Hough v. Cook County Land Co..

• Decision Date: 30 September 1874
• Citation: 1874 WL 8915,73 Ill. 23,24 Am.Rep. 230
• Parties: ORAMEL S. HOUGHv.COOK COUNTY LAND COMPANY.
• Court: Illinois Supreme Court

73 Ill. 23

1874 WL 8915 (Ill.)

24 Am.Rep. 230

ORAMEL S. HOUGH

v.COOK COUNTY LAND COMPANY.

Supreme Court of Illinois.

September Term, 1874.

APPEAL from the Superior Court of Cook county; the Hon. SAMUEL M. MOORE, Judge, presiding.

Messrs. TRUMBULL, CHURCH & TRUMBULL, for the appellant.

Mr. GEORGE W. SMITH, and Mr. CHARLES A. GREGORY, for the appellee.

Mr. JUSTICE SCHOLFIELD delivered the opinion of the Court:

This was a bill in equity, filed by the appellant against the appellee, in the court below, to set aside a conveyance of certain lands, to cancel the stock of appellee, issued to him in payment for the same, and to restrain appellee, in the meantime, from selling such stock, which had been pledged to it as collateral security for a loan made to appellant.

A demurrer was interposed to the bill, which the court below sustained, and dismissed the bill.

So far as the allegations of the bill are material to the questions requiring our consideration, they are as follows: Appellee claimed to be a corporation under the laws of this State, with power to borrow and lend money; to take lands and mortgages as security; to purchase lands and make improvements thereon by erecting buildings for the purpose of renting the same; to hold buildings and lots for the purpose of improving and renting the same, and to do a general loan business, and take lands, mortgages and notes to secure the loans. Appellant, believing that appellee was possessed of the powers it claimed, and that it was authorized by its charter to buy land and issue its stock in payment therefor, and to loan money, etc., on the 24th day of May, 1873, contracted with it to sell and convey to it certain lands in Cook county, which are particularly described in the bill, in consideration that appellee would issue to him 365 shares of its stock, and would also loan him 80 per cent in money of the stock, and hold the stock as collateral security on the loan-- the loan to be for one year from that date, with interest at 10 per cent per annum till due, and 12 per cent per month after maturity, with power, on failure to pay, to sell, etc. The land was conveyed, the money loaned, and the stock issued, and pledged as collateral security, in conformity with the terms of the agreement.

Since the transaction occurred, appellant has been advised by counsel that appellee had no authority to take the land and issue the stock; that it professes to act under authority of “An act to incorporate the Land Improvement and Irrigation Company,” approved March 1, 1867, and the change of name to the Cook County Land Company, by vote of its stockholders, on the 20th of July, 1872, at which time its capital stock was increased, in accordance with an act of the legislature in regard to changing names and increasing stock of corporations, approved March 26, 1872; that the change of name and increase of stock was unauthorized and void, and all the authority appellee had by its charter was to purchase lands for the purpose of irrigation and improvement, for the raising of crops thereon, and the sale and disposal thereof, when so improved.

It is alleged that the power vested in appellee by its charter, which is made part of the bill, as an exhibit, was to examine, survey and purchase lands and interests therein, watercourses or interests therein, for the purpose of irrigating the lands that might be so purchased, and facilitating crops in dry seasons, and to improve and cultivate such crops chiefly as require irrigation to produce the largest returns, and that appellee had no power to purchase and hold lands for any other purpose; that appellee has not purchased any lands for the purpose of irrigation, or for any object contemplated by its charter, but that appellee has purchased a large quantity of land, worth above $600,000, holds improved and unimproved city real estate, announces its intention to erect buildings on part of its vacant city property, and that it has been, since its organization, and now is, engaged in purchasing lands, city lots, the improvement of said lots for the purpose of sale and rental, and in the purchase of tax certificates, and in loaning money on bonds and mortgages, etc.

Appellant insists that the purchase of the land and the loaning of the money and taking notes therefor, were contrary to positive statutes, and therefore void.

The act of March 1, 1867, under which appellee first became incorporated, by its first section, empowers “The Land Improvement and Irrigation Company to have, hold, possess and enjoy, by themselves, successors and assigns forever, lands, tenements, hereditaments, goods, chattels, choses in action, and effects of every kind, and the same to grant, sell, alien, invest, loan and dispose of;” and the fourth section of that act is as follows: “The chief objects of this association shall be to examine, survey and purchase lands or interests in lands, watercourses or interests therein, which are as near as may be adapted by nature to the use of water to irrigate the same, to facilitate the growth of crops in dry seasons, and to improve and cultivate the same for such crops chiefly as require irrigation to produce the largest returns.” Private Laws of 1867, Vol. 2, p. 241.

Section 21 of the general incorporation law, approved March 26, 1872, under which appellee changed its name and increased its capital, contains this proviso: “And provided further, that any corporation other than corporations for manufacturing purposes, availing itself of or accepting the benefits of, or formed under this act (except the mere change of name), shall be subject to the general laws of this State now in force, or which may hereafter be passed, regulating corporations of like character.” 2 Gross,...