The Columbian Athletic Club v. State ex rel. McMahan

• Decision Date: 04 June 1895
• Docket Number: 17,095
• Citation: 40 N.E. 914,143 Ind. 98
• Parties: The Columbian Athletic Club v. State, ex rel. McMahan
• Court: Indiana Supreme Court

40 N.E. 914

143 Ind. 98

The Columbian Athletic Club v. State, ex rel. McMahan

No. 17,095

Supreme Court of Indiana

June 4, 1895

Petition for Pehearing Overruled December 13, 1895.

From the Lake Circuit Court.

The judgment is affirmed.

J. B Peterson and E. D. Crumpacker, for appellant

B. K Elliott, W. F. Elliott, J. E. McCullough, J. Kopelke, H. N Spaan and W. C. McMahan, for appellee.

Howard, C. J. Hackney, J.

OPINION

Howard, C. J.

On the 2nd lay of September, 1893, the appellee, by her relator, who is the prosecuting attorney, filed in the clerk's office of the court below, her verified complaint or information, alleging, amongst other things, that the appellant was a corporation, duly organized and then existing under the laws of the State of Indiana; that the said appellant, assuming to act as such corporation, was engaged in violating the laws of the State, and had misused its corporate powers and franchises; that under the claim of corporate right, and in its character as a corporation, the appellant had willfully violated the statute of the State, prohibiting prize fighting, giving the details of such violation; that the appellant claimed the right, as a corporate franchise, to conduct prize fights, insisting that the statute, under which it was organized, gave to it such right; that, by reason of such wrongful claim, it had induced persons to believe that it had a franchise under the laws of the State to engage in such business of prize fighting, and so had greatly abused its corporate privileges and usurped authority which it did not possess; that it had fitted up and maintained its premises in the county of Lake for the sole purpose of engaging in prize fighting; that it advertised such business in the most public manner, and thus induced thousands of persons to come upon its said premises, in order to witness men engaged in fighting one another for prizes to be awarded to the victors; that the appellant, as such corporation, had further abused and misused its corporate franchises and violated the statutes, by bringing into the State certain persons to perform the duties of sheriffs and other peace officers, and by causing such imported persons, so feloniously assuming to act as peace officers, to beat, bruise and wound persons assembled on appellant's said premises; that many persons were, in consequence, grievously wounded, and that even death had been thereby caused; that appellant, in violation of another statute, had conspired with divers persons, to appellee unknown, to commit and procure the commission of an offense in the night time, to-wit: prize fighting, upon said premises; that appellant, in its said corporate capacity, had caused, created, and was then maintaining a public nuisance on its said premises, in that it had thereon prepared and constructed buildings and other structures, for the sole purpose of procuring men to fight therein for prizes, giving details of fights that had already taken place, stating also the riotous proceedings that followed, and that appellant avows its purpose to continue such prize fighting; that appellant fortified and strengthened its buildings, so as the better to enable it to carry on its said illegal business, as well as to render it the more difficult for sheriffs and other peace officers to enter and arrest those engaged in the violation of the laws, pursuant, also, to the purpose and design of the appellant to permanently use and maintain its premises for the sole purpose of conducting prize fights on its said premises; that, under claim of corporate right and privilege, appellant would, if not enjoined, continue its usurpation of corporate functions, and its abuse of its corporate franchises, thereby causing tumults and riots, so that human life would be endangered, and the local officers of the county be unable to suppress the consequent violence; that the incorporators, as well as all those thus engaged in violation of the laws, were non-residents of the State of Indiana; that appellant had conspired with certain persons named, and with others whose names were unknown, with the purpose, in the event that the court should issue such restraining order, to render the same nugatory, by having the prize fights conducted by such other persons; that unless a receiver should also be appointed, the appellant would falsely and fraudulently assign its rights and property to said co-conspirators, or other third parties, so that prize fighting and other unlawful acts might still be conducted, notwithstanding such order of the court.

The prayer was for a dissolution of the incorporation as having forfeited its franchises, and that it be ousted therefrom; that an injunction be issued, and that a receiver be appointed to take charge of the property, until the further order of the court. The restraining order was issued by the judge in vacation, and was directed especially against a fight advertised for the 4th day of September, being two days after the issue of the order; and the receiver was appointed for the property of appellant in Lake county, being the premises in question.

The appointment of the receiver is assigned as error; and it is contended by counsel for appellant that the court erred both in the issuing of its restraining order, and also in the appointment of the receiver, for the reason that equity will not aid in the punishment, or in the prevention of crime.

"One sufficient reason, among the many," say counsel, "for denying the jurisdiction of equity in this class of cases, is that the law regards the crimes charged as those of the individual perpetrators, and not of the corporation, and the penal laws are adequate to redress wrongs against society by punishing the offenders. Corporations, as such, have no capacity to commit the kind of crimes charged in the information."

In answer to this may be given what a great English judge, Vice-Chancellor Shadwell, said, when appealed to for a receiver in a case where a corporation had violated an injunction: "The directors of the company, their agents and servants cannot, on this motion, be committed to prison; but what can be done, shall by me be done to repress this daring invasion of public and private rights--an invasion maintained, moreover, in open defiance of all law, authority, and order. Let a sequestration issue." Att'y-Gen. v. Great Northern R. W. Co., 4 De Gex & S. 75, as cited in 2 Redf. Rys. (6th ed.) 419.

In Judge Redfield's work, cited above, Vol. 2, p. 364, the author says: "Injunctions in courts of equity, to restrain railways from exceeding the powers of their charters, or committing irreparable injury to other persons, natural or artificial, have been common for a long time in England and in this country."

Extraordinary emergencies in many cases call for extraordinary remedies. In chapter 29 of the work from which we have quoted, Judge Redfield, both in the text and in the notes, gives numerous instances of the interposition of equity to prevent threatened wrongs on the part of corporations.

The rule to be observed in such cases is quoted at p. 366 from Lord Chancellor Cottenham, "That it is the duty of the courts of equity (and the same is true of all courts and of all institutions) to 'adapt its practice and course of proceeding, as far as possible, to the existing state of society, and to apply its jurisdiction to all those new cases which, from the progress daily making in the affairs of men, must continually arise, and not from too strict an adherence to forms and rules established under very different circumstances, decline to administer justice, and to enforce rights for which there is no other remedy.'" This rule, the author concludes, is certainly worthy of one of the ablest, wisest and best judges that ever administered the chancery law of England or America.

In the well considered case of Att'y-Gen. v. Chicago, etc., R. W. Company, 35 Wis. 425, by Chief Justice Ryan, that eminent jurist quotes with approval from Brice's Ultra Vires, on p. 526, as follows:

"Under many circumstances, the court of chancery has, on public grounds, jurisdiction to prevent corporations acting in various ways, or contrary to the intent for which they have been created. The public, however, must be represented in all applications relating to such matters, and this is done by the intervention of the attorney-general. No single person, whether a member of the corporation * or not, is able on his own account, and of his own motion, to call upon the court to interfere for his special protection. The wrong he complains of is not confined to himself; no right or privilege peculiar to himself is violated; the wrongs inflicted and the rights invaded affect the public, and the public, consequently, must be a party to the proceedings. The occasions upon which the court will exercise jurisdiction to restrain the doing of acts of this kind, seem to fall into the three following heads:' * * '(1). When a corporation is abusing powers given for public purposes; (2), or is committing a breach of trust; (3), or is acting adversely to public policy.'"

Under the third head, "When any corporation is doing acts detrimental to the public welfare, or hostile to public policy," the author quotes from Attorney-General v. Great Northern R. W Co., where Kindersley, V. C., said: "Whenever the interests of the public are damnified by a company established for any particular purpose by an act of parliament, acting illegally and in contravention of the powers conferred upon it, I conceive it is the function of the attorney-general to protect the interests of the public by an information; and that, when in the case of an injury to private interests, it would be competent for an individual to apply for an...