I find myself unable to agree with the majority and therefore respectfully dissent.
The relief plaintiffs sought was that the real value of the shares of capital stock be ascertained; that they be entitled to judgment for that amount, plus interest at eight per cent from September 23, 1937; that decree be entered, declaring all of the property and assets of the corporation as a trust fund for the security and payment of the real value of each share of the capital stock held by them, as now ascertained, together with interest at eight per cent; and that a receiver be appointed to take charge of all of the property, assets and books of the corporation; and for such other equitable relief which might seem just and proper to a court of equity.
It is held in the majority opinion, as I read it, that before the dissenting stockholders can have any relief, or before equity will give them any protection, they must wait for three long years.
Prior to the change made by the Legislature in 1933, every stockholder of an Iowa corporation for pecuniary profit, as an *Page 999 essential element of his contract, had the right to withdraw or retire the capital which he had invested at the termination of the corporate life or period for which the corporation was organized. If the majority of the stockholders favored a renewal of the life of the corporation, any stockholder had the election to oppose such renewal, and in the event that the majority of the stockholders voted in favor of renewing the corporate charter it could only be done by purchasing at its real value the stock voted against such renewal.
The United States Supreme Court in Apsey v. Kimball,221 U.S. 514, 31 S. Ct. 695, 55 L. Ed. 834, under a somewhat similar law of Congress in connection with the extension of the corporate existence of a National Bank, held that when the election is made by the majority to extend the corporate charter and by the dissenting minority stockholders to withdraw, the latter thereupon ceases to be a shareholder in the corporation.
And in the case of Ervin v. Oregon Ry. Nav. Co., C.C., 27 Fed. Rep. 625, the court held that the stockholder is equitably at least a beneficial joint owner of the corporate property, and that the majority cannot appropriate to itself the minority's stock or property.
Under the majority opinion the corporation as a legal entity would acquire by the renewal an extension of its corporate life. The corporation would continue to own all of its assets and property. Under the United States Supreme Court case, above cited, the minority stockholder would cease to be a shareholder in the corporation, and yet, under the majority opinion the minority stockholder could not require that the purchase of his stock be consummated until three years after the date such action for renewal was taken; could not even have the fair value of his stock fixed; could not have it adjudicated a lien against the corporate property; could not have a receiver appointed to protect the interest he has in the property of the corporation. In other words the minority stockholders would have nothing but a deferred claim, about which they could do nothing for a period of three years. He would not even know what the purchase price was to be, and the means of determining the real value at the end of three years may very easily be difficult, if not impossible, to ascertain.
The statute provides, "which purchase price shall bear interest *Page 1000 at eight per cent per annum from the date of such renewal action until paid."
The majority opinion holds that the value of the stock cannot be determined until at the end of the three years. When the Legislature provided in the statute that eight per cent interest shall be paid upon the purchase price of the stock which is not renewed, it meant the value of that stock had to be ascertained as of the date of the renewal and not three years later, for interest runs only upon a fixed amount, and if the amount was not fixed it would be impossible to figure the interest until after the end of the three years. This, to me, seems extremely unreasonable, and unfair, and I cannot believe the Legislature had any such thought in mind in the enactment of the statute under consideration. To give the majority of the stockholders a right to run the corporation, without any consideration whatever of the rights and interests of the minority stockholders; to turn over to them the assets of the corporation, to direct how it shall be managed and operated; to give them a right to dissolve the corporation a week or a month or a year afterwards, as the majority would, with all of the assets, as soon as the creditors are paid, is an unreasonable interpretation to place upon this statute. As I interpret the statute the language requires a consummated purchase before the renewal. There can be no renewal until the value of the stock of the minority stockholders voting against the renewal is fixed and their rights and interest are protected. Under the majority opinion those voting for renewal have a three years' option to purchase the stock of the dissenters. A liability at least must be conceded to exist before renewal can be completed. The dissenting stockholders once had the right to share the capital equally with the renewal stockholders upon distribution. Is that right now destroyed altho there has been no purchase of their stock? How can the renewal be an accomplished fact while the purchase price remains undetermined? Obviously, there can be no purchase without a fixed price, either by agreement of the parties to the purchase or by some machinery provided by law. Certainly, a court of equity will not permit the assets of the dissenting stockholders to be appropriated by those seeking to renew the charter, for a period of three years, without giving the dissenting stockholders any rights whatever. The operation and the management of the corporation would be in the hands of the majority. The assets could be dissipated during *Page 1001 that three-year period, and there would be no liability, and no right of a court of equity to intercede, until the three-year period has elapsed, according to the majority opinion. If the buyer could be given three years to purchase, and in the meantime would own the subject of the purchase, then he could be given thirty years as well.
The constitutionality of this statute is not before us. All that we are confronted with is the construction of the statute. The only fair interpretation, as I see it, is that the minority stockholder is entitled to have the fair value of his stock fixed so that it may draw interest at eight per cent as the statute provides; that the minority stockholder is entitled to have the amount due him from the majority stockholder declared to be a lien against the assets of the corporation, and a receiver appointed so that the property and assets of the corporation may be conserved and the rights of the minority stockholders preserved.
I would reverse the district court, and order decree in compliance with the views herein set out.
I am authorized to state that Justice ANDERSON joins in this dissent.