Court Opinion

ID: 7003658
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:46:36.005201+00
Date Added: 2024-06-11T16:10:00.039658
License: Public Domain

Mr. Justice Freeman delivered the opinion of the court. The contention of appellant in this case is that the purpose for which the North End Masonic Temple Association was organized according to its charter, was not one for which the statute authorizes the organization of corporations for pecuniary profit; that its real purpose was to deal in real estate; that it does not carry on nor pretend to carrjr on the alleged purpose for which it was incorporated; and that therefore its charter is void and its stockholders are copartners and liable as such. The argument is stated as follows in appellant’s brief: “ We submit that the North End Masonic Temple Association, being absolutely void as a corporation, never had a legal existence as such, and the stockholders and those participating in its organization became and are nothing but copartners, and the business transacted by them since the attempted organization of said association is merely the business transactions of a copartnership.” It is insisted, therefore, that the demurrer should have been overruled and the defendants required to answer. The alleged corporation is not made a party to the bill. It is regularly organized under the statute, and the legal formalities have apparently been fully complied with. It is sought by this bill to treat it as non-existent, and to deprive the corporation of any control over the property which it holds, at least by legal title, whether such title was improperly acquired and is improperly held or not. What is said in Baker v. Backus, 32 Ill. 79-80, is in point under these circumstances : “ The court had no jurisdiction to deprive the company of its property, and dissolve it when the company was not present to defend itself. All bodies should be allowed the privilege of being present at their own dissolution.” It is argued, however, that this is not even a defacto corporation. The argument is that there is no law authorizing the formation of a corporation for pecuniary profit for the purposes mentioned and hence no corporation defacto, because of no authority in law to exercise the powers claimed. In Eaton v. Walker, 76 Mich. 579-585, it is said: “ Two things are necessary to be shown to establish a corporation defacto, viz.: (1) The existence of a charter or some law under which a corporation with the powers assumed might be lawfully created. (2) A user by the party to the suit of the rights claimed to be conferred by such charter or law. If the law exists and the record exhibits a bona -fide attempt to organize under it, very slight evidence of user beyond this is all that can be required.” See also, Hudson v. Green Hill Seminary, 113 Ill. 618-626. In the case before us appellant has been a stockholder for some years and has received money paid as a dividend and recognized the corporation in other ways and has participated in the alleged illegal combination. Coquard v. Nat. Lin. Oil Co., 171 Ill. 480-484. Corporations may be formed under our general act for pecuniary profit, “ for any lawful purpose except banking, insurance, real estate brokerage, the operation of railroads and the business of loaning money ” (R. S., Chap. 32, Sec. 1), and for “any lawful purpose other than for pecuniary profit,” in the manner provided in section 29 of the same chapter. These corporations may be capable of holding real and personal estate, and may sue and be sued. The corporation in question appears to be regularly organized in conformity with the statute and its purpose as stated is not unlawful. Whether it has exceeded its corporate powers in issuing stock or is exercising them in violation of its charter, has no bearing upon the question of its corporate existence. Appellant’s contention that the law does not authorize the formation of a corporation for pecuniary profit for the purposes specified, may he ground for intervention by the state. “-It is against the policy of this state to allow corporations to hold real estate beyond what is necessary for the transaction of the business or specific corporate purposes of such corporations.” First M. E. Church v. Dixon, 178 Ill. 260-271; Nat. Home Building Association v. Bank, 181 Ill. 35-42; The People v. Pullman Car Co., 175 Ill. 125-143. Whether the purposes for which this corporation is formed reasonably require it to hold the real estate it has in order to carry out the objects of its creation is not before us as the case stands. In the case of Baker v. The Administrator of Backus, 32 Ill. 79, 111, there was as here a “ body corporate de facto. It had been doing business more than a year under the charter, had an office in the city of Chicago, had all the necessary officers through whom the business was transacted, and much money and important interests were involved in their undertaking.” It was concluded that whether the company had ever been legally organized as a corporation and existed as such, “ could be ascertained in no other way than by a direct proceeding at law,” and furnished no ground for the interposition of a court of equity. Whether a company which claims to be incorporated has been legally organized may be ascertained by scire facias or an information in the nature of a quo warranto at law. There is no ground for chancery interposition, where there is a corporation de facto. Stockholders of a corporation fully incorporated under the statute are not considered partners even as between themselves. The legal existence of a corporation can not usually be inquired' into collaterally, where there has been a bona fide attempt to create a corporation and an exercise of corporate powers, especially by parties who have dealt with the corporation as such. “ Only the state can complain of injury to the public or that public rights are being interfered with, and enforce a forfeiture of defendant’s franchises for that reason.” Coquard v. Nat. Linseed Oil Co., 171 Ill. 480-484 (supra). The judgment of the Circuit Court must be affirmed.