Court Opinion

ID: 5436886
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:55:42.07623+00
Date Added: 2024-06-11T08:31:52.249781
License: Public Domain

By the Court, Rhodes, J. :
The petitioner moves that the answer be stricken out, on the ground that it is irrelevant and immaterial, and does not show a legal answer to the writ; and he also moves that the several paragraphs of the answer be stricken out as irrelevant and immaterial.
The first paragraph denies that the Oroville and Virginia City Railroad Company now is or ever was a corporation organized or existing under the laws of the State of California, or otherwise. The third paragraph avers that the petitioner is not entitled to the benefit of a bona fide corporation, for that the persons claiming to compose the same do not claim in good faith to be a corporation, and have not in good faith attempted to comply with the provisions of the law providing for the incorporation of railroad companies, and are not actually doing business as a railroad corporation. The *360fourth paragraph alleges, both generally and particularly, the failure on the part of the persons who claim to compose the corporation to comply with the law in organizing the corporation.
It is contended on the part of the petitioner 'that the proviso to the sixth section of the general Incorporation Act, as amended in 1862, (Stats. 1862, p. 110,) renders these allegations immaterial. The proviso is as follows : “Provided, that the question of the due incorporation of any company claiming in good faith to be -a corporation under the laws of this State, and doing .business as such corporation, or of its rights to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such de facto corporation may be a party, hut such inquiry may be had at the suit of the State or [on] information of the Attorney General.” This provision does not go to the extent of precluding a private person from denying the existence de jure or defacto of an alleged corporation. It cannot be true that the mere allegation that a party is a corporation puts the question, whether it is such a corporation, beyond the reach of inquiry in a suit with a private person. It must be a corporation either de jure or de facto, or it has no legal capacity to sue or he sued, nor any capacity of any kind. It is an indispensable allegation in an action brought by a corporation, that the plaintiff is a corporation; and it results from the logic of pleading that the opposite party may deny the allegation. Were this not so, any number of different bodies of men, each body styling itself the Directors of a given railroad company, might bring separate actions against the county, and it is impossible to see why each would not succeed in the action, upon showing that it was the duty of the Board of Supervisors to subscribe to the capital stock of the given corporation and issue the county bonds. It is not contemplated that the allegation that the company was duly organized should put the fact beyond dispute and dispense with all evidence. The statute furnishes a rule of evidence. It is declared that the due incorporation ■ of any company *361shall not be inquired into collaterally in any private suit, etc., in a certain case; that is, when the company claims in good faith to be a corporation under the laws of this State, and is doing business as such corporation. The alleged corporation must both claim in good faith that it is such corporation, and must be doing business as such corporation; and then its due incorporation cannot be inquired into collaterally. To say that the “ due incorporation ” cannot be inquired into collaterally, does not mean that no inquiry can be made as to whether it is a corporation. Many of the acts required to be performed in order to make a complete organization of the corporation may have been irregularly performed, or some of them may have been entirely omitted, and the rule of the statute is, that such irregular or defective performance shall not defeat the incorporation when drawn into question collaterally. The omission of the names and number of the first trustees from the articles of association, the failure to file a duplicate of the articles of association with the Secretary .of State, an incorrect statement of the length of the road, an omission of the statement of the principal place of business, and many other irregularities of the kind mentioned in Spring Valley Water Works v. San Francisco, 22 Cal. 440, the insufficient acknowledgment of the articles of incorporation, (Dannebroge Mining Company v. Allment, 26 Cal. 286,) are irregularities that will not defeat the corporation, when its organization is collaterally called in question. A substantial compliance with the requirements of the statute will be sufficient to show a corporation de jure in an action between the corporation and a private person. But suppose a body of men meet and declare that they constitute the corporation, but neither subscribe to the capital stock, nor adopt articles of association, nor appoint any officers, nor perform any act in the organization of the corporation, nor transact any business. as a corporation, except in demanding that the Board of Supervisors subscribe to the stock and deliver the county bonds, they cannot claim the benefit of the proviso, for they *362do not claim in good faith to be a corporation,-and are not doing business as a corporation.
There are no cases of which we are aware holding that no proof of the corporate existence of the plaintiff is required, except in those States in which it is held that the general issue, without any objection to the capacity of the plaintiff, dispenses with all proof on that point. This is on the familiar rule that by pleading to the merits the defendant admits the capacity of the plaintiff to sue. But when the objection is taken by plea.in abatement, the plaintiff must prove its corporate existence. If evidence is required on that point, it must be because that is a point in issue, and it cannot be in issue unless it be affirmed in the pleading on one side and denied on the other. (See Ang. & Ames on Corp., Sec. 631, and cases cited.)
But it is claimed that the existence of the corporation is recognized by the Act requiring the county to subscribe to the stock of the company. Admitting such to be the case, that will not overcome the difficulty; for a corporation of this character cannot be created by legislative recognition, the Constitution (Article IY, Section 31) prohibiting the creation of corporations, except for municipal purposes, otherwise than by general laws.
The second paragraph denies that the company demanded that the Board subscribe to the capital stock of the company. This forms a material issue. The subscription was to be made upon the books of the company, and entered in the records of the Board. It was the duty of the company to tender their books and request the subscription, and not of the Board to request the company to produce their books for that purpose. “It is an imperative rule of the law of mandamus that, previously to the making of the application to the Court for the writ to command the performance of a particular act, an express and distinct demand or request to perform it must have been made by the prosecutor to the defendant, who must have refused to comply with such demand, either in direct terms or by conduct from which a *363refusal can be conclusively implied, it being due to the defendant to have the option of either doing or refusing to do that which is required of him, before an application shall be made to the Court for the purpose of compelling him.” (Tapping on Mand. 282; see, also, People v. Romero, 18 Cal. 90; Crandall v. Amador County, 20 Cal. 72.) This rule is applicable in cases where the petitioner or relator has a private interest in or claims the immediate benefit of the act or proceeding required to be/lone or taken; but when the act or proceeding amounts to a mere public duty, without any immediate benefit to the petitioner or relator, the rule may be otherwise.
The fifth paragraph, which avers that the passage of the Act recited in the petition was procured by fraud, is objectionable, first, because it is not well pleaded, as the acts constituting the fraud are not averred. The motion admits, in effect, only those facts that are well pleaded. A general allegation of fraud in a pleading will not be regarded. Second, an Act of the Legislature is not subject to attack on that ground; and it is sufficient on this point to refer to Sherman v. Story, 30 Cal. 266.
The objection to the matter alleged in the sixth paragraph —the pendency of proceedings in quo warranto against the persons named as claiming to compose said company—is well taken. It is no defense to this action. If the defendants conceive themselves entitled to have the proceedings in this case stayed, they can make the application in the proper manner. The grounds of the motion have no appropriate place in the answer.
Motion granted as to the fifth and sixth paragraphs, and denied as to the other paragraphs in the answer.