State ex rel. Security Savings & Loan Ass'n v. Brodigan

1. Mandamus — Secretary of State Has No Discretion to Refuse to File Papers Regular tn Form. The filing of incorporation papers by the secretary of state is a mere ministerial act, and he can be compelled by mandamus to file papers amending articles of incorporation, which are regular in form, but which he refused .to file because he considered the amendment was an ultra vires act.

Original proceeding. Application for a writ of mandamus by the State of Nevada, on the relation of the Security Savings and Loan Association, against George Brodigan, as Secretary of State of the State of Nevada. Two questions are presented for determination in this proceeding: Is the power of amendment conferred in general terms upon all corporations, applicable to petitioner? If so, is the bank examiner’s power to approve or disapprove original articles of incorporation extended, by implication, over relator’s proposed amendments? The first proposition is sustained by the plain provisions of the general corporation act and the building and loan act. Stats. 1915, p. 341. As to the second proposition, the building and loan act, while admittedly subjecting the form of articles of a proposed building and loan corporation to the veto of the bank examiner, is entirely silent as to the exercise of any such power over articles that have ripened into a charter. Only the state, acting by the legislature or the courts, can take back a corporate charter. “Neither the bank examiner nor the banking board has authority to create, destroy, or transmute corporate existence. A banking corporation can be formed only by the incorporators pursuing the statutes and obtaining a charter from the secretary of state. Its corporate life can be terminated only in the manner provided by law.” First Bank v. Lee, 166 Pac. 186. Termination of a part of its corporate life can be eifected only in the same way. 2 Cook, Corp. 5th ed. sec. 501, p. 1036; Lord v. Eq. L. A. Co., 194 N. Y. 212, 87 N. E. 443, 22 L. R. A. 420. The writ should not issue. If the petitioner should be allowed to file its amended articles, a practical destruction of the intent and purpose of the building and loan act would result. The act provides that “the secretary of state shall not issue a certificate of incorporation to any such association, authorizing it to do business in this state, until the articles of association or agreement shall have been approved by the state bank examiner,” under whom it places such associations. Petitioner has become known to the state as a security savings and loan association and as a building and loan association. In so doing it has carried with it the advantages of a law which has given it the special credit and confidence of the people by virtue of the supervision of its affairs by the state bank examiner. It desires now to continue to use the name under which it has operated for several years, but to completely oust the state bank examiner of any jurisdiction over its future operations. Such a course would be destructive of the very purpose of an act reserving to the state special control of a certain' kind of corporations. “It may be said in a general way that the police power extends to all the great public needs.” Camfield v. United States, 167 U. S. 518. “It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong and preponderant opinion to be greatly and immediately necessary to the public welfare. Noble State Bank v. Haskell, 219 U. S. 104. “A corporation may substitute a new charter, provided such substituted charter is germane and necessary to the objects and purposes for which the company was organized.” 14 C. J. 194; Sprigg v. Tel. Co., 46 Md. 67. Petitioner’s amended or substituted charter is not germane to the original articles; it is absolutely foreign. “The shareholders on their part contract with the state that. they will not exceed the powers' granted in the charter, and agree with each other that they will devote .the assets of the corporation to the obj ects and purposes of the charter, and not otherwise. * * * No principle is better settled in this state than that the stockholders in a corporation are granted no rights and clothed with no powers except such as are expressly set forth in the charter, or as arise therefrom by necessary implication.” Savannah Ice Co. v. Canal-Louisiana B. & T. Co., 79 S. E. 45. Articles cannot be amended without the consent of all. stockholders and members because of vested rights. Thompson on Building Associations, 2d ed. p. 52; Barton v. Enterprise L. & B. Co., 114 Ind. 226; Bergman v. St. Paul Assn., 29 Minn. 275. A corporation cannot be given the power to engage in every kind of business. Devey v. Clark, 24 App. Ct. D. C. 487. For the purpose of the present proceeding, petitioner admits it is a building and loan association. Reg-ardless of its own view, this admission is unnecessary, because the law makes it such an association. State ex rel. Standard H. Co., v. State Corporation Comm., 80 Kan. 695.. The policy of the law is not to wind up a building and loan association if it may safely continue in business. Union Savings & Investment Co. v. District Court, 44 Utah, 397.