State ex rel. Utilities Commission v. Carolina Telephone & Telegraph Co.

89 S.E.2d 802, 243 N.C. 46, 11 P.U.R.3d 10, 1955 N.C. LEXIS 719

• Court: Supreme Court of North Carolina
• Decided: November 2, 1955
• Status: Published

Opinion

Barnhill, C. J.

The common capital stock of a corporation is a security within the meaning of that term as used in G.S. 62-82, 83. People v. Whelpton, 222 P. 2d 935; In Re McGraw’s Estate, 10 A. 2d 377, and cases cited; Equitable Trust Co. v. Marshall, 17 A. 2d 13; Mary Pickford Co. v. Bayly Bros., 68 P. 2d 239. See also G.S. 78-2, G.S. 14-401.7, G.S. 105-67. This fact was conceded by the petitioner on the oral argument in this Court.

The right of the Commission to act upon the petition of the petitioner and the scope of its authority in so doing rest on the language used in G.S. 62-82, 83. The pertinent parts of these statutes are as follows:

“No utility shall issue any securities . . . unless and until, and then only to the extent that, upon application by the utility, and after investigation by the Commission of the purposes and uses of the proposed issue, and the proceeds thereof . . . the Commission by order authorizes such issue . . .” G.S. 62-82.

“The Commission, by its order, may grant or deny the application provided for in the preceding section as made, or may grant it in part or deny it in part or may grant it with such modification and upon such terms and conditions as the Commission may deem necessary or appropriate in the premises . . .” G.S. 62-83. (Italics supplied.)

In view of the language thus used by the Legislature in conferring power on the Utilities Commission to supervise and control the issue and sale of securities by a public utility, we unhesitatingly hold that the Commission had the authority not only to veto the sale of the proposed stock at par but also to impose the condition that such stock should be sold at a price not less than $125 per share.

The facts found by the Commission are amply sufficient to support its order. They disclose (1) that at the time the order was entered capital stock of the petitioner was selling on the open market at $144 per share; (2) that a sale of the stock at par would not provide the petitioner with the funds necessary to meet the ever-increasing demands made upon it for public service; and (3) that the sale at $125 per share will barely provide the capital outlay funds now needed by the petitioner. While the findings were not in these exact words, this is a correct summation of the facts found.

It follows that the court below erred in remanding the cause to the Utilities Commission with direction to strike from its order the requirement that said stock be sold at not less than $125 per share. The order entered by the Commission should have been affirmed. Therefore, this cause is remanded to the court below to the end that judgment may be entered in accord with this opinion. •

Modified and affirmed.

WinboeNe and JOHNSON, JJ., took no part in the consideration or decision of this case.