License: Public Domain

MR. JUSTICE BOTTOMLY:
(concurring in part and dissenting in part).
The plaintiff is a stockholder of defendant, which is a domestic corporation, being incorporated under the laws of Montana.
I agree with the majority opinion insofar as it affirms the judgment entered by the district court. I also agree that such a corporation may not by a by-law deny the right of cumulative-voting by any stockholder. This right is established by section- 4 of Article XV of the Montana Constitution, made mandatory and prohibitory by section 29, Article III thereof, and made operative by R.C.M. 1947, Chapter 4 of Title 15. 'These laws provide and establish the public policy of Montana until altered or changed by the sovereign people of this state. It is my opinion that any contract between stockholders for the •election of- directors or trustees of such a corporation other than prescribed by the Constitution is void and courts have no power or authority than has an individual or a combination of stockholders to ignore, set aside or disrupt this established public policy of the state.
Any contract between stockholders of a domestic corporation, in regard to the election of a trustee or director or directors of such corporation contrary to the mandatory and prohibitory provisions of the Montana Constitution would be void as being ultra vires and are contrary to the constitutionally established public policy. In my estimation, the written opinion of District Judge William F. Shallenberger, dated August *57025, 1958, and filed August 26, 1958, and set forth on pages 28 to and including page 32 of the transcript in this appeal, correctly states the applicable law in this case on both points, with which I fully agree.
We should remember that our State Constitution has many exacting provisions not found in any other State Constitution, and if they are to be changed, the same should be referred to the people for their consideration; courts have no power or authority to change such plain provisions. Our Legislature has declared that “Law is a solemn expression of the will of the supreme power of the state.” R.C.M. 1947, section 12-101.
“The will of the supreme power is expressed:
“1. By the constitution;
“2. By statutes.” R.C.M. 1947, section 12-102.
The supreme power and sovereignty of the state resides in the people of the State of Montana. R.C.M. 1947, section 83-101.
It is my opinion that the Supreme Court of Colorado, in People ex rel. Arkansas Valley Sugar Beet & Irrigated Land Co. v. Burke, 72 Colo. 486, 212 Pac. 837, 841, 30 A.L.R. 1085, reached the right conclusion in regard to contracts entered into between stockholders of domestic corporations, to control the election of directors thereof, in holding that such contracts were absolutely void as against the public policy applicable thereto which had been established by the Colorado Legislature.
The Colorado court said in the above decision that “The language [of the law] is plain and unambiguous. It is not susceptible of construction. It interprets itself. It is an absolute, unequivocal command that the directors shall not be elected in any other way than the way or ways which the section itself specifically provides. * * * If a contract * * * may accomplish this result, upon the same principle it may take away from every stockholder his right to nominate or elect any of the * * * directors * * * Upon the plainest principle of justice and law, a contract hawing such effect is so manifestly unfair to the majority of the stockholders, and, *571being so plainly contrary to the letter and spirit of a positive and affirmative statute, and the public policy thereby declared, that a court, which sits to administer justice, ought not to sanction or uphold it, bu,t should unhesitatingly declare it void per se.” Emphasis supplied.
The above-quoted parts of the opinion of the Supreme Court of Colorado were quoted by the district court in his well reasoned and written opinion, hereinabove referred to.
I am somewhat appalled by the majority opinion which, for its principal authority, adopts the reasoning- of the Nebraska Court in the case of E. K. Buck Retail Stores v. Harkert, 157 Neb. 867, 62 N.W. (2d) 288, 295, 45 A.L.R. (2d) 774, in which opinion, the Nebraska court in commenting on the contention therein made, that the contract there being- litigated, was valid as it had been entered into by stockholders outside the corporate structure stated: “It is asserted, however, that an agreement between stockholders as to how stock shall be voted at the election of directors ipso facto changes the manner of election prescribed by the Constitution. To so hold would have the effect of invalidating existing statutes relating to voting trusts and all other forms of voting combines by a majority of the stock to control the mcmagement of the corporation, which were recognized at common law. The Constitution so construed would be superior to amy statute in conflict therewith. We do not think the framers of the Constitution had any such intention * * Emphasis supplied.
I do not think much comment is necessary on the foregoing, as R.C.M. 1947, section 12-104, provides that in this state “there is no common law in amy case where the law is declared by the code or the statute.” Emphasis supplied'.
This court also has held repeatedly, and which needs no citation, that the Federal Constitution and the Constitution of Montana are the supreme law of the state and any statute impinging on the mandatory and prohibitory terms of our Constitution are invalid, unenforceable and void.
The foregoing is my conception of our established law on the *572subject of election', of directors or trustees of domestic corporations.