State Ex Rel. Nw. Colonization & Improvement Co. of Chihuahua v. Huller

• Decision Date: 01 October 1917
• Docket Number: No. 1870.,1870.
• Citation: 168 P. 528,23 N.M. 306
• Court: New Mexico Supreme Court
• Parties: STATE ex rel. NORTHWESTERN COLONIZATION & IMPROVEMENT CO. OF CHIHUAHUAv.HULLER et al.

23 N.M. 306

168 P. 528

STATE ex rel. NORTHWESTERN COLONIZATION & IMPROVEMENT CO. OF CHIHUAHUA

v.HULLER et al.

No. 1870.

Supreme Court of New Mexico.

Oct. 1, 1917.Rehearing Denied Nov. 12, 1917.

Syllabus by the Court.

An action of quo warranto, or in the nature of quo warranto, is the proper remedy to test the right of office in a private corporation.

In a proceeding on information in the nature of quo warranto to oust individual respondents from franchises alleged to be usurped in a private corporation, the corporation is a proper relator, by reason of its special interest in the matter of the inquiry.

Informations in the nature of quo warranto, brought against individuals to inquire by what right they use or exercise the liberties and privileges of a corporation, may be brought on behalf of the state on the relation of any person or persons having an interest injuriously affected.

Quo warranto, or a proceeding in the nature thereof, lies only against one who is in the possession and user of the office, or who has been admitted thereto.

The failure to require a bond of the relator in a proceeding in the nature of an information in quo warranto, while erroneous, does not amount to prejudicial error, where after judgment of ouster against the respondent such judgment is affirmed on appeal.

An information in the nature of quo warranto, while retaining its criminal form, is in modern practice regarded as a civil proceeding.

An information in the nature of quo warranto, while criminal in form, need not be drawn with that certainty required of indictments and the principles of good pleading will apply to both parties, as in ordinary civil actions.

Whether the appearance is general or special is governed by the purpose and object of the appearance. If the appearance be for the purpose of objecting to the jurisdiction of the court, and is confined solely to the question of jurisdiction, then the appearance is special, but any action upon the part of the defendant, except to object to the jurisdiction which recognizes the case is in court, will amount to a general appearance.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, General Appearance; Special Appearance.]

To a quo warranto charging an illegal exercise of corporate functions, the plea should, as a general rule, be either of justification or a disclaimer, and the plea of justification must contain allegations of all such facts as are necessary to show authority for the use of the franchises.

Additional Syllabus by Editorial Staff.

The word “person” is a generic term of comprehensive nature, embracing natural and artificial persons, such as corporations.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Person.]

Appeal from District Court, Bernalillo County; Raynolds, Judge.

Quo warranto by the state of New Mexico, on relation of the Northwestern Colonization & Improvement Company of Chihuahua, against Luis Huller and others. Judgment for relator on the pleadings, and defendants appeal. Affirmed.

On March 16, 1914, a petition for leave to file an information in the nature of quo warranto was filed in the district court of Bernalillo county, by the Northwestern Colonization & Improvement Company of Chihuahua, representing that it had obtained the consent of the Attorney General to institute the action, and that the said company was, and is, a corporation organized under the laws of the territory of New Mexico, in the year 1889, and, after certain formal allegations concerning the organization of said company, its board of directors, officers, and location of its office in the state of New Mexico, the petition further recited that certain persons, the respondents herein named, conspiring together with one George R. Pierce, since deceased, undertook to act together and to exercise corporate functions in the name and pretending to be in behalf of the said Northwestern Colonization & Improvement Company of Chihuahua; that they met and held a meeting at Deming, N. M., on the 14th day of December, 1910, and, pretending to be stockholders of the said corporation, elected certain persons as directors of the said corporation, and passed a resolution authorizing the directors, so pretending to be elected, to meet in the city and republic of Mexico for the purpose of transacting business as a corporation organized under the laws of New Mexico and in the name of the relator herein, and did other acts in the name of the petitioner, such as causing to be issued certificates of stock in the name of the petitioner and certain false statements or certificates appointing Arthur A. Temke the resident agent, upon whom process could be served, and causing the same to be filed with the State Corporation Commission of the State of New Mexico, and likewise assumed to exercise corporate powers in the name of the relator, causing to be issued certain false and fraudulent power or powers of attorney, authorizing the attorneys in fact to appear in certain proceedings pending in the courts of Mexico and to represent themselves as attorneys to act in behalf of the relator.

The petition further continued with recitals as follows: That no one of said persons is the owner of any shares of stock in the relator corporation, excepting S. D. Haskell, who claims and appears to be the owner of 1,000 shares of stock in the said company; and that all of the offices, liberties, privileges, franchises, and authority exercised by the said persons named as respondents have been usurped upon the petitioner and the state of New Mexico, and they have exercised, and are still assuming to exercise, without legal authority, the said offices and franchises, to the damage and prejudice of the relator and of the state; concluding with a prayer for a judgment of ouster.

An order to show cause, addressed to the respondent, was thereafter made by the district court of Bernalillo county, requiring them to appear on April 3, 1914, and show cause why an information should not be filed against them, and directing personal service of a copy of the order, together with a copy of the petition upon the resident agent of the said company as constituted by the respondents, acting as a board of directors of the alleged company. On the said 3d day of April, 1914, there was filed in the office of the clerk of said court a demurrer setting up numerous grounds, which was shortly thereafter overruled and leave granted to file information, which was accordingly filed on April 16, 1914, in substantially the same form as the petition.

Thereupon the trial court summoned the respondents to appear on the 1st day of June, 1914, and make answer unto the information and directed service of process to be made upon Arthur A. Temke, who had been appointed by respondents as their resident corporate agent for service of process in New Mexico. The respondents, other than Lindauer, appearing specially for that purpose, or so denominating their appearance, filed (1) a motion to quash the return of the sheriff upon said order or citation, and vacate the order authorizing such service, (2) to quash the said information or strike the same from the files of the court, and (3) to vacate the order indorsed on said citation; and the said Lindauer, also appearing specially, or so denominating his appearance, filed his plea to the jurisdiction of the court and a plea in abatement of said citation or summons, all of which motions and pleas were overruled by the court. Thereafter various demurrers and pleas were filed by the respondents, and relator subsequently filed replications. Demurrers were filed by respondents to the replications, which were overruled, and thereafter rejoinders were filed. To the rejoinders the relator filed a surrejoinder, setting up as exhibits two certain contracts. The respondents thereafter filed rebutters, and other pleadings, demurrers, and motions too numerous to include in this statement of facts were interposed, from time to time, culminating in a motion for judgment on the pleadings, which motion was sustained and a judgment of ouster entered by the trial court.

Roberts, J., dissenting.

Renehan & Wright, of Santa Fé, and W. D. Hawk, of Chicago, Ill., for appellants. H. B. Jamison, of Albuquerque, Francis C. Wilson, of Santa Fé, J. R. Garfield, of Cleveland, Ohio, and D. J. Cable, of Lima, Ohio, for appellee.

HANNA, C. J.

We shall consider the assignments of error from the standpoint of the importance of the questions raised, as the order in which the assignments of error are presented is not the same in the briefs, and tends to confusion.

[1] The first question to be considered is whether an information in the nature of quo warranto is the proper remedy to try the title to office in a private corporation. In this jurisdiction we unfortunately have no statute upon the subject of this remedy and are left entirely to the common-law principles and our interpretation of the scope of the statute 9th Anne, chapter 20. The English rule is that to justify the employment of quo warranto to try title to office it is essential that the office be such as the law deems of a public nature. The Massachusetts courts seem to be the only American courts which follow the English rule. All other American courts agree in holding that an action of quo warranto, or in the nature of quo warranto, is the proper remedy to test the right of office in a private corporation. The American cases are collected in the note to the case of George H. Brooks, plaintiff in error, v. State of Delaware ex rel. Robert H. Richards, Attorney General, reported in 26 Del. 1, 79 Atl. 790, 51 L. R. A. (N. S.) 1126, Ann. Cas. 1915A, 1133. See, also, High on Extr. Leg. Rem. (3d Ed.) § 653.

[2] The next question in order of importance is raised by point 6 in appellant's brief, that a corporation cannot act as relator in informations in the nature of quo warranto. It is argued...