Court Opinion

ID: 8185261
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:07:39.416836+00
Date Added: 2024-06-11T16:40:23.568221
License: Public Domain

Pinney, J.
1. It is settled in this state, as well as in others in which a similar statute exists, that the suspension by a corporation of its ordinary and lawful business for one whole year, as the language of the statute itself imports (R. S, sec. 1763), does not ipso facto dissolve the corporation, but furnishes a cause for its dissolution by the judgment of a competent court. Sleeper v. Goodwin, 67 Wis. 577, 585; Strong v. McCagg, 55 Wis. 624; Combes v. Keyes, 89 Wis. 309; People v. Hillsdale & C. Turnpike Road, 23 Wend. 254, 257; People v. Bank of Pontiac, 12 Mich. 527, 537.
2. As the authority of the state is essential to the creation of a corporation, and' its charter is considered a contract between the corporation and the state, in all cases where the consideration for the grant of corporate privileges, rights, and franchises is the performance of certain functions and the rendition of services of a public character, as in the case of a railroad corporation or the like, the consent of the state in some form is essential to its dissolution, and an acceptance by the state of the surrender of its privileges, rights,, and franchises is necessary in order to terminate the corporate existence by surrender; and very many cases hold that it is essential in all cases of dissolution by surrender by private companies. Beach, Priv. Oorp. § 781; Combes v. Keyes, 89 Wis. 311. In Bradt v. Benedict, 17 N. Y. 99, it is said that, “ as a general rule, to constitute a dissolution of a corporation by surrender of its franchises, or by misuser or nonuser, the surrender must be accepted by the government, or the default must be judicially ascertained and declared,” and “amere omission to exercise a corporate franchise is *611not a forfeiture per se of the franchise, or a dissolution of the corporation.” 2 Kent, Coinm. *311; Penniman v. Briggs, Hopk. Ch. 300. The corporation in this case was not insolvent. It had property, and was not indebted, and it had the usual board of directors and officers. It is shown, in fact, that there was no intention to surrender its franchises. In Boston Glass Manufactory v. Langdon, 24 Pick. 49, 52, it was held that, “ although .a corporation may forfeit its charter by an abuse or misuser of its powers and franchises, yet this can only take effect upon a judgment by a competent tribunal;” and that “the surrender of a charter can only be made by some formal, solemn act of the corporation, and will be of no avail until accepted by the government. There must be the same agreement of the parties to dissolve that there was to form the compact. It is the acceptance which gives efficacy to the surrender.” And of the omission to choose directors it was said: “It clearly does not show a dissolution of the corporation. Although the proper officers may be necessary to enable the body to act, yet they are not essential to its vitality. Even the want of officers and the want of power to elect them would not be fatal to .its existence. It has a potentiality which might, by proper authority, be called into action without affecting the identity of the corporate body. Colchester v. Seaber, 3 Burrow, 1870. But here, in fact, was no lack of officers: Although no directors had been chosen for several years, yet, by the by-laws of the corporation, the directors, though chosen for one year, were to continue in office until others were chosen in their stead.” A similar provision is found in the charter of this corporation. The authorities are abundant to establish these views. Enfield Toll Bridge Co. v. Connecticut River Co. 1 Conn. 28, 45; Brandon Iron Co. v. Gleason, 24 Vt. 238; Penobscot Boom Corp. v. Lamson, 16 Me. 224, 230; Higgins v. Downward, 40 Am. St. Rep. 141.
*6123. A corporation is not dissolved by mere nonnser of its franchises. Beach, Priv. Oorp. §§ 54, 58, 184; High, Extr. Leg. Rem. § 647; Bank of Bethel v. Pahquioque Bank, 14 Wall. 383, 398, 399; National Bank v. Insurance Co. 104 U. S. 54; Swan, L. & C. Co. v. Frank, 39 Fed. Rep. 456. Hon user may furnish sufficient ground for forfeiture by judicial proceedings to declare and enforce it.. Chesapeake & O. Canal Co. v. B. & O. R. Co. 4 Gill & J. 121, 122; Heard v. Talbot, 7 Gray, 119; People v. Bank of Pontiac, 12 Mich. 537; State ex rel. Hahn v. Minn. Cent. R. Co. 36 Minn. 258. It is held in some cases that a total honuser of the powers, privileges, and franchises of a corporation may exist for such a time and under such circumstances as to create a presumption of surrender and acceptance, but no specified time has been indicated as sufficient for that purpose in any case to which we have been referred. Penfield v. Skinner, 11 Vt. 296; Brandon Iron Co. v. Gleason, 24 Vt. 228. The subject of nonuser, surrender, and abandonment of corporate rights and franchises was quite fully considered in the recent case of Combes v. Keyes, 89 Wis. 311, where the question came up collaterally; and it was there held that in that case there had been a surrender and acceptance by the state, it appearing that the corporation “had been stripped of all its property,, and for twenty-six years had failed to exercise any corporate franchise or elect any officer in this state, or keep any office therein,” and it had, by express legislative authority, mortgaged its franchises, and, upon foreclosure, they had been sold, and the purchaser under the sale organized under legislative authority, which amounted to a confirmation of the transfers of its franchises and an acceptance of previous surrender. The case is clearly distinguishable from the one before us, in which all the grounds alleged in the proposed information only furnish cause for judicial interposition, and no one of them amounts per se to a termination or dissolution of corporate existence; nor does *613the charter of this corporation contain any provision by Avhich, for any cause, the corporation shall cease to exist and stand ipso facto dissolved.
4. The state might waive the grounds of forfeiture alleged. Beach, Priv. Oorp. § 59, and cases cited. And we are of the opinion that it did waive them by the enactment of ch. 244, Laws of 1895, amending its charter, and recognizing, in the most explicit manner, the continued existence of the corporation, and, among other things, expressly confirming its right to exercise the power of eminent domain in the manner prescribed by the general railroad law (E. S. secs. 1845-1856) in addition to the method pointed out by its original charter.
For these reasons, we hold that the corporation is still a lawfully existing one, and that the state has condoned all the alleged acts of nonuser or abandonment, and that there is no ground for permitting the information to be filed to bring in question the corporate existence of the company, or its right to the privileges, rights, and franchises originally conferred upon it.
5. "Whether the provisions of ch. 244, Laws of 1895, which greatly enlarge the existing rights, privileges, and franchises . of the company, and confer upon it others of a varied and most comprehensive and highly important character, are void, as being in violation of the seventh clause of the constitutional amendment of 1871 (art. IT, see. 31), forbidding the enactment of “ any special or private laws . . . (7) for granting corporate powers or privileges, except to cities,” is not presented by the information so as to become a proper subject for judicial determination, and we neither express nor intimate any opinion in respect to these portions of the act. The constitution which gives to this court jurisdiction of the writ of quo warranto gives the court jurisdiction of all cases in which the -information in the nature of quo wa/rrcmto had been used in modern times as a substitute *614for the ancient writ of quo warranto at common law. State v. West Wis. R. Co. 34 Wis. 197. And an information in the nature of quo warra/nto is now regarded, not only as the appropriate means of testing the right to exercise corporate franchises, but also as the proper remedy for the abuse thereof; the ancient civil writ having long since become obsolete in England, and being wholly superseded in that country and in most of the American states by a criminal information in the nature of quo warranto. Beach, Priv. Oorp. § 53; State ex rel. Att'y Gen. v. M., L. S. & W. R. Co. 45 Wis. 579. The statute (R. S. sec. 3466) provides that such proceeding may be brought “ when any person shall usurp, intrude into or unlawfully hold or exercise any public office, civil or military, or any franchise within this state,” etc., or “ when any association or number of persons shall act within this state as a corporation without being duly incorporated ; ” but the use by this court of writs and proceedings in the forms used before the statute still remains. Sec. 3463. By sec. 3241 it is provided that “ an action may be brought by the attorney general, or by any private party, in the name of the state, on leave granted therefor by the supreme court upon cause shown, for the purpose of vacating the charter or annulling the existence of any corporation created, by or under the laws of this state, except a municipal corporation,” in the cases therein specified, but all referring to offenses, violations, or acts of forfeiture already actually committed. This court has no jurisdiction of a mere claim to exercise corporate rights, privileges, or franchises. To usurp, intrude into, or unlawfully hold or exercise an office or franchise, which last term may include corporate powers, means to take possession of the office or franchise without right or unlawfully, or unlawfully hold or use the same after possession has been rightfully or wrongfully acquired. People ex rel. Taylor v. Thompson, 16 Wend. 657. Our statute (sec. 3466) is a literal copy of the New York statute under *615which that case was decided.; and it was there said by Rel-sosr, J., that “ the words of the statute were taken from 9 Anne, c. 20, § 4, under which it has been repeatedly determined that there must be a user or possession of the office or franchise to authorize the information, and that a mere claim is insufficient. Rex v. Ponsonby, 1 Ves. Jr. 1; Rex v. Whitwell, 5 Term, 86; Buller, N. P. 211; Rex v. Tate, 4 East, 337; 4 Pac. Abr. 417; Willcock, Oorp. 462; Ang. & A. Oorp. 744.” The case of Rex v. Ponsonby, supra, is clear and decisive on this point, and it is there said that “ there must be usurpation, intrusion, or unlawful holding. Row, claiming can by no construction be taken to amount to any of these; and it would be strange to imagine the statute intended ever to prevent the asserting or claiming a right. The practice now generally is to have an affidavit of some act of usurpation upon application for leave to file,” etc. And this position is sustained by Reg. v. Pepper, 7 Adol. & E. 745; Updegraff v. Crans, 47 Pa. St. 103, and People ex rel. Farrington v. Whitcomb, 55 Ill. 176. As to the increased or added rights, powers, and franchises under ch. 244, Laws of 1895, the information does not allege that the defendant has used or exercised any of them. There is nothing to show that the company has done any act that it might not lawfully have done under its original charter. The information is the foundation of the jurisdiction of the court, and it cannot be aided by the very general and uncertain statement filed by the defendant that it “ is exercising, and intends to exercise, the privileges, rights, and franchises conferred upon It ... by the amendatory act of 1895, and to acquire, by purchase, construction, and otherwise, the railroads and general routes designated in that act, and to operate the same within and without the state, and to issue its stock and bonds thereon, as authorized by said act.” An information in the nature of quo wa/rranto cannot be maintained against a corporation for what it may intend or threaten to do. *616This information does not present any actual practical question- in these respects for the judgment of the court, and no-judgment of exclusion could possibly be framed upon such-allegations. For these reasons, the court cannot consider them, or enter upon the question of the validity of the provisions of the act of 1895, referred to.
By the Oowrt.— The motion for leave to file an information and for process is denied.