Johnston v. Townsend

124 S.W. 417, 103 Tex. 122, 1910 Tex. LEXIS 155
CourtTexas Supreme Court
DecidedJanuary 26, 1910
DocketNo. 2061.
StatusPublished
Cited by9 cases

This text of 124 S.W. 417 (Johnston v. Townsend) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnston v. Townsend, 124 S.W. 417, 103 Tex. 122, 1910 Tex. LEXIS 155 (Tex. 1910).

Opinion

Mr. Justice Williams

delivered the opinion of the court.

This is an application for a mandamus to compel the respondent to file a charter of incorporation, which he refuses to do on the ground that it is for the formation of a corporation for two purposes—manufacturing and mining—which, he contends, can not be combined in one charter. The purpose is thus stated in the proposed charter:

“The purpose for- which this corporation is formed is the transaction of a manufacturing and mining business and the purchase and sale of goods, wares and merchandise used for such business,”

The right so to incorporate is asserted under subdivision 14 of article 642, Revised Statutes, as follows:

6 “The transaction of any manufacturing or mining business and the purchase and sale of such goods, wares and merchandise used for such business.”

It is the contention of the relators that the mention of both manufacturing and mining in one subdivision of the statute authorizes the formation of corporations for both purposes, without any limitation, which contention is based upon certain expressions in the opinion of this court in Ramsey v. Tod, 95 Texas, 624.

On the other hand, respondent contends that manufacturing and mining are distinct businesses, the transaction of which by one corporation is not authorized by the provision referred to, permitting an incorporation for the one “or” the other.

We do not fully agree with either contention. It must be remembered, as was pointed out in Ramsey v. Tod, that another provision requires that the charter state “the purpose” of the incorporation. It is also to be noted that that for which an incorporation is authorized by subdivision 14 is the transaction of “a business”—not of two or more businesses. Either mining or manufacturing may be a business by itself. The two may be wholly distinct from and unrelated to each other. A charter authorizing both, without restriction, would contain a statement not of the purpose, ■ but of the purposes, and would empower the corporation to transact, not a business, but businesses. Instances of this are a business of mining for gold and another of manufacturing cottons, of mining for coal and of manufacturing shoes.

Regardless of the use of alternative languge in subdivision 14, we think the character of the statutory provisions is such as to exclude the construction that the transaction of two distinct businesses of mining and manufacturing are here provided for. On the other hand, there may be a business consisting of both manufacturing and mining, in which the operations are so related to each other as to constitute an entirety. The products of the mine may be sold in their crude state, or may be manufactured into many different articles and these may be sold or devoted to their various uses. This might justly be treated *125 as the transaction of a manufacturing and mining business and come within the language of the statute. We do not think that the use of the conjunction “or” was intended to prevent an incorporation for that or any other one business, although it consist partly of mining and partly of manufacturing.

If other subdivisions are examined it will be found that in some of them the general character of the purpose which may be promoted by a corporation is expressed by words closely related in meaning, but used disjunctively, in order, apparently, to describe fully the kind of undertaking meant, rather than to require a critical distinguishing of them in the drawing of charters. In the second subdivision we have. authority for incorporating “any undertaking” which is “benevolent, charitable, educational or missionary.” Was it meant that there should be a severe discrimination between several kinds of undertakings described by these different words; that the missionary undertaking should not be incorporated if it should be also a benevolent or an educational undertaking, or that the benevolent undertaking should not include the charitable, or the missionary? While we do not intend, by pursuing this line of reasoning at length through the various subdivisions, to decide questions not before us, we think we risk nothing in saying that words indicative of the kind and character of a business meant are sometimes used disjunctively in this statute to include any business or undertaking which is described or defined by one or all of such words; and that this is true of subdivision 14. To further illustrate from the second subdivision, a missionary undertaking is also a benevolent one and usually, if not always, an educational one. An educational one need not be either benevolent, charitable or missionary, but it may possess all those qualities. Evidently an incorporation is allowed by this subdivision for any undertaking that comes within the meaning of all or either of these words. It does not follow that several undertakings which in their natures are separate and distinct may be included as one. So, we think, “a business” may properly be incorporated as a manufacturing and mining business, but two businesses, one of manufacturing and the other of mining, can not be made one, because the statute does not so provide. The legislative intention that the business should be a unit is further shown by the fact that in subdivision 14 there is no general authority for the purchase and sale of goods, but only an authority for the purchase and sale of those “used for such business.”

A charter must specify the purpose for which the corporation is to be created. This should be done with sufficient clearness to enable the Secretary of State to see that the purpose specified is one provided for by the statute and to define with some certainty the scope of the business or undertaking to be pursued. The charter tendered in this case is so general and indefinite in its language that, while it might apply to one business, such as we have mentioned, consisting of both manufacturing and mining, with the purchase and sale of goods, etc., used for it, it might also be taken to authorize the transaction of two businesses, one of manufacturing and another of mining, with the further power of purchase and sale incident to each. And it appears to be the purpose of the relators to use the charter for the carrying on *126 of what we regard as two distinct businesses. We may look to this as illustrative of the capacities for use of that which it is sought to have the respondent file, although we do not think that questions as to what may be done under a charter ordinarily arise when it is proposed to have one filed. It is proper and important to see that the purpose of a charter is so expressed as to carry out the intention of the Legislature in making that requirement; for it is by a compliance with it that the public, as well as those specially interested in corporations, are to be protected against the assumption of powers not granted. It appears from the petition that the relators, who are also the proposed corporators, have heretofore acted as partners in 'mining for oil, gas and water, and have manufactured their own tools and equipment and devices used in that business, and have invented and received patents on some which were new. They have been able to manufacture more of these than they have needed in doing their own work, and have been engaged in selling them; and the manufacturing business which they wish to incorporate is that of making these tools, devices, etc., for sale to others.

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Cite This Page — Counsel Stack

Bluebook (online)
124 S.W. 417, 103 Tex. 122, 1910 Tex. LEXIS 155, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnston-v-townsend-tex-1910.