Twenty or more owners and proprietors of record of a corporation organized under Laws 1891, Chapter 86 may prepare proposed articles of incorporation and bylaws and a plan of conversion for the purpose of converting the existing corporation into a corporation organized under the general corporation law of this state. Upon notice, the proposers shall call a meeting of all owners and proprietors of record entitled to vote in the affairs of the existing corporation. The notice shall be published in English in a newspaper of general circulation in a county in which the existing corporation is located, once a week for three consecutive weeks, the last publication to be not more than thirty days prior to the date set for the meeting. Similar publication shall also be made in Spanish if there is a Spanish language newspaper of general circulation in the county. The proposed articles of incorporation and bylaws and the plan of conversion shall be presented at the meeting, and, if approved by a vote of the majority of the owners and proprietors of record present at the meeting, then, upon the filing of the articles of incorporation and bylaws with the secretary of state and the issuance of a certificate of incorporation, the corporation organized under Laws 1891, Chapter 86 is converted into a domestic corporation authorized to do business and entitled to all privileges and immunities of a domestic corporation organized under the general corporation laws of this state.
History: 1953 Comp., § 8-2-19, enacted by Laws 1967, ch. 43, § 1; 2013, ch. 75, § 14.
ANNOTATIONSCompiler's notes. — Laws 1891, ch. 86, referred to in this section, was repealed by Laws 1917, ch. 3, § 19. See "Repealing saving clauses" note to 49-2-17 NMSA 1978.
The 2013 amendment, effective July 1, 2013, required the corporation to file its articles of incorporation and bylaws with the secretary of state; and in the fifth sentence, after "filing of the articles of incorporation and bylaws with the", deleted "state corporation commission" and added "secretary of state".
Section held not to violate due process. — Argument that this section lacked due process because of its failure to require personal service or mailing of written notice of the meeting and failure to provide for absentee voting was without merit since there is no inherent right in a stockholder of a corporation to vote by proxy, and since reasonable notice and a fair opportunity were given to the "owners and proprietors" of the grant to attend the meeting at which the proposed corporation was considered. Westland Dev. Co. v. Saavedra, 1969-NMSC-123, 80 N.M. 615, 459 P.2d 141.
Whatever is meant by "sale" and "conveyance" in 49-2-7 NMSA 1978 does not include the procedure enacted to change the character of the corporation itself. To hold otherwise would produce the absurd implication that a land grant corporation could have been converted into a domestic stock corporation by 49-2-7 NMSA 1978 even before the enactment of this section. It would also produce a rather unexplainable conflict between the two provisions. Therefore, due process was not denied for failure to follow Section 49-2-7 NMSA 1978 since this section was the applicable statute. Westland Dev. Co. v. Saavedra, 1969-NMSC-123, 80 N.M. 615, 459 P.2d 141.
Power of state to alter or amend corporate charter. — Argument that a statute which attempted to change character of a legal entity from that of a corporation for the management of a community land grant to that of a domestic stock corporation was in violation of N.M. Const., art. II, § 18, in that it was an attempt by the legislature to divest the town of its vested rights without due process of law, was without merit since a state, through its police power, could make reasonable regulations of corporations, including alteration or amendment of corporate charters if that power had been duly reserved by the state, as was done in New Mexico. Westland Dev. Co. v. Saavedra, 1969-NMSC-123, 80 N.M. 615, 459 P.2d 141.
Incorrect finding of incorporation. — Since this section was not enacted until 1967, it is obvious that a trial court's finding, before that time, that a community land grant corporation was lawfully qualified as a domestic corporation is incorrect and cannot remain undisturbed. Apodaca v. Tome Land & Improvement Co., 1978-NMSC-018, 91 N.M. 591, 577 P.2d 1237.
Void private land grant corporation has no right to proceeds from a land sale and no authority to pay such proceeds to its "shareholders." Conversion is present where the "shareholders" claim and erroneously receive proceeds of the sale. The party aggrieved cannot be deemed to have discovered she has a cause of action for conversion until the date of the judicial opinion which declares the company in question to be a void corporation. Apodaca v. Unknown Heirs of Tome Land Grant, 1982-NMSC-100, 98 N.M. 620, 651 P.2d 1264.