200 Mo. 34 | Mo. | 1906
HEARING ON DEMURRER.
This is an original proceeding begun in this court by the Attorney-General by filing herein, ex officio, an information in the nature of a quo warranto, against the defendant corporation, the purpose of which is to oust it of its franchises and corporate privileges, to have the same declared forfeited, and all of the property, real and personal, of said defendant, forfeited to the State.
The information filed by the Attorney General, leaving off the formal parts, is as follows:
“Comes now Herbert S. Hadley, Attorney-General of the State of Missouri, who in this behalf prosecutes for the State, and informs the court that the Delmar Jockey Club was organized as a corporation under the provisions of article 1 and article IX of chapter 12 of the Revised Statutes of the State of Missouri for 1899, and the acts amendatory thereof, on or about the 18th day of January, 1901; that the capital stock of said corporation, as stated in • the articles of association*42 thereof, was one hundred thousand dollars, divided into one thousand shares of the par value of one hundred dollars each, and the purposes for which said corporation was formed, as alleged in said articles of association, were as follows:
“ ‘The purposes for which this corporation is formed are to encourage and promote agriculture and the improvement of stock, particularly running, trotting and pacing horses, by giving exhibitions of agricultural products and .exhibitions of contests of speed and races between, horses, for premiums, purses and other awards and otherwise; to establish and maintain suitable fair grounds and a race track in the city and county of St. Louis, with necessary buildings, erections and improvements, and to give or conduct on said grounds and race track, public exhibitions of agricultural products and stock, and of speed, or races between horses, for premiums, purses or other awards made up from fees or otherwise, and charge the public for admission thereto, and to said grounds and track; to engage in pool-selling, book-making, and registering bets on exhibitions of speed or horses at the said race track and premises, as provided by law, and to let the right to others to do the same; to conduct restaurants, cafes, and other stands, for the sale of food and other refreshments to persons on said premises; and to do and perform all other acts necessary for fully accomplishing the purposes hereinbefore specifically enumerated.’
“Tour informant further states that since the organization of said Delmar Jockey Club it has become the owner of and is now, and at all times hereinafter mentioned was, the occupant of and in charge of a certain tract, of land, known as the Delmar race track, lying partly in the city of St. Louis and partly in the county of St. Louis; upon which said land there was located a race track, and besides other buildings, erections and improvements, a certain shed or building, known as the betting ring or shed, for the purpose of having conduct*43 ed therein pool-selling, book-making, recording and registering of bets upon contests of speed or powers of endurance between certain horses, upon said race track, and of which said shed or building said respondent, through its officers, agents and representatives, is now and at all times hereinafter mentioned was, the occupant of and in charge of.
, “Your informant further states that said respondent, ever since its organization, has continuously, notoriously and willfully, within this State and at the county and city of St. Louis aforesaid, offended against and violated the laws of this State, and has grossly perverted, abused and misused its corporate authority, franchises and privileges and has unlawfully assumed and usurped franchises and privileges not granted to it by the laws of the State of Missouri, and especially in the following particulars, to-wit: That from the 18th day of January, 1901, up to the 16th day of June, 1905, said respondent, through its officers, agents and employees, conducted within the building, known as the betting ring or shed, hereinbefore mentioned, on the Delmar race track, the business of book-making and pool-selling, registration of bets and the acceptance of bets, and that during said period, said respondent, acting through its officers, agents and employees in charge of its said business, continuously, notoriously and willfully violated the laws of this State:, in that it sold pools and accepted and registered bets from minors upon the results of contests of speed or power of endurance, known as horse races between horses, run on the track of said respondent. That since said 16th day of June, 1905, the said respondent, acting through the officers, agents, employees and representatives in charge of the business of said respondent, has further continuously, notoriously and-willfully offended against and violated the laws of this State,'in this, to-wit: It has continuously kept and occupied within this State its*44 said shed or building, known as the betting ring or shed, above described, located upon said Delmar race track, with certain books, instruments or devices for the purpose of recording or registering bets and wagers upon the results of trials or contests of speed or power of endurance of horses, which were made and took place upon said race track of said respondent; and it has, through its officers, agents, employees and representatives in charge of the conduct of its business, continuously recorded and registered bets and wagers upon the result of trials or contests of speed and power of endurance between certain horses, which were made and took place upon said race track of said respondent; the said respondent, acting through its officers, agents, employees and representatives in charge of its said business, and being the owner, occupant and person in charge of said shed or building, known as the betting ring or shed, as above described, has continuously upon said Delmar race track knowingly permitted said shed or building to be used and occupied for the purpose of recording and registering bets and wagers upon the result of trials or contests of speed and power of endurance between horses, which were made and took place upon said Delmar race track. And said respondent, acting through its officers, agents, emplojmes and representatives in charge of the conduct of its said business, has continuously kept, exhibited, used and employed in said building, and continuously and knowingly permitted to be kept, exhibited, used and employed in said building, known as the betting ring or shed, upon said Delmar race track, certain devices and apparatus for the purpose of recording' bets and wagers upon the result of trials or contest of speed and power of endurance between horses which were made and took place upon said Delmar race track.
“Tour informant further states that said respond*45 ent has never given any exhibition, of agricultural products for the purpose of encouraging and promoting agriculture, or for any other purpose; that it has never given any exhibition of contest of speed and races between horses for the purpose of improving the stock of trotting and pacing horses; that it has never established or maintained any fair grounds in the city or county of St. Louis, or any other place.
“And your informant further states that the trials or contests of speed and power of endurance between horses which were at all the times herein mentioned made and took place upon said Delmar race track, were conducted under the direction, management and control of said respondent, acting through its officers, agents, employees and representatives in charge of its said business, and that said trials or contests of speed and power of endurance between said horses were conducted by said respondent at the times herein alleged for the purpose of enabling the said respondent to do the things and acts hereinbefore alleged to have been done by said respondent, in violation of the laws of this State. That said acts and things done by said respondent as aforesaid, constituted all of the business transacted or things done by said respondent under and by virtue of the franchise and authority conferred upon said respondent as a body corporate under the charter granted to said respondent by the State of Missouri. That by reason of the facts herein stated said respondent has willfully, continuously and unlawfully misused and abused the franchises, privileges and authority conferred upon it by the laws of the State of Missouri as aforesaid and that the commission by said respondent of the acts as herein stated in violation of the laws of the State of Missouri have been of great harm and injury to the public and a perversion and misuser of the franchises granted to it by the State of Missouri and a usurpation of franchises and privileges*46 not granted to said respondent by tbe State of Missouri, all to tbe great injury of tbe general public and tbe State of Missouri.
“Wherefore, Herbert S. Hadley, Attorney-General of the State of Missouri, who prosecutes in this behalf for the State of Missouri, prays the consideration of the court here in the premises that process of law may issue against said respondent, and that said respondent may be ousted of all its franchises and corporate privileges and that the saíne may be declared, forfeited, and that all of the property, real and personal, of said respondent, be declared forfeited unto the State.” -
Defendant filed demurrer to said information, as follows:
“The respondent now comes and says that the information filed herein is insufficient in law, and that it ought not to be required to answer the same; and the respondent further says that the said information is so insufficient in this:
‘ ‘ 1. That the portion which relates to acts of bookmaking, pool-selling and registration of bets described as the business carried on by the respondent from January 18,1901, to June 16,1906', does not state violations of law, because such acts were lawful, there being no averment that the defendant was not licensed to do such acts.
‘ ‘ 2. That portion which alleges that the respondent during such period ‘sold pools and accepted and registered bets from minors,’ does not state violations of law, because it is not'alleged that the respondent knew that the persons whose bets were registered were minors, and there is no averment that the respondent was not licensed to sell pools or register bets.
“3. That portion which relates to acts of bookmaking and registering bets and acts of .permission to others to make books or register bets, and to keeping*47 and using devices for recording bets, after June 16, 1905, does not state violations of law, because a corporation cannot’ commit a felony, or felonies, and tbe offense of book-making, pool-selling, or registering bets and the like is denounced a felony by the statutes of this State.
“4. That the information does not state any facts upon which a judgment of ouster could lawfully be based, for the obvious reason that to violate a criminal statute is not the usurpation or misuser of a franchise, there being a marked difference between franchises and felonies or misdemeanors, and quo ivarranto will not lie to compel the observance of a criminal statute, or to punish its violation.
“5. The information neither alleges nor charges: that the stockholders of the defendant corporation directed or authorized its alleged officers to violate the criminal laws of the State or to commit the felonies charged in said information.
“6. The information neither alleges nor charges that any of the officers or agents of said corporation haye been prosecuted under indictment or upon verified information for the felonies charged therein, and have been after trial found guilty thereof, but seeks to have this honorable court convict certain persons of the felonies charged in said information without the intervention of constitutional methods, and in a manner unknown ‘to the law of the land’.
‘ ‘ 7. Said information shows on its face that it seeks to deprive the stockholders of said corporation of their property without due process of law and without due conviction of any of the agents and officers of said corporation of the felonies imputed to it in said information.
‘‘8. Because said information seeks to have this court adjudge specific persons to be guilty of felonies without the aid of a prior indictment or verified' information charging such offenses, and without trial*48 by jury, as guaranteed in the Constitution of the State.
‘ ‘ 9. That the act of the General Assembly, entitled, ‘An act prohibiting book-making and pool-selling, and prescribing a penalty therefor,’ approved March 21, 1905', is void, because it violates section 28 of article 4 of the Constitution, in that it contains two subjects, to-wit: the prohibition of book-making and the prohibition of pool-selling, which, are two distinct subject-matters, which have no relation to each other, and are not germane.
“Wherefore the defendant prays judgment,” etc.
After the demurrer was filed, the State filed a motion for judgment upon the pleadings. But such motion was unnecessary, since judgment, as a matter of course, must be for’ the State if the demurrer be not sustained and the defendant does not plead over; and nothing more will, therefore, be said regarding it.
The defendant’s demurrer to the information in effect admits every material allegation in the information contained, but it does not admit mere legal conclusions, if any, stated in the information. This being the effect of the demurrer, it follows that all the acts charged in the information to have been committed by defendant in violation of law, after the 16th day of June, 1905; being material, stand admitted. But defendant contends that as such acts are declared by statute to be felonies, and that as a corporation cannot commit a felony, the violation of its charter in this respect, therefore, constitutes no ground for forfeiting its charter. That a corporation cannot have a felonious intent, and cannot, therefore, be prosecuted for a felony, is clear. It is equally clear, however, that an officer of a corporation, and in charge of its affairs, may as such officer do that which the statute declares to be a felony in like manner as he may do that which the statute declares to be a misdemeanor. There is no difference in principle.
It is unnecessary to cite authorities to show that no felony can be committed without a felonious intent, for this is well-settled law. Upon this question, how-. ever, the defendant cites the case of the Commonwealth v. Proprietors of New Bedford Bridge, 2 Gray 339, which is deserving of more than a passing notice. In that case the defendant bridge company was prosecuted by indictment for maintaining a nuisance. The court said:
“The indictment in the present case is for a nuisance. The defendants contend that it cannot be maintained against them, on the ground that a corporation, although liable to indictment for nonfeasance, or an omission to perform a legal duty or obligation, is not amenable in this form of prosecution for a misfeasance, or the doing of any act unlawful in itself and injurious to the rights of others. There are dicta in some of the early cases which sanction this broad doctrine, and it has been thence copied into- text-writers, and adopted to its full exteat in a few modern decisions. But if it ever had any foundation, it had its origin at a time-when corporations were few in number, and limited in their powers, and in the purposes for which they were created. Experience has shown the necessity of essentially modifying it; and the tendency of the more recent cases in courts of the highest authority has been to extend the application of all legal remedies to corporations, and assimilate them, as far as possible, in their le-gal duties and responsibilities, to individuals. To a certain extent, the rule contended for is founded in good sense and sound principle. Corporations cannot be indicted for offenses which derive their criminality from evil intention, or which consist in a violation of those social duties which appertain to men and*50 subjects. They cannot be guilty of treason or felony; of perjury or offenses against the person. But beyond this, there is no good reason for'their exemption from the consequences of unlawful and wrongful acts committed by their, agents in pursuance of authority derived from them. Such a rule would, in many cases, preclude all adequate remedy, and render reparation for an injury, committed by a corporation, impossible; because it would leave the only means of redress to- be. sought against irresponsible servants, instead of against those who truly committed the wrongful act by commanding it to- be done. There is no principle of law which would thus furnish immunity to a corporation. If they commit a trespass on private property, or obstruct a way to- the special injury and damage of an individual, no one can doubt their liability therefor. In like manner, and for the same reason, if they do similar acts to- the inconvenience and annoyance of the public, they are responsible in the form and mode appropriate to- the prosecution and punishment of such offenses. [Angeli & Ames on Corp., secs. 394-396; Maund v. Monmouthshire Canal Co., 4 Man. & Gr. 45-2, and 5 Scott N. R. 457; The Queen v. Railroad, 3 Ad. & El. N. S. 223; The Queen v. Railroad, 9 Ad. & El. N. S. 315, 2 Cox C. C. 70; Railroad v. Broom, 6 Exch. 314; State v. Railroad, 3 Zab. 360.] ”
It is apparent that this decision is not an authority for the contention that a corporation is not subject to an action of quo ivarrawto to oust it of the franchises conferred upon it, for a misuse or perversion of them, or that a corporation is exempt from the consequences of unlawful and wrongful acts committed by its agents in pursuance- of the authority derived from its charter. The information, charges that respondent, “acting through its officers, agents, employees and representatives in charge of its business, ” engaged in the acts of misuser -charged against it in the information. It will thus be seen that the unlawful act charged is not against
It is argued by defendant that forfeiture will not lie for an illegal act committed by a corporation. It is true that not for every illegal act will the charter of a corporation be forfeited; but the charter of the defendant is a contract with the State that it will use the franchises therein granted; that it will not misuse or pervert other franchises, and that it will not engage in the doing or carrying on of any business which is unlawful or immoral.
But it is claimed for defendant that the only violation of law by it which would justify an action in quo ivarranto would be a violation “of the organic law” from which the corporation derived its existence. In support of this position we are cited to the case of the Ill. Trust & Savings Bank v. Doud, 105 Fed. 123. It was held in that case that no corporation is required to exercise all the powers conferred upon it as a condi
In State v. New Orleans Gas Light & Banking Co., 2 Rob. (La.) l. c. 532, it is said: “It may be proper to state that it is now well settled that an act of incorporation may be forfeited for a misuse of the powers entrusted to it. It is a tacit condition of a grant of incorporation that the grantees shall act up to the end or design for which they were incorporated. If they do not, the rights and privileges granted may be withdrawn.” [5 Thompson on Corp. sec 6609; Terrett v. Taylor, 9 Cranch 43; State ex inf. v. Lincoln Trust Co., 144 Mo. 562.]
It is further contended by defendant that it was not the intention of the Legislature; upon any principle of rational construction, to make it a condition of the corporate life of racing associations, that they should not only provide the funds for the State Fair at Sedalia, but also; at the same time, conduct private fairs within their own local racing grounds; that this was not the intention of the.Legislature in the permissive grant, which was fully subserved by the money contributed to the State Fair at Sedalia, and that it is only the nonuser of some business franchise which affects the public which the courts would consider upon an information alleging such nonuser as a ground of forfeiture; that in the case at the bar the public was more benefited by the contribution of money to the support of the fair at Sedalia, on behalf of the people of the entire State, and in exhibition of the products of the State there, fha.n if a local exhibition of the products of St. Louis county had been given by the respondent corporation. In reply, we may be permitted to say that it is not our province to say that the public was in no way concerned about local exhibitions in St. Louis county of agricultural products, and stock. At any rate, we are unwilling to declare that the public was not interested in such
We are unable to concur in the position that this court will take judicial notice of the fact, even if true, that the defendant has every year created and paid over the fund for the making of such exhibitions at the State Fair at Sedalia, when in fact no such exhibitions have been held by defendant.
Defendant also contends that the acts of book-making, pool-selling and the registration of bets, alleged to have been committed by defendant between January 18,1901, and June 16, 1905, were lawful, because it was permitted by its charter to engage in such business, and it is not alleged in the information that it was not licensed to do these acts; another contention being that the acts charged against defendant in the registration of bets and the selling of pools to minors were in nowise improper, because it is not pleaded that defendant was a licensed book-maker.
The argument with respect to that portion of the petition which relates to general acts of book-making, between January 18, 1901, and June 16, 1905, is that it does not show violation of the law, because non constat the defendant was a licensed book-maker. [Sec. 7419, R. S. 1899.]
The State contends that defendant’s charter should be forfeited for book-making and pool-selling between January 18, 1901, and June. 16, 1905, because that provision of its charter which authorized it to engage in such acts was invalid for the reason that it was not authorized by the organic law; but the laws of this State, and especially section 40, Laws 1905, page 8, recites
It is alleged in the information and admitted by the demurrer that during the time indicated defendant sold pools to and registered bets with minors, which was a violation of law, it having no authority so to do. To make and sell pools and book-bets to minors is expressly prohibited by statute, and any person doing so may be punished as for a misdemeanor. [Sec. 2193, R. S. 1899.] So that defendant was without authority from any source to sell pools to or register bets’ with minors, and in doing so it was exercising a power which it did not possess, the tendency of which was immoral and to encourage minors in dissipation and vicious habits. Defendant now contends that the portion of the petition which relates to such sales does not state violations of law, because it is not alleged that the respondent knew at the time that such persons were, in fact minors. The statute is an absolute inhibition against selling pools or book-bets to minors, and it was entirely unnecessary that the petition should allege that such sales were made to minors, knowing such persons to be minors. It was the defendant’s duty to know when sales were made that they were not made in violation of law.
The acts for which a forfeiture of defendant’s charter is asked are acts done by the corporation
A final contention is that the act of the Legislature of 1905', entitled, “An act prohibiting book-making and pool-selling and prescribing a penalty therefor,” approved March 21, 1905, is void because it violates section 28, article 4, of the Constitution, in that it contains two subjects, the prohibition of book-making and pool-selling, which are not germane but incongruous and in discord with each other. The section referred to reads as follows: “No bill . , . shall contain more than one subject, which shall be clearly expressed in its title.” Whatever may be the correct definitions of the terms “book-making” and “pool-selling,” wherever either is used it is always understood to have reference to horse racing of some character, and the one is, therefore, germane to the other. When this is the case, the act is not unconstitutional. In State ex rel. v. Miller, 100 Mo. l. c. 444, it is said: “Its demands are that matters which are incongruous, disconnected and without any natural relation to each other must not be joined in one bill; and the title must be a fair index of the subject-matter of the bill. A very strict and literal interpretation would lead to many separate acts relating to the same general subject, and thus produce an evil quite as great as the mischief intended to be remedied; hence, a liberal interpretation and application must be allowed. In Ewing v. Hoblitzelle, 85 Mo. 64, the following rule, taken.from Sedgwick, was approved: ‘Where all the provisions of a statute fairly relate to the same subject, have a natural connection with it, are the inci
HEARING ON COMING IN OE ANSWER.
On July 28, 1905, Herbert S. Hadley, Attorney-General, filed in this court his information, ex officio, in the nature of a quo warranto, against the respondent corporation, the purpose of which is to divest said corporation of its franchises and forfeit its property to the State. To this information the respondent interposed a demurrer, which matter being in issue was submitted to this court and fully disposed of by an opinion by Burgess, J., reported above, in which opinion the information is fully set out, and for that reason will not be incorporated herein.
After the. disposition of the demurrer by the opinion aforesaid, the respondent filed answer as follows:
“Respondent, Delmar Jockey Club, comes by its attorneys, and for its answer to the information of the Attorney-General herein, admits that it is a corporation duly organized and incorporated under the laws of the State of Missouri and denies each and every other allegation in said information alleged or contained.
“Wherefore respondent prays that it be hence discharged with its costs.
“2. For its further answer to that portion of the information of the Attorney-General herein, wherein it is alleged that respondent has failed to exercise certain franchises, claimed to be possessed by it, this respondent states that it has fully carried out and exercised all those provisions in its charter authorizing it to give exhibitions of agricultural products and exhibitions of contests of speed and races between horses for the pur*61 pose of encouraging and promoting agriculture and the improvement of stock, and has provided suitable fair grounds for the same, in this, that between the 18th day of January, 1901, and the 16th day of June, 1905, in pursuance of the provisions and requirements of sections 7419 to 7424, inclusive, Revised Statutes 1899, respondents duly paid large sums of money into the Treasury of the State of Missouri, to the credit of the State Fair Fund, the same being a fund created by section 7424, Revised Statutes 1899:, for the development and advancement of the industrial interests of this State under the direction of the State Board of Agriculture, and that all said moneys so paid into said fund were received, used and appropriated by the State of Missouri, for the purpose of holding and giving annual exhibitions of agricultural products and stock of every kind and description at the city of Sedalia, Missouri, and that the said sums of money paid by respondent into the Treasury of the State of Missouri under the terms of section 7419 to 7424, inclusive, were used and appropriated by the said State of Missouri and its said State Board of Agriculture solely for the maintenance and support of the said Missouri State Fair held annually at Sedalia, and for the further purpose of providing, constructing, improving and equipping all grounds, stands and buildings necessary for the holding and giving of said fair.
“Respondents further state that by exercising and receiving the said sums of money for the above-mentioned purposes the said State of Missouri intended to and did accept the same as full and complete performance and use by respondents of its franchise to give exhibitions of agricultural products and stock and the said State of Missouri thereby intended to and did waive any other or further exercise of such franchise on the part of respondent.
“Further answering the allegations of non-user*62 from June 16, 1905, to the date of the filing of this information, to-wit, July 28, 1905, respondent states that the franchise of giving exhibitions of agricultural products and stock is not one which can be exercised continuously and at all times from the beginning to the end of the year, but is one, owing to its peculiar character, which can only be exercised! during the harvest season of each year. For these reasons respondent was not required to exercise such franchise between the above specified dates, but respondent further avers that it has in good faith endeavored at all times to exercise the franchise granted to it by its articles of incorporation in the manner and for the purposes intended by such grant, and that such is its purpose in the future, and respondent intends in every way to comply with and perform according to law all the obligations which it assumed upon the grant of the aforesaid franchises, to it by the State of Missouri, and respondent again specifically denies each and every charge, allegation or assertion of a contrary purpose on its part, contained in the information filed herein.
“Wherefore, respondent prays that it be hence discharged with its costs.” '
Upon the filing of this answer the Attorney-General filed motion for judgment upon the pleadings, and the issues thus raised are the ones now for consideration and judgment by the court.
This motion is as follows:
“Comes now Herbert S. Hadley, Attorney-General of the State of Missouri, who in this behalf prosecutes for the State, and moves the court for judgment on the return and answer for respondent herein, for the following reasons:
“First. Said return and answer fails to state facts showing any sufficient cause or excuse for, or any legal defense to, the non-user of respondent’s franchises authorizing it to give exhibitions of agricultural*63 products and exhibitions of contests or speed or races between horses for the purpose of encouraging and promoting agriculture and the improvement of stock, and for the establishing and maintaining of suitable fair grounds in the city and county of St. Louis, as set forth and charged in the information herein.
“Second. It appears from the facts stated in said return and answer, and the second count thereof, that respondent is guilty of the acts of misuser and abuser of its franchises charged in the information herein filed, in this, to-wit, that respondent engaged in the business of book-making and pool-selling, registration of bets and the acceptance of bets in violation of the' laws of this State.
“Wherefore, informant prays that final judgment of ouster be rendered against the respondent as prayed for in the information in this case.”
As a further part of the history of the case it might be said that the court sustained the motion for judgment and entered judgment of ouster and levied a fine of $5,000, but filed no opinion.
This judgment of ouster was for both misuser and non-user, and upon motion for rehearing was set aside, and said cause taken as submitted on the motion as above stated, and then assigned for opinion.
Points respectively urged by contending counsel will be duly noted in the course of our remarks.
I. The first question is to determine the effect of respondent’s answer. There is first a general denial. This without further pleading would raise the issue both as to the misuser and non-user charged in the information. As to non-user, the general denial first pleaded is followed by a plea, hereinabove fully set out, which amounts to a plea of confession and avoidance. This answer admits, in effect, that it was the duty of the corporation to maintain fair grounds and hold an agricultural fair “in the city and county of St. Louis”
“The purposes for which this corporation is formed are to encourage and promote agriculture and the improvement of stock, particularly running, trotting and pacing horses, by giving exhibitions of agricultural products and exhibitions of contests of speed and races between horses, for premiums, purses and other awards and otherwise; to establish and maintain suitable fair grounds and a race track in the city and county of St. Louis with necessary buildings, erections and improvements, and to give or conduct on said grounds and race track, public exhibitions of agricultural products and stock, and of speed, or races, between horses, for premiums, purses or other awards made up from fees or otherwise, and to charge the public for admission thereto and to said grounds and track; to engage in pool-selling, book-making, and registering bets on exhibitions of speed or races at the said race track and premises, as provided by law, and to let the right to others to do the same; to conduct restaurants, cafes, and other stands, for the-sale of food and other refreshments to persons on said premises; and to do and perform all other acts necessary for fully accomplishing the purposes hereinbefore specifically enumerated. ’ ’
It undertakes to avoid this admitted failure by saying that by reason of the requirements of sections 7419 to 7424, Revised Statutes 1899', it had paid large stuns of money into the State Treasury which were used to maintain a State Fair at Sedalia, Missouri. These sections of the statutes constituted the old law providing for licensing pool-selling and book-making, and providing that the license fees should go to the State Fair fund. Even before its repeal, this law, which is article 2 of chapter 105, Revised Statutes 1899', in nowise excused the respondent from exercising the franchise
In the Price ease, Smith, P. J., said: “It is a rule of pleading that a general denial is overcome by a subsequent confession and attempted avoidance. [McCord v. Railroad, 21 Mo. App. 95.] It is a further rule that where a pleading is ambiguous it is to be taken most strongly in its interpretation against the pleader. The defenses pleaded by the answer are clearly inconsistent and should have been stricken out in the court below (Darrett v. Donnelly, 38 Mo. 493, and Adams v. Trigg, 37 Mo. 142); but as they were allowed to stand without objection we must now regard the first, the denial, as overcome by that of the subsequent confession and avoidance.”
In the latter case, Bank of Monett v. Stone & Prickett, Broaddus, J., after a collation of the cases in this State, uses this language, which we approve: “We know of no rule of pleading which permits a party liti
We conclude, that as to the charges of non-user contained in the information, they stand as confessed under the pleadings, and the question next for consideration is whether or not for this confessed dereliction ouster should go, and if so to what extent. This question we consider next.
II. Courts move cautiously in taking from corporations their charter grant of franchises. No insignificant act of either misuser or non-user will suffice for the exercise of the power vested in the courts, but the courts can and will forfeit all the franchises of a corporation for either misuser or non-user if the acts or omissions are sufficiently great. In fact it may be said that forfeiture may be declared upon either of three grounds, (1) wilful non-feasance or non-user, (2) wilful misfeasance or misuser, (3) usurpation of powers not granted. [10' Cyc., 1280:]
Justice Story, of the U. S. Supreme Court, at an early day announced the doctrine thus: “A private corporation created by the Legislature may lose its fran
Supreme Court of Pennsylvania, in case of Commonwealth v. Bank, 28 Pa. St. l. c. 389, uses this language: “It may be affirmed as a general principle, that where there has been a misuser, or a nonuser, in regard to matters which are of the essence of the contract between the corporation and the State, and the acts or omissions complained of have been repeated and wilful, they constitute a good ground of forfeiture. ’ ’
The Supreme Court of Mississippi says: “The acts of misuser or non-user must be touching matters which are of the essence of the contract between the sovereign and the corporation, and they must be wilful and repeated.” [Atty.-Genl. v. Railroad, 51 Miss. l. c. 608.]
In Iowa, the doctrine is thus stated: “A failure to substantially comply with the express provisions or conditions of the articles and of the general laws, or a wilful misuse or non-use in regard to matters which go to the essence of the contract between the corporation and the State, are acts and omissions which amount to a forfeiture. [Ang. & A., Corp., sec. 774; Boone, Corp., sec. 203; Mor., Priv. Corp., 1014; Tayl., Corp., sec. 457; Wat., Corp., sec. 427; Ins. Co. v. Needles, 113 U. S. 574, 5 Sup. Ct. Rep. 681; State ex rel. v. Railroad, 36 Minn. 246, 30 N. W. 816; State ex rel. v. Council Bluffs & N. Ferry Co., 11 Neb. 354, 9 N. W. 563; State v. Farmers’ College, 32 Ohio St. 487.] Courts act with extreme caution in proceedings like this, and forfeitures will not be declared, except under the express provisions of the charter, or for a plain misuse
In addition to the cases quoted from, and the cases cited in the quotations, many others along the same line could be cited. Suffice it to say that the courts hold, and rightfully, that where there is either wilful misuse or wilful non-use of the franchise or franchises, which are of the essence of the contract with the State, and those in which the State or public is most interested, then a forfeiture of the whole charter should be and will be declared. When a corporation receives from the State a charter granting certain franchises or rights, there is at least an implied' or tacit agreement that it will use the franchises thus granted; that it will use no others, and that it will not misuse those granted. A failure in any substantial particular entitles the State to come in and claim her own, the rights theretofore granted, and this through a judgment of forfeiture in a proceeding like the one at bar.
The right to construct and maintain suitable fair grounds in the city and county of St. Louis, and to
Such a flagrant and willful non-user of franchises, which are of the very essence of the grant, demand, in our judgment, the forfeiture of all the rights and franchises granted, and we therefore hold that there shall be a judgment decreeing a forfeiture of all the rights and franchises granted to respondent by its charter and a dissolution of said corporation.
III. We reach now the interesting proposition of this case, and that is whether or not, in addition to ousting respondent from its franchises, we can and should appropriate a part of its substance to the use and benefit of the State.
The State often grants to corporations many rights which inure largely to the benefit of the corporation and not to the benefit of the State, but with the sweet
In the case at bar, the conditions presented practically amount to a misuser. Here the State grants several powers to respondent, but with the central thought and purpose of procuring an agricultural fair. As an inducement and to encourage respondent in so doing, other powers are given which inure to the financial benefit of the corporation. The maintenance of an agricultural fair we know often proves a financial loss. Here we have the respondent sorting out the bitter from the sweet — exercising those powers which inure to its own benefit and willfully neglecting those in the interest of the public.- This willful conduct, considering the powers granted as a whole, with the central purpose in that whole, to construct fair grounds and buildings, and maintain an agricultural fair, might be
But returning to the question of non-user, pure and simple. The overwhelming weight of authority is to the effect that the court can forfeit the franchise for non-user. Forfeiture is but taking from the corporation its property, its corporate rights, which are a part of its property. Forfeiture is not only the taking of property, but it is further punishment by putting to. death the corporation itself. It we can take one class of the corporation’s property for mere non-user, why not another? This respondent claims that the rights and franchises granted and which it is exercising are valuable. If we can take them for non-user, why can’t we go further and say that we will not only punish you by forfeiture of all these valuable rights, which you hold as your property, and by putting you to death by dissolution, but we will, because of-the willful wrong to the State, take from your gains a further portion of your property ? We see no distinction. The character of the judgment is within the discretion of the court.
The doctrine is announced broadly in 10 Cyc. 1279, as follows: “It may be collected from a comparison of a number of decisions speaking upon that question that, although the grounds of forfeiture have been clearly made out, yet the question of imposing the severe penalty of the law is committed to- judicial discretion so far as mitigation is concerned, unless a judgment of ouster is commanded by a statute in such terms as leaves the court no discretion.”
And in High’s Extraordinary Legal Remedies (3 Ed.), p. 702, sec. 758, as follows: “The propriety of imposing a fine in addition to judgment of ouster is regarded as a matter of sound judicial discretion, and when no improper motives are alleged or shown against
Onr own court through Marshall, J., in case of State ex inf. v. Armour Packing C'o., 173 Mo. 1. c. 392, said: “This leaves only the question of punishment. The punishment to be imposed rests in the sound judicial discretion of the court. It need not necessarily be a general judgment of ouster. It may be an ouster of the right to do the particular act complained of (State ex inf. v. Lincoln Trust Co., 144 Mo. 562; State ex rel. v. Gas & Oil Co., 153 Ind. 483; State ex rel. v. Railroad, 47 Ohio St. 130; State ex rel. v. Standard Oil Co., 49 Ohio St. 137; Yore v. Superior Court, 108 Cal. 431; State v. Turnpike Co., 10 Conn. 157; State ex rel. v. Topeka, 30 Kan. 653 ; People v. Railroad, 15 Wend. 113; Commonwealth v. Canal Co., 43 Pa. St. 301); or it may be a suspensive judgment of ouster with a fine accompaniment (State ex inf. v. Ins. Co., 152 Mo. 1), or it may be a simple fine, if it appears that the trust, pool or conspiracy complained of and proved, has been abandoned. In short, the character of the judgment rests in the discretion of the court. [5 Thompson on Corp., sec. 6812; Weston v. Lane, 40 Kan. 479; State ex rel. v. Railroad, 91 Iowa 517; State ex inf. v. Bernoudy, 36 Mo. l. c. 281.] ”
In the Packing Company case, supra, it is true the implied contract with the State was violated by misuser of powers granted, but the penalty fixed, $5,000, was not under section 8968, the quasi-criminal section of 'the law, but under the broad right of the court to control the creatures of the State by taking their property from them, whether it be their franchises or other kinds of property.
In fact, Judge' Marshall, in the Packing Company Case, 173 Mo. 356, at page 380, expressly says that the fines and penalties fixed by the statutes, at least quasi-criminal, if not criminal, are not considered in the ease.
What is true of this case is true of other cases where the court in its discretion has by its judgment forfeited to the State a part of the property of the corporation. Without lengthening an argumentative opinion, already too long, we conclude that this court has the right to add to its judgment of ouster and dissolution, what is usually termed a fine; that the fine heretofore originally fixed, $5,000, is not an unreasonable one; that the judgment of this court should and will be to the effect that respondent is ousted of all of its charter rights and the same forfeited to the State; that out of its property it pay to the State the sum of five thousand dollars, together with the costs of this action, and that said corporation be dissolved and it is so ordered.
IV. Upon a reading and consideration of the foregoing opinion written by Graves, J., Valliant and Lamm, JJ., concur in hoto. Fox, J., concurs in the second paragraph or proposition thereof, and expresses no opinion as to the first paragraph or proposition, but dissents from the third paragraph; Brace, C. J., and Gantt, and Burgess, JJ., concur in the opinion except as to the third paragraph thereof.
It therefore follows that, by the opinion of the majority of this court, the respondent should be ousted of all of its franchises and charter grants and that the same be forfeited to the State, the corporation dissolved, but that no further fine or punishment be inflicted, and that the judgment of the court go to that effect and that respondent pay the costs. It is accordingly so ordered.