State ex rel. Boynton v. Wheat Farming Co.

22 P.2d 1093, 137 Kan. 697, 1933 Kan. LEXIS 322
CourtSupreme Court of Kansas
DecidedJune 10, 1933
DocketNo. 30,251; No. 30,252
StatusPublished
Cited by22 cases

This text of 22 P.2d 1093 (State ex rel. Boynton v. Wheat Farming Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Boynton v. Wheat Farming Co., 22 P.2d 1093, 137 Kan. 697, 1933 Kan. LEXIS 322 (kan 1933).

Opinion

The opinion of the court was delivered by

Tiiiele, J.:

These are actions brought in this court by the state to oust the above-named defendants as corporations within the state of Kansas.

The petitions are similar and charge due and legal incorporation for the following purposes, to wit:

(а) The Wheat Farming Company on September 3, 1927, for: (1) The encouragement of agriculture and horticulture. (2) The improvement of the breed of domestic animals by importation, sale or otherwise. (3) The promotion of immigration. (4) The erection and maintenance of market houses and market places. (5) The conversion and disposal of agricultural products by means of mills, elevators, markets and stores and otherwise. (6) The erection of buildings and the purchase and sale of such real estate and real-estate products as may be incidental to the full performance of the purpose of this corporation as a farming company.
(б) The Sledd Farm Corporation on December 22, 1925, for: (1) The encouragement of agriculture and horticulture. (2) The construction and maintenance of dams and canals for the purpose of irrigation.

In each case it is alleged that the corporation has been and is abusing its power and exercising powers not conferred upon it by law, viz.: producing, planting, harvesting and gathering and selling for profit, and for profit alone,' wheat, corn, barley, etc.

In the Wheat Farming Company’s case, the following is alleged:

“Your relator further alleges and says that the organization of said defendant company has been continued solely upon the theory of its engaging in the business of farming for profit, and said defendant has been and is now [699]*699selling stock to the public, offering, as the sole inducement for said sales, great profit to be derived in corporation farming, and that said corporation is not now, nor has it been, engaged in scientific research, experimental farming- or any other work for the encouragement of agriculture or horticulture save and except such work as may have been incidental to its own operation as a farm corporation for profit and to further its own financial interests and those of its officers, directors, servants, agents and employees, and that said defendant has bought up and now owns in the state of Kansas enormous tracts of land, the exact area of which is to this plaintiff unknown, but is to the defendant well known, and now has enormous land holdings in the state of Kansas, which said land is far more in area than is adequate or necessary for the defendant to use in its legitimate business in encouraging agriculture and horticulture, and that all of said land now held by the defendant as aforesaid is held for the sole purpose of commercial farming.
“Your relator further alleges and says that the defendant has purchased and now holds a great quantity of farm equipment, farm implements and farm machinery, which is far more in quantity than is necessary for the encouragement of agriculture and horticulture and that said equipment, machinery and implements are not now being used for the encouragement of agriculture and horticulture.
“Your relator further alleges that said defendant, the Wheat Farming . Company, has practically abandoned its corporate franchises, privileges, purposes and functions.”

And in the Sledd case, with appropriate change of name, almost identical allegations are made. Copies of the charter granted and amendments thereto are attached as exhibits in each case.

The. Wheat Farming Company filed an answer containing forty paragraphs, which are summarized as follows: Admission of incorporation, of producing the crops mentioned, and that it has lands and implements; alleging that it was organized for the purpose of showing by experimentation and demonstration how farming, especially in grains, could be made profitable instead of unprofitable, as it had been, and in carrying out- its purposes had only gotten fairly started; that it is incorporated for fifty years and, if permitted to pursiiie its activities, will continue to show by means and methods promulgated by it how agriculture in western Kansas can be changed from nonprofit to profit; that among the things done and to be done are actual demonstration of discoveries of experiment stations, operation of large units with modern machinery and equipment, scientific study of weather and soil and their relation to productivity, improvement and adaptation of seed, seed treatment and development of agricultural experts; that the advancement of the company and its accomplishments had encouraged the adoption of its methods by others to their benefit; that the company owns [700]*700market houses, elevators, buildings and real estate, and buys and sells agricultural products; that the counties in which it operates since it -began have increased in population; that it owns 64,000 acres of land in seven counties; that the charter board of the state of Kansas knew 'it was intending to engage in business for profit and that other companies were chartered for similar businesses before and after it was chartered, and that licenses for the sale of stock in such corporations have been granted and thousands of Kansas citizens have invested millions of dollars in the stock of such companies; that on January 5,1928, by the action of the charter board, the capital stock was changed from $150,000 divided into 1,500 shares of $100 each to 150,000 shares of no par value, and on January 18,1928, the capital was changed to 150,000 shares of common stock of no par value and 3,000 shares of preferred stock of $100 par value, and on October 8, 1930, the common capital stock was increased to 300,000 shares of no par value, and that in connection therewith all requisite fees were paid; that the corporation fees and blue-sky permit fees amounting to several thousands of dollars were paid; that ad valorem taxes for the years 1928, 1929 and 1930, approximating $30,000, have been paid; that in pursuance of authority granted, over 100,000 shares of common stock and preferred stock to the amount of $300,000 to over 1,100 different persons, and approximating $2,000,000, had been sold. The history of certain bills introduced in the legislature is detailed and- many other allegations are made which need not be noticed here but will be referred to as occasion demands.

The Sledd Farm Corporation filed an answer admitting its incorporation and alleging that its application for and the charter granted to it set forth that it is organized for profit and that the purposes for which it is formed are:

“Farming land under irrigation. The encouragement of agriculture and horticulture. The construction and maintenance of dams and canals for purposes of irrigation. The erection and maintenance of such buildings necessary for a general farming business. The purchase and maintenance of machinery necessary to carry on a general farming business and the doing of all things necessary and incidental thereto.”

At the time of its incorporation the capital stock was $50,000; on October 2, 1928, the capital stock was increased to $100,000; on April 9, 1929, the capital stock was increased to $200,000; on September 19,1929, the capital stock was increased to $600,000, and on May 13,1930, it was increased to $1,750,000, the requisite fees being [701]*701paid to the state.

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Bluebook (online)
22 P.2d 1093, 137 Kan. 697, 1933 Kan. LEXIS 322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-boynton-v-wheat-farming-co-kan-1933.