State ex rel. Attorney General v. Northern Pacific Railway Co.

147 N.W. 219, 157 Wis. 73, 1914 Wisc. LEXIS 171
CourtWisconsin Supreme Court
DecidedMay 1, 1914
StatusPublished
Cited by10 cases

This text of 147 N.W. 219 (State ex rel. Attorney General v. Northern Pacific Railway Co.) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Attorney General v. Northern Pacific Railway Co., 147 N.W. 219, 157 Wis. 73, 1914 Wisc. LEXIS 171 (Wis. 1914).

Opinions

MARSHALL, J.

I.

The application for leave to commence an action in this court to annul defendant’s corporate franchise, presented this proposition: Assuming that the remedy sought is appropriate under any circumstances which might be disclosed consistent with admitted facts, and that the statute as to changing the fundamentals of a railroad corporation, denominated an amendment in sec. 1820, R. S. 1878, applied to defendant when the occurrence happened which was intended to work an increase in the amount of its capital stock, — first to $155,000,000 and second to $250,000,000, and it, nevertheless, did not comply therewith by filing papers in the office of the secretary of state, evidencing the changes; but there was no intention of thereby defying the law, the defendant acting under advice of counsel and in good faith believing it possessed authority to make such changes in execution of a spe* cial charter power on the subject and the state, by silencej with full, or reasonable means of knowledge of the facts, ae-' [83]*83quiesced for nearly twenty years as to tbe first change and sis years as to the second, — its departments taxing and dealing with defendant, regulating it and profiting by its expansion of capital, — thus by conduct impliedly assuring it and the public that the two efforts were legitimate and the new certificates represented valid corporate stock, and investors, relying thereon, have freely and publicly dealt therein, and no disadvantage to the state or its citizens will have accrued if defendant does, presently, what it should have done before issuing such certificates, while an annulment of its franchise would cause loss to many innocent individuals and be detrimental to public interests, — should this court permit its jurisdiction to be used as requested, in advance of a judicial determination of the disputed question, and, if in favor of the state, neglect by defendant to seasonably atone for its non-feasance in such manner as judicially advised or directed, in case of its being held that responsibility in the matter has not been extinguished by laches or some statutes of limitation ?

The foregoing states, briefly, the whole case as first presented. It does not follow as matter of course, that, because there is ground for forfeiture of a corporate franchise, this court should permit its jurisdiction to be used to that end. Rights as regards remedies may, by" interfering equities, under some circumstances, be lost by the state as well as by individuals. It has no vested or inherent right in such matters which it may use unjustly and oppressively, being dependable, as it is, for vitality of such rights, upon the original jurisdiction of this court, which is said to be “unlimited in extent,” “undefined in character,” — Att’y Gen. v. Railroad Cos. 35 Wis. 425; State ex rel. Fourth Nat. Bank v. Johnson, 103 Wis. 591, 79 N. W. 1081,— clothed with sovereign authority of the people, — so,- necessarily, as limitless as the exigencies of situations requiring judicial interference. Such was the wise purpose of the framers of the constitution, — State ex rel. Umbreit v. Helms, 136 Wis. 432, 118 N. W. 158,—to create a power equal to all emergencies, to be [84]*84used as sparingly as should comport with its dignity and the importance of the matter to be dealt with, and always to the end that justice might be done, — justice in the broadest sense, judicially cognizable, which may, and often does, rise above and render dormant remedies for vindication of strict legal rights.

The stated proposition seems to be decidedly ruled in defendant’s favor by these principles. Time may be so characterized by circumstances as to estop the state from enforcing legal rights and require the court, in the exercise of sound judicial discretion, to refuse to open its doqr to an effort to that end.

An application for leave to use the original jurisdiction of this court to annul a corporate franchise, is addressed to sound judicial discretion and should not be permitted as to a going corporation, carrying out the design of its creation, performing duties of a quasi-public character, having to do with the daily necessities of a large number of people and involving large investments in which many innocent persons are pe-cuniarily interested in its undisturbed continuance, unless there is a clear, wilful misuse, abuse, or nonuse, of the franchise sought to be forfeited, or an intentional or inexcusable violation of law, striking at the very groundwork of the contract between the sovereign power and the corporation, whereby the latter fails to fulfil the very design and purpose of its organization, and there is no other way of adequately meeting the case.

Those principles are familiar and control any situation to which they apply. Whether the facts call for such application or not in any given situation, depends upon matters of fact to be evidentiarily established and judicially found, if not admitted. Activity of the power is fenced closely about by equitable principles, the objective, in each case, being justice, reasonable doubts, inter partes, to be resolved in favor of public interests. This court has many times applied these [85]*85salutary principles; tbe significant instances being' those relied upon by counsel for defendant. State ex rel. Att’y Gen. v. Janesville W. Co. 92 Wis. 496, 66 N. W. 512; Att’y Gen. v. Railroad Cos. 35 Wis. 425; Ashland v. Ashland W. Co. 110 Wis. 94, 85 N. W. 695; Linden L. Co. v. Milwaukee E. R. & L. Co. 136 Wis. 179, 116 N. W. 900. In the last instance cited it was given as the settled rule that “only when tfye action of the corporation is wilful should the attorney general be permitted to bring suit to annul its charter.”

Thus it will be seen that the duty here, at the start, was plain. There was no wilful defiance of law,- — only, at most, a good faith, nonnegligent mistake of law, in which the state-as well as the corporation participated, without, necessarily, any real injury to the public. What the real right of the matter was, when the petition was presented, as at every point of time since the alleged nonfeasance occurred, was involved in such doubt that only this court could solve it and, though solved in favor of the state,.such solution would not furnish any legitimate basis for discretionary activity of this, court looking to an annulment of defendant’s existence, in the absence of defiance of the thus established law and perhaps no way being open to adequately punish the corporation and vindicate the dignity of the law without serious detriment to the public and innocent proprietors of stock.

In the situation indicated, this court might have dismissed plaintiff’s application and left the attorney general to proceed, at his convenience and as he might see fit, to seek redress in some other way; but, in harmony with the practice and policy to promote the most direct and speedy termination of controversies, practicable, especially where great public interests are involved, it used its authority, as regards the time and manner of affording use of its jurisdiction, by denying use thereof for the purpose requested; but retaining-the petition as initiatory to appropriate proceedings to secure a judicial determination as to whether defendant had [86]*86offended, as claimed, and, if so, whether it should repair the wrong by yet doing what it ought to have done, so far as practicable.

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Cite This Page — Counsel Stack

Bluebook (online)
147 N.W. 219, 157 Wis. 73, 1914 Wisc. LEXIS 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-attorney-general-v-northern-pacific-railway-co-wis-1914.