Court Opinion

ID: 6571640
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:29:59.252298+00
Date Added: 2024-06-11T15:56:55.765568
License: Public Domain

The opinion of the court was delivered by
Phelps, J.
— The first question, in the order of this case, arises upon the plea in abatement. That plea sets up an objection to the jurisdiction of the justice’s court, and of course to the appellate jurisdiction of the county court, founded upon the supposed incompetency of the justice, before whom the action was originally brought, to judge between these parties. The plea alleges, that J. H., the justice, is related within the second degree of affinity to one H. K., who is a member of the Sears-burgh Turnpike Company, and the owner of a portion of the stock of said company.
This plea is founded upon the statute law of the state, which provides, that a justice of the peace shall not take cognizance of a case, where he is related within the fourth degree, either by affinity, or consanguinity, to either of the parties.
The question then is, simply whether the justice-is related within the fourth degree to either of these parties. That he is related to H. K-, and that H. K, is a membar and stockholder *320^10 col’Porati°n> is admitted by the demurrer. That H. K-js interested consequently in the suit, and to be affected by the i'esult, must be admitted as a necessary consequence. But there ¡s n0 prohibition in the statute, as to justices related to persons, not parties to the suit, who may have an interest in its issue. There is certainly no such prohibition in the common law, no such ground of exception to the jurisdiction, to be found in the books. The defendant therefore derives no aid from any preexisting rule of the common law, in favor of the construction of the statute for which he contends.
Is then H. K., in a legal sense, a party to this suit ? This question may well be answered by asking others: Can he discharge it ? Is he entitled to receive the amount of the judgment, should one be obtained, and would his receipt .therefor protect the defendant ? Is he liable for costs ? Could an execution for costs be levied of his property ? All these questions must be answered in the negative. How then is he a party ? In no sense, certainly, unless a remote and consequential interest makes him such. To hold that such would be the effect of such an interest, would be 'to confound all distinctions. The corporation in its'corporate capacity is plaintiff, and not the individual stockholders in their individual capacity. A stockholder, as such, can neither, control nor discharge the suit, nor indeed exercise any power over it more than a stranger. Some decisions in Massachusetts may have led to misapprehension on this point. The courts of that slate have indeed held, that the individual inhabitants of a town are parties to a suit in behalf of the town. This is probably upon the ground, that by their statute, as by ours, an execution against a town may be levied of the goods and chattels of any inhabitant. But whatever may be the ground of those decisions, they have never applied the principle to private corporations, as banks, and other joint stock companies. They have ever held, that a sheriff, who was a stockholder in a bank, could legally serve an attachment in favor- of the corporation, holding that he was neither a party, nor, in a legal sense, interested. So far therefore as the question relates to private corporations, the decisions in that state are in favor of the plaintiff.
The courts of that state have also held, that upon common law principles, a judge who is interested, or a party in a suit, is incompetent to adjudicate upon it. And they have- carried tho *321doctrine to an extent which could not be adopted here without impeding the course of justice. Holding with respect to political corporations, that the individual inhabitants are parties, they have even denied the competency of the judges of the county courts to adjudicate upon a suit in behalf of the county. If this doctrine is sound as applied to counties, it is not easy to discover any reason why it does not apply to the state at large, and to its highest judicial tribunals. Upon this ground, the jurisdiction exercised by the supreme and county courts over suits upon bonds, recognizances, &c., either directly or in the name of the state, or in that of the treasurer as trustee, must be abandoned as illegal. And if we add to this the principle of our judiciary act, that no judge shall take cognizance where he is interested, we suspend at once all criminal jurisprudence, in cases where the penalty is, either in whole or in part, a pecuniary mulct to be paid into the statt^jy^nly treasury, and where the costs of prosecution^'fSSi^r^g^im&a the same.— To apply the doctrine to thi#c^to^lmwevei’, wi||nust proceed one step farther in absurdityAmd holdR^Mif&lfeistrate could act m a suit, either for or aga#f&i.%wn or countmcorporation, who was related to any of it®nhalñm^^^iiv^re the state was prosecutor or plaintiff, if l%h#lmrmaiive jgjmiin the fourth degree within it. Whether the o^aéiia^rfthose courts be correct or not, there is certainly no propriety in extending it to the length contended for. The true principle seems to be this: Where the judge is himself interested, he is in general certainly incompetent to act as such ; but even here the plea in abatement should give the plaintiff a better writ; in other ivords, there should be some person who is competent; and where the interest of the judge sinks into that minute and re-note interest which is possessed equally and alike by all the iilizens of the state, the objection must ex necessitate rei fail.
In suits in behalf of a corporation, either public or private, he individual members, it would seem, are rather interested han technically parties.. And although it may be correct to n-eat them as parties to certain purposes, yet it certainly would jot be so, to consider them as parties in the most comprehensive sense, to every purpose, and with all the consequences which would legally flow from it.
Further, H. K. may legally sue the corporation or be sued jy it. This of itself shews that the interest of the corporation *322an(j that 0f an individual member are not identical. We are therefore of opinion, that H. K. is not strictly a party.,to this su'tj an(l that tb® plea in abatement is not sustained by the terms of the statute.
Jt is argued however, that this'case comes within the spirit of the statute, if not withi'n its letter. But it requires something more than legitimate construction to interpolate the words “ or persons in interest” into this statute. It would be adding to its provisions. The statute confines the disability to the relatives of the parties: mere interpretation can carry it no farther. To extend it to relations of those having a remote or contingent interest, requires an act of positive legislation. It would introduce a new provision. The term “ parties” cannot, by any species of criticism, be made to mean “ or other persons in interest.”
The. legislature have not deemed it expedient to go to that length: Nor do we so deem it. It would be impossible to foresee, what remote and contingent interests might be involved in. the progress of a suit, and to make the jurisdiction of the court to depend upon a disclosure of such an interest, would lead to the discussion of.matters foreign to the issue, and would often interrupt the administration of justice.
The analogy attempted to be shown in the argument, between this exception to the magistrate and the grounds of challenge to a juror, does not hold. The operation of the two tilings, in practice, is widely different. In the case of jurors, it is in the power of the court to supply the places of those who may be liable to challenge, and even to excuse jurors where the objection falls short of a legal ground of challenge. All this may be done without obstructing the administration of justice. But with respect to judges, an exception to the jurisdiction, if well founded, is fatal to the proceeding.'. There is no power to substitute another trier, nor to exercise that discretion, which is very properly confided to courts in the selection of jurors.
Another question, whieh has been raised in the case is, whether the plaintiffs have sufficiently shewn their corporate existence. It appears that they gave in evidence their charter, and proved the completion of the road, the acceptance of it, as required by the charter, the erection of toll-gates, &.c. But it is insisted, that they should also have produced the record of *323their organization. We think this was unnecessary; and that their corporate existence was sufficiently proved. The existence of a corporation de facto is always sufficient-for the ordi-" nary purpose of protecting the corporate rights agaipst a stranger. In some cases, as where an authority is claimed, by virtue of corporate powers, to interfere with .the person or property of the citizen, greater strictness is required. Such are the cases of the school districts, cited in the argument, where the power of taxation and of proceeding by distress was assumed. In such cases, the proceedings must conform strictly to law.— But for the purpose of enforcing a contract, made with a supposed corporation as such, or of protecting the property of such a corporation from tort-feasors, it is enough to shew a corporation defacto. What .indeed is a corporation by prescription, but a corporation de facto ? Its legal origin is presumed from its continued existence; yet the production of the chp.rter in this case, is at least as good as that .presumption. Shewing then an existence in fact, and the legality of that existence by the original charter, is all that can be required.
It is every day’s practice, to admit proof of the existence of corporations, without even the production of the charter; and this in criminal cases. In indictments for uttering counterfeit bank notes, parol proof of the existence of the corporation in fact, is uniformly admitted. Indeed, frequent as these indictments are, as well as convictions upon them, I do not recollect a single instance of the production of the bank charter in such a case, since I have been upon the bench.
I am aware that where a corporation is plaintiff, the corporate capacity must be shewn. But the question here is, what proof is prima fade sufficient to establish it ? In this case, the plaintiffs have shewn a legal origin by their charter, and an existence de facto by their acts. Of what use is the production of their record, of their own proceedings ? Suppose it produced, and their proceedings found irregular, what would be the consequence ? An erroneous opinion has obtained, that the corporation would be extinct. This by no means follows. It is not every irregularity, ov want of conformity with the directions of the charter, which would annihilate the corporation. Suppose the directors of a bank are elected, but the meeting of the stockholders is not duly warned, — or suppose the election to take place on the second Tuesday in January, when, by the *324charter, it should be on the first: Is the corporation dissolved ? Shall every contract, entered into during the year, be deemed v0^> f°r want °f Parties • Shall all the securities in their hands held ineffectual for want of a capacity to sue, or shall there be no tangible responsibility for their paper which may be floating in the community ? The operation of such a rule could not be endured. Had the common law contained such a dogma, it would long since have been rooted out by legislative action. Informations in the nature of a quo ivarranto, to try the right to an office, are frequent in England ; yet it was never supposed that a decision against the regularity of the proceedings, and against the right of the incumbent, destroyed the corporation. But if an election is set aside, a new election follows.
Acts of incorporation, like the one in question, frequently direct the manner of proceeding, the time, place, and manner of electing officers and holding meetings of the corporators, &c. Now if the Corporation proceed to act under their charter, although these directions are not strictly followed, yet they act as a corporation, and by virtue of their charter, and may have an existence in fact to the purposes for which they are incorporate. So long as they have such existence in fact, they are most clearly subject to all the liabilities and duties imposed by the charter, and, as a necessary consequence, entitled to the corresponding rights. charter may even be forfeited, and still the corporate capacity remain. It is only when the forfeiture is enforced, and the charter vacated by competent authority, that the corporation and its legal capacity ceases.
Another point was made at the trial, which’ does not appear to be relied upon here; and that is, that the legislature has no power to authorize the plaintiffs to locate their turnpike upon a previously established road. This point has been discussed heretofore, and has been, in more than one instance, formally decided. By the establishment of a public highway, the public acquire an easement in the land, or right of passing over it. But this right the public may relinquish, and, as the legislature are the guardians of the public interest in this particular, it appertains to that body to relinquish the public right, when they deem it expedient.
Judgment affirmed.