Court Opinion

ID: 6968744
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:58:34.806198+00
Date Added: 2024-06-11T16:08:43.175550
License: Public Domain

Mr. Justice Phillips delivered the opinion of the court: The purpose of this society, and its action with reference to an attempt to change the location of its principal office from the city of Fulton to the city of Rock Island, and the legislation under which such attempted change was sought to be made, are stated and set forth in Bastian v. Modern Woodmen of America, 166 Ill. 595, where it was held that where an incorporated benefit society has by its fundamental law fixed its principal office at a place designated in its articles of association, such principal office cannot be changed without the amendment of its fundamental law and its articles of association; that such change of its articles of association must be made in accordance with methods assented to by its members, and that statutory provisions relating thereto must necessarily be observed; that in the absence of a statute to the contrary, a corporation has no power to perform strictly corporate acts outside of the State of its creation. It was further held in that case that section 10 of the act of 1893, concerning benefit societies, was in conflict with section 18a of the act of 1887 as added by the act of 1893, and repeals the conflicting provisions of that section; that a benefit society organized in this State, which had applied for permission to continue business under the act of 1893, concerning benefit societies, was prohibited by section 10 of ¿that act from changing the location of its principal office at a meeting held in another State. It was further held that an unauthorized and illegal removal of the principal office might be enjoined by members of the society who contributed to its support and were interested in its funds. It is unnecessary to repeat or discuss the legislation under which this organization was acting, but that case, in its discussion of the question as to the powers of this organization under the law of this State in force prior to the time of that opinion, must be considered conclusive. In 1897 an act was passed (Laws of 1897, p. 237,) entitled “An act to amend an act entitled ‘An act to provide for the organization and management of fraternal beneficiary societies for the purpose of furnishing life indemnity or pecuniary benefits to beneficiaries of deceased members, or accident or permanent indemnity disability to members thereof, and to control such societies of this State and of other States doing business in this State, and providing and fixing the punishment for violation of the provisions thereof, and to repeal all laws now existing which conflict herewith, ’ by adding thereto an additional section hereby designated as section 7£, and amending sections 10 and 12 thereof.” The additional section 7i and amended section 10 are as follows: “Sec. 7£. Any corporation, association or society organized under the provisions of this act amended by this section, may change its article of association in the manner prescribed by its own rules, but no such change shall be of legal effect until a certificate setting forth fully and definitely the changes proposed shall have been submitted to and approved by the insurance superintendent and filed in the office of the Secretary of State, and a certified copy thereof recorded in the, office of the recorder of deeds in the county in which the original certificate of association was recorded. Every corporation, association or society organized, having adopted such change in its articles of association, shall comply with the provisions of this section wiihin sixty (60) days.” “Sec. 10. Any such society organized under the laws of this State may provide for the meeting of its legislative or governing body in any other State, province or territory wherein such societies shall have subordinate bodies, and all business that has heretofore or may hereafter be transacted at such meetings shall be valid, in all respects, as if such meeting was held within this State; and where the laws of any such society provide for the election of its officers by votes to be cast in its subordinate bodies, the votes so cast in. its subordinate bodies in any other State, province or territory shall be valid as if cast in this State: Provided, however, that all meetings held within this State, in any such society organized under this law or heretofore organized, no member shall be allowed to cast more than fifteen votes by proxy on any question submitted therein.” This act was approved May 27, 1897, with an emergency clause. By this legislation any society organized under the provisions of the act was authorized to change its articles of association in the manner prescribed by its own rules, and was further empowered to provide for the meeting of its legislative or governing body in any other State or territory wherein the society should have subordinate bodies, and it declared all business that had theretofore been or might be thereafter transacted at such meetings should be valid in all respects, to the same extent as if such meetings were held within this State, and rendered valid all acts done with reference to changing the place- of its principal office, and empowered the society to do what was held in Bastian v. Modern Woodmen of America, supra, could not be done, and legalized the action of such society in attempting to effect such removal, by which the illegality of the act, as held in that case, was obviated. The appellants insist that the legalizing clause of section 10 of the act above is void because not expressed in the title of the amendatory act, and is special legislation. As to the first objection, it is sufficient to say that if all the provisions of the act relate to one subject, which is indicated in its title, and the parts of the act are incident ,to and reasonably connected with the subject indicated and are reasonably auxiliary thereto, then the act may include details of legislation with reference to that subject matter so indicated without the title being a mere index of everything contained therein. The provision of the constitution cannot be so narrowly construed as to require the title of an act of itself to contain the entire act. It is sufficient if the title of the act suggests the subject matter; then it includes all that is reasonably auxiliary thereto. The title of this act is sufficiently full and complete to include all the subjects embraced therein, not excepting what is termed retrospective legislation.. An act which affects all corporations ór persons within the particular class towards which the legislation is directed, and is general,-—applicable to all belonging thereto,—is not obnoxious to an objection as being special legislation. Because it is directed to a particular subject, including all persons that may be within a particular class to which the subject applies, does not constitute the act one having reference to a special subject and does not render it special legislation. Where the legislature enacts a law with reference to a particular subject matter, and authorizes acts to be done which are not, in and of themselves, jurisdictional with reference to a person or property, it may by curative legislation approve and render valid any act done which it had power to originally authorize, and which may have been done theretofore under a supposed power and authority. If something is done or omitted constituting a defect in a proceeding, which might have been authorized or dispensed with by the legislature, a subsequent curative statute authorizing or dispensing with such act done or omitted renders the act valid. If something is done which might have been made immaterial by the legislature, that body, by a subsequent law, may cure a defect existing because of such immateriality and render the same valid. If that body has power to authorize a particular act to be done, it may by a subsequent act render valid an act so done without a power theretofore conferred. (Town of Fox v. Town of Kendall, 97 Ill. 72.) But this power does not extend to a jurisdictional question where the rights of persons are involved, which can only, under the constitution, 'be taken under due process of law. The principle is, if a property right is asserted, whether inherent in a natural person or conferred by law upon an artificial person, the question is presented, has the legislature renounced the right to legislate further with reference to the subject matter or to subject it to further control? If so, a property right is secured either to a natural or an artificial person; but if not, a mere naked right has been granted, which is subject to governmental regulation, which may be dealt with as the public good may require, by the law-making power, in the same manner as with reference to all other rights. In Bank of the Republic v. County of Hamilton, 21 Ill. 53, it was said (p. 59): “If, in a law creating an artificial being, rights or powers are conferred upon it, which, by the express terms of the act or by reasonable intendment, shall not be taken away or modified by a subsequent law without the consent of the corporation, that becomes what has been termed a charter contract, and becomes a property in the hands of the corporation, and is protected by those constitutional provisions referred to; but unless there be such express provision or reasonable intendment that such right or faculty shall not be touched by subsequent legislation, it is held in the same subordination to governmental control to which the rights and faculties existing in natural persons are subject.” The legislation above quoted, and the right to amend the charter of this corporation, were valid, and clearly within the power of the legislature. Appellants contend that the change of the principal office of this corporation could not be made without the consent of its members; and further, that a contract outside the articles of association had been entered into between the promoters and the early members, fixing the location of the principal office at Fulton, and hence no change could be made of that principal office except by the unanimous consent of its members. It is further insisted, that by reason of donations made to the corporation by residents, citizens and inhabitants of Fulton, no change could be made of the principal office from that city, even with the consent of all the members of this corporation, without the consent of the residents, citizens and inhabitants of Pulton. And it is finally urged that there is no provision in the articles of association, or of the statute under which the association was incorporated, allowing a change of the location of the principal office to be made by less than all the members, and hence it is urged that the consent of all must be had. Prior to the act of June 22, 1893, there was no law authorizing the head camp of an incorporation existing by virtue of the laws of this State to transact business at a meeting- held outside of this State. By section 10 of the act last mentioned such society organized under the laws of this State might provide for the meetings of its legislative or governing body in any other State, and all business theretofore or that mig'ht thereafter be transacted at such meetings, except so far as the same may relate to the removal of the principal place of business, shall be as valid in all respects as if such meetings were held within this State. At the meeting of the head camp df the Modern Woodmen of America held at Madison, Wisconsin, in June, 1895, certain proceedings were had and the following resolution was adopted: “Resolved, That the rule of this corporation with regard to amendments to the articles of association of this corporation be and is declared to be as follows: That the board of directors of this order have power, and they are hereby required, to amend the articles of association and the fundamental law of this order in such particulars as the same may be directed to be done by vote of two-thirds of the members of the head camp, by its certificate signed by the head consul or head clerk and attested by the seal of the corporation, and that this resolution or rule take effect from and after its passage.” The exception in the act of 1893 being left out of the amendment of 1897, and the provisions of section 7-J- having been incorporated in this statute by that amendment of 1897, at a meeting of the head camp held at Dubuque, Iowa, on the second day of June, 1897, a resolution was adopted by a two-thirds vote changing the articles of association by striking out the name “Pulton” as the location of the principal office and substituting therefor “City of Rock Island,” and directing the board of directors, head consul and head clerk to make, under the seal of the corporation, a certificate of such change, and have the same recorded as required by law. The certificate was so made within sixty days and approved by the insurance superintendent and filed in the office of the Secretary of State, and a copy thereof was also filed in the office of the recorder of deeds of Whiteside county. This action of the head camp at Dubuque was in accordance with the resolution adopted at Madison and a compliance with section 7\ of the amendatory act of 1897, and was authorized by section 10 of the latter act. The persons who constituted the charter members of this society have no rights which are not common to the other members of the association. This association, having its origin in a single camp composed of a small number of persons, has been extended until now there exist thousands of camps, extending over more than twenty States and including a membership of over 290,000. The manner of government of the entire body differs from the ordinary corporation for pecuniary profit. But this corporation not organized for the purpose of pecuniary profit, could not possibly carry out any legislation with reference to any change except in the manner designated in the act under which it is organized, to-wit, the act of 1893 and the amendments thereto, which have been accepted by it. Under those statutes the plan of the association as expressed in its articles and fundamental law, and acted upon from the beginning, could not and did not contemplate a meeting of its vast membership in one body. The legislative power of the association was therefore vested in the head camp,—a body composed of certain officers and representatives of the membership, chosen by the members themselves from local camps,— and to the body as thus organized the power to exercise full authority in all matters pertaining to the weal and welfare of the association in all matters not otherwise provided for in the fundamental law is given. The delegates and certain officers assembled in a head camp in the way prescribed by the rules of the association could lawfully act on all matters delegated to that body under the articles of association and its rules, and under the statutes under which they were organized and the amendments thereto, and the action of such head camp was the action of the members of 'the association. The head camp might, therefore, under this amendatory legislation of 1897, and under the action taken at Madison and Dubuque, lawfully change the location of the. principal office, and such action is valid and binding on the members of the association. In so doing their action is not in conflict with anything said in Bastian v. Modern Woodmen of America, supra. What is here said disposes of the allegations of the bills of Anthony W. Bastian et al. v. Modern Woodmen of America et al., and of the bill of Leroy Baker v. Charles W. Hawes and Modern Woodmen of America. By the bills of Oscar Park et al. v. Modern Woodmen of America et al., City of Fulton v. Modern Woodmen of America, and Parker J. Bennett v. William A. Northcott et al. and the Modern Woodmen of America, it is averred, in substance, that a secret fraternal society first came into existence at Lyons, Iowa, in 1883, and it is alleged that twenty-one persons, constituting the sole membership of the society of the Modern Woodmen of America, elected Joseph C. Boot head consul, Lewis G-. Blaine head banker and Albert Hilton head clerk, which last named officers constituted an executive committee, with power to make and execute contracts. The bills allege that a proposition was made to the citizens of Fulton, Illinois, that the Modern Woodmen of America would become organized under the laws of the State of Illinois and establish its principal place of business at Pulton if the citizens and inhabitants would donate or contribute toward the society certain sums to pay for the obtaining of a charter in Illinois, to purchase a corporate seal, furnish an office for the principal place of business for a period of one year, pay the salary of a head physician for one year, and contribute towards the society necessary sums to keep it in running order, and would organize a local camp; that the Modern Woodmen of America would then, as soon as practicable, become incorporated under the laws of the State of Illinois, and would move its principal office from Lyons, in the State of Iowa, to Pulton, Illinois; that the inhabitants of Fulton agreed to accept said proposition, and organized Forest Camp No. 2, and paid the necessary funds for the incorporation of the society under the laws of the State, and there were paid by certain individuals certain small sums of money in carrying out the alleged contract, and paid for the head physician and for office rent for one year, with other expenses; that said society became incorporated in pursuance of said agreement, and named in the articles of association Pulton, in Whiteside county, in the State of Illinois, as its principal place of business; .that said contract was reduced to writing. The proposed removal of the principal office is then alleged in these several bills. There is no evidence in this record showing any contract reduced to writing, and its destruction, as alleged in several of these bills, by which the principal office was to be kept at Pulton, in Whiteside county, Illinois. The weight of proof tends to show that no such agreement in writing ever existed. The contract, as set out in the bills, is, in effect, an allegation that the promoters of this incorporation who had incorporated its first camp at Lyons, Iowa, proposed to move the principal office to Pulton, Illinois, and retain the principal office at that place for certain alleged considerations. The considerations alleged to have been paid, so far as the allegations of these bills are concerned and so far as set forth therein, and under the proof in this record, might be disposed of by the application of the maxim de minimis non curat lex. With reference to those allegations, it is sufficient to say that under the averments of the bills a contract is alleged to have been entered into by the promoters of this corporation before the incorporation took place, because of which, in consideration of certain expenditures being made by certain citizens and inhabitants of Pulton, its chief office should be located in that city. The decided weight of authority is that contracts of this character, made by the proposed promoters of a corporation, do not render the latter liable thereon. The rule is well stated in Cook on Stockholders, (sec. 707,) where it is said: “Any other rule would be dangerous in the extreme, inasmuch as promoters are proverbially profuse in their promises, and if the corporation were to be bound by them it would be subject to many unknown, unjust and heavy obligations. The only protection of the stockholders and of the subsequent creditors against such a result lies in the rule that the corporation is not bound by the contracts of its promoters. The rule is just and should not be weakened.” This principle is in effect sustained by Seeberger v. McCormick, 178 Ill. 404. Whilst contracts of this character made by a promoter may be ratified by the corporation, and the benefits it has accepted may be enforced against it to the extent that it may be rendered liable for damages for failing to comply therewith where there is such a ratification, yet all subsequent members or stockholders cannot be precluded or the welfare of the corporation jeopardized or prejudiced by requiring it to perform some contract perpetually, where the interests of almost every person connected with the association or corporation may be disastrously affected thereby. In case of ratification, compensation may be had in damages for a violation thereof. It is averred in the last three named bills that in the articles of association the place of the principal office was fixed at Pulton. This is, however, not averred to be a ratification of the contract of these promoters. It appears that on the application to the Secretary of State for a certificate of incorporation the place of the principal office was left blank, and that a certificate was refused by the Secretary of State because of such omission, and thereupon the city of Fulton was inserted as the place of the principal office. The pleading must be taken most strongly against the pleader, and the allegations of these bills do not amount to an averment of a ratification by the corporation. As to the bill filed by the city of Pulton, that municipality is not authorized to sue- in behalf of the citizens, residents and inhabitants thereof because of the alleged donations they may have made to the promoters of or to the Modern Woodmen of America. That municipality of itself could not extend municipal aid and benefit under the constitution, and it is not authorized to sue on behalf of inhabitants, residents or citizens thereof, and seek to protect their interests by litigation conducted in its name which may be attended with costs. We cannot agree with the contention of the appellants that the consent of all the members of this association must be had before a removal of the principal office could be effected. To so hold would render the action of a single member sufficient to prevent the action of all the other members, and is not in accordance with the purpose of the articles of association, the statutes under which it is acting, or its welfare. One becoming a member of this association must know that the charter of the company is not unalterable. He must take notice of the fact that it is liable to be amended by the legislature, and that the company might accept such amendment. By his contract when he became a member, not only was there incorporated therein the provisions of the statutes of the State as they then existed, but he is held to recognize the further principle that there is the right in the legislature to change the provisions of the charter as public good and the interests of the company may require. (Illinois River Railroad Co. v. Zimmer, 20 Ill. 654.) One becoming a member with this knowledge cannot assert a right in himself as existing which would prevent the acceptance of any legislation that might be adopted for the welfare of the association, and hence a single objection cannot take away the right of the corporation to accept this amendatory legislation and act thereon, thereby changing the place of the principal office. Neither can the objection of one or more members deprive the legislature of the State of its power to regulate, control and direct the procedure or powers of an artificial person created and brought into being by it. The object of the corporation, as stated in the statute and its articles of association, is the furnishing of life indemnity and pecuniary benefits to the widows and heirs of its members. Its manner of conducting its business, as between its members and the association, is through its local camps. There is no direct association between the member and the head camp other than through the representatives of the local camp in the head camp. The head camp, composed of officers and delegates, directs the policy of the local camps. The location of the principal office of the association is not a part of its plan for the benefit and advantage of an individual member of a particular camp. The principal place of business is more one of public convenience, for the general good of the association, and no individual member can acquire a right or interest as to the location of the principal office which is against the general good of a great majority of his fellow-members and the general benefit of the association. Appellees gave notice of a purpose to move a dissolution of the injunction in the case of the city of Fulton as complainant, as also in the case of Parker J. Bennett, complainant, and in the case of Leroy Baker, complainant, in vacation. The appellants, on appearing before the judge in accordance with this notice, entered a motion for a change of venue, which was denied, and that is assigned as error. Subsequently the cases proceeded to a hearing on bills and answer before another judge at a regular term of the Whiteside circuit court. A term had intervened between the dissolution of the temporary injunction and the subsequent hearing on bill, answers, replications and proofs. These appeals do not bring before us the question of the change of venue, nor is there incorporated in the certificate of evidence the facts on which the judge acted. Under the evidence appearing in this record and under the legislation applicable to this corporation there was no error in the circuit court in dismissing the bills for want of equity. The decree of the circuit court of White- ' side county is affirmed. c#rmfí(Z_