Case ID: mass_5/html/0174-01.html
Source: Caselaw Access Project
Author: {"author": "Parsons, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* Commonwealth versus the Union Fire and Marine Insurance Company in Newburyport.
    An information in the nature of a quo warranta, is grantable at the relation of any individual interested in the election or admission of an officer or member of a corporation: But an information for the purpose of dissolving the corporation, or of seizing its franchises, cannot be prosecuted but by the authority of the commonwealth, exercised by the legislature, or by the attorney or solicitor-general.
    This was a motion for a rule upon the defendants to show cause why the Solicitor-General should not be directed to file an information in the nature of a quo warranta against them, that the said company might be dissolved, and their corporate powers be adjudged void.
    The motion was made by Sullivan, in behalf of seventeen persons alleging themselves to be members of the corporation, and a rule was granted returnable at the term of this Court next to be holden in the county of Essex. That rule not having been served on the corporation, a new rule to the same effect was moved for, at the term in Essex, and granted, returnable at the July adjournment :f this term, and being duly served, the parties appeared, and
    
      Jackson, for the defendants
    contended that the corporation could not by law be called to answer out of their own county. The relators, as well as the corporation, all have their residence in Essex. There the facts, of which there will be many in question, must be tried, and in the discussion of them, the books and papers of the company must be produced. He therefore moved that the rule, if it is tobe sustained, should be enlarged to the next November term in Essex.
    
    But he insisted that an information to seize the franchises of a corporation is never ordered at the motion of an individual. Here it ought to be directed by the government, or at least filed by the Attorney or Solicitor-General ex officio.
    
    
      The Solicitor-General
    
    acknowledging himself to appear, not in his official character, but as counsel for the relators, insisted that where the mischief, or cause complained of,, is such as affects the public, the Court will order an information at the relation of any [ * 231 ] individual *not specially interested, and a fortiori at the instance of corporators, who complain of an injury to themselves.
    The facts charged in this case, if proved, would certainly incur a forfeiture of the charter, as they imply a gross misuser of the powers of the corporation. It will not be denied that there is ground from the affidavit of the complainants, to believe them true. As they are denied, the truth of them is a proper subject of inquiry by this Court, who have the general superintendence of all this species of corporations. If this process does not lie, the mischief is irremediable, and these companies will continue to misuse their powers, and abuse their privileges, under an idea that no authority exists in the government to correct or punish their malpractices.
   The opinion of the Court was afterwards delivered to the following effect by

Parsons, C. J.

This corporation was created by the statute of 1806, c. 89., which required the holders of the corporate stock to pay fifty per cent, of their subscriptions within sixty days after the first meeting of the company; and that no insurance on any one risk should be made for a larger sum than ten per cent, of the capital stock actually paid in.

The parties applying for this rule have alleged that the corporation have been guilty of malfeasance, in not requiring from the members payment of the fifty per cent, of their subscriptions within the time limited by the statute of incorporation, and also in taking greater risks than are authorized by the terms of their incorporation.

We have not inquired into the truth of these allegations, as we are satisfied that, in this case, such inquiry would be immaterial, because this rule is not moved for in behalf of the. commonwealth, or by its authority.

Informations of this nature are properly grantable for the purpose of inquiring into the election or admission of an officer or member of a corporation, when moved for by any person interested in, or injured by such election or admission, if the same was unduly made.- And * upon such information, if the elec- [ * 232 ] tian or admission was illegal, judgment of a motion might be entered, and a fine m ght also be imposed on the party who had usurped upon the commonwealth.

In this case, the parties applying for the rule do not complain of any illegal election or admission, of any officer or member of the corporatioi , but the object of the application is to obtain a judgment of forfeiture of the franchises of the corporation, and a seizure of them by the commonwealth.

We are well satisfied that a corporation, as well when created by charter under the seal of the commonwealth, as by a statute of the legislature, may by nonfeaéance or malfeasance forfeit its franchises, and that by judgment on an information, the commonwealth may seize them. And if the allegations stated in the motion for the rule in this case were true, and the commonwealth had caused an informotion to be filed and prosecuted, for the purpose of seizing the corporate franchises for such malfeasance, judgment for those causes might have been rendered for the commonwealth.

But an information for the purpose of dissolving the corporation, or of seizing its franchises, cannot be prosecuted but by the authority of the commonwealth, to be exercised by the legislature, or by the attorney or solicitor-general, acting under its direction, or ex oficio in its behalf. For the commonwealth may waive any breaches of any condition expressed or implied, on which the corporation was created; and we cannot give judgment for the seizure by the commonwealth, of the franchises of any corporation, unless the commonwealth be a party in interest- to the suit, and thus assenting to the judgment.

This distinction between informations in the nature of a quo warranta, to impeach any election or admission of a corporate officer or member, and informations to dissolve a corporation, is well settled, and upon sound principles of law .

Rule discharged. 
      
      
        Rex vs. Corporation of Carmarthan, 2 Burr. 869.
     
      
      
         King vs. Ogden & al. 10 B. & 230. See also Tancred on Quo Warranto, 14.