State ex inf. Walker v. Equitable Loan & Investment Ass'n

41 S.W. 916, 142 Mo. 325, 1898 Mo. LEXIS 335

• Court: Supreme Court of Missouri
• Decided: January 19, 1898
• Status: Published

Opinion

Sherwood, J.

1. Several points are raised by tbe demurrer which will now receive consideration; and first as to the capacity of the Attorney-G-eneral to institute this proceeding in manner and form as it has been instituted. As to this point it is the settled law of this State that such officer can, of his own motion and without leave of this court, file an information in quo warranto, and take all other subsequent and necessary steps to have such cause thus instituted, passed upon and determined. State ex inf. Circuit Attorney v. Bernoudy, 36 Mo. 279; State ex inf. Attorney-General v. McAdoo, 36 Mo. 452; State ex rel. v. Steers, 44 Mo. 223; State ex rel. v. Bishop, Ib. 229; State ex rel. v. Hays, Ib. 230; State ex rel. v. Vail, 53 Mo. 97; State ex rel. v. Townsley, 56 Mo. 107; State ex rel. v. Rose, 84 Mo. 198; State ex rel. v. Town of Westport, 116 Mo. loc. cit. 605; State ex rel. v. McMillan, 108 Mo. 153. See, also, Short on Mand. and Quo Warranto, *175; High, Ex. Leg. Rem. [2 Ed.], sec. 45, and cases cited. This has been the rule of this State ever since State v. Merry, 3 Mo. 278.

At common law “the old writ of quo warranto is a civil writ, at the suit of the crown; it is not a criminal prosecution. .......This was the true old way of inquiring of usurpations upon the crown, by holding fairs or markets, viz., by writs of quo warranto. Then informations in the nature of a quo warranto came into use and supplied their place.” These observations fell from Mr. Justice Wilmot in Rex v. Marsden, 3 Burr. 1817, in the year 1765. See High, Ex. Leg. Rem., sec. 603. In Blackstone, written in 1758, some seven years before the last mentioned period, it is asserted that the proceeding by quo %oarranto “is properly a criminal method of prosecution.” Cooley’s Black., book 3, ch. 17, p. 262. But whatever the original of the writ, whether civil or criminal, it is certain now at the present time and for a. long period anterior to this, it has been and is but a civil suit. There is a distinction, of course, to be taken, a distinction pointed out by Scott, J., in State v. Ins. Co., 8 Mo. 330, between a writ of quo warranto and an information in the nature of a quo warranto, but while this is true, yet it is also true even in Blackstone’s time, the issuance of the writ itself, owing to its cumbersome length, had. long fallen into disuse, which resulted in the modern substitutionary and more speedy method of the filing of ex officio informations by the Attorney-General. Cooley’s Black., book 3, ch. 17, p. 262.

Our Constitution provides in the third section of its sixth article, that this court “shall have power to issue writs of habeas corpus, quo warranto, certiorari and other original remedial writs, and to hear and determine the same.” Inasmuch as the issuance of a writ of quo warranto had not occurred in England for centuries; inasmuch as courts, lawyers and text-writers had been accustomed for hundreds of years to use the expression “writ of quo warranto” as the legal equivalent and synonym of “information in the nature of quo ivarrcmto,” it will be presumed that the framers of our Constitution were not unmindful or ignorant of such a common form of expression and the meaning which it bore, and therefore when they used the words “writ of quo warranto” they intended thereby only to convey in abbreviated form the meaning that phrase had for so long a period and so continuously been employed to convey, to wit, “informations in the nature,” etc.

Since writing the above it has been found that in other States possessing organic laws like our own, similar conclusions have been reached. State v. Railroad, 34 Wis. 197, and cases cited; State v. Gleason, 12 Fla. , and cases cited; High's Ex. Leg. Rem., secs. 610, 611.

And the jurisdiction of this court in this regard being conferred by the Constitution, it is beyond the 1 power of the legislature to take it away, and it will not be intended that a legislative enactment was designed to take such jurisdiction away, although such enactment should confer another and distinct remedy upon some inferior court or board. State v. Allen, 5 Kan. 213; State v. Massmore, 14 Wis. 115; Kane v. People, 4 Neb. 509; 19 Am. and Eng. Ency. of Law, 664; People v. Bristol Co., 23 Wend. 222; People v. Hillsdale Turnp. Co., Ib. 254; State v. Baker, 38 Wis. 71; High, Ex. Leg. Rem., sec. 615; 2 Spelling, Ex. Rlf., secs. 1772, 1873. In consequence of this well recognized principle, sections 7 and 8 of the laws of 1895, pages 31 and 32, in relation to the duties of the supervisor of building and loan associations, to institute proceedings in the circuit court against a delinquent building and loan association, and that such proceeding shall be conducted by the Attorney-General, can not abate the jurisdiction conferred on this court by the Constitution nor deprive the Attorney-General of his common law and inherent powers to file ex officio informations as in the present instance. And it is well enough to say in concluding this paragraph of this opinion, that the briefs in this cause are not properly entitled, since the Attorney-General in such cases as this is proceeding ex officio after the manner of the common law, and entirely independent of and above our statute of quo warranto which is derived in substance from 9 Ann. c. 20, Tancred’s Quo Warranto, pp. 13 and 14. So that a relator or leave to file an information ex officio are alike unnecessary to the Attorney-General. And this court has twice determined that in such informations, no relator is required. State ex inf. Circuit Attorney v. Bernoudy, 36 Mo. 279; State ex rel. Brown v. McMillan, 108 Mo. 153.

It results from these considerations then that the Attorney-Greneral’s “legal capacity to sue” (as it is termed) must, in this instance, stand undoubted.

2. Another ground of demurrer urged under the general head that “the petition does not state facts” etc., is that the information does not charge that the misuser of the franchise is a “tvillful malfeasance” on the part of the respondent company. But one case has been found which announces that unless the words “a willful nonfeasance and misfeasance” are used in an information against a corporation that such information, lacking such words, will be fatally defective. State v. Columbia & Hamp. T. P. Co., 2 Sneed, 254.

If, by the term “ivillfuV, is merely meant “an act done designedly, intentionally or purposely, as contra-distinguished from accident or absence of intention or design” (Com. v. Perrier, 3 Phil. R. 232; Winfield, Adjudged Words & Phrases, p. 645), then there would be no serious objection to its use; and the information, alleging as it does that the respondent company, from the time of its organization, to wit, July 19, 1887, has continuously, down to the time of filing the information, done the acts charged in the first paragraph of that information, then the information does charge in substance and effect that the acts alleged were willfully, to wit, designedly or intentionally, and not accidentally done. And this court will presume that acts which the law will not sanction if done for over nine years, were not altogether the result of unfortunate mistake or momentary misapprehension.

But if the word “willful” is to be used to convey its usual signification, to wit, that of one with a bad motive or purpose (Com. v. Kneeland, 20 Pick. 220) then its use would be foreign to a case of this sort, because this is simply a civil proceeding, and it has been held that it is enough to work a forfeiture that the performance of the condition is neglected or designedly omitted, and that the ingredient of a lad or corrupt motive is not necessary. People v. Kingston, Etc., Turnp. Co., 23 Wend. 193; 5 Thompson on Corp., sec. 6612.

Moreover, the ancient precedents of forms of in-formations ex officio in the nature of quo luarranto, do not employ the word 11 willful’’ nor indeed any equivalent word; they simply say, after appropriate preamble: “Have used and still do use, without any warrant'or royal grant, the following liberties and franchises, to wit, of all which liberties, privileges and franchises aforesaid, the said -, during the time aforesaid, have usurped, and still do usurp, upon the said lord the king, to the great damage and prejudice of his royal prerogative; whereupon the said attorney of the said lord the king, for the said lord the king, prays the advice of the court in the premises, and due process of law against the said-in this behalf to be made, to answer to the said lord the king, by what warrant he claims to have, use, and enjoy the liberties, privileges, and franchises aforesaid.”

And “this is the form, whether the information be brought for an usurpation without any original title, or for a subsequent forfeiture, where the original title is not disputed.” Tomlin’s Law Die. 281, Title, Quo Warranto. And precedents are very good witnesses of what the law is. State v. Meyers, 99 Mo. loc. cit. 114.

Nor does the word “willful” appear in the forms of ex officio information in the nature of quo warranto in modern precedents of such informations. State v. Pawtuxet Turnpike Corporation, 8 R. I. 182; People v. Bristol Turnpike Co., 23 Wend. 222; People v. Kingston Turnp. Co., Ib. 193; State v. Gleason, 12 Fla. 190; State v. Messmore, 14 Wis. 115; People v. Bank, 6 Cow. 196; People v. Impor. Co., 103 Ill. 491; Mechem, Pub. Off., sec. 491.

The information must therefore be held free from flaw though lacking the word uwillful.”

3. It has been urged on behalf of the respondent company that it was advised “by an official opinion of the Attorney-G-eneral, the relator herein, that it had a legal right to so pledge such loans, and did so innocently and in good faith, being thereby misled by the relator who instituted this proceeding.” But to this it may shortly be replied that the demurrer in this ease raises an issue of law, which is alone for consideration, and will not be allowed to be obscured by any consideration of an issue of fact.

4. The act approved April 20, 1895, Laws of that year, page 111, section 14, operating as it does only prospectively, can not cure acts of previous misuser alleged in the information. Com. v. Lykens Water Co., 110 Pa. St. 391; and the act of March 27, 1897, Laws 1897, page 90, section 1, has as little to do with arresting the progress of the present prosecution. Indeed the respondent admits in effect the illegality of' the act of depositing the alleged full paid up stock of the respondent company with the State treasurer, but claims that the act “was a nullity and will shortly be terminated by law.” This of itself is a sufficient admission to show the ultra vires nature of the act referred to.

In Turrett v. Taylor, 9 Cranch, 43, 51, Mr. Justice Stoky said: “A private corporation created by the legislature may lose its franchises by a misuser or nonuser of them; and they may be resumed by the government under a judicial judgment upon a quo warranto to ascertain and enforce the forfeiture. This is the common law of the land, and is a tacit condition annexed to the creation of every such corporation.”

“Where being legally incorporated for authorized objects a corporation has habitually employed its franchises in an illegal manner to accomplish objects so authorized, or employed them to accomplish objects not authorized in its charter or articles, such acts constitute a perversion.” 2 Spelling, Exr. Rif., see. 1812.

Quo warranto “will lie either to forfeit the charter or existence of the corporation, or to forfeit particular franchises belonging to it. It lies to put an end to the corporation as a whole for non-compliance with conditions essential to the right to exercise corporate powers of the kind granted to it in its charter or claimed by it in its articles, or for a total perversion or abandonment of its powers legally derived and vested in the incorporators; and it lies on the same grounds to forfeit particular franchises, in which case judgment of forfeiture of these particular franchises may be rendered .without affecting the corporate existence. The establishment against a corporation, before a judicial tribunal in which opportunity for defense is afforded, that its condition is such as to render its continuance in business hazardous to the public or to those who do business with it; that it has exceeded its corporate powers; and that it has persistently violated the rules, restrictions, or conditions prescribed by law,— constitutes sufficient reason for the State which created it to reclaim the franchises and privileges granted to it.” Ib., sec. 1813.

And as corporate grants are always assumed to have been made for the public benefit, any conduct which destroys their functions, maims and cripples their separate activity, and takes away free and independent action, affects unfavorably the public interest. People v. Refining Co., 121 N. Y. 582.

It is quite apparent that: First. The defendant association unlawfully assumed and usurped franchises and privileges not granted it by the laws of Missouri, in issuing “full paid stock” secured by pledges of other stock of said association, and also by deeds of trust, to secure the redemption and payment of said “full paid stock.” Second. The defendant association unlawfully assumed and usurped franchises and privileges not granted it by the laws of Missouri, in acting as surety for the Pettis County Investment Company to the State treasurer for any liability said Pettis County Investment i Company might incur. Third. That though the defendant association had the right to issue full paid or prepaid stock, there is nothing in the law under which the association was chartered that will authorize it to make this “full paid stock” preferred stock by using certain securities of the association to guarantee the payment thereof. Hohenshell v. Home Sav. & Loan Ass’n, 140 Mo. 566.

For these reasons we adjudge the information sufficient in law, and if so advised, the respondent corporation may plead further, for which purpose seven days’ time is granted from the date of filing this opinion.

All concur, except Brace, J., not sitting.