People ex rel. Attorney-General v. Stanford

2 L.R.A. 92, 19 P. 693, 77 Cal. 360, 1888 Cal. LEXIS 705
CourtCalifornia Supreme Court
DecidedNovember 21, 1888
DocketNo. 9733
StatusPublished
Cited by15 cases

This text of 2 L.R.A. 92 (People ex rel. Attorney-General v. Stanford) 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. Stanford, 2 L.R.A. 92, 19 P. 693, 77 Cal. 360, 1888 Cal. LEXIS 705 (Cal. 1888).

Opinion

Works, J.

This cause was decided in Department One, and a rehearing granted. It was held by the department that the second count of the complaint was bad, and that it was error to overrule the demurrer thereto. We adhere to this conclusion, and to that extent the opinion of the department is adopted as the opinion of the court.

There was also a demurrer to the first count of the complaint, which was overruled by the court below. It is urg ed upon us that this count of the complaint is bad, for the reason that conclusions are pleaded, and not the facts. The pleading is an anomaly. It sues the Potrero and Bay View Railroad Company as one of the defendants, and at the same time alleges that it is not a corporation. It alleges that the private individuals named as defendants, and the Potrero and Bay View Railroad Company, are falsely claiming that there is such a corporation, and that they have unlawfully held and exercised, and still do exercise, and claim, and hold unlawfully, divers powers, etc.

It is well settled that a corporation cannot be sued as such, and brought into court, and the action maintained against it on the ground that it is not a corporation. If it is intended to draw in question the franchises of the corporation, the proceeding must be against the individuals who usurp the franchise. If it is claimed that the corporation is usurping privileges and powers not belonging to it, the corporation is the proper and only proper party. (Angell and Ames on Corporations, sec. 756; Boone on Corporations, secs. 162, 163; State of Ohio v. Cincinnati Gaslight and Coke Co., 18 Ohio St. 262; People v. Rensselaer etc. R. R. Co., 15 Wend. 113; Mud Creek [364]*364Draining Co. v. State, 43 Ind. 236.) By making the corporation a party, it is admitted that it once had an existence. (Angelí and Ames on Corporations, sec. 756.)

In Mud Greek Draining Co. v. State, supra, the court says: “This first paragraph was clearly bad. It is not against certain persons claiming to be a corporation, but against the corporation by its corporate name. It is brought into court as a corporation, to answer an allegation that it is not and never was a corporation. When a corporation is brought into court by its corporate name, its existence is thereby admitted.”

In this case, the corporation being made a party, its existence is admitted. It must follow, therefore, that there is no cause of action stated as against it. But there are other defendants sued jointly with it, and charged with having jointly with such corporation usurped the rights of a corporation, etc. There is no question made in the record or in the briefs as to the misjoinder of these parties. But we are clear that the people cannot bring both a corporation and the individuals who compose it before the court, by information in the nature of quo warranto, and claim the non-existence of the corporation thus brought before the court, and that the other defendants, jointly with it, are claiming to be and exercise the rights and privileges of such corporation. To permit such a course would be subversive of all rules of pleading. If we are right in the position taken, that by suing the corporation as such its existence is admitted, this is an end of the matter so far as this count of the complaint is concerned, for the reason that the whole force of its allegations, as against the individual defendants, rests upon the sole ground that no such corporation exists. • If the complaint can be defended on the ground that it admits that such a corporation once existed, but has ceased to exist, it is open to the objection made to it that it does not state the facts showing how and by what means it has ceased to exist. We are of the opinion that [365]*365it would be sufficient, in an action against individuals charging that they are wrongfully claiming to act as a corporation, to allege, in general terms, that there never ■was such a corporation. In such case, the allegation that there never was such a corporation covers the whole ground. Nothing can be added to this general statement, which is itself an allegation of a fact. We are equally clear that where the existence of the corporation is expressly averred, or is admitted, it is not sufficient to allege that it has ceased to exist. The facts showing that its existence has terminated must be set forth. And if the claim is, that the corporation is acting as such, but the proceedings under which it is acting are defective, the facts showing that it is so claiming to act, and the defects claimed to exist, should be set out specifically.

Taking either view of the complaint, therefore, we must hold this count to be bad, and that the court below erred in overruling the demurrer to it.

There was an answer to the complaint, to which a demurrer was sustained. Notwithstanding what was said in the opinion in department, we are constrained to hold that this was error. The answer for each and all of the defendants jointly and severally and specifically denies that “the defendants, or any of them, claiming to be the said Potrero and Bay View Railroad Company, have for a long time, or do now, or at any time have unlawfully claimed, or unlawfully exercised, the franchises, powers, or privileges in said city and county in this behalf in said complaint alleged, or any franchise, power, or privilege.” The other material allegations of the complaint are denied in like manner. It is urged that in an action of this kind, it is not enough for the defendants to deny the allegations of the complaint, for the reason that the writ requires them to show affirmatively by what right they are exercising the franchises, and so it is held in department. This is true where it is admitted, or not denied, that they are exercising the rights and [366]*366privileges alleged, and they attempt to establish bheir right to do so. (High on Extraordinary Legal Eemedies, 712, 716.)

But «.the defendants, whether it is the corporation or individuals who are alleged to be wrongfully claimi lg to be such, may, instead of justifying their claim, denj that they are making such claim and exercising the rights and privileges alleged: It is certainly not necessary to

justify tlioir right to laydown and operate a rai road when they deny specifically that they are doing any such thing.

The authorities cited in the former opinion are t) the effect that the people are not bound to prove anything, where the defendants attempt to justify their right or disclaim. (Dillon on Municipal Corporations, 3d ed., sec. 893; and Angelí and Ames on Corporations, sec. 756.)

But these authorities are only applicable where it is admitted, or not denied, that the defendants are exerc: sing the franchises, and the question is as to the right to exercise them. That is not the case here. The issue presented is not one of the right to exercise a franchise, but whether is being exercised. The impropriety of attempting to join the corporation and the individuals alleged to be acting as such in the same action is thus made manifest. It is impossible that both could be doing the acts alleged. That the individual defendants are in the wrong, as alleged, can only be established by showing that there is no such corporation; and if the corporation does exist, and is itself exercising the franchises complained of, the ind:viduals charged may truthfully, and with perfect propriety, deny that they

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Bluebook (online)
2 L.R.A. 92, 19 P. 693, 77 Cal. 360, 1888 Cal. LEXIS 705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-attorney-general-v-stanford-cal-1888.