People ex rel. Marshall v. Ravenswood

20 Barb. 518, 1855 N.Y. App. Div. LEXIS 92
CourtNew York Supreme Court
DecidedSeptember 3, 1855
StatusPublished
Cited by1 cases

This text of 20 Barb. 518 (People ex rel. Marshall v. Ravenswood) is published on Counsel Stack Legal Research, covering New York 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. Marshall v. Ravenswood, 20 Barb. 518, 1855 N.Y. App. Div. LEXIS 92 (N.Y. Super. Ct. 1855).

Opinion

Mitchell, J.

The complaint shows that the defendants have violated their charter, and also that they omitted to do certain things which might be essential to give them a legal corporate existence, and prays that they may be excluded from the franchises which they claim, and that the corporation be dissolved. The defendants object that several causes of action are improperly joined ; insisting that one cause treats the corporation as never having existed, and the other as having once existed and then lost its right to a continued existence; and that these are inconsistent allegations, and the judgments to be rendered on them, incompatible. This mode of pleading is deliberately sanctioned in The People v. The Saratoga and Rensselaer Rail Road Company, (15 Wend. 126.) If the former system did not allow it, the present does, as it allows [522]*522causes of action arising out of the same transaction or the same subject matter. There is but one subject matter in this case— the right of the defendants to continue to exercise certain franchises. That right may be decided against them, by showing that they did not comply with conditions precedent to the origin of that right, or with conditions subsequent; and in either case the judgment is that they be excluded from such franchises. (Code, §§ 440, 443, &c.) In like manner if a lease were executed to one, with a condition that the lessee should not enter until he should pay a certain bonus, and to be void on non-payment of rent, the lessor—if the lessee entered—might show that neither the bonus nor the rent was paid, and claim the possession of the land. There would be but one subject matter-—the right to the possession of the land.

The code recognizes that the action may be against the corporation for either kind of usurpation of franchises, when it provides (§ 441) that the judgment, whether against a natural person or association, if they are found guilty of usurping a franchise, shall be that they be excluded from such franchise.

The judgment of the special term, against the defendants, should be affirmed with costs.

Cowles, J.

Scire facias, quo warranto, and information in the nature of quo warranto, are abolished, and the .remedies provided in part 2, title 13, chap. 2 of the code, substituted in their place. This suit, and the pleadings under it, must be construed by those provisions. It is brought against the defendants as a corporation. The defendant is sued by and in its corporate name. The object is to vacate its charter, as provided for in § 430 of the code. It is brought against the corporation, not against natural persons usurping, or assuming without proper authority to exercise corporate powers or rights. By the act of bringing the suit the plaintiffs assume that the defendants have acquired legal corporate existence ; for if it did not exist as a corporation, they could not be brought into court as such.

The distinction between actions brought to vacate a charter or to annul the existence of a corporation, and those brought [523]*523against individuals acting as a corporation without being duly incorporated, is clear and broad. (Code, §§ 430, 432.) The one lies against the corporate body itself, the other against the persons unlawfully assuming to act as a corporation. The one can only be brought on leave first obtained from the supreme court or a judge thereof. (§§ 430, 431.) The other may be brought without such leave. (§ 432.) The judgment in the one case is that the “ corporation be excluded from such corporate rights, privileges and franchises, and that the corporation be dissolved.” (§ 442.) In the other case the judgment is that the person usurping such franchise be excluded therefrom ; and he may also be fined, in the discretion of the court. (§ 441.) In case of judgment against the corporation, a copy of the judgment is to be filed in the office of the secretary of state. (§ 445.)

This distinction under the code had been previously recognized. Formerly judgment of ouster was rendered when a liberty or franchise was wrongfully usurped, and that supposed there had been no grant; but if the liberty or franchise had been granted, or had once existed and was forfeited for abuse or misuser, judgment of seizure was given. Judgment of ouster would operate upon individuals ; judgment of seizure upon a corporation. (The King v. The City of London, cited in 2 Term Rep. 523, and commented upon in The People v. The Saratoga and Rensselaer Rail Road Co., 15 Wend. 113.) In the last case the court-say, “ When therefore an information is filed under the revised statutes against a corporation by its corporate name, the existence of the corporation is admitted-—or rather that it once had a legal existence.” And under the provisions of the code the same principle is evidently applicable.

This suit being against the corporation by its corporate name, must be held to admit that the defendant has once acquired legal and actual corporate existence, and that admission arising from the fact of the suit being brought against the defendant as a corporate body treating it and assuming it to be a legal entity, cannot, as it seems to me, be overcome by any averments in the complaint that it had not acquired existence. Otherwise, we are presented with the absurdity of assuming to bring into court a [524]*524fictitious party, which neither has nor ever had existence ; and that too in face of the fact, as shown by the record, that the defendant sued is actually present in court, which is the case here; for the defendant is not only sued by this corporate name as an artificial person actually in existence, but appears in court by that name, and interposes this demurrer. There is, therefore, such a legal entity as this defendant. It is admitted by the plaintiff by the very act of suing, and is conceded by the defendant by the act of appearing and demurring; and this broad fact cannot be overcome by the plaintiff’s charging in his complaint facts which, if true, would go to show that the defendant had failed to comply with' such terms as by the charter were conditions precedent to its organization as a corporate body.

The plaintiff has inserted in his complaint averments of that description, and which are only proper to be made when the suit is against individuals, for usurping or assuming to act as a body corporate when in fact they are unincorporated.

These averments are, as I regard them, manifestly irrelevant and impertinent; for the plaintiff cannot be. permitted to treat the defendant as a corporation in fact for the purpose of proving it, and then assume to charge that it never performed those acts, without performing which it never could have acquired existence.

But the complaint also charges other acts of neglect or omissions of duty which, if true, -would forfeit the charter, and also avers the doing of acts which could only be performed by the defendant as an actual existing corporation; thus in effect averring its actual existence.

As I regard the case, the plaintiffs admit the corporate existence of the defendant by the mere fact of suing it by its corporate name, and consequently must be held to have admitted the performance by it of all such acts as by the charter were conditions precedent to its entering upon a state of legal- existence.

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Bluebook (online)
20 Barb. 518, 1855 N.Y. App. Div. LEXIS 92, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-marshall-v-ravenswood-nysupct-1855.