People ex rel. Carey v. Lincoln Towing Service, Inc.

• Decision Date: 04 October 1977
• Docket Number: No. 62945,62945
• Citation: 11 Ill.Dec. 640,54 Ill.App.3d 61,369 N.E.2d 94
• Parties: , 11 Ill.Dec. 640 PEOPLE of the State of Illinois ex rel. Bernard CAREY, State's Attorney of Cook County, Illinois, Plaintiff-Appellant, v. LINCOLN TOWING SERVICE, INC., an Illinois corporation, Ross Cascio and John Andrea, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 94

369 N.E.2d 94

54 Ill.App.3d 61, 11 Ill.Dec. 640

PEOPLE of the State of Illinois ex rel. Bernard CAREY State's Attorney of Cook County, Illinois Plaintiff-Appellant, v. LINCOLN TOWING SERVICE, INC., an Illinois corporation, Ross Cascio and John Andrea, Defendants-Appellees.

No. 62945.

Appellate Court of Illinois, First District, Second Division.

Oct. 4, 1977.

Supplemental Opinion On Denial of Rehearing Nov. 22, 1977.

Bernard Carey, State's Atty. Cook County, Chicago, for plaintiff-appellant; Paul P. Biebel, Jr., Deputy State's Atty., Chief, Civ. Actions Bureau, and Alan L. Fulkerson, Asst. State's Atty., of counsel.

Lipnick, Barsy & Joseph, Chicago, for defendants-appellees; Burton Joseph, Chicago, of counsel.

PUSATERI, Justice.

This action was initiated by the State's Attorney of Cook County, Bernard Carey, and three other individual named plaintiffs, who brought a three count complaint to oust the defendant Lincoln Towing Service, Inc., from its corporate franchise and to enjoin the individual defendants Ross Cascio and John Andrea from continuing to conduct business in the complained of manner.

Under Counts I and II of the complaint, the plaintiff was the People of the State of Illinois on the relation of Bernard Carey, State's Attorney of Cook County, Illinois.

Count I of the complaint sought relief by way of quo warranto (Ill.Rev.Stat.1973, ch. 112, par. 10), alleging that the defendant Lincoln Towing Service, Inc., through its officers, employees and agents, exercised powers not conferred upon it by law and in excess of the powers conferred upon it by its corporate charter. Specifically, Count I alleged that Lincoln Towing:

"A. * * * purposely engaged in a persistent and consistent course of criminal trespass to vehicles in violation of Ill.Rev.Stat., Ch. 38, § 21-2 (1973).

B. * * * purposely engaged in a persistent and consistent course of unlawful intimidation, coercion and other illegal conduct to compel others to deal with it, in violation of Ill.Rev.Stat., Ch. 38, § 38 et seq. (1973), to wit:

1. Unlawfully refusing to surrender the possession of towed automobiles after demand for possession by the parties entitled thereto, until an illegal towing and storage charge is paid.

2. Entering and damaging vehicles in violation of Ill.Rev.Stat., Ch. 95 1/2, § 4-102(a) and (b) (1973)."

Count II of the complaint was brought pursuant to the statute entitled "Criminally Operated Businesses" (Ill.Rev.Stat.1973, ch. 38, par. 38-1 et seq.), and sought to revoke the corporate charter of the defendant Lincoln Towing as well as to enjoin the defendants Ross Cascio and John Andrea from conducting business in the complained of manner.

Under Count III of the complaint, the three individual plaintiffs, by their attorney, Bernard Carey, State's Attorney of Cook County, sought to bring a class action on behalf of themselves individually and on behalf of all others similarly situated. On June 30, 1976, this court, pursuant to a written opinion (40 Ill.App.3d 126, 351 N.E.2d 342), held that the State's Attorney improperly attempted to represent the individual plaintiffs in this cause, and granted the motion of the defendants-appellees to oust the State's Attorney of Cook County as attorney for the private individuals named. On January 11, 1977, the individual plaintiffs having failed to pursue their appeal by their own counsel, the appeal with respect to Count III of the complaint (the class action wherein they were plaintiffs) was dismissed herein.

As to Counts I and II, the trial court entered an order granting the defendant's motion to strike and dismiss, holding: (1) quo warranto was an inappropriate remedy under the allegations in Count I; and (2) the statute on which Count II is based is inapplicable to the conduct complained of. The case was brought before us on the appeal of the plaintiff seeking a reversal of the trial court's order striking and dismissing Counts I and II.

In support of the allegations in the complaint, the plaintiff submitted affidavits of eight individuals as exhibits attached to the complaint. The eight affidavits averred facts that defendants sometimes towed vehicles which were legally parked and refused to return them to their owners until a charge was paid; that the defendants sometimes returned vehicles which they had towed, to their owners, in a damaged condition; that notices advising vehicle owners that their vehicles would be towed by Lincoln Towing, or any towing company, were not always posted on the premises from which the defendants towed vehicles; that an agent of the corporate defendant made threats of physical harm to a person requesting return of his automobile; and that defendants refused return of an automobile, after receiving the charge demanded for release of the automobile.

Count I of the complaint seeks to assert quo warranto as the appropriate remedy to the averred complained of facts. The writ of quo warranto is not a routine legal procedure; it is included in the category of legal writs known as "Extraordinary Remedies" (Allen, Mandamus, Quo Warranto, Prohibition, Ne Exeat, 1960 Ill.L.F. 102). It is one of the most ancient writs known to the common law, a high prerogative writ "in the nature of a writ of right for the king, against him who claims or usurps any office, franchise, or liberty, to inquire by what authority he supports his claim, in order to determine the right." 3 W. Blackstone, Commentaries * 262.

Until the early 18th Century, the remedy was available only on the suggestion of the Attorney General to prevent encroachment upon the royal prerogative. ¹ The Statute of Anne (9 Anne, c. 20 (1711)), expanded the writ's applicability, to cases of "intrusion into, or usurpation of corporate offices in corporate places." State v. Ashley, 1 Ark. 279, 305 (1839).

The availability of quo warranto in the United States generally is regulated by constitutional or statutory provisions (74 C.J.S. Quo Warranto § 1 (1951)), although in some states it still exists as part of the common law (Cleaver v. Roberts (1964), 7 Storey 538, 57 Del. 538, 203 A.2d 63.) In Illinois, the quo warranto remedy, now is, in effect, a statutory information in the nature of quo warranto, and under the statute it has become the vehicle for the assertion of many rights, both public and private, which could not have been vindicated at common law by quo warranto. (People ex rel. Sandburg v. Grabs (1940), 373 Ill. 423, 26 N.E.2d 494; People ex rel. Raster v. Healey (1907), 230 Ill. 280, 82 N.E. 599.) The Quo Warranto Act enacted in our State in 1937 (1937 Ill.Laws, p. 992) repealed the Act of 1874 (Ill.Rev.Stat., 1874, p. 787) and made various procedural changes, but did not change the substantive requirements of quo warranto under the former Act. People ex rel. Barrett v. Gentile Co-op Ass'n. (1946), 392 Ill. 393, 64 N.E.2d 907.

Since a corporate franchise proceeds from the sovereign power, the People have the right at all times to inquire, by way of quo warranto, into the title by which such a franchise is claimed or exercised. (People v. United Medical Service (1936), 362 Ill. 442, 452, 200 N.E. 157.) Quo warranto is a remedy for determining the right and title to corporate office (Compare Department of Disabled American Veterans v. Bialczak (1st Dist. 1976), 38 Ill.App.3d 848, 349 N.E.2d 897, with People ex rel. Stoolman v. Pyle (3rd Dist. 1924), 235 Ill.App. 532), and a method for testing the legality of the existence of a private corporation (Osborn v. People ex rel. Lewis (1882), 103 Ill. 224; Nelson Chesman & Co. v. Singers (4th Dist. 1913), 183 Ill.App. 591).

The Quo Warranto Act provides that a proceeding in quo warranto may be brought in case "Any corporation does or omits to do any act which amounts to a surrender or forfeiture of its rights and privileges as a corporation, or exercises powers not conferred by law; * * * " (Ill.Rev.Stat.1973, ch. 112, par. 9(e)). ² If a corporation violates this provision, it may be ousted from its franchise or its franchise may be forfeited. Ill.Rev.Stat.1973, ch. 112, par. 14. See People v. White Circle League of America (1951), 408 Ill. 564, 97 N.E.2d 811.

In our State, it has seldom been necessary to utilize the provisions of the Quo Warranto Act to oust Illinois corporations from the privilege of the corporate franchise, other than for non-payment of franchise taxes, as most such enterprises have been of law-abiding character. The case of People v. White Circle League of America made clear, however, that the law is not powerless to act if it should appear that a corporation persists in illegal activity. Rather than proceed by complaint in equity, the Attorney General there instituted a quo warranto proceeding based on alleged violations by the League of those sections of the Criminal Code relating to the dissemination of obscene materials.

The proceeding was successful, and the corporation was ousted from its franchise, despite a claim that constitutional rights of free speech and free press were being invaded. The facts being generally admitted by the pleadings, the principal issue was one as to whether or not the common law writ of quo warranto, as regulated by statute, was broad enough in scope to cover the situation. The court interpreted the fifth specification of the first section of the statute, to-wit: one relating to any corporation which "does or omits to do any act which amounts to a * * * forfeiture * * *, or exercises powers not conferred by law" (Ill.Rev.Stat.1949, ch. 112, par. 9(e)) as being sufficient to deal with the problem. It achieved that conclusion, without going into the broader questions of public policy, on the theory that any corporation engaging in criminal acts necessarily exercises powers "not conferred by law." Following the decision in White Circle, it was opined that the "use of either quo warranto or bill in equity is, then, clearly permissible should there be occasion, in the...