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Corporation Commission of the State of Arizona v. Consolidated Stage Company, a Corp.

Supreme Court of Arizona

July 14, 1945

THE CORPORATION COMMISSION OF THE STATE OF ARIZONA and AMOS A. BETTS, WILLIAM PETERSEN, and WILSON T. WRIGHT, as Members of the Corporation Commission of the State of Arizona, Appellants,
v.
CONSOLIDATED STAGE COMPANY, a Corporation, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. Dudley W. Windes, Judge.

Judgment affirmed.

Mr. Joe Conway, Attorney General, and Mr. Thomas J. Croaff, Assistant Attorney General, for Appellants.

Messrs. Struckmeyer & Struckmeyer, and Mr. Claude E. Spriggs, for Appellee.

LaPrade, J. Stanford, C. J., and Morgan, J., concur.

OPINION

LaPrade, J.

[63 Ariz. 258] The appellee is a corporation doing business as a motor carrier of passengers and property for hire under a certificate of convenience and necessity issued by the appellant Arizona Corporation Commission. See Chapter 66, Article 5, Regulation of Public Highway Transportation, Sections 66-501 to 66-533, Arizona Code Annotated 1939. A Mr. Hood, owning a share of stock in the appellee corporation, filed an application with the commission for permission to transfer or assign his share of stock and "his interest" in the corporation to a Mr. Fix. The applicant shareholder proceeded upon the theory that he was one of the joint owners or associates or copartners in the ownership of the assets

Page 111

of the company, and disregarded the legal entity of the corporation. His apparent purpose was to transfer physically what he considered to be his interest in the certificate of convenience, completely [63 Ariz. 259] disregarding that the corporation and not he owned the certificate of convenience and all other assets of the company. It is elementary that a corporation is for most purposes an entity distinct from its individual members or stockholders. By the very nature of a corporation the corporate property is vested in the corporation itself and not in the stockholders. The natural persons who procured its creation and have pecuniary interest in it are not the corporation. A portion of the commission's order reads as follows:

"It is hereby ordered that the rights of Paul Hood shall be transferred to S. B. Fix."

The pleadings show that the commission ordered the transfer of a share of stock in the appellee corporation from one shareholder to a prospective shareholder.

Upon the application being filed for the transfer of this share of stock, the appellee appeared before the commission and resisted the petition upon the ground that the commission had no jurisdiction under its power granted by law to transfer stock in a private corporation from one party to another. Notwithstanding the protest, the commission made and entered its order that the transfer of said stock be made.

A rehearing was requested as authorized by Section 69-248, Arizona Code Annotated 1939, and was denied. Thereafter the appellee brought this action in the superior court, as provided by Section 69-249, Arizona Code Annotated 1939, to have said order of the appellant set aside for the reason that the order or decision of the commission was unlawful and not within its jurisdiction.

The sole issue presented to the trial court by appellant, as submitted by its counsel, was "whether or not the corporation commission has the power to transfer any stock of any corporation from one party [63 Ariz. 260] to another." At the trial of the matter the commission moved for judgment upon the pleadings, which motion was denied. The appellee then moved for judgment upon the pleadings, which motion was granted and judgment ...


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