McCormick v. Statler Hotels Delaware Corp.

• Decision Date: 26 November 1963
• Docket Number: No. 37761,37761
• Citation: 195 N.E.2d 172,30 Ill.2d 86
• Parties: Harold J. McCORMICK, Appellee and Cross Appellant, v. STATLER HOTELS DELAWARE CORPORATION et al., Appellants and Cross Appellees.
• Court: Illinois Supreme Court

Page 172

195 N.E.2d 172

30 Ill.2d 86

Harold J. McCORMICK, Appellee and Cross Appellant, v. STATLER HOTELS DELAWARE CORPORATION et al., Appellants and Cross Appellees.

No. 37761.

Supreme Court of Illinois.

Nov. 26, 1963.

Rehearing Denied Jan. 20, 1964.

White, Shaheen & Lundberg, Chicago, (Roger Q. White and John M. Kaveny, Chicago, of counsel), for appellee and cross-appellant.

Friedman, Koven, Salzman, Koenigsberg, Specks & Homer, Chicago (John W. Day

and Stanley R. Zax, Chicago, of counsel), for appellants-cross appellees.

DAILY, Justice.

This was a petition for writ of mandamus filed in the circuit court of Cook County by Harold J. McCormick, a shareholder, to compel Statler Hotels Delaware Corporation and its secretary, William J. Friedman, to permit plaintiff to examine the corporation's list of shareholders. In addition, the complaint sought recovery of the penalty provided in section 45 of the Illinois Business Corporation Act, (Ill.Rev.Stat.1959, chap. 32, par. 157.45,) for defendants' allegedly wrongful refusal to allow plaintiff to examine the list. Undisputed facts established by the pleadings showed that the corporation, organized under the laws of Delaware, had been registered and licensed to do business in Illinois as a foreign corporation, that it had maintained a registered office and agent in Illinois, and that it had a stock transfer agent in Illinois which, as required by section 45, kept a list of the corporation's stockholders. After a hearing, the trial court found the issues in favor of plaintiff and awarded him a penalty of $2,000 for which it found defendants liable. Defendants have prosecuted this direct appeal and plaintiff has cross-appealed, the latter contending that the court failed to assess the full statutory penalty. Our first consideration is whether there are grounds which require or permit us to entertain jurisdiction on direct appeal.

Defendant has brought the appeal here on the theory that constitutional questions are involved and as a basis therefor contends: First, that the imposition of a penalty violated due process of law because they 'did not know or have reason to know' that the penalty provision would be enforced against them; and second that the enforcement of the penalty against them is in violation of the full-faith-and-credit clause under the circumstance that the laws of Delaware, while providing that a list of stockholders shall be open to the examination of every stockholder, make no provisions for a penalty in the event of refusal. Restating the last contention, its essence is that the law of Delaware applied here to control the rights and obligations between the parties. It is axiomatic, however, that this court will not assume jurisdiction of a direct appeal unless the constitutional question is fairly debatable, (Betts v. Village of Calumet Park, 20 Ill.2d 524, 170 N.E.2d 563; Moore v. County Board of School Trustees, 10 Ill.2d 320, 139 N.E.2d 738,) and we regard it as well settled that neither due process nor the commands of the full-faith-and-credit clause were violated under the circumstances of this case.

It is uncontrovertible that the legislature may prescribe reasonable conditions on which foreign corporations, other than those engaged in interstate commerce or constituting instrumentalities of the Federal government, may do business in this State, (Union Central Life Ins. Co. v. Lowe, 349 Ill. 464, 182 N.E. 611; State of Illinois v. Illinois Central Railroad Co., 246 Ill. 188, 92 N.E. 814; Ryerson & Son v. Shaw, 277 Ill. 524, 115 N.E. 650,) and it has been repeatedly held that the qualification of a foreign corporation in accordance with the statutes permitting its entry into a State constitutes an assent on its part to all reasonable conditions imposed. (Cincinnati, Indianapolis and Western Railroad Co. v. Barrett, 406 Ill. 499, 94 N.E.2d 294; Holz v. Smullan, (7th cir.) 277 F.2d 58; State of Washington ex rel. Bond & Goodwin & Tucker, Inc., v. Superior Court of Washington, 289 U.S. 361, 53 S.Ct. 624, 77 L.Ed. 1256.) By section 103 of our Business Corporation Act, (Ill.Rev.Stat.1959, chap. 32, par. 157.103,) it is expressly provided: 'A foreign corporation * * * shall * * * enjoy the same, but no greater, rights and privileges as a domestic corporation * * * and * * * shall be subject to the same duties, restrictions, penalties, and liabilities now or hereafter imposed upon a domestic...