Court Opinion

ID: 8871943
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:31:48.694631+00
Date Added: 2024-06-11T17:06:12.422398
License: Public Domain

Additional Opinion Upon Petition por Behearing. Bespondents have filed a petition for rehearing in which they contend that “the provisions of the Business Corporation Act do not apply to an insurance corporation”; that “the provisions of the Business Corporation Act, including section 45 thereof, are not applicable to insurance corporations because of section 156 of the Business Corporation Act (Ill. Rev. Stat. 1943, Chap. 32, par. 157.156 [Jones Ill. Stats. Ann. 32.160]), which is as follows: ‘The provisions of this Act shall apply to all existing corporations, including public utility corporations, organized under any general law of this State providing for the organization of corporations for the purpose or purposes for which a corporation might be organized under this Act.’ .... An insurance corporation may not be organized under the Business Corporation Act. That Act provides that corporations for profit may be organized under it for any lawful purpose or purposes except for the purpose of banking or insurance or the operation of railroads. (Section 3, Business Corporation Act, Par. 157.3, Chap. 32, Ill. Rev. Stats. 1943 [Jones Ill. Stats. Ann. 32.003].)” The instant defense which respondents now seek to interpose was not raised in the brief they filed in this court. The following were the sole points made in respondents’ brief: “I. “In view of defendants’ evidence at the retrial, the Appellate Court’s decision in the original appeal on the subject of what constitutes an improper motive is final and the rule of res adjudicata must therefore be applied. “II. “In determining whether a shareholder’s purpose is improper, it is the duty of the Court to ascertain from the facts in each case the good faith of the respective parties and apply the remedy so as to administer justice between the parties. “III. “Plaintiff’s constant demands upon the Company for information and his distortion thereof in letters circularizing shareholders is a further reason for denying him the relief requested. “IV. “Where it is determined that a stockholder is entitled to the right to inspect, he cannot recover more than one statutory penalty regardless of the number of demands.” The brief of respondents assumed that the decision in the cause turned upon the question of the good faith of the parties. Respondents concluded their brief as follows: “For the reasons given, the harassing of the Company, the continual demands made on its officers for information, the uses made -of the information so obtained in circularizing shareholders and upsetting, not only them, but the policyholders and agency force as well, and finally, the proven conspiracy existing between Tribble and the plaintiff, because of all of these things defendants ask that the judgment of the lower court be affirmed.”  Under Rule 13 of this court we would be justified in striking respondents’ petition for rehearing from the files. However, there is no merit in the defense they now seek to interpose. The right to examine corporate records given to a shareholder by Section 45 of the Business Corporation Act applies to all corporations organized for profit. It applies to insurance companies organized under another General Act. In Venner v. Chicago City Ry. Co., 246 Ill. 170, Venner filed a petition for mandamus against the Chicago City Railway Company and its president and secretary to compel the defendants to permit him to examine the books, records and accounts of the company, which were under their control. The defendant corporation filed an answer in which it set up that it was incorporated under a special public act of the legislature, approved February 14, 1859, and that it was not subject to the provisions of Section 13 of the Corporation Act approved April 18, 1872. That section provided: “It shall be the duty of the directors or trustees of every stock corporation to cause to be kept at its principal office or place of business in this State, correct books of account of all its business, and every stockholder in such corporation shall have the right at all reasonable times, by him-self or by his attorney, to examine the records and books of account of the corporation.” This section was a part of the General Act concerning corporations for pecuniary profit, which was approved April 18, 1872, and went into force July 1, 1872. The Supreme court held that Section 13 was a proper exercise of the police power of the State and that it affected all corporations, irrespective of the Act under which they were organized. At the time of the decision in the Venner case there was a General Corporation Act which expressly excepted banking and insurance companies from the organization provisions of that Act. The opinion in the Venner case was filed June 29, 1910, and the important ruling made therein has never been overruled nor modified. In People v. Building & Loan Ass’n, 369 Ill. 518, it was held that the police power may be exercised not only in the interest of the public health, morals, comfort and safety, but also for the promotion of the general welfare; that building and loan associations are quasi-public in character, and because of this fact the State may, in the exercise of its police power, subject them to a degree of regulation which might be unnecessary and unreasonable in the case of purely private business corporations. The opinion states (p. 526): “All grants, stipulations or restrictions as to corporations are subject to subsequent alteration by general laws enacted under the police power. (Integrity Mutual Ins. Co. v. Boys, 293 Ill. 307; Venner v. Chicago City Railway Co., 246 id. 170; Ward v. Farwell, 97 id. 593.) ” In Babcock v. Harrsch, 310 Ill. 413, the court cites with approval the ruling in the Venner case. In Wilson v. Mackinaw State Bank, 217 Ill. App. 494, it was contended by the bank that the right given to a stockholder to examine the records and books of account of a corporation did not apply to stockholders of a State bank organised under the Banking Act and that the right extended only to stockholders of a corporation organized under the provisions of the General Corporation Act. The Appellate court of the Third District followed the ruling in the Venner case and held that the contention of the bank was without merit. In Maremont v. Old Colony Life Ins. Co., 189 Ill. App. 231, the court sustained the ruling of the trial court that Section 13 of the Corporation Act, approved April 18, 1872, that every stockholder in a stock corporation shall have the right at all reasonable times, by himself or by his attorney, to examine the records and books of account of the corporation, applied to a life insurance company, and the Appellate court states in its opinion that they did not see how the trial court could have ruled otherwise in view of the ruling in the Venner case. The sole case cited by respondents is Prudential Ins. Co. v. Richman, 292 Ill. App. 261, 269, but that case does not support respondents’ position. It was there held that in respect to its organization and powers the insurance company was governed solely by the provisions of the Insurance Act and not by the General Corporation Act, but the court did not hold, indeed, it could not hold, in view of the ruling in the Venner case, that the provisions of the General Corporation Act, enacted under the police power, did not affect all corporations alike. If that ease were an authority for respondents’ position, we would, of course, disregard it. We may state that upon the first appeal in this cause respondents did interpose the instant point, but after petitioner cited the Venner case and other decisions that were adverse to the contention of respondents, the latter clearly abandoned the contention upon the second trial, and they now seek to again interpose the contention in their petition for a rehearing. Respondents, in their petition, reargue certain points that we passed upon in our opinion, but we find nothing in the reargument to cause us to change our judgment.  Respondents close their petition with the following statement: “Certain information, previously unknown to respondents, has unexpectedly come to their attention since the opinion of this Court was rendered. Within a few days respondents will therefore file a Motion, supported by affidavit, ashing that the cause he remanded for retrial for the purpose of hearing newly discovered evidenced’ (Italics ours.) Some days later respondents filed in this court a motion “to remand the cause to the trial court to hear newly discovered evidence concerning the ownership of the 1150 shares of the Capital Stock of the North American Life Insurance Company of Chicago, a corporation, which form the basis of this suit, and to await the outcome of the present controversy between Appellant, Stanley II. Doggett, and Maud M. Doggett, his mother. ’ ’ Attached to the motion is an affidavit of one of the attorneys for respondents, in which he states that a letter, a photostatic copy of which is attached to the affidavit as an exhibit, has been received in the home office of the respondent company, on Friday, April 19, 1946. The affidavit further states that the ownership of the 1150 shares of the capital stock of respondent company by Doggett is the basis of his right to a list of the stockholders and that Doggett can have no right to said list if he does not own said shares of stock. Exhibit 1 purports to be a letter from a law firm in New York City notifying the respondent corporation that the mother of Stanley Doggett, Maud M. Doggett, claims to be the owner of the 1150 shares of stock; that she has demanded of her son the return of the shares, and that unless he returns the certificates in the immediate future the law firm has been instructed by Mrs. Doggett to institute suit to compel the return of the certificates. Doggett filed a counter-affidavit in which he asserts that he owns the said shares of stock and that they were given to him by his mother in 1936. It is evident that this motion is not a proper one and that its plain purpose is to influence our opinion in the matter of the petition for rehearing. It is an effort to make a part of the record in this cause alleged evidence that was not introduced in the trial court. Respondents, in the trial court, did not question Doggett’s ownership of the stock. Indeed, they admitted in their answer that he was the “registered legal owner on the books of North American Life Insurance Company of Chicago of eleven hundred fifty shares of the capital stock of said Company.” If we assume that respondents are acting in good faith in making the motion, and that they are proceeding upon the assumption that we have the right, under Section 92 of the Civil Practice Act, to receive additional evidence and to consider the same in passing upon questions before us, we may state that we have no such authority. In People ex rel. Busch v. Ferro, 313 Ill. App. 202, in our additional opinion, we said (pp. 229, 230): ‘‘ The petitioner has filed a petition for rehearing in this cause. In support of the same petitioner has filed a written motion asking permission to file a certain document in the 'cause and ‘moves the court that said document be made part of the record of the above entitled cause and be considered by the court in examining the petition for rehearing.’ Attached to the motion is a photostatic copy of what appears to be a part of a sheet of paper bearing no date and upon which appear short notations made by a number of persons. The so-called document was not introduced in evidence in the trial court, but the petitioner contends that this court has authority under section 92 of the Civil Practice Act [Jones Ill. Stats. Ann. 104.092] to receive additional evidence and to consider the same in passing upon the appeal. We have no such authority. In Schmidt v. Life Assurance Society, 376 Ill. 183, 197, 198, appears the following: “ ‘Per Curiam: A motion has been made in this case under section 92 of the Civil Practice Act (Ill. Rev. Stat. 1939, chap. 110, par. 216) to submit to this court certain original evidence hot offered in the trial court. “ ‘This section purports to give the Supreme and Appellate Courts power to receive' evidence not produced on the trial. Except as provided by the constitution for the filing of original suits in the Supreme Court, its jurisdiction is wholly appellate. In so far as section 92 of the Civil Practice Act, supra, attempts to give the Supreme Court original jurisdiction on the appeal of a cause, of matters germane upon the trial thereof, this provision contravenes section 2 of article 6 of the constitution, which provides that the Supreme Court has appellate jurisdiction, only, in all cases except in cases relating to the revenue, mandamus and habeas corpus. The matters offered do not come within the original jurisdiction of the court. The motion is denied. ’ ” We have this day entered an order denying the motion of respondents. After a careful examination of the petition for rehearing and the motion filed by respondents, we have reached the conclusion that the judgment we have heretofore entered in this cause is a just and necessary one and that respondents will adhere to the policy they have always followed, not to furnish a stockholders’ list to anyone, unless the law compels them to do otherwise. The instant cause demonstrates that Section 45 of the Business Corporation Act enunciates a wholesome and necessary law. The petition for rehearing is denied. Petition for rehearing denied. Friend, P. J., and Sullivan, J., concur.