Opinion letter to the Honorable J. Anthony Dill

January 10, 1972 Honorable J. Anthony Dill Representative, District 44 8011 Grandvista Avenue St. Louis, Missouri 63123 Dear Representative Dill: OPINION LETTER NO. 15 Answer by l etter-Wood FILED /e5- You have asked for my legal opinion on the following questions : nl. I.s an act of the legislature required to dissolve 'the Druids' Hall Association', a corporation created by a special act of the legislature and approved February 16, 1857, laws or 1857, page 639. "2. If an act or t he legislature is required to dissolve this corporation created by special act of the legislature, should the dissolving act provide for the manner of distribution or remaining assets or such corporation or does the general law, such as the law of escheats, direct the manner or distribution of remaining assets? " The Act of 1857 referred to is herein set out : "Be it enacted by the General Assembly of the State of Missouri, as follows : § 1.- -That Turner Maddox, John w. Colvin, Henry Bischoff, Prederick Spies, John P. Tuck- man, John Ulbricht, George Hasfurther, Michael Ostertag, Henry Teustel, George Schoenhals , ... Honorable J. Anthony Dill Charles P. Cady, Conrad Philips, John A. Kalt- wasser, George P. Daub, John L. Link, Philip Stremmel, Charles P. Meissner, Oswald Benken- dorf, Lewis Miller, John Keil, Nicholas Berg, Julius Hennig, Casper Gellenbeck, George Moeler, Edward E. Allen, Henry Spukler, George H. Senden and Henry Kling, and their associates and suc- cessors in office, shall be and they are hereby created a body politic and corporate, by the name and the style of 'The Druids' Hall Associa- tion,' with a capital stock of fifty thousand dollars, which may be increased at the will of the stockholders, to any amount not exceeding two hundred thousand dollars, in shares of twenty dollars each; by which name they and their successors shall have perpetual succes- sion, and are made capable in law and equity of acquiring and holding any and every kind of property whatever, for the purpose or build- ing a Druids' Hall in the city or St. Louis, and the same to sell or otherwise dispose of; of contracting and being contracted with, of suing and being sued, of defending and being defended against in all courts and places whatever, in all manner or actions, and may have a common seal, and the same to alter or change at pleasure. § 2.--The above named persons, or any three of them, shall have power to open books for subscription of the said stock, in such manner and at such time and places as they may appoint, and to close the same; and the sub- scribers shall meet at such time and place as the above named persons, or any three of them, shall appoint, by first giving notice or such meeting in one or more newspapers in the city of St. Louis, and choose sixteen directors, one or whom shall be chosen President; and said directors shall hold their offices until their suoces·sors are elected and qualified ac- cording to the by-laws of said association. § 3.--The affairs or said association shall be managed by said directors, who shall be chosen by the stockholders annually, in such manner and at such times as the by-laws may provide. -2- Honorable J. Anthony Dill § 4. --Any grove, degree grove, chapter, grand grove. or other organization or regular Druids, shall have power to subscribe and hold stock in said association, which stock shall be represented by the chief officer or said grove, degree grove, chapter, grand grove, or other organization or regular Druids for the time being. § 5.--The ~took or said association shall be considered personal property, and shall be transferable according to such rules and under such restrictions as the Board or Directors may by the by-laws direct; who may also, by their by-laws, prescribe what number or direc- tors shall form a board competent to transact business or the association, prescribe what number or officers are necessary, their duties titles and salaries, and such other things as they may deem proper, always, however, subject the laws or this State. § 6.--The fUnds or the corporation hereby created are hereby exempted from taxation, and shall be expended in buying an adequate lot or piece or ground, and erecting thereon a build- ing sufficient and commodious for the use or the United Ancient Order of Druids, in the oity or St. Louis; which ground and building, while the same or any part thereof shall be occupied and used for the purpose herein men- tioned, shall not be subject to taxation. "This act shall take effect and be in force from and after its passage. "Approved February 16, 1857 . " The general law on dissolving corporations has been thus stated: "A corporation may be wound up and dissolved either voluntarily or involuntarily. It is said by Blackstone (1 Bl Com 485) that 'a cor- poration may be dissolved: (1) By aot or Par- liament, which is boundless in its operations; (2) by the natural death of all its members, in case or an aggregate corporation; (3) by surrender or its franchises into the hands or the King, which is a kind of suicide; (4) by -3- Honorable J. Anthony Dill forfeiture or its charter, through negligence or abuse or its franchises; in which case the law judges that the body politic has broken the condition upon which it was incorporated, and thereupon the incorporation is void.' • • • " (19 Am.Jur.2d, Corporations, Section 1588, p. 954) Your questions relate to the first situation described by Blackstone and it is to that which we will give primary considera- tion herein. Bl ackstone's first situation does not completely obtain in this country, at least since the decision in The Trustees or Dartmouth College v . Woodward, 4 Wheat 518, 4 L. Ed. ~29 (1819) giving to cor- porate charters the status or contracts, t he obligations or which cannot be later impaired by the state (Article I, Section 10, Con- stitution or the United States). Therefore, unless the right or the state to dissolve a corporate charter is reserved, it cannot be subsequently dissolved through repeal of the charter. Graham v. Polsom, 200 U.S . 248, 50 L.Ed. 464, 469 (1906); Louisville Gas Co. v . dltizens Gas Li~1t Co., 115 u.s. 683, 29 L.Ed. 516 515 (1885}; New 3ersey v . Yard, 95 u.s. 104, 24 L.Ed. 352, 35~ (1877). The charter granted to the Druids' Hall Association contains no re- servation of the power or the state to later alter, amend, or re- peal it. A general law in efteot at the time this special charter was granted provided: "Seo. 7 The charter of every corporation that shall hereafter be granted by the legislature, shall be subject to alteration, suspension, and repeal, in the discretion of the legislature. " (RSMo 1845, p . 230, 232' 1855, p. 369, 371) (See State on inf. Dalton v. Holekamp Lumber Co., 331 S.W. 2d 171, 177 (St.L.Ct.App. 1960) tor an exposition of the subsequent history or this statute which today appears as Section 351.700, RSMo 1969) The United States Supreme Court has recognized that a state may reserve through general law the power to amend, alter, or re- peal special charters. Cit of Covin ton v. Commonwealth or Kentuc 173 u.s. 231, 43 L.Ed. 6 , • ur upreme o~ , on a number of occasions, has refused to read provisions or the g~neral corporation law into special charters for charitable or educational purposes granted by the legislature prior to the adoption or the Constitution of 1865 (when t he state 's power to alter, amend, or repeal all corporate charters was reserved in the Constitution; Article VIII, Section 4, Constitution of Missouri, 1865). -4- Honorable J. Anthony Dill State ex rel. Banister v. Trustees of Wil~iam Jeweil College, 260 S.W.2d 479, 481-482 l Mo . bane 1953) Trustees or William Jewell Collefe v. Beavers, 171 s.W.2d 604, 6oS (Mo. bane 19 3) State ex rel. Morris v. Board of Trustees or Westminlster college, 74 s.w. 99o, 991 (Mo. 1903) State ex rel. Clover v. Ladies or the Sacred Heart, 12 s.w. 293 (Mo. 1889) The rule has been otherwise as to special charters issued to business or public cornorations during this period, whose charters have been held to include all provisions of general law ex~sting at the time or the grant, including the reserved right or altera- tion, amendment, or repeal contained in the general corporation law (RSMo 1845, p. 230, Sec. 7). State ex rel. Hines v. Cape Girardeau & Jackson Gravel Road co·., lOS s.w. 761 {Mo. Bane 1967) Gregf v. Granby Mining & Smelting Co., 65 s.w. 3i2 Mo'. l90l) Watson Seminari v. Pike County Court, 50 s.w. S8o ~ 883 (Mo. 899) (Public corporation) We cannot determine from its charter alone the exact nature and character o~ the Druids' Hall Association, and particularly whether it was a charitable or educational organization, or a busi- ness corporation to be operated tor the profit or ita members. We do note a general law in errect at that time providing tor the in- corporation or benevolent associations, which associations were to be 11 ••• governed by the provisions or the act concerning corpora- tions, except as herein otherwise limited. " (RSMo 1855, Vol. 1, p. 379, 381). Evidently, the incorporators of the Druids' Hall Asso- ciation did not desire a charter under either the ~eneral corpora- tion law or the benevolent aasooiaton law and chose instead the special charter granted to them by the legislature in 1857. Ac- cordingly, we have some question as to whether the provisions of the general corporation law in oftect when the special charter was granted to the Druids' Hall Association did apply to and become a part ot such charter, so as to effect the neoesaary reservation by the state or the power to alter, amend, or repeal the aa3ociation'a charter. We are therefore hesitant to advise you that involuntary -5- Honorable J. Anthony Dill dissolution ot the Druids' Hall Association through an act repeal- ing its charter is an appropriate moans or dissolution. However, as already indicated, there are other methods of ac- complishing dissolution: " ••• The duration of a corporation, though unlimited by its charter, and though it is given the capacity to have perpetual succes- sion cannot be regarded as 'everlasting,' within the general and common meaning or that word. It may be dissolved and cease to exist tor want ot members, by voluntary surrender ot franchises, forfeiture by misusers, etc •••• " (State ex rel. Walker v. Payne, 31 S. W. 797, 79B ( Ho. 'bano 1895)) The above, of course, restates the last three metho~s described by Blackstone for dissolving a corporation . Since you state that some or the members or the corporation ~·e still alive, and since you do not indicate that t here exists any violation of the corporate franchise whiol1 might juatil'y an action in quo warranto, 1t would appear that voluntary surrender or the corporate charter by all living members is the best m~ans of now dissolving the corporation. As sta".;ed, 'tie catmot detel~mine from its charter alone it the Druids' Hall Association is a business corporation for profit, a religious or charitable association, or a corporation not for pro- tit. This determination would necessarily have to be made on the basis or the corporation's actual activities and manner or opera- tion. If. 1n tact, the corporation is a business corporation for profit, we believe 1t may accept the provisions of the General and Business Corporations Law in the ma.nner set out in Section 351.025, RSMo. Dissolution of the corporation could be thereafter effected in the manner prescribed by this law (Sections 351.460, et seq., RSMo). If, in fact , the corporation is a corporation not for pro- tit engaged in any of the purposes specified in Section 355.025, RSMo, we believe it May accept the provisions of the General Not Por Profit Corporation Law in the manner set forth in Section 355. 020, RSMo, and thereafter dissolve following the procedures directed by that law (Section 355.255, RSMo). Yours very truly, JOHN C. DANFORTH Attorney Gc·neral -6-