Montana Attorney General Opinion 15-634

Opinion No. 634 Gm,zing Distticts-Incorporators, Qualifications of. HEIJD: The incorporators of a graz- ing district must not only own lands but must own lands within the pro- posed grazing district. October 29, 1934. Your letter to us of the 25th inst., is in part as follows: "Your opinion is respectfully re- quested as to whether cooperati\-e grazing associations created under the provisions of Chapter 66. Laws of 1933, may be incorporated by others than holders of land in the district .. "I understand from Section 2 of the above chapter that to become an incorporator one must be a 'qualified person' and from subdivision 6 of Sec. 2 and also Sec. 4 and the reading of the entire act I have concluded that the three or more persons men- tioned in Sec. 1 are not eligible to incorporate unless they are land owners. For the future guidance of this office it will be appreciated if you will give me your opinion upon this point." Sections 1, 2, 3, 4 and 5 of Chapter 66, La ws of 1933, provide: "1. A corporation, mutually ope- rated, for the purpose of aiding in the conservation of natural forage resources within a designated area to be jointly used by its members, and for aiding in the restoration and improyement of lands which may be acquired by lease or purchase from lloli tical subdivision or from others, shall be known in this Act as a 'Co- operative Grazing Association.' "Lands acquired by such an asso- ciation and utilized by its members for grazing purposes under such defi- nite restrictions and limitations as shall contribute to the conservation, restoration, and imllrovement of the forage resources of such lands, shall be known as a 'Cooperative Grazing District.' OPI~IO~S OF THE ATTOR~EY GE~ERAL 437 "Three or more persons residing within the State of ]\fontana may in- corporate under this Act. "2. Whene'l"er three or more quali- fied persons shall desire to incorporate a Cooperative Grazing District, having for its object the utilization, conserva- tion, restoration, and impro'l"ement of forage resources on their land or upon lands to be acquired by such associa- tion by purchase or lease, they shall prepare and file articles of incorpora- tion to that effect in the office of the Secretary of State in the manner in this Act specified; such articles shall be signed, sealed and acknowledged in the form now provided by the stat- utes of this state for the conveyance of real estate, and shall include the following: "1. The name of the association. "2. The purpose for which it is formed. "3. The county or counties in which such district is located and the prin- cipal office or place of business in the state. "4. The membership fee, which shall in no case be grea ter than Fi-Ye Dollars. "5. The term for which such asso- _ ciation is incorporated, not exceed- ing forty years. "6. The names and residences of the persons who subscribed to and acknowledged such articles of incor- poration, together with the legal de- scription of the lands o\vned by them. "7. Names -and residences of those who have subscribed for membership with a description of the lands of each. "3. Each association organized under this Act shall have the following powers: "1. To lease or acquire, by pur- chase or otherwise, lands for grazing purposes or for raising forage crops and to dispose of such lands pur- chased by trade, sale, or otherwise. "2. To construct or acquire fences, reselToirs, or other facilities for the care of livestock. "3. To lease from thc county or counties in which the Cooperath'e Grazing District is located, land ac- quired by such county or counties through tax sale or otherwise, which is located in or contiguous thereto and not already under lease. "4. To apportion to members graz- ing rights within such district on. such terms, conditions and limitations as may be speCified by the directors thereof, or in accordance with the terms and limitations imposed for the purpose of conservation, restoration and improvement of forage resources in the leasing of county, state or federal land. "4. Any person owning land within or conti~uous to the proposed bound- aries of any Coopernth'e Grazing District, set up by any association incor.porated under this Act, shall be entitled to become a member thereof by paying the membership fee and by subscribing to the by-laws and by complying with the regulations and limitations determined by the direc- tors thereof or by the terms of lease of leased lands included therein. The memberShip fee, which shall be fixed and determined by the directors of such associations, shall in no case ex- ceed FiYe Dollars. "-When any member shall dispose of lands owned b~' him within or con- tiguous to the Cooperative Grazing District so that he is no longer the owner of lamls so within or contigu- ous, then he shall cease to be a mem- her of such association and his rights and interests in the association ;;ha II be determined hy the direc- tors thereof. When any member shall dispose of a part of the lanels owned lIy him so that another individual or other individuals shall by the pur- chase and ownership of such la~ds acquire right to membership, then the rights and interests involved shall be determined by the Board of Directors. "Each member shall have one vote. "5. Cooperative Grazing Associa- Oons organized under this Act shall, upon completion of organization and incorporation, file with the County Clerk of the county or counties in which such lands lie, a map or plat of the ~razing district proposed to be created. If such district shall con- tain land situated in more than one county, then a map or plat of such grazing district shall be filed with the County Clerk of each county. 'Vhene\'er any Incorporated Grazing Association shall enlarge or reduce the ·138 OPI~IONS OF' THE ATTORNEY GENERAL area included within its district. or change or modify its boundaries, it shall file with the County Clerk or Clerks, a map or plat to indicate such changed boundaries." . The articles of incorporation show on their face that one of the incor- porators does not own "any real estate." We think the necessary implication from the language of the law as qnoted is that the incorporators must not only own lands but lands within the pro- posed grazing district. To contend otherwise would do violence to the in- tent of the legislature. That which is implied in a statute is as much a part of it as that"which is expressed. (State v. Riedel, 46 S. W. (2d) 131; Colo- rado & S. Ry. Co. v. City of Ft. Collins, 121 Pac. 747; 2 Lewis' Sutherland Stat- utory Construction sec. 5()(). p. 933; 25 R. O. L. sec. 228, p. 978; 59 Corpus Juris sec. 575, p, 972.) In this state corporations' are crea- tures of statute and can be brought into existence only by suhstantial com- pliance with statutory provisions. The statute is in the nature of a grant of the right to exercise corporate fran- chises to such persons as may comply with its terms. The instrument called "articles of incorporation" constitutes the evidence of the acceptance of the terms and conditions contained in the statute. The requisites of the instru- ment are clearly stated in section 2 of the Act. if anyone of these is omitted, such omission is a fatal defect and no de jure right to exercise corporate franchises exists. It is essential, there- fore, to the right to file articles of in- corporation of the kind in question here that they include, among other things, "the names and residences of the persons who subscribed to and ac- knowledged such articles of incorpora- tion, together with the legal descrip- tion of the lands owned by them." (Bates y. Wilson, 24 Pac. 99; ;\ferges v. Altenbrand, 45 ;\font. 355; Martin v. Deetz, 36 Pac. 368; In re Daughters of Israel Orphan Aid SOCiety, 210 N. Y. S. 541; 1 Fletcher's Cyclopedia Corpin'- ations sees. 129, 131, 144, 145 and 156; 14 C. J. 118-120.) An additional reason may be urged against the filing of the articles of incorporation and that is that they do not comply with the prOvisions of sub- division 7 of said section 2.