State ex rel. Clapp v. Minn. Thresher Manuf'g Co.

• Decision Date: 07 March 1889
• Citation: 40 Minn. 213,41 N.W. 1020
• Parties: STATE EX REL. CLAPP, ATTORNEY GENERAL, v MINNESOTA THRESHER MANUF'G CO.
• Court: Minnesota Supreme Court

40 Minn. 213

41 N.W. 1020

STATE EX REL. CLAPP, ATTORNEY GENERAL,vMINNESOTA THRESHER MANUF'G CO.

Supreme Court of Minnesota.

March 7, 1889.

(Syllabus by the Court.)

1. Proceedings upon information in the nature of quo warranto belong to the class designated “remedial cases” in section 2, art. 6, of the constitution of the state, and are not included in the class denominated “cases at law” in section 4, art. 1, of the same instrument, in which trial by jury is demandable as of right.

2. No corporation can be organized under Gen. Laws 1873, c. 11, (Gen. St. 1878, c. 34, §§ 120-143,) except for an exclusively manufacturing or mechanical business. If the purpose for which a corporation is formed, as stated in its articles of association, is to carry on a manufacturing or mechanical business, and also some other and distinct kind of business, not properly incidental to or connected with the former, it will belong to the class of corporations authorized to be formed under title 2, c. 34, Gen. St., (sections 109-119,) although the articles recite that it is formed under the act of 1873.

3. The object of proceedings by quo warranto against a corporation being to protect public interests, to warrant a forfeiture of corporate franchises for misuser the misuser must be such as to work or threaten a substantial injury to the public.

4. “Franchises” and “powers” distinguished.

5. Acts ultra vires, or in excess of powers, are not necessarily a misuser of franchises, such as will warrant their forfeiture. To justify such forfeiture the ultra vires acts must be so substantial and continued as to so derange or destroy the business of the corporation that it no longer fulfills the end for which it was created. Ultra vires acts may be such as to justify interference by the state by injunction to prevent a continuance of the excess of powers, while they would not be a sufficient ground for a forfeiture of the corporate franchises in proceedings by quo warranto.

6. If the unauthorized acts affect merely stockholders and creditors who have an adequate legal remedy, the state will not interfere. Demurrer to the answer overruled, and information dismissed.

Quo warranto.

Moses E. Clapp, Atty. Gen., (Gordon E. Cole, James N Castle, and Horace G. Stone, of counsel,) for relator.

Flandrau, Squires, & Cutcheon, (Henry D. Hyde, of counsel,) for respondent.

MITCHELL, J.

Proceedings upon information in the nature of quo warranto, filed by the attorney general against respondent, to show cause why its franchises should not be declared forfeited and the corporation dissolved. In justice to this court, as well as to the attorney general, it is proper at the outset to correct an error into which respondent's counsel have fallen. They have repeatedly asserted, both in their briefs and in their oral arguments, that the attorney general has filed a disclaimer of any interest in these proceedings on his own part or on part of the state. An inspection of the statement filed by him will show that it will bear no such construction. As such proceedings are in the nature of a public prosecution, having for their object the recovery to the state of a usurped or forfeited franchise, and not to redress private grievances, no one but the attorney general has authority to institute or prosecute them; it being exclusively for him to determine when public interests require them to be instituted. Therefore, had he moved to dismiss, as he had the undoubted right to do, or had he stated that this was not a case which public interests required to be prosecuted, we would undoubtedly have dismissed, notwithstanding objections by private parties. But the attorney general having done neither, and the information being filed by him in his official capacity, this court did the only thing it could do under the circumstances, viz., to entertain the proceedings, and determine them according to law.

1. It is objected that this court has no original jurisdiction in proceedings of this nature. In a number of cases since the enactment of chapter 58, Gen. Laws 1876, the existenceof such jurisdiction has been taken for granted without question. State v. Sharp, 27 Minn. 38,6 N. W. Rep. 408;Barnum v. Gilman, 27 Minn. 466,8 N. W. Rep. 375;State v. Dowlan, 33 Minn. 536,24 N. W. Rep. 188;State v. Harrison, 34 Minn. 526, 26 N. W. Rep. 729. Twice the point has been considered and decided. State v. Railway Co., 35 Minn. 222,28 N. W. Rep. 245;State v. Railway Co., 36 Minn. 246,30 N. W. Rep. 816. Under such circumstances, we would ordinarily consider a question as foreclosed. But inasmuch as it is an important one, involving constitutional rights, and respondent's counsel have placed their contention upon grounds not heretofore distinctly presented to this court, to the discussion of which they have brought great learning and exhaustive research, we have thought proper to re-examine the subject.

Respondent's position is that the act of 1876, assuming to give this court original jurisdiction in quo warranto, is unconstitutional. Their line of argument is-First, that this court has no jurisdiction, for any purpose, in any case in which trial by jury is demandable as of right; second, that trial by jury is demandable as of right in all cases in which such right existed at common law at the time of the adoption of the constitution of the state; third, that at common law a party had a right to trial by jury in proceedings upon information in the nature of quo warranto. Counsel have gone very exhaustively into the discussion of the nature of the ancient and obsolete writ of quo warranto, and of its more modern substitute, an information in the nature of quo warranto, and of the mode of trial of such proceedings at common law. But, for present purposes, all we deem necessary to consider are the provisions of our own constitution in connection with the right of trial by jury as it existed in the territory of Minnesota at the time of its adoption, and the construction which has been put upon these constitutional provisions by this court. And, first, it must be remembered that the statutes then, as now, only gave the right of trial by jury in actions for the recovery of money or of specific real or personal property, or for divorce for adultery. Rev. St. 1851, c. 71.

The writ of quo warranto, and proceedings upon information in the nature of quo warranto, had been abolished; relief of that nature being obtained only in a civil action. Rev. St. 1851, c. 80. Such an action would not have been triable by a jury unless the territorial statutes were in conflict with article 7 of the amendments to the federal constitution which provides that “in suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved,” which was the only restriction upon the power of the territorial legislature to take away the right of jury trial. Section 4, art. 1, of the constitution of the state, is that “the right of trial by jury shall remain inviolate, and shall extend to all cases at law, without regard to the amount in controversy.” Section 2, art. 6, of the same instrument, provides that “it [the supreme court] shall have original jurisdiction in such remedial cases as may be prescribed by law, and appellate jurisdiction in all cases, both in law and equity, but there shall be no trial by jury in said court.” The first of these provisions received a construction (always since followed) at an early day in Whallon v. Bancroft, 4 Minn. 109, (Gil. 70,) in which it was held that the effect of it was-First, to recognize the right of trial by jury as it existed in the territory of Minnesota at the time of the adoption of the constitution; and, second, to continue such right unimpaired and inviolate; that it neither took from nor added to the right as it previously existed, the only change being to secure this right in “cases at law” involving less than $20. Ames v. Railway Co., 21 Minn. 291;State v. City of Lake City, 25 Minn. 404. The expression “cases at law” has been invariably construed by this court as referring to ordinary common-law actions, as distinguished from suits in equity, or admiralty and special proceedings, or what are called “remedial cases” in section 2, art. 6. Whatever may be the scope of the phrase, “actions at common law,” in the constitution of the United States as construed by the federal courts, it is certain that the term “cases at law,” used in our constitution as construed by this court, would not include proceedings upon information in the nature of quo warranto; also that such proceedings fall within the term “remedial cases,” as used in section 2, art. 6. In State v. City of Lake City, supra, it is said that a distinction is clearly made between the classes of cases denominated “cases at law” in section 4, art. 1, and those included under the designation of “remedial cases” in section 2, art. 6; the former evidently referring to ordinary common-law actions, while the latter embrace those remedies of a special or extraordinary character, usually spoken of as special proceedings, such as mandamus, quo warranto, and others of like special or extraordinary character. The same distinction and substantially the same definition of “remedial cases” is repeated in State v. Railway Co., supra, and as was said in State v. City of Lake City, supra, section 4, art. 1, of the constitution, must be construed in connection with section 2, art. 6, which gives this court original jurisdiction in such “remedial cases” as may be prescribed by law, coupled with the express prohibition that there shall be no jury trial in this court. Evidently the “cases at law” referred to in the first cannot include any of the “remedial cases” included in the second, and the prohibition of a jury trial in this court negatives any implication that the right to such a mode of trial can be enjoyed in any of the “remedial cases” which this court may be...