Attorney General v. Belle Isle Ice Co.

• Decision Date: 20 January 1886
• Citation: Attorney General v. Belle Isle Ice Co., 59 Mich. 157, 26 N.W. 311 (Mich. 1886)
• Court: Michigan Supreme Court
• Parties: ATTORNEY GENERAL v. BELLE ISLE ICE CO.

26 N.W. 311

59 Mich. 157

ATTORNEY GENERAL v. BELLE ISLE ICE CO.

Supreme Court of Michigan

January 20, 1886

Quo Warranto.

Moses Taggart, Atty. Gen., C.J. Reilly, and Otto Kirchner, for relator.

Alfred Russell, John G. Hawley, and Russel &amp Campbell, for respondents.

CHAMPLIN J.

This is a proceeding by information in the nature of a quo warranto to determine the rights of respondents to exercise the franchises of a corporation organized under "An act to authorize the formation of corporations for mining, smelting or manufacturing iron, copper, mineral, coal, silver, or other ores or minerals, and for other manufacturing purposes," approved February 5, 1853. The respondents pleaded to the information, therein setting forth (1) articles of association executed by them under and by virtue of the above act, on the fifth day of January, A.D.1874, and duly filed as required by law, and amended articles of association executed on the third day of April, 1882, and duly filed. (2) That the relator has been a stockholder in such corporation for more than 11 years, and was then a stockholder therein; and from January 1, 1874, to April 1873, the relator received dividends, was president and director of said company, was actively engaged in performing the duties pertaining to his position, and received a salary for his services. (3) That the respondents are the directors of said Belle Isle Ice Company, and as such manage and control its business; that there are other persons besides the relator and these respondents who are stockholders in said company, and the plea proceeds to give their names, the number of shares held by each, and states that their residence is in Wayne county, where their business is carried on. To the second of these pleas the attorney general demurred, and he replied to the first and third.

In his replication to the first plea he sets up and states that the several persons in said plea named did not, by the said articles of association, associate according to the act therein named, for the purpose of engaging in and carrying on any kind of mining or manufacturing business, because said persons entered into the said articles of association for the purpose of entering into the business of gathering ice as it was formed naturally on Detroit river and Lake St. Clair, and of storing said ice, and vending the same, as an article of merchandise, to the public generally and for no other purpose whatsoever. The replication then asserts that its business hitherto has been confined to gathering, storing, and vending the ice, and describes the method and appliances used in conducting and carrying on such business. This replication is demurred to by the respondents for two reasons: (1) That the matters set forth do not show that the respondents were acting as a corporation under the name of the "Belle Isle Ice Company" without then and there being legally incorporated, or without any legal warrant or authority therefor; (2) that the matters set forth in the replication do not show that the business carried on by the Belle Isle Ice Company was not a manufacturing business, and as such could not lawfully be conducted by a corporation organized under the laws of the state of Michigan, as in said first plea mentioned.

The first point stated in the demurrer appears to me to be well taken. Section 8635, How.St., authorizes the attorney general to file an information in the nature of a quo warranto against individuals, upon his own relation, or upon the relation of a private party, without leave of court, when any association or number of persons shall act as a corporation within this state without legally being incorporated. The information filed charges that the respondents "did act, and do now act, as a corporation in this state, under and by the name of the 'Belle Isle Ice Company,' without then and there being legally incorporated, and without any legal warrant or authority therefor." Section 8655 provides that whenever judgment shall pass against a person or corporation that has been adjudged guilty of unlawfully holding or exercising any franchise or privilege, judgment shall be entered that such defendant be ousted and altogether excluded from such franchise or privilege, and the next section authorizes the court to impose a fine not exceeding $2,000. It appears by the articles of association set up in the plea of respondents that the respondents, with others, are associated and incorporated under the act aforesaid, as declared in such articles, for the purpose of putting up, packing, and manufacturing for market, Detroit river and lake ice, and distributing and selling the same. The law requires the articles of association to state distinctly and definitely the purpose for which the same is formed. If it does not state a purpose for which the statute authorizes a corporation to be formed, it would not be legally incorporated, and its articles would afford no warrant for the exercise of corporate action. If it does state such a purpose, and if the other requirements of the law are complied with, it is a legal corporation, and authorized to act as such. In either case the articles themselves are the sole criterion to ascertain the purpose for which it was formed, and the intent...