Caton v. Ottawa Hydraulic Co.
| Decision Date | 14 November 1885 |
| Citation | 3 N.E. 413,115 Ill. 281 |
| Parties | PEOPLE ex rel. CATON v. OTTAWA HYDRAULIC CO. and others. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Appeal from La Salle county circuit court.
This was an information in the nature of a quo warranto, filed by L. W. Brewer, state's attorney in and for the county of La Salle, at the relation of John Dean Caton, a citizen of Illinois. The information gives the court to understand and be informed that in November, 1851, a certain pretended joint-stock company was formed under the laws of Illinois, called the ‘Ottawa Hydraulic Company,’ for certain specified purposes, to-wit, ‘to lease, use, and occupy, and to sublet water-power lots and land, to build mills and factories, and generally to carry on a manufacturing and mechanical business in the city of Ottawa, in said county; that no more than a nominal amount of the capital stock of said company was ever paid in; that the pretended purpose of building mills and factories was false and fraudulent; that said company has never done anything to carry out such purpose; but that the sole object of such company was to speculate in water-power in and about said city of Ottawa, by renting water-power from certain persons, and then subletting such water-power to other parties, and dividing the profits, and that this is the only business the company has ever done; that the company and its officers are still carrying on such business, and pretending to act under such pretended organization, and are thereby usurping the power and franchises of the state; that its franchises and organization were obtained by fraud, and have been wrongfully applied to unauthorized purposes, whereby its said franchises and organization are void in law and in fact, and are forfeited by the prostitution of the power of the state, to the damage and prejudice of the people, and against the peace and dignity of the same.’ The information closed with a prayer for process, requiring the defendant company and its officers to appear and answer, and for a judgment of forfeiture and ouster. The court granted leave to file the information, and directed process to be issued against the defendants. The defendants demurred to the information. The demurrer was sustained, and the information dismissed, at the costs of the relator, who prayed an appeal to the supreme court.L. W. Brewer, State Atty., for the People.
C. Beckwith, (Bull, Strawn & Ruger with him,) for relator.
Lorenzo Leland and Hiram T. Gilbert, for appellees.
The question presented for determination is whether the court ruled properly in sustaining a demurrer to the information. It will be perceived the averments in the information, when stripped of all unnecessary verbiage, are in substance and legal effect that the company organized for the alleged purpose of establishing and carrying on a certain specified business, when in truth and in fact it intended to do nothing of the kind, but on the contrary intended to carry on altogether a different business, which it has alone pursued from the date of its organization to the present time; and that only a nominal portion of the capital stock, if any, has ever been paid in. In the case thus made the company as a corporate body is assailed on three distinct grounds: (1) That its organization was effected by false representation in its original statement; (2) that it has failed to perform the duties which the law of its organization imposed upon it; (3) that it is, and has been from the date of its organization, engaged in a business not warranted by its articles of association, or, more strictly expressed, the company is assailed on the grounds of fraud, misuser, and non-user. To this it is answered: (1) That whatever cause of forfeiture of the company franchises may have originally existed, the state has subsequently waived it, both by legislative recognition and by acquiescence in its exercise of corporate functions for a period of over 30 years; (2) that by the act of 1853, entitled ‘An act to amend the act incorporating the Ottawa Hydraulic Company and the La Salle County Manufacturing Company of Ottawa, both incorporated under the general law approved February 10, 1849,’ the legislature not only recognizes the legal existence of the defendant as a corporate body, but that it expressly authorized it to do the very acts now relied on as a ground for forfeiture of the company's franchises.
That the act referred to is an unequivocal recognition of the defendant's corporate existence is too plain to admit of serious question. Such recognition distinctly appears both in the title and body of the act. We also think it equally clear that the leasing and subletting of water-power by the company as charged in the information are fully justified by the act in question. By the first section of the act it is authorized ‘to hold, lease, transfer, use, and enjoy all of the property and privileges leased to it by the trustees of the Illinois & Michigan Canal, and all such property and privileges, the use and enjoyment of which has been granted to it by the president and trustees of the said town...
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