decided: October 12, 1971.
Appeal from judgment of Court of Common Pleas of Lancaster County, Trust Book No. 41, page 202, in re appeal of Laura Watt O'Connor.
James P. Coho, for appellant.
Raymond W. Midgett, Jr., with him Kenneth W. Gemmill, John I. Hartman, Jr., Dechert, Price & Rhoads, and Windolph, Burkholder & Hartman, for appellee.
Bell, C. J., Jones, Eagen, O'Brien, Roberts, Pomeroy and Barbieri, JJ. Opinion by Mr. Justice Roberts.
[ 444 Pa. Page 207]
The appeal presents the question of whether an award made to a dissenting shareholder under § 515 of the Business Corporation Law*fn1 was supported by competent evidence. We find that it was not, and accordingly
[ 444 Pa. Page 208]
remand the record for a new determination of fair value.*fn2
The majority shareholders of Watt & Shand, a Pennsylvania corporation, amended the corporation's articles of incorporation to eliminate cumulative voting. Appellant Laura Watt O'Connor, a dissenting shareholder, duly objected and demanded the fair value payment of her 813 shares of common stock.*fn3 Pursuant to the provisions of § 515 the appellee, Watt & Shand, made an offer to pay the appellant $93.46 per share.*fn4
[ 444 Pa. Page 209]
This offer was refused. The corporation then petitioned the court to determine the fair value of appellant's shares. Exercising its prerogative under § 515 the trial court appointed an appraiser to receive evidence and make a recommendation as to the fair value of the dissenting shareholder's stock.*fn5 During the course of the hearings before the appraiser the respective parties presented experts whose testimony on the fair value of the shares ranged from $90 to $272. Following the conclusion of the hearings the appraiser in his report to the court recommended that the appellant be paid $84.56 per share. Appellant filed exceptions to the appraiser's report. The trial court dismissed the exceptions and adopted the findings of the appraiser. This appeal ensued.
Our review of this appeal encompasses only an ascertainment of whether the findings of the trial court are supported by competent and substantial evidence.*fn6 We reject appellant's request that we make an independent determination as to the fair value of her shares: "This Court does not sit as a trier of issues of fact expecting to be persuaded that one or the other side is more credible. That is only a task for a trial court and we would never invade that area of the judicial
[ 444 Pa. Page 210]
process." Reed v. Universal C.I.T. Credit Corporation, 434 Pa. 212, 217, 253 A.2d 101, 104 (1969). In doing so we are mindful of the admonition of one experienced commentator: "The questions involved [in a dissenting shareholder's appraisal suit] are rather economic than legal in character. . . . Such standards can better be derived by consulting the business man, the banker, and the industrial engineer, than the jurist, legal scholar, or lawyer."*fn7
Section 515 is silent on the issue of appeal. This Court has recognized that such legislative silence is of significance in determining the nature of our certiorari: "If the statute controlling the proceedings fails to provide for an appeal or is silent thereto, a writ of certiorari to inspect the record is in the broadest sense, and the merits of the issue may be judicially reviewed: Cullen Appeal, 392 Pa. 602, 141 A.2d 389 (1958), and Kaufman Const. Co. v. Holcomb, 357 Pa. 514, 55 A.2d 534 (1947)." Absentee Ballots Case, 423 Pa. 504, 508, 224 A.2d 197, 199 (1966).
The earlier statute governing dissenting shareholder's rights stated that the "judgment of the court thereon shall be final and conclusive."*fn8 We interpreted that statute as giving this Court a very narrow scope of review, but acknowledged that a different result would be in order if that phrase had been omitted: ". . . it is only where the statute is silent on the question of appeal that a review by certiorari may be had 'in the broadest sense' and the court may consider the record, including the testimony, to determine whether the findings are supported by competent evidence and to correct any conclusions of law erroneously made." (Emphasis
[ 444 Pa. Page 211]
added.) Lowry v. General Waterworks Corporation, 406 Pa. 152, 155-56, 177 A.2d 82, 84 (1962) quoting from Dauphin Deposit Trust Company v. Myers, 388 Pa. 444, 460, 130 A.2d 686, 694 (1957).
The Legislature in superseding the old act with § 515 deleted the phrase "the judgment of the court thereon shall be final and conclusive." In doing so it gave this Court broad certiorari review and the duty to determine whether the findings of the trial court are supported by competent and substantial evidence.
The Commonwealth's statutory protection of dissenting shareholders through the appraisal provision is in keeping with the practice across the country. Of the fifty-three jurisdictions which have corporation statutes, all but one make some provision for the rights of dissenting shareholders.*fn9 The purpose of these statutes is to protect the property rights of the dissenting shareholders from actions by majority shareholders which alter the character of their investment.*fn10
Mindful, then, that we are reviewing a record in which an individual is seeking redress from an allegedly insufficient computation of the fair value of her property, we have engaged in a careful examination of the record. As stated earlier the lowest fair value suggested during the course of the hearing was $90. Prior to the hearing the corporation had offered the dissenting shareholder $93.46 per share. Notwithstanding these facts the appraiser submitted without explanation his recommendation that the fair market value was $84.56. As there is not evidence to support this lower figure, we cannot conclude that the trial court's acceptance
[ 444 Pa. Page 212]
of the appraiser's recommendation is supported by competent and substantial evidence. We thus vacate the trial court's judgment and remand for a new determination of fair value consistent with this opinion.
Judgment vacated and case remanded.