People ex rel. Attorney-General v. Dashaway Ass'n

24 P. 277, 84 Cal. 114, 1890 Cal. LEXIS 771
CourtCalifornia Supreme Court
DecidedMay 10, 1890
DocketNo. 11089
StatusPublished
Cited by34 cases

This text of 24 P. 277 (People ex rel. Attorney-General v. Dashaway Ass'n) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People ex rel. Attorney-General v. Dashaway Ass'n, 24 P. 277, 84 Cal. 114, 1890 Cal. LEXIS 771 (Cal. 1890).

Opinion

The Court.

This is an information in the nature of a quo warranto to forfeit the charter of the Dashaway Association, a corporation organized and existing under the laws of the state of California, and for a judgment declaring that its property escheat to the state; that a receiver be appointed to take possession of all the property; that an injunction issue, etc.

The complaint avers that the object and purpose for which the said corporation was formed was to promote [116]*116the cause of temperance; that it has no capital stock; that it has members who are elected under provisions of its by-laws; that it has since its incorporation received at various times from its members and others contributions and donations of money for the purpose for which it was incorporated, to wit, the promotion of the cause of temperance, with which moneys it acquired by purchase real estate in the city and county of San Francisco; that in 1883, by leave of the court, it sold certain real estate in said city and countyfor one hundred and fifty-six thousand dollars; that it paid off a mortgage of forty-five thousand dollars,leaving a balance in cash on hand of one hundred and eleven thousand dollars, realized from property purchased with donations as aforesaid and for the purposes aforesaid; that the corporation has abused and misused its powers, disregarded its corporate trust, and violated its charter, and has fraudulently and unlawfully perverted its funds, and misapplied seventy-two thousand dollars from the object for which the corporation was formed, and from the use for which it was given and received, by dividing, distributing, and paying out the same among its members; that the officers and members have conspired and colluded with defendant to fraudulently and unlawfully accomplish this result, and that the corporation has still the sum of thirty-nine thousand dollars on hand, received in like manner and for like purpose, which, as relator is informed, it will dispose of in like unlawful manner, unless restrained.

Defendant demurred to the information, upon the grounds,—“1. That the said complaint does not state facts sufficient to constitute a cause of action; 2. That the said court has no jurisdiction of the person of the defendant or the subject of the action.”

The demurrer was sustained by the‘court below, “on the grounds that the court has no jurisdiction.”

Judgment was entered in favor of defendant, from which judgment relator appeals to this court.

[117]*117Corporations are creatures of the law, and when they fail to perform duties which they were incorporated to perform, and in which the public have an interest, or do acts which are. not authorized or are forbidden them to do, the state may forfeit their franchises and dissolve them by an information in the nature of a quo warranto. {People v. Utica Ins. Co., 15 Johns. 358; 8 Am. Dec. 243; People v. Pittsburg R. R. Co., 53 Cal. 694; Golden Rule v. People, 118 Ill. 492.)

The grant of corporate franchises is always subject to the implied condition that they will not be abused. {Chicago Life Ins. Co. v. Needles, 113 U. S. 574.) ■

“In its relations to the government, and w'hen the acts or neglects of a corporation, in violation of its charter or of the general law, become the subject of public inquiry, with a view to the forfeiture of its charter, the willful acts and neglects of its officers are regarded as the acts and neglects of the corporation, and render the corporation liable to a judgment or decree of dissolution.” (Angell and Ames on Corporations, sec. 310; Life Ins. Co. v. Mechanics’ Ins. Co., 7 Wend. 35; Bank Commissioners v. Bank of Buffalo, 6 Paige, 497; Ward v. Sea Ins. Co., 7 Paige, 294.)

This reasoning proceeds upon the theory that the corporation is cognizant of and approves of the acts of its agents; and where it is made to appear that the agent has departed from his duties as prescribed by the corporation, or violated his instructions in the performance of the acts complained of and relied upon as a basis for forfeiture, no such forfeiture will be declared. {State v. Commercial Bank, 6 Smedes & M. 237.)

In People v. Utica Ins. Co., 15 Johns. 358, 8 Am. Dec. 243, an application had been previously made by the attorney-general to a court of chancery for an injunction to restrain the company from usurping the franchise of banking, which application was refused because there was a complete and adequate remedy at law by an in[118]*118formation in the nature of a quo warranto. People v. Bank of Niagara, 6 Cow. 196, People v. Washington and Warren Bank, 6 Cow. 211, and People v. Bank of Hudson, 6 Cow. 217, are authority to the point that the action is properly brought in. the name of the people, and against the corporations in their corporate names, in eases where they had, as corporations, usurped franchises not granted by their charters. (See also People v. Trustees of Geneva, 5 Wend. 211.)

The writ of scire facias was formerly used by government as a mode to ascertain and enforce the forfeiture of a corporate charter, in cases where there was a legal existing body capable of acting, but who had abused their power. It would not lie in cases of mere defacto corporations. It was necessary that the government be a party to the suit, for the judgment was that the parties be ousted and the franchises seized into the hands of the government. (2 Kent’s Com. 313.)

The writ of quo warranto was a writ which issued to bring the defendant before the court to show by what authority he claimed an office or franchise, and was applicable alike to eases where the defendant never had a right, or where, having a right or franchise, he had forfeited it by neglect or abuse. (3 Bla. Com. 262, 263.)

An information in the nature of quo warranto, which has succeeded the writ of that name, was originally in form a criminal proceeding to punish the usurpation of the franchise by a fine, as well as to seize the franchise. This information has, in process of time, become, in substance, a civil proceeding to try the mere right to the franchise or office.

It was a peculiarity of both the quo wa,rranto and information in the nature of quo warranto that the ordinary rule of pleading was reversed, and the state was bound to show nothing, and the defendant was required to show his right to the franchise or office in question; and if he failed to show authority, judgment went [119]*119against him. (Angelí and Ames on Corporations, sec. 756.)

The practice has, however, become quite general in this country for the information to set forth the facts relied upon to show the intrusion, misuser, or non-user complained of.

In information of quo warranto there were two forms of judgment. When against an officer or individual, the judgment was ouster; when against a corporation by its corporate name, the judgment was ouster and seizure.

In the first case, there being no franchise forfeited, there is none to seize; in the second case there is; consequently the franchise is seized. (2 Kent’s Com. 312, and note.)

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Bluebook (online)
24 P. 277, 84 Cal. 114, 1890 Cal. LEXIS 771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-attorney-general-v-dashaway-assn-cal-1890.