71ST CONGRESS 2d Session } SENATE { REPORT No. 758 PRESCRIBING COURT PROCEDURE IN APPEALS FROM DECISIONS OF THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA MAY 29, 1930.-Ordered to be printed Mr. GLASS, from the Committee on the District of Columbia, submitted the following REPORT [To accompany S. 35581 The Committee on the District of Columbia, to whom was recommitted the bill (S. 3558) to amend section 8 of the act making appropriations for the expenses of the government of the District of Columbia for the fiscal year ending June 30, 1914, and for other purposes, approved March 4, 1913, having given further consideration to the same, reports favorably thereon with the recommendation that the bill do pass with the following amendment: On page 2, line 15, before the word "evidence", insert the word "the". This amendment is necessary to insure the people and the publicutility corporations in their right to a review by the local courts of findings by the Public Utilities Commission. The bill seeks to amend the public utilities law of the District. which was contained in the appropriation bill cited in the title of this proposed legislation. It is intended to amend specifically those provisions of the law relating to appeals to the District Supreme Court from decisions by the Utilities Commission. Probably the most important feature of the bill, from a public standpoint, is the exclusion of commission orders fixing valuations. from the class of orders or decisions subject to appeal to the local courts. POWERS OF THE COURT The Supreme Court of the United States has held that the District courts have certain extraordinary powers in the review of decisions by the utilities commission, notably in the fixing of valuations. This bill does, however, provide for review by the District courts of other orders or decisions by the commission. "In any such action or proceeding," the bill states, "the findings of the commission as to the facts upon which such order or decision is based shall be conclusive, if such findings are supported by the evidence and if such order or decision is not confiscatory." This provision does not unduly restrict the courts in reviewing appeals, nor, on the other hand, does it grant the utilities commission. any unlimited or unsupervised authority. It does, however, liberalize the present law to make the decisions of the commission, particularly those affecting valuations, more effective than as at present. The bill provides that the hearing of such appeals shall have precedence over civil causes of different nature, and allows for appeals to the District Court of Appeals and thence, by writ or certiorari, to the Supreme Court of the United States. SUSPENSION OF DECISIONS The proposed legislation permits the commission to suspend the contested order for a reasonable time, but specifically states that no appeal shall operate to stay any such order unless the court or the commission shall so direct. Upon reviewing an appeal, the bill provides, the court may modify, reverse, or affirm the commission's decision. The bill provides, in detail, a method of procedure by the court in acting on such cases. The bill also stipulates that every action or proceeding to modify or reverse an order or decision of the commission shall be commenced within 60 days after the entry of the order. The committee feels that the bill will operate to prevent delays in the effectiveness of the commission's decisions and to provide a method of court procedure more equitable and reasonable than is now provided by law. о Mr. ROBSION of Kentucky, from the Committee on the District of Columbia, submitted the following REPORT [To accompany S. 4551] The Committee on the District of Columbia, to whom was referred the bill (S. 4551) to amend an act entitled "An act to establish a Code of Law for the District of Columbia," approved March 3, 1901, and the acts amendatory thereof and supplemental thereto, having considered the same, reports favorably thereon, with the recommendation that the bill do pass. The purpose of the proposed legislation is to amend the District Code with respect to the organization of corporations. The bill was suggested to the committee by prominent members of the District. bar, and, so far as the committee has been able to ascertain, there is unanimity of opinion among the attorneys of Washington that the existing corporation law of the District is archaic, clumsy, and unduly restrictive. The bill under consideration represents a revision of the original bill studied by the committee, S. 3492, reference to which is made in the reports and letters appended to this report. The revision was undertaken by the committee, and the present bill introduced, in order to make certain modifications suggested by members of the committee and by the corporation counsel of the District. In its present form, the bill, S. 4551, has the approval of the committee, the District authorities and the representatives of the bar. CONTENTS OF THE BILL The bill proposes to amend the District Code by adding thereto three additional sections-639 (b), 639 (c), and 639 (d). Section 639 (b) provides that corporations organized in the District may amend their charters so as to permit them to add to or diminish corporate powers, substitute other purposes and powers,__change corporate business, change location of place of business in the District, and to make any other amendment which would have been lawful or proper to insert in the original certificate of incorporation. This proposed new section may indirectly give some indication of the drastic restrictions imposed by present law upon District corporations. Section 639 (c) contains provisions permitting a local corporation to create one or more classes of preferred stock, with or without voting power as the charter may provide; and to have one or more classes of common stock, subject to the stipulations governing such stock in the charter. The section also contains a definition of the term "charter"; a provision that preferred stock may be made subject to redemption at such times and prices as the charter may provide; and a provision stating that the charter shall state the amount and terms of preference of stock which is preferred as to its distributive share of the assets of the corporation upon dissolution. The section further calls for a plain statement of restriction, limitation, or preference on all certificates for stock having limited or no-voting powers, or having preference or limitation as to dividends or as to its share of the assets upon dissolution. There is no provision in existing law in the District for the classification of stock, and the committee feels that this proposed new section is fair to the seller and buyer of stock. Section 639d is designed to enable local corporations to sell, lease, or exchange its business upon a two-thirds vote of all the shares. Ample provision is made for the protection of dissenting stockholders, the section outlining a fair and reasonable method by which such stockholders may obtain a just price for their stock from the corporation, or in event of a disagreement, from the District courts. The section makes clear that this proposed legislation shall not affect any law regulating public-utility corporations in the District or the act of April 28, 1904, to prevent the fraudulent sale of merchandise in the District. INDORSEMENTS OF THE BILL There are appended hereto, as part of this report, letters from the District Commissioners and members of the local bar, in support of this proposed legislation. It will be noted that the objectionable features referred to in the commissioners' letter have been removed from the bill. COMMISSIONER OF THE DISTRICT OF COLUMBIA, Hon. ARTHUR CAPPER, United States Senate, Washington, D. C. SIR: The Commissioners of the District of Columbia have the honor to submit the following on Senate bill 3492, Seventy-first Congress, second session, entitled "A bill to amend an act entitled 'An act to establish a Code of Law for the District of Columbia,' approved March 3, 1901, and the acts amendatory thereof and supplemental thereto," which you referred to them for report as to the merits of the bill and the propriety of its passage. The bill was referred to the corporation counsel of the District of Columbia for report, and there is inclosed herewith a copy of the report of the acting corporation counsel, Mr. Vernon E. West, regarding the features of the bill. As will be seen, the corporation counsel finds no objections to the proposed new sections 639 (b) and 639 (c). As to section 639 (d), however, certain objection able features are found by him. The commissioners concur in the report and recommendations of the acting corporation counsel and recommend that section 639 (d) be modified along the lines suggested by him. Very truly yours. PROCTOR L. Dougherty, President Board of Commissioners of the District of Columbia MARCH 13. 1930. The COMMISSIONERS: I return herewith Senate bill 3492, to amend the Code of Law for the District of Columbia, referred to this office for report. This pending bill proposes to insert new sections, 639 (b), 639 (c), and 639 (d), as an amendment to subchapter 4 of chapter 18 of the code providing for the incorporation of commercial enterprises. Section 639 (b) permits corporations to amend their charters by adding to, or diminishing, the corporate powers; by substituting other powers for those set forth in the charter; by changing the corporate business, and by making any other amendment provided such amendment shall contain only such provisions as might be inserted in an original certificate of incorporation. Section 639 (c) provides for the issuance of preferred stock and the rights and obligations which may be granted to and imposed upon the holders thereof. I see no objection to the two sections above referred to and am of the opinion they should be approved. Section 639 (d), however, contains certain objectionable features. It provides that a corporation organized or existing under subchapter 4 of chapter 18 of the code may "sell, lease, or exchange all of its property and assets as an entirety, including its good will, and franchises" to or with any other corporation or natural person upon the affirmative vote "of two-thirds of all the stockholders" but any stockholder who, at least 5 days before the meeting for the approval of such sale, lease, or exchange, files his protest, may, within 20 days after such meeting make a written demand upon the grantor corporation for payment of his stock, and he shall thereupon be entitled to receive an amount equal to the fair value thereof, unaffected by such sale, lease, or exchange. If such dissenting stockholder and the corporation of which he is a stockholder shall fail to agree upon the fair value of the stock he may file a petition within 30 days after such demand in the Supreme Court of the District for the ascertainment of the fair value of his share. Thus far the section is not objectionable. It, however, provides that the claim of the dissenting stockholder for the fair value of his stock is made a lien upon the property and assets so leased or exchanged superior to any mortgage or other lien placed on said property and assets by the grantee. This section also provides that the grantee shall take the property and assets of the grantor corporation subject to the latter's debts and liabilities, and such debts and liabilities shall have priority over any incumbrances placed upon said property by the grantee. The effect of this portion of the section, in my opinion, is to preclude a corporation from selling, leasing, or exchanging all of its property for the reason that the grantee would be unable to borrow money upon the security thereof or give a good title thereto until the statute of limitations had run after such sale or lease, and all suits brought within the statute by creditors or dissenting stockholders had terminated. I, therefore, recommend that the provisions to which I have made objection be omitted. VERNON E. WEST, Acting Corporation Counsel, District of Columbia. Hon. ARTHUR CAPPER, COOKE & BENEMAN, Washington, D. C., January 17, 1930. United States Senate, Washington, D. C. SIR: I hand you herewith draft of a bill which is intended to amend the Code of Law for the District of Columbia with respect to the organization of corporations within the District of Columbia. The present corporation law of the |