Melick v. Central Investment Co.

186 Ill. App. 24, 1914 Ill. App. LEXIS 795

• Court: Appellate Court of Illinois
• Decided: April 21, 1914
• Docket: Gen. No. 19,300
• Status: Published

Opinions

Mr. Presiding Justice Smith

delivered the opinion of the court.

The administratrix resisted the claim in the court below on the following grounds and insists upon them here: (1) Appellee corporation was not authorized, on October 14, 1907, under the Act of 1905 (J. & A. ¶ 2525), as to foreign corporations, to do business and make leases on real property and the lease in question; (2) that real estate brokerage business of buying, selling, holding, reletting and subleasing cannot be carried on in Illinois by a foreign corporation; (3) that appellee had not procured the necessary certificate from the Secretary of State, pursuant to the Act of 1905, wherein the powers and objects were stated it may exercise herein not in conflict with the law or public policy of the State of Illinois; (4) that it could do no business for which a domestic corporation could not be organized, and that the lease to Josephine King,, deceased, was void; and, further (5) that by the forcible detainer proceedings in the Municipal Court, February 2, 1909, the lease was terminated and canceled and has ceased to exist; and that the several items of appellee’s claim are not covered by or recoverable under the terms of the lease.

The charter of appellee was introduced in evidence and appears in the record. Under its charter the Central Investment Company was authorized, among other things, to do and carry on the following businesses, all of which could be legally carried on in the State of Illinois: First, the building of houses and other buildings, structures and improvements and other mechanical business; sixth, to do a general contracting and building business; seventh, to do a general collection business. The Central Investment Company appears to have filed its charter with the Secretary of State of Illinois on September 28,1897, and on that date the Secretary of State issued its certificate, reciting, among other things:

“Whereas, Central Investment Company, incorporated under the laws of the State of New Jersey, has filed in the office of the Secretary of State duly authenticated evidence of its incorporation, as provided by law, and has, in all respects, complied with the requirements of law governing foreign corporations; * * * that said Central Investment Company is from the date hereof duly authorized to do business in the State of Illinois for a term of ninety-nine years, and is entitled to all the rights and privileges granted to foreign corporations under the laws of this State.”

In Central Investment Co. v. Melick, 162 Ill. App. 474, supra, which was the appeal from the judgment of the Municipal Court in forcible detainer case, brought by the Central Investment Company against Jessie Meliek, administratrix, under the lease in question in this case, it was held that the Central Investment Company had in all respects complied with the requirements of law governing foreign corporations, and that this was all that was necessary for it to do in order to enable it to carry on the business in this State.

In White Sewing Machine Co. v. Harris, 252 Ill. 361, the Supreme Court held:

“In our judgment the legislature by the act of 1905 intended that it should be a mere continuance of the main features of the former act, with some modifications as to details, which would not require foreign corporations already doing business in the State to re-qualify or pay again the license fee already paid before they could do business in the State. Appellant, by its license issued under the act of 1897, was authorized to bring this suit.”

We think it clear, therefore, that the Central Investment Company, having qualified on September 28,1897, to do business in this State, was not required to re-qualify under the Act of 1905.

The Central Investment Company, as we have seen, was authorized by its charter to carry on various kinds of business authorized to be done in this State by corporations organized under the laws of this State. It was, under the license issued to it, authorized to do and carry on in this State any of the several objects for which it was organized, as stated in its charter, which could be lawfully carried on by a domestic corporation; in other words, it had the same power and authority to carry on the business for which it was organized in this State that a domestic corporation would have, no more nor less. It had the right to carry on in this State all businesses mentioned in the first, sixth and seventh objects mentioned in its charter. There was a law authorizing such corporation. It was a corporation de jure under the express provisions of the statutes of Illinois, and it was authorized to own and hold real estate sufficient for its needs. There being a law of Illinois authorizing the Central Investment Company to do business in this State, and being-authorized to own and hold sufficient real estate for its needs, if it has abused such rights and acquired more real estate than it actually needs to carry on its business, such right can only be questioned by the State in a direct proceeding by quo warranto. We think this doctrine is well settled in this State. In Imperial Building Co. v. Chicago Open Board of Trade, 238 Ill. 100, the main question was whether the Imperial Building Company was legally organized and whether the lessee could raise that question in an action for rent on the lease, and it was held that the tenant might raise the question when there was no law authorizing such a corporation. The Supreme Court, however, stated the doctrine applicable where there had been an attempt in good faith to organize under a law authorizing the incorporation and corporate functions were exercised by the corporation so organized, and held:

“The general rule is, that where there is an attempt in good faith to organize under a law authorizing the incorporation, and corporate functions are exercised, this makes the organization a corporation de facto, and its legality cannot be questioned collaterally or by one who deals with it as a corporation. In such cases the introduction in evidence of the charter and proof of user, and that the party seeking to deny the legality of the corporation dealt with it as a corporation, sufficiently proves it a corporation de facto, and whether there may have been some irregularities in perfecting the incorporation will not be inquired into. The legality of such incorporation can only be attacked by the State in direct proceeding.”

In the Imperial Building Co. case, supra, and in the case of People v. Shedd, 241 Ill. 155, there was no legitimate business the corporations could do under their charters; and having been incorporated simply and solely to deal in a particular piece of real estate in each case, it necessarily followed from the statement of the corporation in each case that there was no law authorizing such corporation. In the Shedd case, supra, the Court said:

“In Rector v. Hartford Deposit Co., 190 Ill. 380, the object of the corporation was ‘to erect and operate safety deposit vaults.’ This is a business distinct from the ownership, management and control of real estate. It is necessary to have a location for the business of receiving and storing valuable packages and providing vaults for that purpose, just as it is necessary to have a place for operating a machine shop, a mill, a hotel or a warehouse, all of which are purposes for which a corporation may be organized. The corporation built a fourteen-story building, 150 feet high and 91 feet by 50 feet on the ground, having a basement, eight stores and over one hundred suites of offices. Its only safety deposit vault was in one end of an office on the fourth floor, and its inside dimensions were 5x6x8 feet. The vault and its earnings were, of course, of no consideration in the business actually transacted by the corporation, and it was contended that the erection of such a building was a gross abuse of its corporate powers and that the corporation could not recover rent upon a lease of one of the rooms of the building, since the ownership of the building was beyond its corporate powers. But the court held that since the' corporation had power to own a building-necessary for its corporate purposes, it could be required to answer to the State, alone, for an abuse of such power, and that that question could not be availed of as a defense to a suit for rent.”

So here, in this suit for rent by the Central Investment Company, duly authorized in New Jersey and in this State, to do business which required the owning of real estate for the purpose of conducting and carrying on its business, it cannot in this action for rent be defeated by a defense, at the instance of a tenant, that it has no corporate existence. It is required to answer to the State alone on that question. In the Rector case, supra, the Supreme Court further said at page 389 of the opinion:

“We think it has never been held in this State, or understood to be the law, that the question whether such power has been abused could be raised and availed of in defense in a proceeding wholly collateral to the question of the right and power of the corporation in the premises. The earlier decisions of this court are to the effect that a corporation having general power to own real estate for corporate purposes and to acquire real estate in collecting debts due it, may be required to answer to the State, and to the State only, for an alleged usurpation of power in the respect of the ownership and enjoyment of landed property.”

To the same effect are Springer v. Chicago Real Estate Loan & Trust Co., 202 Ill. 17, and Hudson v. Green Hill Seminary Corporation, 113 Ill. 618.

The Central Investment Company appears to have complied with the law of this State, and is entitled to do business in this State, and it also appears from the charter of the company offered in evidence by the attorney for appellant, that the company is authorized to lawfully carry on several of the objects for which a corporation may be formed in this State. Being so authorized, to do business in this State, the statute expressly gives it the power to hold real estate sufficient for its needs, and if it has abused such right, the State, and the State alone, can raise the. question.

Furthermore, appellant is estopped from questioning the right of appellee to sue or recover under the lease in question. The suit brought by the Central Investment Company in the Municipal Court was an action under the statute for the possession of the premises unlawfully withheld, and for rent due up to the time of the commencement of the suit under the lease in question. It was between the same parties as in this case. It involved the question of the validity of the lease here in controversy, and the right and power of the Central Investment Company to make such a lease and to collect rent thereunder. It also involved the question which counsel seek to raise in this case, of the right under special clause 3, to bring suit in forcible detainer before the termination of the lease. Judgment was duly entered in the cause, not only for the possession but also for the several instalments of rent due. On appeal to this court the judgment was affirmed. Central Investment Co. v. Melick, supra. Under the well established principle of law, it was the duty of appellant to present any and all defenses which she had to such action, including the right of the Central Investment Company to make the lease, its right to sue for possession and' recover thereunder, and the liability of the appellant herein under the lease. All such questions here raised, which could have been raised and presented in that case, are settled and adjudicated. The only questions here raised and discussed by appellant, which were not settled in that case, is the effect of the proceedings in that case upon the lease itself as to its determination or cancellation, and the amount due, if any, at the commencement of this action.

As to the effect of the proceedings in the former case upon the lease itself, clause 3 of the lease, quoted in the statement preceding this opinion, provides that the lessor should have the right, in case of default by the lessee in the payment of rent, to re-enter and take full and absolute possession of the premises without such re-entry working a forfeiture of rents to be paid and the covenants to be performed by the lessee during the full term of the lease. Under this express provision of the lease, the Central Investment Company was authorized, in case of default, to re-enter and take possession of the premises, either by forcible detainer proceedings or otherwise, without the same working a forfeiture of the lease. Grommes v. St. Paul Trust Co., 147 Ill. 634. The lease in the Grommes case contained a similar clause to the special clause in this lease. In that case default was made in the payment of rent and suit was commenced for possession of the premises. The Supreme Court, after reviewing cases bearing on the question quite fully, on page 643 of the opinion, says:

“There is nothing illegal or improper in an agreement, that the obligation of the tenant to pay all the rent to the end of the term shall remain notwithstanding there has been a re-entry for default; and, if the parties choose to make such an agreement, we see no reason why it should not be held to be valid as against both the tenant and his sureties.”

See also the case of Heims Brewing Co. v. Flannery, 137 Ill. 309, where there was a covenant in the lease in controversy in that case, that the obligation on the part of the defendant to pay the stipulated consideration should not cease by reason of the surrender of the building. To the same effect is the case oi Springer v. Chicago Real Estate Loan & Trust Co., supra.

Upon a review of the evidence, we think the amount of the judgment of the Circuit Court was fully justified thereby. There is no error in the record, and the judgment is affirmed.

Affirmed.