I dissent.
Two basic questions are presented on these appeals: (1) Is the voting trust agreement so inconsistent with the rehabilitation agreement that it impairs the obligation of contracts ? (2) Can such a voting trust agreement be created under section 1037(e) of the Insurance Code without court approval? On the first issue the majority opinion holds that the two agreements are not inconsistent, that there is no impairment of the obligation of contracts, and that even if there is such impairment it is justified under the police power. On the second issue it holds that, properly interpreted, the section authorizes the creation of the challenged voting trust without court approval. It is the position of this dissent on the first issue, that the two agreements are inconsistent; that the voting trust impairs the obligation of contracts by impairing the rights of thousands of policyholders who entered into contracts with the new company on the basis of a reorganization plan approved by them and the courts; that such impairment cannot be justified under the police power; and that the voting trust renders nugatory several judicial orders already made. On the second issue this dissent takes the position that the construction given the section by the majority *369is not compelled by the language of the amendment; that it renders the section unconstitutional; that it results in the repeal by implication of another subsection of section 1037, and abrogates another section of the Insurance Code; and that such a voting trust can be entered into only after first securing court approval.
Are the provisions of the voting trust agreement so inconsistent with the provisions of the rehabilitation agreement that they impair the obligation of contracts a/nd vested rights?
This question should be disposed of before the section is construed, for if the voting trust impairs the obligation of contracts and abrogates rights vested on the faith of the court approved rehabilitation agreement, the section, as construed by the majority, would be unconstitutional as in violation of both the federal and state Constitutions, unless such impairment is justified under the police power. This issue is relevant to the question of construction, because, if two equally reasonable constructions are possible, that which does not make the statute unconstitutional is to be preferred to a construction which accomplishes that result.
A comparison of the provisions of the two agreements demonstrates that they are incompatible. The voting trust provides for a disposition of the stock of the new company in a manner expressly forbidden by the rehabilitation agreement.
The voting trust agreement was entered into by Carpenter on April 4, 1938. Prior to that time Carpenter held the entire capital stock of the new company as a special trustee under the terms of a “Rehabilitation and Reinsurance Agreement” entered into on December 4, 1936, as of July 22, 1936. The history and background of that contract, approved by court order as required by law, have been sufficiently set forth in prior decisions. (Carpenter v. Pacific Mut. Life Insurance Co., 10 Cal.2d 307 [74 P.2d 761], aff. in 305 U.S. 297 [59 S.Ct. 170, 83 L.Ed. 182]; Carpenter v. Pacific Mut. L. Ins. Co., 13 Cal.2d 306 [89 P.2d 637]; Carpenter v. Pacific Mut. Life Ins. Co., 14 Cal.2d 704 [96 P.2d 796].) Suffice it to say that the agreement was approved by the court after careful consideration to make certain that the rights of all persons with claims against the old company would be protected. Among other things, it provided that the commissioner should transfer to the new company all the property and assets of the old *370company and that, in return, the new company should assume the obligations of the old company except with respect to a particular class of policies known as noncancellable policies. In a subsequent clause the new company also assumed a limited obligation with respect to the so-called “non-can” policies and agreed to set up, as rapidly as possible, a special fund for the restoration of full benefits thereunder. The entire capital stock of the new company was to be held by the commissioner as a contractual trustee for the purpose of carrying out the rehabilitation plan. The permit which authorized the new Pacific Mutual Life Insurance Company to issue 10,000 shares of capital stock, provided that the commissioner should subscribe for and purchase all of the authorized stock of the new company for which he was to pay $3,000,000 in cash. Section 6 of the rehabilitation agreement provides that the $3,000,000 paid by the commissioner for the capital stock is to constitute the capital and paid-in surplus of the new company.
Section 20 of the Rehabilitation and Reinsurance Agreement is entitled “Mutualization and Disposition of Stock of New Company.” It provides that the commissioner, as conservator or liquidator of the old company, shall not dispose of any of the capital stock of the new company except as provided therein. The following exceptions are the only ones specified: Subdivision (a) of section 20 provides that the commissioner may dispose of the stock of the new company in accordance with any plan of mutualization which may thereafter be adopted by the policy holders of the new company, and that such a disposition might include a transfer to voting trustees if the plan so provided. Subdivision (b) contains other provisions not involved in the present problem. Subdivision (c) contains a provision giving the old company the option to pay off the amount needed to restore benefits under the “non-can” policies and authorizing the commissioner to dispose of the stock of the new company in accordance with any court order entered pursuant to such a full settlement of the obligations of the old company. Subdivision (d) authorizes the commissioner to sell the capital stock of the new company upon order of court if, at any time, he determines that such a sale is required for the protection of the estate in liquidation. Subdivision (e) provides: “It is the purpose, spirit, and intent of this agreement that, unless the provisions for mqtualizatioii are eliminated pursuant to the provisions of *371subparagraph (b) of this paragraph 20, the stock of the New Company shall not be sold or disposed of prior to the full restoration of benefits under Non-Can Policies except by proceedings for mutualization, so long as a reasonable probability of completing restoration of benefits under Non-Can Policies shall continue. . . Subdivision (f) contains the usual severability clause. The effect of this plan of rehabilitation was to place in the hands of the commissioner legal title to the stock of the new company in return for which he parted with the assets of the old company. He held legal title as trustee for the benefit of the creditors and policyholders of the old company for whom the capital stock of the new company was the most important remaining asset. (Carpenter v. Pacific Mut. Life Ins. Co., 10 Cal.2d 307, 335 [74 P.2d 761].)
On February 2, 1937, upon the application of Samuel L. Carpenter, Jr., as Insurance Commissioner, the court made an order of liquidation reciting that the commissioner had transferred all the assets of the old company to the new Pacific Mutual Life Insurance Company except the capital stock of the new company and any claims the old company might have against its past or present officers. The order stated that since any further efforts to conserve the business of the old company appeared futile to the commissioner, he was thereby appointed liquidator and directed to wind up its business. The rights and liabilities of the old company, its creditors, policyholders and shareholders were fixed as of July 22, 1936, the date when the rehabilitation plan became effective. Section 8 of the'court’s order of liquidation provided: “That title to all property and assets of respondent corporation [the old company] now vested in said Commissioner as said conservator, together with all right, title and interest of said Commissioner as said conservator in said stock of Pacific Mutual Life Insurance Company [the^new company], shall remain and be vested in said Commissioner, and his successor in office, as liquidator of The Pacific Mutual Life Insurance Company of California. ’ ’
When the commissioner, under the powers conferred upon him by the Insurance Code, took over the old company in July of 1936 every policy of the company, totalling millions of dollars, was placed in jeopardy. The agency organization and the good will of the old company was in danger of being-lost. The rehabilitation plan, resulting ultimately in the court approved rehabilitation agreement, was an attempt by the *372commissioner, acting pursuant to the provisions of section 1043 of the Insurance Code, to meet this emergency by creating a new company to take over the solvent policies. The basis of that plan was that, acting pursuant to the provisions of the agreement, the commissioner was to hold and control the stock of the new company until all claimants were paid. Pursuant to this fundamental policy the agreement expressly provided in section 20, quoted supra, that the commissioner was prohibited from disposing of the stock except as provided in the plan. Policyholders were given the election of accepting policies in the new company or of filing claims against the old company. As to both assenting and dissenting policyholders, an integral part of the contract was that the state Insurance Commissioner, until all claimants were paid, would control the policy and management of the new company through ownership of the stock. The inducement held out to secure court approval, and the inducement held out to the policyholders, was that the new company, under this plan, could not be returned into private management, but that the new company would remain under the management and control of the Insurance Commissioner until all claimants were paid. (Carpenter v. Pacific Mut. Life Ins. Co., 10 Cal.2d 307, 332 [74 P.2d 761].) The superior court approved that plan on the basis of continued commissioner control, and the court’s order of liquidation, quoted supra, expressly provided that the stock of the new company should remain in the commissioner and his successor in office. The action of the superior court in approving the reorganization agreement was affirmed by this court and by the United States Supreme Court, again on the hypothesis that by the agreement every interested person’s rights were protected by the provision that control of the stock would remain in the hands of the commissioner and his successor in office. On that basis thousands of policyholders made their election. Direct and continuous commissioner control was the very essence of the court approved contract. Now what happened?
On April 4, 1938, after this agreement had been entered into and approved by the court, and after thousands of policyholders had changed their position in reliance thereon, Carpenter entered into the Pacific Mutual Voting Trust Agreement here challenged. It purports to be a contract between Carpenter as conservator and liquidator of the old company on the one side, and four named trustees on the other. The *373voting trust agreement recites that the purposes of the rehabilitation agreement of July 22, 1936, will be facilitated by the transfer of legal title in the capital stock of the new company to voting trustees of established character and ability. Paragraph Fourth provides: “All of said stock . . . shall be received by the Trustees in trust, and shall be held, distributed, or otherwise disposed of, by the Trustees as provided in this agreement. While this agreement continues in effect the Trustees shall have full legal title to all shares of the stock of the Corporation [the new company] deposited with or held by them hereunder, and shall be entitled to exercise with respect thereto all rights and powers of every name and nature which the Depositor [the commissioner] had except as may be otherwise herein expressly provided/’ The trust was made irrevocable for a period of slightly less than twenty-one years except that it could be terminated sooner by the commissioner in the exercise of any of the powers of disposition over the stock reserved to him in Paragraph 20 of the Rehabilitation and Reinsurance Agreement. Paragraph Eighth of the voting trust agreement provides: “The Trustees, fairing the continuance of this Agreement shall he vested with and shall possess and shall he entitled to exercise in their discretion all the rights and powers of an absolute owner of the stock held hy them hereunder. ...” The trustees agreed to carry out faithfully the obligations of the commissioner as set forth in the rehabilitation agreement. Paragraph Eleventh states: “The Depositor [the commissioner], as herein provided, retains a beneficial interest in the shares of stock which are the subject matter of this Voting Trust. ...” Paragraph Twenty-third provides: “It is one of the primary purposes of this agreement to assure the full accomplishment of all of the intents and purposes of the Rehabilitation Agreement in accordance with its terms. The parties hereto therefore declare that no provision of this agreement is to be construed in any manner which would result in a violation of any of the terms, agreements, or provisions of said Rehabilitation Agreement. ...”
The obvious purpose and legal effect of this voting trust agreement was to transfer from the commissioner, a state official, to a board of private trustees, the legal title to the stock and all of the responsibilities and duties which devolved upon the commissioner as special trustee and holder of the capital stock of the new company under the rehabilitation agreement.
*374It does not require extended comment to demonstrate that the voting trust agreement violates the provisions of the Rehabilitation Agreement. Section 20 of the Rehabilitation and Reinsurance Agreement provides that the commissioner shall not dispose of the stock of the new company except as therein provided. The exceptions provided are: (1) Pursuant to the terms of any plan for mutualization of the new company; (2) according to court order if the old company proved able to pay off its obligations under the “Non-Can” policies; and (3) by court order where he deems it necessary to safeguard the interests of the estate in liquidation. The first and third of these alternatives contemplate a change in the corpus of the trust held for the creditors of the old company, the first by mutualization of the new company and the last by exchange of the stock of the new company for a more secure piece of property. The second alternative contemplates a termination of the trust in the event the old company raised sufficient funds to pay off its obligations.
The voting trust agreement transfers full legal title to the board of trustees in a situation where the rehabilitation trust is to continue, but it is not a transfer pursuant to a plan of mutualization nor one made in order to safeguard the estate in liquidation. If the creation of the voting trust were not contrary to the provisions of the rehabilitation agreement then section 1037(e) was superfluous. But the majority concedes that the sole source of power to transfer title to the stock to the voting trustees is to be found in that section.
The majority opinion does not dispute that this transfer is not provided for in the rehabilitation plan. It does, however, argue that the rehabilitation plan does not prohibit this transfer, urging that section 20 of the rehabilitation plan uses “dispose of” in the sense of an absolute disposition of the stock, rather than merely a transfer of legal title in trust. This argument is unsound. The rehabilitation plan by expressly providing that the commissioner shall not dispose of the stock except under certain specific conditions provides the exclusive modes by which the commissioner may dispose of the stock. The attempt to limit the meaning of “dispose” to absolute alienation is met directly by the fact that although one of the exceptions provided in the rehabilitation plan is a transfer to voting trustees, such a transfer must be pursuant to a plan of mutualization of the new company under section 20(a). Furthermore, under the rehabilitation plan the commissioner was a trustee for the creditors of the old company. *375Thus, all he had was the legal title to the stock. The beneficial interest was in the creditors of the old company. Since all he had was the legal title, the transfer of all that he had is obviously a disposition of the stock within the meaning of the rehabilitation plan.
The majority opinion (pp. 356-357) lays great stress upon the provision of the voting trust agreement that “if any covenant or agreement provided herein . . . should be contrary to any express provision of said Rehabilitation Agreement, or contrary to the policy of said Rehabilitation Agreement . . . then such covenant or covenants, agreement or agreements, shall be null and void. ’ ’-Since the rehabilitation agreement expressly prohibits the commissioner’s disposing of the stock except as specifically authorized, and since the disposition in question is not so authorized, the voting trust is void under its own provisions.
The majority opinion argues, however, that the two agreements are not inconsistent but that the voting trust agreement “is intended to and does supplement and facilitate the carrying out of the provisions of the rehabilitation agreement” (p. 357), and states that this is made apparent by the provision above quoted that if any covenant of the voting trust is contrary to the rehabilitation agreement it is null and void. The argument is that because the voting trust states that it was intended to facilitate the rehabilitation agreement, and because it states that if any of its provisions are contrary to the rehabilitation agreement such provisions are null and void, none of its provisions can violate the rehabilitation agreement. The non sequitur is obvious. The rehabilitation agreement provided that the commissioner should exercise the voting rights; the voting trust provides that such power should be exercised by the voting trustees. Such provision is “contrary to the policy of said Rehabilitation Agreement” and is contrary to an “express provision of said Rehabilitation Agreement. ’ ’ The provision of the voting trust purporting to transfer this power to the voting trustees is therefore “null and void” under the very terms of the voting trust.
The majority opinion states, however, that “Although the trust agreement transfers to the trustees the legal title to the stock, it expressly reserves to the commissioner ‘the entire beneficial interest in such stock. ’ The commissioner therefore retains for the benefit of the stockholders and creditors of the old company the same substantial interest he theretofore pos*376sessed as statutory trustee. ’ ’ (p. 358.) It is true that the voting trust provides that the commissioner retains “the entire beneficial interest” in the stock. But it also provides that “full legal title” thereto is transferred to the voting trustees in order that “they may exercise the rights of stockholders in the control of the Corporation,” and that the trustees “shall be entitled to exercise with respect thereto all rights and powers of every name and nature which the Depositor had” except as expressly provided otherwise. A subsequent paragraph provides that the “Trustees, during the continuance of this Agreement shall be vested with and shall possess and shall be entitled to exercise in their discretion all the rights and powers of an absolute owner of the stock held by them hereunder.”
The majority opinion in several places states that by the voting trust agreement the commissioner simply transferred the “administrative duties” of voting the stock to the trustees while retaining the “beneficial interest” in the stock. Just what is meant by a transfer of the “administrative duties” of voting the stock is not clear. The power that was transferred to the trustees by the voting trust was the power to vote 100% of the stock of the new company. What does that mean ? It means that prior to creation of the voting trust the commissioner had the power to elect the entire board of directors of the new company. Through the exercise of that power he had the power and it was his duty to control the general policy of a corporation with several hundred millions of dollars of assets. It was these powers that he voluntarily transferred to the voting trustees. To characterize such important functions as the mere “administrative” duty of voting the stock does not minimize their importance. Moreover, the commissioner has retained no “beneficial interest” in the stock. He was not the beneficial owner of the stock, and never had a beneficial interest therein. He had the legal title as trustee, and the rehabilitation agreement so provided. In Carpenter v. Pacific Mut. Life Ins. Co., 10 Cal.2d 307 [74 P.2d 761] at p. 335, this court, in referring to what the record there showed, stated: “It discloses that as trustee for all creditors of the old company, including dissenters, the commissioner holds all of the stock of the new company. ...” The creditors and policyholders and stockholders of the old company owned and still own the beneficial interest in the stock. The commissioner had the legal title subject to the terms of the trust set forth in the rehabilitation agreement. *377He transferred all that title, all those rights, and all of his duties to the trustees. There was nothng of a “beneficial” nature or otherwise for him to retain. He transferred everything he had and retained nothing.
The majority opinion then seeks to show that there is no inconsistency between the voting trust and the various court orders. Of course if the voting trust is consistent with the rehabilitation agreement it is likewise consistent with the court orders. If a transfer of all his interest in the stock to the trustees did not violate the express provisions of the rehabilitation agreement- prohibiting such transfer, then the transfer did not violate the similar provision in the court orders. But, as already pointed out, the voting trust does violate the provisions of the rehabilitation agreement. For the same reasons it violates the court order heretofore quoted.
The next argument advanced in the majority opinion is that the voting trust merely “permits a transfer of the administrative duty of voting the stock from one state instrumentality to another” (p. 359). On the next page of the opinion this thought is further elaborated upon, and it is definitely held that the voting trustees are a “state agency or instrumentality” and that all that section 1037(e) and the voting trust do is “to transfer the duties of the commissioner to another state instrumentality.” The thought is then expressed that the voting trustees are a state board, agency or instrumentality in the same sense that national banks, although privately owned, are government agencies, or that the Regents of the University of California, although not public officials, constitute a governmental agency. Other illustrations of a similar nature are given. In all of the illustrations given in the majority opinion, however, the agency involved was not only designated by statute, but its duties and functions were fixed by law. (See the provisions of the National Bank Act, 12 U.S.C.A., sec. 21 et seq.; and the provisions of Art. IX, sec. 9, of the State Constitution, relating to the Regents of the University.) It is because of duties and functions imposed upon them by the statute that they are state agencies or instrumentalities, and not simply because the statute provides for their appointment. In the instant case neither section 1037 (e) of the Insurance Code nor any other provision of law imposes any duties on the trustees. Their duties and functions are fixed by contract—the voting trust agreement. Except as nrovided in that contract their *378duties are no different from those of any private trustee, and they no more constitute a governmental agency than do trustees appointed by will or contract.
The argument that the voting trustees constitute a governmental agency overlooks the nature and source of their functions under the voting trust. The commissioner’s rights, powers and duties over the stock of the new company were not defined by statute—those rights, powers and duties arose out of and had their sole source in the contractual obligations and provisions of the rehabilitation agreement. It was these rights, powers and duties that were voluntarily transferred to the voting trustees by the commissioner. The rights, powers and duties of the voting trustees over the stock of the 'new company are not defined by statute. They have their sole source in the rehabilitation agreement. This being so the transfer by the commissioner to the voting trustees of a purely contractual power cannot make the trustees a governmental agency. They are contractual trustees appointed pursuant to statute. The only governmental function the commissioner exercised over the stock of the new company was as conservator or liquidator of the old company. The stock of the new company is the principal asset of the creditors of the old company. The commissioner still possesses all of his powers and duties as conservator and liquidator of the old company. None of those official duties have been transferred to the voting trustees. The commissioner is still the liquidator or conservator of the old company. Certainly it is not to be assumed that by the authorization to create a voting trust the Legislature intended to remove the commissioner as conservator or liquidator, and to substitute in his place the voting trustees. Yet the only way the voting trustees can be held to be a governmental agency is to hold, contrary to the fact, that the voting trustees have been substituted as conservator or liquidator in place of the commissioner. The true fact is that the voting trustees in voting the stock are not performing a governmental function at all, but are performing duties created solely by contract. That being so they are not in any sense a governmental agency.
When the superior court was asked to approve the rehabilitation agreement setting up a new company to take over the assets of the old company one of the major problems presented to the court and to the creditors of the old company was the selection of a trustee for the stock of the new company. After dug consideration, the parties to the agreement, *379and the court, determined that it was in the interest of all concerned to select a public official with the qualifications, experience, duties, functions and staff of the insurance commissioner. They could have selected a bank, a corporation, or private trustees, but, as a matter of contract, they selected the insurance commissioner as trustee. The legislature has no more power to permit that selected trustee to appoint another trustee in his place than it would have to provide that a private trustee selected by the trustor and beneficiaries could, without the consent of the trustor and beneficiaries, appoint another trustee. If this statute is constitutional, the trustor and beneficiaries of the trust, without their consent, are compelled to accept trustees that they never have selected, and, as this case demonstrates, that some of them do not want. Viewed in this aspect it makes no difference in result whether the voting trustees be considered a private board or a governmental agency. Where parties have, by contract, selected one public official as a contractual trustee, the Legislature is without power to authorize him to appoint another public agency in his stead without the consent of the contracting parties. The parties selected the Insurance Commissioner as trustee. They did not select the state Corporation Commissioner, the Fish and Game Commissioner or any other official to serve as trustee, and the Legislature, against the will of the contracting parties and without their consent, cannot substitute other trustees for the one agreed upon. In fact, the famous Dartmouth College case (Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 [4 L.Ed. 629]) established this principle. In that case the Legislature of New Hampshire attempted to change the trustees of Dartmouth College and to substitute new and different trustees. It was held, and there has been no deviation from that rule, that such legislative enactment was unconstitutional as an impairment of the obligation of contracts. It is apparent, therefore, that, at least in a case not falling within the police power, the rule that the state may lawfully transfer statutory functions from one state official or department to another, has no application to functions conferred upon the state official or department not by statute but by contract.
The majority opinion next holds that even if it be assumed that the voting trust impairs the obligations of the rehabilitation agreement, such impairment is justified under the police power. The majority opinion states that “it is settled that *380contract and property rights must yield to legislation in the interest of the general welfare” (p. 361). It is undoubtedly the law that contract rights are subject to alteration, without violating the impairment of obligation of contracts and due process clauses of the Constitution, when such alteration is necessary in the public interest. It is also undoubtedly the law that the state, under its regulatory power, may regulate the insurance business, and under certain circumstances, affect private contract rights. The eases cited in the majority opinion establish these general principles beyond doubt. The principle was clearly stated in Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398 [54 S.Ct. 231, 78 L.Ed. 413, 88 A.L.R 1481] at p. 434, where the court stated: “Not only is the constitutional provision qualified by the measure of control which the State retains over remedial processes, but the State also continues to possess authority to safeguard the vital interests of its people. It does not matter that legislation appropriate to that end ‘has the result of modifying or abrogating contracts already in effect.’ Stephenson v. Binford, 287 U.S. 251, 276, 77 L.Ed. 288, 301, 53 S.Ct. 181, 87 A.L.R 721. Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worth while,—a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court.” (See, also, Brown v. Ferdon, 5 Cal.2d 226 [54 P.2d 712]; Birkhofer v. Krumm, 27 Cal.App.2d 513 [81 P.2d 609].)
It is imperative, however, that the impairment of contract rights be in the public interest. But what public interest could be served in the present case by relinquishing commissioner control and returning the management to private control? What public interest impelled changing the voting trust from one where the commissioner, as trustee, exercised sole power over the stock, to a private self-perpetuating, irrevocable voting trust? The superior court, this court and the United States Supreme Court approved the rehabilitation agreement because they were of the opinion that it was in the general *381welfare of the policyholders, creditors and the public that the commissioner retain the stock for the protection of all concerned. No sound reason has been suggested why the public interest would be benefited or the general welfare advanced by a change in this policy. No emergency existed. There was no change in conditions between the time of the rehabilitation agreement and the time section 1037 (e) was passed. The majority opinion suggests the possibility that the statute was passed to enable the commissioner to avoid a possible position of “conflicting interests.” The argument proves too much. Section 1037 (e) is not mandatory. It leaves it to the discretion of the very person in whom the conflict is alleged to exist— the. commissioner—to determine whether the assumed conflicting interest shall be continued or settled. Had the Legislature been of the view that the general welfare required an impairment of vested rights because of an assumed conflict of interest it would have made the voting trust form of management mandatory and not discretionary. It is also suggested that the amendment might have been intended to permit the commissioner to avoid the burden of exercising the voting power. Had that been the intention of the Legislature it would have provided for the appointment of a person or persons responsible to him to perform this duty. But this amendment, according to the majority, permits the creation of a self-perpetuating board independent of the commissioner for twenty-one years. Moreover, the time to consider whether the burden of voting the stock was too onerous or whether that duty might conflict with his other duties was when the rehabilitation agreement was under consideration. At that time the commissioner, the superior court, this court and the United States Supreme Court determined that the duties under the rehabilitation agreement were not too onerous and that they did not conflict with his other duties. The very basis of the rehabilitation agreement was that the commissioner was the best informed, qualified, and impartial agency in the state to vote that stock. Of course, the Legislature could prohibit the Insurance Commissioner from accepting the position of trustee of such a trust, or could compel him to resign from trusteeships already accepted, if it determined that such duties were incompatible with the commissioner’s statutory duties. In that event, however, the Legislature could not compel the contracting parties to accept a new trustee selected by the commissioner without their consent. Until the selec*382tion of a new trustee the trust would not fail, but, under accepted principles, .would continue under the supervision of a court of equity.
Respondents also suggest the possibility that the Legislature may have believed that from a practical standpoint the commissioner might be unqualified, because of lack of knowledge, to elect competent directors. If the commissioner were unqualified to select directors whom he could replace at pleasure, he would be equally unqualified to select voting trustees, and in this latter situation any error in judgment would be irreparable for twenty-one years. The majority opinion also suggests that the legislation may have been intended to secure continuity in management. Such a contention assumes that the commissioner would arbitrarily and capriciously change the board. Had that concept motivated the legislation, the Legislature would have made the change mandatory and not discretionary.
A case directly in point on this issue is In re Bond & Mortgage Guarantee Co., 157 Misc. 240 [283 N.Y.S. 623], interpreting the New York statutes dealing with rehabilitation from which most of our statutes on this subject were copied. There the New York Commissioner of Insurance took over the assets of an insolvent insurance company, and from its assets, with court approval, organized a new company as a guarantee corporation. This new corporation was to carry on the business of the old company retaining, as here, all its capital stock for the benefit of creditors. By court order the commissioner was authorized to enter into a contract with the guarantee corporation to ' service all mortgages of the old company. Thereafter the Legislature, purporting to act in an emergency, expressly provided that the Mortgage Commission should take over from the guarantee corporation all of the mortgages being serviced by it under the court’s decree. The court held that the legislation, insofar as it purported to be applicable to rights vested pursuant to court decree, was unconstitutional. The court (p. 648 [283 N.Y.S.]) stated: "When the language of a statute clearly requires a retroactive construction, it must be so construed though thereby it is held to be unconstitutional. Westervelt v. Gregg, 12 N.Y. 202 [62 Am.Dec. 160], Retroactive statutes are not of themselves unconstitutional, but when they are in conflict with the provisions of either the Federal or the State Constitutions, a different result may follow. Such result follows where, as here, such a statute vio*383lates the right of the parties to such a servicing contract made part of any such order, to perform and to have performed the provisions of such contract, or it interferes with a vested right conferred by an order in the nature of a decree of which a servicing contract is made a part, finally adjudging the rights of the parties and the provisions of such contract. After a final determination of the rights of the parties to. such a proceeding has been rendered, such rights ‘have passed beyond the legislative power, either directly or indirectly, to reach or destroy. After adjudication the fruits of the judgment become rights of property. These rights became vested by the action of the court and were thereby placed beyond the reach of legislative power to affect.’ Gilman v. Tucker, 128 N.Y. 190, at page 204, 28 N.E. 1040, 1044, 13 L.R.A. 304, 26 Am.St.Rep. 464. . . . The provisions of chapter 638 of the Laws of 1935, in so far as they purport to require turning over such servicing contracts made part of any final court order entered prior to May 1, 1935, deprive the guarantee corporation and the certificate holders, the real parties in interest, of their property without due process of law in conflict with article 1, section 6 of the Constitution of this state (Livingston v. Livingston, 173 N.Y. 377, 66 N.E. 123, 61 L.R.A. 800, 93 Am.St.Rep. 600; Gilman v. Tucker, supra; Germania Savings Bank of Kings County v. Village of Suspension Bridge, 159 N.Y. 362, 54 N.E. 33; Burch v. Newbury, 10 N.Y. 374) and are in conflict with the Fourteenth Amendment to the Constitution of the United States. Coombes v. Getz, 285 U.S. 434, 52 S.Ct. 435, 76 L.Ed. 866; Memphis v. United, States ex rel. Brown, 97 U.S. 293, 24 L.Ed. 920; McCullough v. Virginia, 172 U.S. 102, 19 S.Ct. 134, 43 L.Ed. 382. Moreover, the aforesaid provisions of said amendment impair the obligations of contracts in violation of article 1, section 10, clause 1 of the Constitution of the United States. Delmas v. Merchants’ Mut. Ins. Co., 14 Wall. (81 U.S.) 661, 20 L.Ed. 757; Red Rock v. Henry, 106 U.S. 596, 1 S.Ct. 434, 27 L.Ed. 251; County of Clay v. Society for Savings, 104 U.S. 579, 26 L.Ed. 856; Danolds v. State of New York, 89 N.Y. 36, 42 Am.Rep. 277; New York Sanitary Utilization Co. v. Department of Health, 61 App.Div. 106, 70 N.Y.S. 510; In re Cook, 86 App.Div. 586, 83 N.Y.S. 1009.” This reasoning is directly applicable to the statute here involved.
The majority opinion attempts to distinguish this case on the ground that all that the New York case decided was that *384the Legislature could not take assets away from a new company set up pursuant to a court approved rehabilitation plan and turn them over to a state agency created as the result of an existing emergency. The point is that if the due process and contract clauses protect the parties to a court approved rehabilitation contract even in the face of an “emergency” alleged to exist by the Legislature, they certainly protect the parties when, as in the present ease, no public interest is served by the impairment.
Construction of Section 1037 (e)
Independently of the constitutional argument, section 1037 (e) requires that there be court approval of any voting trust adopted pursuant to its provisions. There was no such approval of the present voting trust and it is, therefore, invalid.
Subsection (e) of section 1037 of the Insurance Code is but one of six subsections. The entire section enumerates the major powers of the commissioner when acting as conservator or liquidator. Subsection (d), which was part of the section long before subsection (e) was added in 1937, expressly provides “that no transaction involving real or personal property shall be made where the market value of the property involved exceeds the sum of one thousand dollars without first obtaining permission of said court, and then only in accordance with such terms as said court may prescribe.” Obviously, the relinquishment of legal title to all the capital stock of the new company for which the commissioner had paid $3,000)000 was a “transaction involving . . . personal property . . . where the market value of the property involved exceeds the sum of one thousand dollars. . .” The majority opinion emphasizes that subdivision (e), dealing exclusively with voting trusts, has no provision for court approval. This is not conclusive. A separate provision for court approval in subdivision (e) would be redundant in view of the broad provisions of subsection (d). The section must be read in its entirety, and effect, if possible, be given to each part thereof. To give subsection (e) the interpretation given to it by the majority of this court is to read subsection (d) out of the section in one significant type of “transaction”—transfer of title to personal property by the creation of a voting trust.
Court approval of this voting trust is necessary for another reason. Subdivision (e) of section 1037 is a general provision dealing with the powers of the commissioner as conservator or liquidator. It does not deal specifically with reorganiza*385tions and rehabilitation agreements. The section permitting such agreements and the section under which the commissioner acted in executing the rehabilitation agreement here involved, is section 1043 of the Insurance Code. That section permits the commissioner, as conservator or liquidator “subject to the approval of said court” to enter into rehabilitation agreements. As already pointed out, the voting trust modified and altered the court approved rehabilitation plan. If a rehabilitation agreement requires court approval to be effective, any modification thereof requires court approval, for a modified plan is, in fact, a new and different plan. Any other construction would permit a material change in the rehabilitation plan without court approval and would thus nullify the requirement of court approval in the first instance. The majority opinion by construction reads the requirement for court approval out of section 1043.
A holding that the voting trust is invalid does not render void the actions of the hoard of directors elected hy the voting trustees.
In the event this voting trust were held to be invalid it would not jeopardize the actions of the board of directors of the new company that had been elected by the voting trustees. There can be no doubt that the acts of the present board after their election are valid, even though the voting trust is void. Under our law the right to vote stock is dependent upon the records of the corporation, and since the voting trustees appeared in the books as shareholders, their right to vote the stock cannot be questioned. (Sec. 320(a), Civil Code; Lawrence v. I. N. Parlier Estate Co., 15 Cal.2d 220 [100 P.2d 765]; Los Angeles v. Owens River Canal Co., 120 Cal.App. 380 [7 P.2d 1064]; Dedrick v. California Whaling Co., 16 Cal.App.2d 284 [60 P.2d 551].) A stockholder not appearing on the books who asserts his right to vote must seek the aid of a court either to secure a statutory review of the election, or to secure a re-transfer of the stock to himself. (Sec. 315, Civ. Code; Moore v. Bowes, 8 Cal.2d 162 [64 P.2d 423]; Bowes v. Superior Court, 13 Cal.App.2d 656 [57 P.2d 583]; Los Angeles v. Owens River Canal Co., supra; Dedrick v. California Whaling Co., supra; Smith v. California Thorn Cordage, Inc., 129 Cal.App. 93 [18 P.2d 393]; Lawrence v. I. N. Parlier Estate Co., supra.) Even if it be assumed that the particular election of the board of directors by the voting trustees was invalid, they are at least de facto officers of the *386corporation, and have the same powers as a de jure board. No attack can be successfully made on their corporate acts or on their status by collateral action. (See cases collected 6A Cal.Jur. 1068, et seq.; Storrs v. Belmont Gold Min. & Mill. Co., 24 Cal.App.2d 551 [76 P.2d 197]; Farbstein v. Pacific Oil Tool Co., Ltd., 127 Cal.App. 157 [15 P.2d 766]; Consumers Salt Co. v. Riggins, 208 Cal. 537 [282 P. 954]; 2 Fletcher, Cyclopedia of Private Corporations (1931), p. 142, et seq.; Stevens on Corporations (1936), p. 618, et seq.; California Corporation Laws (1938 ed.) by Ballantine, p. 90, sec. 82.) Thus no argument of expediency can justify the interpretation given the section in the majority opinion.
The judgment should be reversed.
Traynor, J., concurred.
Appellants' petition for a rehearing was denied July 22, 1943. Traynor, J., and Peters, J. pro tern., voted for a rehearing.