Court Opinion

ID: 9286291
Source: CourtListenerOpinion
Date Created: 2022-11-29 16:43:05.751199+00
Date Added: 2024-06-11T17:13:00.937295
License: Public Domain

Mr. Presiding Justice Goodwin delivered the opinion of the court. Appellant, who will be referred to as the relator, seeks the reversal of a judgment in favor of appellees, who will hereinafter be referred to as defendants, in a proceeding in which he had, by the permission of the court, filed an information against the defendants, alleging, in substance, that the American Medical Association was a corporation not for pecuniary profit, organized under the laws of the State of Illinois in 1897, with a charter which vested its management in nine trustees to be elected as the by-laws might direct; that there was no power or authority under the laws of the State of Illinois permitting it to elect a board of trustees “without the said State of Illinois’’; that it adopted by-laws providing that the State and local organizations should elect delegates to a national House of Delegates, which should elect trustees “at such place in such city and State as such House of Delegates might assemble”; and that the association had no power to deprive members “of the right to vote for and elect a board of trustees,” or to elect such trustees “without the boundaries, of the State of Illinois.” It further alleges that three of the respondents were elected trustees in Minneapolis, Minnesota, in 1913, three.in Atlantic City, New Jersey, in 1914, and three in San Francisco, California, in 1915, and that they usurped the office of trustee of the American Medical Association. When defendants ’ demurrer to this information was sustained, relator elected- to stand by the information, and judgment was entered for the defendants. The language of the information stating the provisions of the by-laws in regard to the election of trustees is not clear, but counsel for relator have set out in their briefs the provisions of the by-laws recited in relator’s petition for leave to file the information, as follows: “Article 3—Membership. “The membership of this association shall consist of"such members of the constituent associations and of such medical officers of the army, of'the navy and of the United States public health and marine hospital service as shall make application in accordance with the by-laws hereinafter provided. “Article 4—Constituent Associations. “State and territorial medical associations which have, or which hereafter may, become organized in accordance with the general plan of organization of the American Medical Association, and * * * declare allegiance to the formation and the perpetuation of the House of Delegates of the American Medical Association shall be recognized as constituent associations, etc. “Article 5—House of Delegates.” Section one provides that the business body shall be known as the House of Delegates and “consist of delegates elected by the constituent associations, by the scientific sections of the American Medical Association, from the medical departments of the army and of the navy, and from the United States public health and marine hospital service”; that the House of Delegates shall represent the “delegated powers * * * and shall be the national representative body of the constituent associations. ’ ’ Counsel further say that the by-laws provide that the House of Delegates shall elect the general officers of the association and the trustees; that its membership shall not exceed 150. The position of the relator is that an election of a trustee at a meeting held outside of the State of Illinois is void, and that the provisions for the election of delegates by State and medical associations, and the election of trustees by such delegates, áre also void. These questions were before another division of this court in People v. Hoyne, 182 Ill. App. 42, and in that case a majority of the court sustained the contentions now made by the relator. There seems to have been ah assumption on the part of the relator that this decision is binding upon the parties to the instant suit, but obviously it is not, since the statute expressly provides “that such opinions shall not be of binding authority in any cause or proceeding other than that in which they may be filed.” This is not the same cause, nor are the parties the same. On the argument it was further suggested that as an application had been made to the Supreme Court in that case for a ■writ of certiorari and denied, the court, by such action, passed upon the merits of the controversy, and thus declared itself to be in harmony with the conclusion reached by the Appellate Court. This contention, in our judgment, involves an entire misconception of the purpose and effect of the statutory provisions in regard to writs of certiorari. Those provisions are substantially identical with a section of the United States statute providing for the issuance of writs of certiorari to the Circuit Court of Appeals, which is as follows: “In any case, civil or criminal, in which the judgment or decree of the circuit court of appeals is made final by the provisions of this Title, it shall be competent for the Supreme Court to require, by certiorari or otherwise, upon the petition of any party thereto, any such case to be certified to the Supreme Court for its review and determination, with the same power and authority in the case as if it had been carried by appeal or writ of error to the Supreme Court.” The conditions' which led to the enactment of the State statute were also substantially similar to those which brought about the provision for writs of certiorari to the United States Circuit Court of Appeals, referred to by Mr. Justice Brewer in Forsyth v. City of Hammond, 166 U. S. 506, at page 511, where he says: “Up to the time of the passage of the Act of 1891, creating the Circuit Courts of Appeal, the theory of federal jurisprudence had been, a single Appellate Court, to wit, the Supreme Court of the United States, by which a final review of all cases of which the lower federal courts had jurisdiction was to be made. * * * The rapid growth of the country and the enormous amount of litigation involving questions of a federal character so added to the number of cases brought here for review, that it was impossible for this court to keep pace with the growing docket. The situation had become one of great peril, and many plans for relief were suggested and discussed.” He then states the provisions for the Circuit Courts of Appeal, and continues: . “It was obvious that all contingencies in which a decision by this tribunal was of importance could not be foreseen, and so there was placed in the act creating the Courts of Appeal, in addition to other provisions for review by this court, this enactment:” He then quotes the language of the statute, and later continues: “Obviously, a power so broad and comprehensive, if carelessly exercised, might defeat the very thought and purpose of the act creating the Courts of Appeal. So exercised it might burden the docket of this court with cases which it was the intent of Congress to terminate in the Courts of Appeal, and which, brought here, would simply prevent that promptness of decision which in all judicial actions is one of the elements of justice. “So it has been that this court, while not doubting its power, has been chary of action in respect to certioraries. It has said: ‘It is evident that it is solely questions of gravity and importance that the Circuit Courts of Appeal should certify to us for instruction; and that it is only when such questions are involved that the power of this court to require a case in which the judgment and decree of the Court of Appeals is made final, to be certified, can be properly invoked. ’ ” It seems a conclusive answer to the relator’s contention to say that, during the 26 years that the United States certiorari act has been in force, there does not appear to be a case in which counsel have suggested that the Supreme Court, by denying the writ of certiorari, stamped the conclusions of the court of appeals with its approval, and impliedly made a declaration in regard to what was the law. The language of the statute does not require our Supreme Court to issue a writ of certiorari in any case, but merely provides that it shall be competent for it to do so; nor does it require the court to pass upon the merits of the controversy presented, but leaves that to the discretion of the court, to be exercised in every case. So, in the case cited here, the question considered upon the application for the writ was not necessarily the one as to the correctness of the conclusions of this court. The Supreme Court first had presented to it the question of whether there was anything in the circumstances of the case which made it expedient for it to pass upon the merits of the controversy and to declare the law. Obviously it was competent for the Supreme Court to go into the merits of the contentions made in the petition, but it was equally competent for it to say that as, under the decision of the Appellate Court, the questions involved would again be presented in a quo warranto proceeding in which all the parties in interest would be before the court, it would be better to pass upon them in that case, in which a binding adjudication of the rights of all the parties could be made. Any inference, therefore, as to the opinion of the Supreme Court in regard to the correctness of the conclusion reached by the Appellate Court must necessarily rest upon speculation and conjecture. The function of finally declaring the law of the State rests with its Supreme Court, and is accomplished by means of its opinions, in which it speaks through its justices. The only safe rule would, therefore, appear to be that its conclusions in regard to the law are to be found in its reported opinions, and not deduced inferentially from its action in denying writs of certiorari. We are aware that in the case of Soden v. Claney, 269 Ill. 98, the court remarked that: “It does not follow that such a denial of a petition for the writ of certiorari is an approval of the. reasons upon which the Appellate Court bases its judgment, but it is an approval of the conclusion reached, and is therefore, in effect, an affirmance of the judgment”; and later, that: “The effect of denying Claney’s petition for the writ of certiorari was to hold that there were no probable grounds for the reversal of the judgment of the Appellate Court so far as it affected the rights of Claney as a defendant in the original bill”; but this language of the court must be taken in connection with the circumstances in which it was used. In that case, the court expressly stated: “These petitions were considered upon their merits, and the petition of Claney was denied.” The case goes no further than to hold that when the Supreme Court has denied a petition for a writ of certiorari, the judgment ' of the Appellate Court, so far as the petitioner is concerned, will not thereafter be reconsidered. The effect of a denial of a writ of certiorari, though conclusive, is purely negative. By its action, the Supreme Court does not review the judgment of the Appellate Court, but declines to do so. This does not make the judgment of the Appellate Court final, but it leaves its finality undisturbed. For these reasons we are constrained to hold that the action of the Supreme Court in denying the State’s Attorney’s petition for a writ of certiorari in the case cited does not constitute an authoritative declaration in regard to the questions of law involved, and that so far as any action by the Supreme Court is concerned, these questions are still open. It, therefore, devolves upon us to consider the merits of the points presented. The first question is, was the election of trustees of the American Medical. Association void because held outside the limits of the State of Illinois? Corporations, whether for pecuniary profit or otherwise, have such powers, and such only, as are vested in them by the law of the State under which they are organized. Corporations not for pecuniary profit, such as the association in question, have, by section 32 of the Corporation Act (J. & A. 2450),been given power to elect trustees “in such manner, at such times and places, and for such periods as may be provided by the certificate of incorporation, or in case such certificate does not contain such provisions, then as may be provided by the by-laws.” It will be seen that the place at which the trustees are to be elected is left absolutely to the discretion of the association, without any express qualification. It cannot be doubted that it was within the plenary legislative power of the General Assembly to authorize corporations of this character to hold elections of trustees at any place, whether within or without the limits of the State. In conferring the power upon the association they have chosen to use language of a broad and unrestricted character, which in itself places no limitation upon the association’s choice of place. Had it chosen to limit this authority to places “within the State,” presumably it would have done so by the use of those simple and apt woyds. Cases stating that it is the general rule that corporations have no power to do so-called “corporate acts” outside of the State creating them are clearly not in point; the basis for that rule is an absence of legislative authority, and here, as we have seen, unrestricted authority has been given. But those cases are also inapplicable for another obvious reason. The rule has been evolved and applied only to cases involving business corporations and organizations of a like nature, such as insurance companies and benefit associations, and in regard to such organizations it has been held that, while they may engage in business in other jurisdictions, they may not perform corporate acts outside of the State, unless such authority has been directly conferred upon them, and the cases in which this has been held abound in reasons based upon the jeopardy of the pecuniary interest of the stockholders, and the desirability of keeping the corporate acts of such corporations within the control of the sovereignty creating them. It may Well be that this limitation upon the powers' of business corporations is the result of judicial legislation, but it seems firmly fixed in the law. Although we are of the opinion that the Legislature has given express authority to corporations not for pecuniary profit to hold elections of trustees at any place, whether within or without- the limits of the State, we are further of the opinion that, in the ahsence of such express legislative authority, the decisions which hold that business corporations cannot, in the absence of express legislative authority, hold such elections outside of the State, would not warrant a conclusion that in such circumstances the corporations not for pecuniary profit could not do so. The principles which govern the interpretation of statutory provisions providing for the creation of corporations for pecuniary profit are essentially and necessarily different from those governing the construction of provisions for the incorporation of associations not , for pecuniary profit. In the former class, the directors, under the sanction of the State, become the trustees of the fortunes of the stockholders in whole or in part. To a certain extent, both directors and stockholders are relieved from financial responsibility for the acts of the corporation, and there is a concentration of financial power which may, according to circumstances, become greatly beneficial or exceedingly hurtful to the interests of the public. It is, therefore, obviously desirable that acts of a business corporation of a purely corporate nature be done within the domain of its creator, and consequently under its control. Associations not for pecuniary profit, however, are essentially different in their nature; they are organized for the mutual benefit of the members, or for the promotion of the general welfare, or both, and include a multitude of organizations for the advancement of education, science, commerce and industry, and for other beneficent purposes, and, when possessed of a membership of a general character, constitute integrating strands tending to give solidarity to the country in peace and in war. Consequently, there is every reason to give a liberal interpretation to the broad powers permitting them to determine for themselves the questions of where they shall meet, how they shall select their officers, and all other matters of like nature. Again, we must bear in mind the fundamental principle of statutory construction that a law is to- be interpreted in the light of the circumstances in which it was enacted. We cannot lose sight of the fact that when the act under consideration was passed, innumerable associations not for pecuniary profit existed, having memberships scattered throughout the country, and accustomed to meet from time to time in different centers of population. This plan had been adopted for the obvious purpose of giving members an approximately equal opportunity to attend a general meeting of the association, and tended to preserve their unity and the interest of the members. All this was a matter of common knowledge, and it was, therefore, with this in view that the Legislature conferred upon such organizations power to elect trustees “at such times and places” as it might determine upon. It was suggested in the opinion of the court in People v. Hoyne, supra, that this statute says, “as may be provided by the by-laws,” and that the bylaws in this case do not definitely fix the place at which the elections shall be held. While that point is not before us, since it is not covered by the information, the by-laws set out in the State’s Attorney’s petition for leave to file the information definitely fix the method by which the place of election shall be determined; this is, in our view, providing for the place of 'election within the meaning of the statute. On the first question raised by the information, we are, therefore, clearly of the opinion that the association had the power to éleet trustees at places outside of the State of Illinois. The final question arises, then, as to whether the method adopted for electing the trustees of the association violated the provisions of the statute. There is, so far as we know, no principle of law which, in the absence of statutory provisions, requires that the trustees of an association or society, not for pecuniary profit, shall be elected in any particular manner or by any particular method. The statute itself, in the very broadest language, permits such associations to elect their officers “in such manner” as they may see fit to provide in their articles of incorporation or bylaws. We do not see how broader language could be used. Again, we must recall that when the statute was passed, it was a very general custom for political organizations and societies organized for other purposes, which had a large membership, to choose their officers and directors through delegates selected for that purpose. We see nothing unfair or contrary to public policy in permitting organizations having a widely scattered membership to provide for the election of trustees through delegates selected by local groups of members, nor do we see any reason for holding that the Legislature, when it stated that the trustees should be elected in the manner that might be provided by the by-laws, intended, notwithstanding this broad language, impliedly to prohibit the method selected in this particular case and which was in general use at the time the act was passed. Delator’s argument in this regard is based upon section 31 of the Corporation Act (J. & A. 2449), which, in providing for special and annual meetings, says that “At any such meeting, members of the corporation may take part and vote in person or by proxy.” What was the purpose of this provision? Obviously it required no legislative enactment to secure to a member the right to take part and vote at an annual meeting of his association. The provision clearly was for the purpose of securing to him the privilege of exercising that right by proxy, and so to take part in the meeting, although it might be physically impossible for him to attend. There is nothing in the statute which expressly or by implication prescribes the nature of the business which shall come before the special and annual meetings of the association; these are matters of internal regulation left to the association itself and, as indicated, we are of the opinion that the phrase does no more than to secure to a member the privilege of voting by proxy upon such matters as properly come before a' meeting. Upon this point " also we have arrived at a conclusion different from that reached in People v. Hoyne, supra. While we prefer to follow the former opinions of the Appellate Court wherever possible, the statute expressly provides that such opinions are not to be considered binding upon us except in the same case. From this it seems clearly to be our duty to differ from a former opinion where, after a careful and painstaking consideration of the question involved, we arrive at an opposite conclusion. For the reasons above stated, the judgment of the Circuit Court is affirmed. Affirmed.