Court Opinion

ID: 6971267
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:02:53.515826+00
Date Added: 2024-06-11T16:08:48.518500
License: Public Domain

Mr. Justice Magrúder, dissenting: I do not concur in all of the opinion of the majority, as prepared by my brother Scott, and submit the following views: First—In the petition for mandamus herein filed, the petitioner alleges that the act of March 10, 1901, when properly construed, has no reference to corporations organized not for pecuniary profit, or to religious corporations. It is then alleged that the petitioning corporation herein is a corporation not for pecuniary profit, and, therefore, does not come within the purview and requirements of the act. This contention cannot be maintained. The act is broad enough in its terms to include all corporations, whether religious corporations, or corporations organized not for pecuniary profit, as well as corporations organized for pecuniary profit. The first section of the act provides “that every corporation hereafter organized under the laws of this State shall * * * file with the Secretary of State a statement,” etc. This language is broad enough to embrace every corporation organized under the laws of the State, and makes no distinction between those organized for pecuniary profit, and those organized not for pecuniary profit. Again, section 2 provides that “every incorporated company, other than railroad, banking, building and loan and insurance companies, existing by virtue of any general or special law of this State, or hereafter organized by virtue of any law of this State, shall annually * ■■ * report to the Secretary of State.” The language of this section is broad enough to embrace corporations organized not for pecuniary profit, as well as corporations organized for pecuniary profit. Every corporation, except railroad, banking, building and loan and insurance companies, is embraced within the requirements of the act. Consequently, the petitioner could not escape obedience to the requirements of the act upon the alleged ground that it is a corporation organized not for pecuniary profit. By reas.on of its character in this regard it is not taken out of the terms of the act. It seems to be contended that corporations, organized not for pecuniary profit, are not embraced within the terms of the act, because the report, mentioned in section 2, is required to state “whether or not the corporation is pursuing an active business under its charter and the kind of business engaged in, if any;” and because, in section 2, “a failure to make said report and pay said fee shall be prima facie evidence that said corporation is out of business,” etc.; and because in section 7 it is provided “that any corporation, which is pursuing an active business under its charter, failing to make said report at the time provided by law may, * * * be re-instated,” etc. It does not necessarily follow that the words, “active business” and “business,” as here used, refer only to corporations organized for pecuniary profit. These words are not confined to corporations which do business for the purpose of making money, but refer to the carrying out of the objects of its charter by any corporation. When the. corporation is required to report whether or not it is pursuing an active business under its charter, it is merely required to report whether or not it is a going concern, or is doing such acts as it is authorized to do, and for the doing which it was clothed with corporate existence. For instance, the petitioner alleges that its corporate object, as shown by its charter, is, among other things, “to alleviate the wants of the poor and needy; to visit and attend the sick; to rescue the victims of persecution; to provide for, protect and assist the widow and orphan,” etc. The accomplishment of these ends, though they may be ends proposed to be accomplished by a corporation organized not for pecuniary" profit, may require the employment of agents and the distribution and delivery of supplies. The carrying out of the charitable objects proposed by the charter might require the employment of such means and agencies as would constitute a business, though not a business pursued for pecuniary profit, and pursued only for the purpose of accomplishing such charitable ends. It cannot be said, therefore, that the broad language, used in section 1 and section 2 of the act, is so far limited and restricted by the subse-' quent use of the words, “active business,” and “business,” as to eliminate altogether from the purview of the act such corporations, like the petitioner, as are organized not for pecuniary profit. Judicial notice is taken of the fact that section 2 of the act of March 10, 1901, was amended by an act approved May 13, 1903. (Sess. Laws of 111. 1903, p. 123). By the latter act section 2 was amended by inserting after the words “insurance companies,” the following words: “religious corporations and corporations not organized for pecuniary profit.” Section 2, as thus amended, read's as follows: “Every incorporated company other than railroad, banking, building and loan and insurance companies, religious corporations and corporations not organized for pecuniary profit, existing by virtue of any general or special law of this State, or hereafter organized by virtue of any law of this State, shall annually, between the first day of February and the first day of March, report to the Secretary of State,” etc. In other words, the amendment to section 2, takes religious corporations and corporations not organized for pecuniary profit, as well as railroad, banking, building and loan and insurance companies, out of the operation of the act of 1901. This amended act, however, has no effect upon the present suit, and does not bring it within the doctrine announced in the case of Vance v. Rankin, 194 Ill. 625, for the reason that the forfeiture and cancellation herein-before set forth were complete before the passage of the amended act; and the time has passed when, by the provisions of the act of 1901, the petitioning corporation can be re-instated. This being so, if the act of 1901 is a valid act, the forfeiture and cancellation complained of by the petitioner must stand. The act of 1901, before it was amended, and as amended, is not an act which gives a special remedy, but is an act which imposes a penalty. The penalty, having been incurred under the act of 1901 before amendment, cannot be remitted by the amendment to the act passed in 1903. That amendment, by its terms, refers to future and not past action, as clearly appears from the words “every incorporated company, * * * shall annually * * * report to the Secretary of State,” etc. The report to be made refers to future reports, that is to say, all reports made after the passage of the amendment in 1903. Whether or not, therefore, the petitioner is entitled to the writ of mandamus prayed for, depends upon the question whether the act of 1901 is a constitutional law. Second—The petition further alleges that, even if the act of March 10,1901, does include corporations organized not for pecuniary profit, yét that “it is unconstitutional and void, and is no warrant in law for the Secretary of State to cancel and forfeit petitioner’s charter, or to demand money for its re-instatement.” This allegation of the petition presents for consideration the constitutionality of the act of May 10, 1901. And the observations hereinafter made apply as well to the act as amended in 1903, as to the original act of 1901, that is to say, as well to the act since religious corporations and corporations not organized for pecuniary profit have been excluded from its operation as when they were included. By the act in question the legislature requires every corporation in the State, with the exceptions specified, to make a report annually to the Secretary of State, and to pay to him a fee of one dollar, and makes the failure to make such report, and pay such fee, operate as a forfeiture of the charter of the corporation; and the Secretary of State is required, upon default by the corporation in making such report, to enter upon the records of his office the cancellation of the charter of the corporation so making such default. Has the legislature the power to forfeit the charter of a corporation for failure to perform a specified act without any ascertainment of such failure by a judicial proceeding? The charter of a corporation is an executed contract between the government and the corporators. (Dartmouth College v. Woodward, 4 Wheat. 518; Coles v. Madison County, Breese, 154; Bush v. Shipman, 4 Scam. 186). The legislature has no power to repeal, impair or alter such a contract against the consent of the corporation. (Bruffett v. Great Western Railroad Co. 25 Ill. 310). The first clause of section 10 of article 1 of the constitution of the United States provides that “no State shall * * * pass any * * * law impairing the obligation of contracts.” Section 14 of article 2 of the constitution of 1870 of Illinois provides that “no * * * law impairing the obligation of contracts ■ * * * shall be passed.” A law which, like the one here under consideration, authorizes such a ministerial officer as the Secretary of State to' enter upon the records of his office the cancellation of the charter of a corporation, without a judicial determination that such corporation has been guilty of some act, which authorizes a forfeiture of its charter, impairs the obligation of the contract between the State and the corporation, as embodied in its charter. (Bruffett v. Great Western Railroad Co. 25 Ill. 310). If, however, there could be any question as to the correctness of the proposition already stated, there can be no question as to the unconstitutionality of this act, for another reason. The fourteenth amendment to the constitution of the United States provides, among other things, as follows: “Nor shall any State deprive any person of life, liberty, or property without due process of law.” Section 2 of article 2 of the constitution of 1870 of Illinois provides as follows: “No person shall be deprived of life, liberty, or property without due process of law.” The franchises, granted to a corporation by the act of incorporation, are property. (Regents v. Williams, 9 Gill & Johns. 365; 31 Am. Dec. 97). Such franchises being property, they cannot be taken away from the corporation without due process of law. What is due process of law? The expression, “due process of law,” means the same as the expression, “the law of the land.” (Cooley’s Const. Lim.—6th ed.-—-p.430; Burdick v. People, 149 Ill. 600). “The law of the land” has been defined to bfe “the general law; a law which hears before it condemns; which proceeds upon inquiry, and renders judgment only after trial. The meaning is that every citizen shall hold his life, liberty, property, and immunities, under the protection of the general rules which govern society. Everything, which may pass under the form of an enactment, is not, therefore, to be considered the law of the land.” (Cooley’s Const. Lim.—6th ed.—p. 431). In Regents v. Williams, 31 Am. Dec. 99, it was said: “By ‘the law of the land’ is meant, by the due course and process of the law.” In Campbell v. Campbell, 63 Ill. 462, we held that the words, “clue process of law,” in the clause of the constitution forbidding' divestiture of title except by due process of law, “has reference to judicial proceedings according to the course and usage of the common law, and must always be based upon notice.” In Board of Education v. Bakewell, 122 Ill. 339, we quoted and adopted the definition of due process of law, as given by Mr. Justice Edwards in Westervelt v. Gregg, 12 N.Y. 209, which definition is as follows: “Due process of law undoubtedly means, in the due course of legal proceedings according to those rules and forms, which have been established for the protection of private rights. Such an act as the legislature may, in the uncontrolled exercise of its power, think fit to pass, is, in no sense, the process of law designated by the constitution.” In the case of Board of Education v. Bakewell, supra, we said (p. 350): “To ascertain that a deed is conditional, that there has been a breach of condition, and to enforce forfeiture for the breach, are judicial functions, which it is not within the competency of legislative power to exercise. * * * A private corporation, created by the legislature, may lose its franchises by a mis-user or a non-user of them, and they may be resumed by the government under a judicial judgment upon a quo warranto to ascertain and enforce a forfeiture.—Terrett v. Taylor, 9 Crunch, 51.” In Burdick v. People, 149 Ill. 600, we said (p. 605): “The phrase, ‘due process of law,’ is the equivalent of the words, ‘law of the land,’ as used in Magna Charta, and means, ‘in the due course of leg'al proceedings according to those rules and forms, which have been established for the protection of private rights.’ (Board of Education v. Bakewell, 122 Ill. 339; Rhinehart v. Schuyler, 2 Gilm. 473; Davidson v. New Orleans, 96 U. S. 97; Cooley’s Const. Lim.—5th ed.—■ marg. p. 356, top p. 435). An act of the legislature is not necessarily the ‘law of the land. ’ A State cannot make anything ‘due process of law’ which, by its own legislation, it declares to be such. An act of the legislature, which transfers the property of one man to another without his consent, is not a constitutional exercise of legislative power, because, if effectual, it operates to deprive a man of his property without ‘due process of law. ’— Davidson v. New Orleans, supra; Taylor v. Porter, 4 Hill, 140; Rohn v. Harris, 130 Ill. 525; Ervine’s Appeal, 16 Pa. St. 256; Hoke v. Henderson, 4 Dev. 1.” Inasmuch as “due process of law,” or “the law of the land,” are expressions, which have reference to judicial proceedings according to the course and usage of the common law, then an act of the legislature, which de- . prives a person or a corporation of property without providing for any judicial proceeding, is a violation of the constitution, because it is an attempt to confer judicial power upon the legislature. Article 3 of the constitution of 1870 is as follows: “The powers of the government of this State are divided into three distinct departments—the legislative, executive and judicial; and no'person, or collection of persons, being one of these departments, shall exercise any power properly belonging to either of the others, except as hereinafter expressly directed or permitted.” Section 1 of article 6 of the constitution of 1870 provides that “the judicial powers, except as in this article is otherwise provided, shall be vested in one Supreme Court, circuit courts, county courts, justices of the peace, police magistrates, and such courts as may be created by law in and for cities and incorporated towns.” In Bruffett v. Great Western Railroad Co. 25 Ill. 310, where this court had under consideration an act of the legislature, whose design appears to havé been to repeal the charter of a railroad company, and to confer its property rights and franchises upon a different body of incorporators, we said (p. 312): “If, however, this act might be regarded as an effort to declare a forfeiture of the chartered rights of the company, then in existence, it is urged that it would violate the second article of our State constitution. The second section of that article divides the powers of government, and confers them upon three distinct bodies of magistracy; the legislative, the executive and the judiciary. The second section expressly prohibits any person, or collection of persons, being- one of these departments, from exercising any power properly belonging to either of the others, and it declares all acts in violation of that section void. * * * We are informed by Mr. Justice Blackstone, in his Commentaries, that, amongst the different modes by which a corporation may be dissolved, is that of a forfeiture of its charter by negligence or abuse of its franchises. In such a case, the law judges that it has broken the condition, upon which it was incorporated, and thereupon it has become void. He also informs us that the regular course in such a case, to deprive the body of its powers, is to bring an information in the nature of a quo warranto, to inquire by what warrant its members exercise their corporate powers, having forfeited the charter by the acts complained of in the information. Another mode of judicial proceeding is by scire facias, which, under some circumstances, is the appropriate remedy to have the forfeiture ascertained and declared. These are the remedies in Great Britain, notwithstanding the parliament in theory possesses the same power to declare a forfeiture as the courts. Chancellor Kent, in his Commentaries, (vol. 2, p. 305,) lays down the doctrine, that the legislature cannot repeal, impair or alter the rights and privileges conferred by the charter, against the consent, and without the default of the corporation judicially ascertained and declared. * * * It is not doubted that the legislature is prohibited, by the constitution, from exercising the power of judicially determining and declaring that a contract is forfeited, between individuals. And no reason can be perceived, why it should be exercised, when the State itself is a party to the agreement. The power, in either case, is by the constitution devolved upon the courts, and is consequently prohibited to the legislative department. It then follows that this act, so far as it may have been designed to declare a forfeiture of the charter of the Great Western Railroad Company, and to dissolve that body, is prohibited by the constitution, and is inoperative and void.” So, here, the act of May 10, 1901,—inasmuch as it makes the failure to file a report and pay a fee of one dollar prima facie evidence that the corporation is out of business, and makes such failure operate as a forfeiture of the charter of the corporation, and furthermore makes it the duty of the Secretary of State, a mere ministerial officer, to enter upon the records of his office, as soon as practicable after default in making such report, the cancellation of the charters of all corporations, failing to make such report at the time and in the manner therein provided—is in contravention of the constitution, and is inoperative and void. In Regents v. Williams, supra, the court had under consideration an act of the legislature, which professed to discontinue and abolish the corporation of the regents of a university, and to appoint a board of trustees, composed of different persons, under the corporate name of the trustees of the University of Maryland, and to transfer to the new corporation, thus attempted to be created, all the franchises and property of the corporation intended to be abolished; and it was held that this act, “if effectual, would amount to a legislative ouster; a legislative judgment of dissolution; an exercise of judicial power not warranted by the constitution; a sentence of ouster or of dissolution, being strictly a judicial act, for some imputed delinquency ascertained on proceedings at law instituted for that purpose, which, though assuming the garb of a law, the legislature, not being invested with a judicial power, is not competent to pass without the consent of the corporation.” In the case of Regents v. Williams, supra, it was also said: “It cannot be denied that the franchises granted by the act of incorporation are vested rights, and can they be taken from the regents by any act of the legislature without impairing the obligation of the contract, that they shall be possessed and enjoyed by them and their successors in their corporate character? It is very clear that they cannot, and that no act of the legislature of the State can effect that object without the assent of the corporation, if the prohibitory clause of the tenth section of the first article of the constitution of the United States is applicable to such a contract as this; and no reason is perceived why it should not be held to apply as well to such contract as to any others, considering and treating this as a private corporation. * * * The legislature has no right, without the consent of a corporation, to revoke or alter its charter, or take from it any of its franchises or property; they are alike beyond the reach of legislative power here, and the high prerogative power of the crown of England, which may create, but cannot at pleasure dissolve a corporation, or without its consent alter or amend its charter. * * * To say that the legislature possesses the power to pass capriciously or at pleasure a valid act, taking from one his property and giving it to another, would be in this age, and in this State, a startling proposition, to which the assent of none could be yielded; and yet there is nothing to forbid it, if it is once conceded that they have power to dissolve one corporation, and take from it its franchises and property, without its consent, and transfer them to another. * * * The legislature, executive and judiciary, are all creatures of the constitution, each confined in its action to the circumscribed sphere assigned to it, and cannot rightfully exercise any power which is repugnant to that instrument, or not within their respective spheres of action.” It cannot be said that the legislature would not have power to require any corporation, created under the laws of Illinois, to make such report as is required by this act. In default of making such a report it might impose a fine, and authorize the proper officers of the government to institute a judicial proceeding in consequence of the violation of the statute. But to hold that the legislature has the power to cancel the charter of the corporation, and take away its corporate franchises, without a judicial investigation of the question whether the corporation has been guilty of any act to justify a forfeiture of its charter, would be to clothe the legislature with the power, not only to impair the obligation of a contract, but also to deprive the corporation of its property without due process of law, and to confer upon the legislature the power to exercise judicial functions. Judge Cooley in his work on Constitutional Limitations, (6th ed. p. 443) says: “A vested right of action is property in the same sense in which tangible things are property, and is equally protected against arbitrary interference. Where it springs from contract, or from the principles of the common law, it is not competent for the legislature to take it away. And every man is entitled to a certain remedy in the law for all wrongs against his person or his property, and cannot be compelled to buy justice, or to submit to conditions not imposed upon his fellows as a means of obtaining it. Nor can a party, by his misconduct, so forfeit a right that it may be taken from him without judicial proceedings, in which the forfeiture shall be declared in due form. Forfeitures of rights and property cannot be adjudged by legislative act, and confiscations without a judicial hearing after, due notice would be void as not being due process of law.” In the case at bar, the petitioner herein failed to make the report, and pay the fee, required by section 2 of the act of May 10, 1901. If this failure be regarded as “misconduct,” it could not so far forfeit the right of the petitioner to be a corporation, that that right could be taken from it without judicial proceedings, declaring the forfeiture in due form. The legislature cannot declare a forfeiture of property by an act of its own, and, if this is so, it cannot confer the power to declare such forfeiture upon a ministerial officer, like the Secretary of State. All the authorities and text books, to which the briefs refer, announce this doctrine. “The charter of a corporation cannot be forfeited for mis-use or abuse of charter powers, except by direct judicial proceedings.” (12 Am. Dig.—Cent. ed.—p. 2422, and cases there cited). Undoubtedly, under section 9 of the Illinois Corporation act, the General Assembly has power “to prescribe such regulations and provisions as it may deem advisable, which regulations and provisions shall be binding on any and all corporations formed under the provisions of this act,” etc. (1 Starr & Curt. Ann. Stat.—2d ed.— p. 1006). But the power to prescribe regulations and provisions, which shall be binding upon a corporation, does not include the power to repeal its charter without a judicial proceeding; nor does that section of the act in regard to corporations confer any authority upon the Secretary of State, under a state of facts created by the General Assembly, to cancel and forfeit the charters of corporations. In Thompson’s Commentaries on the Law of Corporations (vol. 5, sec. 6584) the doctrine is thus clearly announced: “Except where the power to repeal the charter of a corporation, or to revoke the franchises which it has conferred upon the co-adventurers, is expressly reserved, as already, stated, it is not, in general, competent for the legislature of a State to dissolve a corporation, or to declare a forfeiture of any of its franchises. The reason is, that such an act is an exercise of judicial power, which, by all American constitutions, is vested in a separate body; which, consequently, is denied by implication to the legislature; and which, in some States, is denied to it in express terms. The franchises of a corporation are property; and, in view of this fact, there is no room for doubt upon the proposition, that an act of the legislature annulling the franchises of a corporation, where the power to do so has not been reserved so as to become a part of the contract embodied in the grant itself, would be a deprivation of property without due process of law-, within the inhibition of the fourteenth amendment to the constitution of the United States.” (Ibid. secs. 6608, 6700; People v. Mallary, 195 Ill. 582). ' For the reasons above stated, it seems to me that .the act of May 10, 1901, is unconstitutional. Complaint is made that mandamus is not the proper remedy to secure the relief here sought. No objection is made as to the form of the present proceeding, nor as to the tribunal in which it has been begun. The reports are full of cases, where the question of the constitutionality of an act of the legislature has been determined in a proceeding by mandamus. (High on Ex. Legal Rem.— 3d ed.-—sec. 124a; Giddings v. Blacker, 93 Mich. 1; People v. Thompson, 155 Ill. 451; People v. Hutchinson, 172 id. 486; Marbury v. Madison, 1 Cranch, 149; Ex parte Robinson, 86 U. S. 505; People v. Rose, 167 Ill. 147; People v. VanCleave, 187 id. 125; People v. VanCleave, 183 id. 330). Counsel for the respondent says that the legality, or rather the existence of a corporation, cannot be questioned in mandamus, but must be raised and determined by a direct proceeding- in the nature of a quo xoarranto or a scire facias. The object here is not to determine the legality or the existence of a corporation. It is not denied that the petitioner herein was properly organized as a corporation. The question here is whether, under an act of the legislature, the Secretary of State has the power to cancel the charter of a corporation, already existing and leg-ally organized. When a corporation is organized under the Corporation act of this State, the statement, which announces the purposes of the organization, is filed with the Secretary of State. The license to the commissioners to open books for subscription is issued by the Secretary of State. The report of the commissioners is filed in the office of the Secretary of State. The certificate of organization of the corporation is issued by the Secretary of State. This act itself, in section 7, authorizes the Secretary of State to re-instate a corporation, which has failed to make the report required by section 2, upon the records of his office upon the payment of a fee in the sum of §20.00 for such re-instatement and filing an affidavit, etc. The prayer of the petition for mandamus in this case is substantially a prayer, that the petitioning corporation be re-instated by the Secretary of State without the payment of the fee of §20.00. Involved in the re-instatement of the corporation necessarily is the cancellation of the forfeiture which has been placed upon the records. There can, therefore, be no objection to the prayer of the petition, which asks that the cancellation, which has been made under the provisions of section 2 be removed, or in other words, that the cor-' poration be re-instated upon the records of the Secretary of State. (2 Spelling on Ext. Rem. sec. 1455, et seq.; Ellis v. County Comrs. 2 Gray, 370; People v. Matteson, 17 Ill. 167; People v. Brinkerhoff, 68 N.Y. 259; In re Bradley, 7 Wall. 364). I think that the writ of mandamus should be awarded in accordance with the prayer of the petition.