Court Opinion

ID: 7004287
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:47:42.435025+00
Date Added: 2024-06-11T16:10:01.368777
License: Public Domain

Mr. Justice Stein delivered the opinion of the court. • First. A court of chancery has no jurisdiction to try title to office upon a bill filed purely for that purpose, the proper remedy being by quo warranto. Kean v. Union Water Co., 52 N. J. Eq. 813; Perry v. Oil Co., 93 Ala. 372; Jenkins v. Baxter, 160 Pa. St. 199; Lawson v. Kolbenson, 61 Ill. 405. But as was held in Chicago Macaroni Co. v. Boggiano, 202 Ill. 312, and Garmire v. Mining Co., 93 Ill. App. 331, the court may determine who are the proper officers by way of affording incidental relief where it has jurisdiction upon other grounds. That the bill at bar presents such- a cise, appears from the foregoing statement. The acts of the defendants resulted in tying up the funds of the insurance company and prevented it from doing business and meeting its obligations. Excepting banks, no reputation is more sensitive than that of a life insurance company. Had the state of things continued which existed when the injunction issue, the reputation and business of the company would have been ruined, and irreparable injury would have resulted to it and its stock and policy holders. Second. If the holders of Ho. 3 stock had a right to vote, the defendants were not elected trustees of the company and had no right to do what they did. Conceding that stock must be fully paid for before-the holder of it is entitled to participate in elections for trustees, it does not appear on the face of the bill that the shares of stock in question were not paid for. On the contrary, it appears that the executive committee ordered the stock to issue upon what it deemed, an adequate consideration; and there is nothing before us from which we can determine that the consideration was inadequate or that the transaction lacked in good faith. Uor was there any increase of stock in tlie issue. All the stock originally subscribed had been placed in the treasury of the company and divided into three series. Series Ho. 3 was “,to be used and sold on recommendation of the board of trustees, either to provide additional assets or liquidate the obligations of the company.” The stock was so issued out of the treasury for the latter purpose. Third. The chairman of the stockholders’ meeting rejected the votes of the holders of Ho. 3 stock on the ground that they were interested in the then pending questions relating to the issue and validity of the stock. In so ruling the chairman erred. Each stockholder represents himself and his own interests only, and his right to vote upon any measure is not in any way affected by the fact that he lias a personal interest thórein different or separate from that of the other stockholders. Gamble v. Water Co., 123 N. Y. 91; Bjorngaard v. County Bank, 49 Minn. 483; 3 Clark & Marshall on Priv. Corp., 2005; 2 Cook on Corp. (4th Ed.), 1319. At the time of the election the stock stood in the names of the persons offering to vote it. The right to vote corporate stock is prima facie in the person who has the legal title, as shown by the records of the corporation. 3 Clark & Marshall on Priv. Corp. 1993. Eourth. Whether, at the time the resolution was passed and the contract made under which the Ho. 3 stock was issued, the company was sufficiently organized and had a sufficiently legal existence to enable it to make a valid contract of that kind, is a question not entirely free from difficulty. The statute (Hurd’s Rev. Stat. of 1901, Ch. 73, Sec. 176) provides: “ Before any life insurance company goes into operation under the laws of this state, a guarantee capital of at least $100,000 shall be paid in money and invested in the stocks of the United States * * * or in such other stocks and securities as may be approved by the auditor of public abcounts,” etc. ' Secs. 180 and 181 are as follows : “ Mo policy shall be issued until a certificate from the auditor has been obtained authorizing such company to issue policies. * * * “ Whenever the corporators shall have fully organized such company, and the said company shall have deposited with the auditor the required amount of capital, it shall become his duty to furnish the corporators with a certificate of deposit, which, with the certified copy of such declaration, previously received from, the auditor, when filed for record in the office of the recorder of deeds in the county where such company is to be located, shall be the authority to commence business and issue policies, and the same, or a certified copy thereof, shall be evidence in all suits.” The above provisions were clearly enacted for the benefit of policy holders; and while in the bill before us there is no allegation that the deposit required by the statute was ever made, or a certificate of deposit furnished and filed, it by no means follows from such failure that the company had no power to issue the Mo. 3 stock and enter into the contract in pursuance of which it was done. Under the act of 1869 the organization of the company is complete for all purposes except issuing policies when the following things have been done: first, a charter filed as required by Sec. 178; second, the approval of the charter bv the attorney-general; and, third, the subscription of its capital stock and election of directors. It may then proceed with the collecting of subscriptions, opening offices, preparing forms and policies and taking steps toward com-' pleting its general equipment for enabling it to issue policies as soon as the deposit shall be made. Appellants raise no objection to the release of the original subscribers to the capital stock and the turning in of the same into the treasury of the company, and we do not wish to be understood as expressing any opinion in that regard. The order appealed from is affirmed.