Bush v. State ex rel. Wernecke

Lairy, J. — This is an action of quo warranto brought by the State of Indiana, on the relation of the prosecuting attorney of the Forty-Third judicial circuit of Indiana, against .appellants. The material allegations of the complaint are as follows: “That said defendants have been for more than two years last past, and still are, usurping the franchise of being a corporation by the name and style of the Reservoir Improvement Company in the counties of Vigo and Clay in the State of Indiana; and that by that name.are pleading and being impleaded, contracting and being contracted with, and otherwise acting as a corporation within Vigo and Clay counties, in the State of Indiana, without being legally incorporated; that as such pretended corporation said defendants, as an association of persons, have acted within the said counties and state as a corporation without being legally incorporated. * * ' * The relator would give the court to understand and be informed that said defendants have never been and are not now legally incorporated, and during a period of more than two years last past, have so usurped the franchise of being a corporation as aforesaid. Wherefore, this relator asks the court that said defendants be required to show by what right they claim to háve and enjoy the privileges of such corporation.” Appellants’ motion for an order requiring appellee to make the complaint more specific was overruled, and thereafter appellants filed a joint, and several answer, to which a demurrer was addressed by appellee. The court sustained this demurrer and, upon appellants’ re [342] fusing to plead further, judgment was rendered against them. Appellants assert that the court erred in overruling their motion for an order requiring the complaint to be made more specific. It is conceded that the complaint is sufficient to withstand a demurrer under the authority of Smith v. State, ex rel. (1895), 140 Ind. 343, 39 N. E. 1060; but it is asserted that the material allegations do not tender any certain and definite issue by reason of the general and indefinite character of the language employed. It is alleged that the defendants had been for more than two years, and at the time the complaint was filed still were, usurping .the franchise of being a corporation; and, as such, that they were pleading and being impleaded, contracting and being contracted with, in the corporate name they have assumed, and were otherwise acting as a corporation without being legally incorporated. By the motion it was asked that the plaintiff be required to state in the complaint the facts relied on as showing that the corporation was not legally organized and incorporated, and showing that it was usurping the powers, rights and franchises of a corporation without being legally incorporated. The common-law writ of quo warranto was in the nature of a writ of right against him who claimed or usurped any office, franchise or liberty to inquire by what authority he supported his claim in order to determine the right. 3 Blackstone’s Commentaries (Book 3) ch. XVII. The procedure under the writ was civil and not criminal in its nature, being prosecuted by the king through his attorney-general without any relator to try the mere civil right to some office, liberty, or franchise which was being claimed or exercised by some person in violation of the prerogative right of the sovereign. The writ soon fell into disuse in England and was sue [343] ceeded by the information in the nature of quo warranto, which was criminal in its nature, involving a fine or imprisonment in addition to a judgment of ouster. The proceeding by information in the nature of quo warranto lost its criminal character, in everything except form, long b*efore the American Revolution, and was applied to enforcing civil rights, seizing franchises and ousting the wrongful possessor, the fine being merely nominal. In proceedings under the ancient writ of quo warranto, which were brought by the crown through its attorney-general, no great particularity in pleading was required, but the allegations employed were of the most general character. The purpose of the writ was to call upon the defendant to show the authority by which he exercised a corporate franchise or assumed the duties of a public office, and the same was true as to informations in the nature of quo warranto. It was not the purpose of such writ of information to tender an issue of fact, but to call upon the defendant in theomost general terms to set up the facts showing by what warrant or authority the privilege, franchise or office was held or exercised. In such proceedings it was sufficient for the state to allege that the defendant intruded into a certain office without authority of law, or that he usurped the powers, privileges and franchises of a corporation without legal warrant or authority so to do. The defendant could not traverse an information of this character by any plea to general issue; he must, by his plea, either disclaim or justify. He must disclaim all right to the office or franchise and deny the usurpation, or he must specifically allege facts which show a legal right to discharge the duties of the office, or to exercise the privileges and franchises of a corporation, as the case, might be. The rules of pleading as thus announced still obtain except in states where by statute the pro [344] ceedings have been assimilated to those in ordinary civil actions. 17 Ency. Pl. and Pr. 458; State, ex rel. v. Messmore (1861), 14 Wis. 125; State, ex rel. v. Dahl (1886), 65 Wis. 510, 518, 27 N. W. 343; Boyer v. Teague (1890), 106 N. C. 577, 618, 11 S. E. 665, 19 Am. St. 547. 1. In this state the early statutes provided for a proceeding by information in the nature of quo warranto (R. S. 1843 p. 937), but in 1852 the Civil Code was adopted, by which a remedy by civil action was substituted for the information in the nature of quo warranto as it had previously existed. Chapter 44 of the Code on the subject of informations was reenacted in 1881, and still remains in force without change. Section 816 of the Code of 1881 is as follows: “The information shall consist of a plain statement of the facts which constitute the ground of the proceeding, addressed to the court.” §1190 Bums 1914, §1133 R. S. 1881. Section 818 of the Civil Code of 1881 is as follows: /‘Whenever an information is filed, a summons shall issue thereon; which shall be served and returned as in other actions. The defendant shall appear and answer, or suffer default, arid subsequent proceedings be had as in other cases.” §1192 Burns 1914, §1135 R. S. 1881. Section 55 of the Code of 1881 provides that the summons shall be issued by the clerk, under the seal of the court, and directed to the sheriff, and shall notify the defendant of the action commenced, the parties thereto and the court where pending. §317 Burns 1914, §314 R. S. 1881. Section 84, of the Code, being §338 R. S. 1881, §343 Burns 1914, provides: “The complaint shall contain — * * * A statement of the facts constituting the cause of action, in plain and concise language, without repetition, and in such manner as to enable a person of common understanding to know what is intended.” [345] 2. Under the provisions of our Code the rules of pleading which apply in civil actions generally must be held to apply in actions of quo warranto. The seetion of the statute which requires that the information shall consist of a plain statement of the facts which constitute the ground of the proceeding must have been intended to require something more than the general statements and legal conclusions which were recognized as sufficient at common law. It is provided by statute in this state that a proceeding of quo warranto may be brought by a person on his own relation who claims an interest in' the office, franchise or corporation that is the subject of the information. §1189 Burns 1914, §1132 R. S. 1881. In such a proceeding this court has held that an information is insufficient which does not state facts showing the interest of the relator. State, ex rel. v. Bieler (1882), 87 Ind. 320; Reynolds v. State, ex rel. (1878), 61 Ind. 392, 402; State, ex rel. v. Home Brewing Co. (1914), 182 Ind. 75, 105 N. E. 909. It is also the rule that in proceedings to oust a corporation de facto, its existence as such being admitted or charged, the defects in the proceedings for its organization must be set out distinctly; and where a proceeding is brought to forfeit the franchise of a corporation for misuser or nonuser of its corporate powers, the facts constituting such misuser or nonuser must be specifically stated. 32 Cyc 1452; State, ex rel. v. Portland, etc., Oil Co. (1899), 153 Ind. 483, 53 N. E. 1089, 53 L. R. A. 413, 74 Am. St. 314; State, ex rel. v. Buchanan (1904), 37 Tex. Civ. App. 325, 83 S. W. 723. 3. By statute a conclusion stated in a pleading is deemed to be an allegation of every fact necessary to sustain such conclusion when the same is necessary to the sufficiency of the pleading. Acts 1913 p. 850, §343a Burns 1914. Under this act the facts nec [346] essary to sustain the conclusion would be regarded as stated in testing the information by a demurrer, but a motion for an order requiring the pleading to be made more specific by stating the facts on which the conclusion is based should have been sustained. In this case, however, an answer was filed setting out the articles of incorporation, the certificate of the secretary of state and all of the steps taken and acts done by the defendants in their effort to incorporate the company whose right to exercise corporate franchises and to exist as a corporation is questioned by the state in this proceeding. The sufficiency of this answer was challenged by a demurrer which was sustained. The answer thus tendered an issue as to the validity and efficiency of steps taken for the incorporation of the company, and by the demurrer an issue of law was joined. If appellee' had been required to make the information more specific by setting out the alleged defects in the proceedings and the defendants had demurred to the information as thus amended, the issue of law presented for decision could not have been materially different. If the state had, been required to make the information more specific inj response to appellants’ motion, the issue would have, been tendered by the information instead of the answer but, as the pleadings stand, the issue was tendered by the answer. The denial of appellants’ motion had the effect of shifting the burden of pleading the facts from'' the state to the defendants; but the court is of opinion that this was not so prejudicial to the defendants as to' require a reversal. If appellants had stood on the ruI-< ing of the court on their motion to require the information to be made more specific, and, refusing to plead further, had suffered judgment to go and had appealed therefrom, a different question would be presented. This brings us to a consideration of the second assignment of error, which challenges the ruling of the [347] trial court in sustaining the demurrer addressed to the answer. The memorandum filed with the demurrer was quite lengthy stating numerous particulars in which it was alleged the pleading was insufficient. Only those discussed on appeal will be considered. 4. The statute from which appellants derive authority to incorporate is chapter 165, Acts 1913. Acts 1913 p. 433, §8233 et seq. Burns 1914. Appellees assent that the title of the act is not broad enough to cover all of the purposes for which corporations may be formed as designated in the body of the act, and that no corporation can be organized thereunder for the purposes so embodied in the act not covered by the title. The state has a right to attack the constitutionality of the statute under .which appellants claim to be incorporated. Attorney-General v. Perkins (1889), 73 Mich. 303, 41 N. W. 426. [348] 5. [347] From an examination of the title in connection with the body of the act, the court is convinced that the position of appellee cannot be sustained. The first section of the act provides that any number of persons, not less than five, who may be landowners affected and interested in the construction, extension, changing, improvement, maintenance or repair of any levee, dyke, breakwater, dam, sewer, ditch, drain, diversion channel, creek, watercourse, pumping station, syphon, flood gate, waste gate, or in a combination of more than one of these objects or in any work deemed to be necessary for, or to be an aid to, the protection, drainage, reclamation or improvement of any wet or overflowed land or lands subject to overflow, or who may be interested in the extension, 'changing, improvement, maintenance or repair of any such work already constructed or in process of construction, may associate themselves together by wrritten articles of association, etc. ■ An examination of the title will show that it expresses as the sub [348] ject of the act the construction, extension, changing, improvement, maintenance or repair by incorporated associations of all the various kinds of works for the drainage and reclamation of wet or overflowed lands as set out in the body of the act, except those indicated by italics in this opinion. The title also indicates that the act provides for the organization of such associations, prescribes their powers, provides for the making and collection of assessments for the cost and expenses of such improvements against lands benefited, and for all other matters properly connected therewith. The title of the act, as well as the body, indicates that the purpose of the act was to provide for the incorporation of associations for the purpose of draining, protecting and improving wet and overflowed land by means of the construction of the various kinds of improvements mentioned. It is true that waste gates are not mentioned in the title, but the construction, of waste gates may be so intimately connected with other improvements expressly mentioned and so necessary to the efficacy of the work as a whole as to be properly connected therewith. The same may be said as to any •work not expressly mentioned in the title which may be deemed necessary for an aid to the protection, drainage, reclamation or improvement of wet or overflowed lands. “Where the title relates to a subject which is broad enough to make it possible to comprehend different matters, which might or might not be included in the subject as means to a given end, the disposition of the courts is to solve doubtful questions as to the relation of a particular matter to the subject, in favor of the legislation.” State, ex rel. v. Board, etc. (1905), 166 Ind. 162, 197, 76 N. E. 986, 997. [349] 6. [348] The case here presented is not one falling within the evils which the framers of the Constitution intended to guard against by the adoption of §19 of Art. [349] 4 of the Constitution. In the case of Robinson v. Skipworth (1864), 23 Ind. 311, 317, it is said: “The numerous attempts to procure improper legislation under false titles; the oft-repeated efforts, sometimes too successful, to incorporate into popular measures some foreign matter that could not otherwise become a law; and the blending of two or more totally distinct measures in one act, neither of which could succeed alone, make up the record that finally resulted in the incorporation into our fundamental law of the section referred to. It was not the design of the framers of our Constitution to put a clog upon fair and honest legislation; but to give ample scope for each act, to embrace all proper matters connected with one subject embraced in it.” Considering the title in connection with the body of the act, it is apparent that no member of the legislature which passed it could have been misled as to its purpose. Nothing foreign to the purpose as expressed in the title is embodied in the act. It is apparent that the purpose of the act was to authorize the formation of associations to drain and reclaim wet or overflowed land, and to protect land against overflow by the construction of the .various kinds of works of improvement designated, and others of a like nature adapted to the desired ends. 7. The articles of incorporation filed by appellants state as the objects of the association the construction of all of the various kinds of improvements enumerated in §1 of the act. It is asserted that the statute authorizes the formation of a corporation for the construction of each of the several classes of improvements; but that a single corporation cannot be formed for the purpose of undertaking the construction of all the different kinds of works named in combination, even though such combination is employed in one project of reclamation of wet and overflowed land. Ap [350] pellants base their contention on the wording of the first section of the act in which the disjunctive conjunction “or” is used to connect the words specifying the various improvements authorized. If appellee’s theory were adopted and carried to its legitimate ends, it would lead to an absurd result. It certainly could not have been the purpose of the act to require the formation of several corporations to construct the different parts of one general project of reclamation, and to require separate contracts for each class of work which combined to constitute the improvement as a whole. On the other hand, it is apparent that a corporation formed under the act should have power to carry out a complete plan of reclamation by the construction of any of the works of improvement mentioned or by any combination of such works as might be required to accomplish the result desired. The express language of §1 of the act indicates such an intention. A corporation formed for the purpose of constructing the several kinds of works named as a part of one general improvement would not be formed for the purpose of engaging in several separate and distinct lines of business wholly disconnected, wholly independent of each other and neither of which was connected with or dependent on the other, as was the case of Williams v. Citizens’, etc., Co. (1900), 25 Ind. App. 351, 57 N. E. 581, and other cases cited. In that case, as well as in the case of Burke v. Mead (1902), 159 Ind. 252, 64 N. E. 880, the articles of association were filed under the section of the statute providing for the organization of voluntary associations for the purpose of conducting the several lines of business and enterprise enumerated. These cases, as well as all others cited in support of this contention of appellee, can be easily distinguished from the case now before the court. [351] 8. [350] A further objection is urged to the articles of incor [351] poration set out in the answer on the ground that the signatures of Louis Klinger and Mary A. Jones to the articles of incorporation were not acknowledged. The answer shows that at the time the articles of association were filed they were duly signed and acknowledged by each of the seven persons who were members at that time, and it expressly avers that Louise Klinger and Mary A. Jones were severally interested in the contemplated work by reason of being owners of land affected thereby, and that, subsequently to the original execution and acknowledgment of said articles and election of directors, they duly became members by signing the articles of association as provided by law. • Section 5 of the act provides that owners of land affected may become members by signing the articles of association after they have been filed and recorded. The fact that these signatures were not acknowledged does not invalidate the articles of association, and the objection made is without force. 9. The only other objection urged against the validity of the articles of association set out in the answer is that they do not state the objects.of the corporation with sufficient certainty, and that they contain no description of the work to be undertaken by the association. The statute requires that the articles shall state the objects of the association generally, and provides that it shall not be necessary to give the route, or a particúlar description of any of the work, or its location, but it shall be sufficient to state generally the scope and character of the proposed work and the counties included or in which the work , will be done. In view of the general requirements of the act, the court holds that the statement of the objects for which the association was formed are sufficiently stated in the articles of association, and that no more particular description of the proposed work was required than that [352] stated therein. Section 12 of the act provides that, before causing any work to be commenced or any assessment to be made therefor, the board of directors shall cause a careful survey of the proposed work, and have plans and specifications prepared showing all of the details of the work proposed and the exact location of each item of said work by bearings and distances with reference to well-defined land corners or other permanent objects along the several lines of location so that a good intelligent description of the work will be had. Neither the act of 1852 (1 G. & H. 303), nor the act of 1869 (Acts 1869 p. 82) contained any such provision. The only provision made for a description of the proposed work by either of these acts was required, to be stated in the articles of incorporation. The cases of West v. Bullskin, etc., Ditching Co. (1869), 32 Ind. 138, and O’Reiley v. Kankakee, etc., Draining Co. (1869), 32 Ind. 169, were decided under the first one of these acts, and the other cases upon which appellee relies were decided under the second. Skelton Creek Draining Co. v. Mauck (1873), 43 Ind. 300; Crawford v. Prairie Creek Ditching Assn. (1873), 44 Ind. 361. In these cases it was held that the articles of association must contain such description of the work proposed as would enable a landowner (¡o know whether his lands would be affected thereby, and to enable assessments to be made. It was the evident purpose of §12 of the act under consideration to make provision for such a definite description of the work to be accomplished as would obviate the necessity of any particular description in the articles of association. The cases to which reference has just been made cannot, therefore, be regarded as of authoritative force in this case. The articles of incorporation are not invalid or ineffective for any of the reasons presented. All that has been said in this opinion has reference to [353] the original articles of association set -out in the answer. The court being of the opinion that the original articles are sufficient to show the existence of a de jure corporation, it is not deemed necessary to consider the questions presented as to the effect of the amended articles set out in the answer. The trial court erred in sustaining the demurrer to appellants’ answer, and the judgment is accordingly reversed, with instructions to overrule such demurrer. Note. — Reported in 119 N. E. 417. See under (2) 32 Cyc 1448, 14,52; (4) 12 C. J. 760.