The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1902-01-24


4 Il was probably thought unjust ia IN
Y hvVeht stovAhoiders III corporations 10 i'm
y pos heavy hhes on the corporation ~
l. such for aiding some one tn r'rr, ~ &
o nninwtul combination when IN. coru,rs
Z ion WAS not a party TO the conbiuatIon
= unu ulu hvt become party los vonbiping
: agent ol It's members in the nsc ~ , ,nn
r capital combined hy tnrm witnopt CON.
, tilnuting capital to this existing comm.
: hattun 70 cun not be- said to h1,, ,,.,.t.
a combination. Gates vs. uoon,r "a T 49,
oV5, Mcich " Windmill Co, ~ Trx AZ
And again Il was probably though tbnt
= ufdSur punishment OF cach ouirer ~
corporation by me OF from, so ~ : 49, u
ana imprisonment IN tho nrnttsnti,rr
from one 10 ten years, would oporatc ~,
I prevent corporation from tonbivi,s n,
or aiding ir carrying out a r,,nl,i,s, y.
Go which IL did not form n marty Mil
ont expressly prohibiting corporation ald.
lhs others As the corporation cnn ouiv
act 10y It's officers, any remedy when -, ,s
on IT'S Officers personally and witch IL
suniolcht 70 prevent It's oflcers from
ton out OF the acts furhIddpt, la its 49, ~,
without the law being made to op,r1tn rH
the corporate entity, which would involve
tnc property OF stockholders whether fbSV
were guilty OF wrong ur not ''''
On the whole. ! ain OF the opinion th,t
section OF the act requiring a forfeiture
OF a charter OF private corporation AM
section 10 which imposes clvil nnn,it Iu"
prescribe these punSnmcnts Tor yiojnttnns
ny tue corporation Of inhihluonS of thr
'"N NhiNh ere 10y Tue law designed md
applied TO restricting the action ~ tbc
corporation It's such, ana that "A rofnor,
non can not be said TO have vIolatrl n
( provision Of the law which docs pnt ,r,,l,,
I 10 4 corporation. but is expressly u,t,iSS
nnd addressed To tho acts OF mdiyidu,tls
me most that cnu bo said against tho
/ acts OF the corporation I'm trying ia rnrry
I out for individuals COMPOSING IL Tho No.
J poses OF an unlawful combination mail,
between them and existing before the cor !
PORTION was organized. aud ia which 10 I
Y
/ hieDcd II by the combination of iuJiviJu
aiS, Is thut The corporation though In |
nTtaleu 10 stalnte law violated The public |
pohey OF the state, not merely by buving 1
up competing congresses. but iu eGtrr
tanning the purpose In connection thorc
win OF aiding the unlaWful rnriltnnttn,
uelWccn others, made for the purpoSr of |
preventing competition, The fact mar Ia
lhns acted against The public policy of
iu' statc might prevent 1t from enforcing
w INC courts inc contracts made for such
purposes but the doing hy "a cornorptlon uf
acts contrary Ia public policy is moi 4, l
ground for the forfeiture 81 Inc charter of
State SO. $50 w. vs.
Another grave question In this case is
ueGeSSalIy raised by he general demurrer
ana ms been foroshadowed by some son.
SlderAtions alcHdy presented I'm thls ,1sr
treated IN this opinion, though tho pup.tiuu /
was not noticed IN the argument Tho
question referred to is. Was any cor
poraton ever formed IL the articles OF I'm.
corporation signed by the charter incubrr.
W as an NNluWlQl agreement of combination
OF the capital of these several persons for
one or more or the purposes dcuuunred hy
the ANTITRUST law Is mis- trinl had i'm
court eN pnrte with no defendant before the
court, nut only myth masqucUding I'M.
der the name OF a corporatinng il f.
generally true that a suit by tho State
AGAINST defendant as corporation admits
us legal existence MS q corporation. hui ,
THIS Is only an Implied admission which
may be wholly destroyed by the sppcinl ,
pleading Of facts showing that no corpora
svi LEI
charges that tho articles of incorporation
were made In pursuance Of au agreement | ,
on the part Of the chnrter mcmbcrs to com
blhe their capital for the purpose Of re. |
Strictlng aids to commerce and preventing
competition In aids TO commerce, to.wit,
cotton congresses. This In effect alleges
signed for the unlawful purposes denounced
ny me net Of 1888. Section II Of that act
reads MS follows: "fhat any contract or
agreement in violation Of the provisions
OF this act shall he absolutely void and not {
eniofcibie either In law or equity" This \
l9hguuse leaves no room for holding that
uhRWIul purposes are not void, bat merely {
yollnbie at the option OF the government. !
u the agreement OF articles OF nssocin- \
llon ny which these parties attempted
to form themselves Into corporation (
We're void, then no corporation WAS I
formed, because private corporations can
only be formed In this State by agreements /
ltlWt''h lle persons forming corporation, v
signed and acknowledged by them aud tlIei :
p me Office Of tn" secretary Of state The h
Illegal purpose Of q contract which does not +
lppear on It's face to be for an plc.nI pur 4
bose may always be shown by evidence /
Illundc And It is familiar principle Of
he contract Is Illegal the whole contract j
S void, though Its provisions may be- soy {
lable and in part lawful. S
Inc STATUTES OF this state authorize tho 4,
ot quo WArrnnto proceeding
canst ANY association OF persons" who
nay net 'as corporation without being
rtlrlc 1913. But In such eases tho sult -
must he AGAINST persons thus acting No T.
ersons are sund IN this suit IL
a. may he regarded as against public mol. .
~ 10 mold that the charters or corpora n
ions MAY be shown to have been void at -
hcr inception because Of purposes cutor. \
nslncss the corporation would actually en-. >,
ago IN. which are not written IN the char, II
nttci anu wisdom or the laws II enActS VI
nd t seems difficult for q court to hold
rat IN" plain words Of a statute shall not ~
e given eject. because Of some ndycrse le
7iHic policy which the court may see IN J.
io operation o1 statute under a given az
Many other clnsgrs nf con.
Jay be shown to he Illegal and void be. n
lnSc 81 tho purposes OF the parties max ~
iem ylolnii"nS Of the law, and no dinrr. ~
n rule can he applied 10 contracts NJ as- hr
relation into corporate bodies merely he "a
'use The objects expressed In the agree. !,
liuf as tins question has not been argued. NJ
nd as | hold that the acts charged 90 10
I'VE been done hv the corporation ne such pa
II existed as distinguished from tho acts fr'
me by Tho individuals who brought II into &
.lsteuce. are not made grounds for the FOR. III
turc Of its charter. n II has one the rel
So viii bc disposed OF In this court upon an
10 assumption thHt the defendant r. n Ia,
I'D corporation But this question will fel
I'VE to be considered bv the appellate w.
urts. where II can he fully argued. q : tho rel
ture Of the dnal JUDGMENT disposlng Of An
Is cnse win have 20 be addressed TO the ga
ndition that we have no defendant before las
o court II no corporation WIS formed by I'm
q alleged unlawful agreement as The per Sc
ms concerned arc not sued In Ibis case.
ID the remedy will have to bo sought in
rsuine the individuals and stopping them
I'M acting as q corporation and hy imDos- Tn
6 fines on them FOR violating tho anil. fri
tst law ~
Having reached the conclusion that the lar
ilntiffs petition stHtcs no cause Of action Tn
alnst the corporation sued. N would be | dis
oper to set aside the order made ST the 80
airing ~ the ease overriding the general ger
murrcr sustain n and dismiss tie suit ma
less the state desired 10 amend its prti. | Gle
n: and this Is tine only proper coursp 20 -,
10 II the attorney general desires TINT hl'
Is course shall be taken IN order 70 excr. OF
q the right 10 amend which ne would NO
We had N the general demurrer had been r.
stained al the beginning ~ the trial But
,ne attorney general shall not desire this OF