Putnam v. Sweet

Hubbell, J.,

dissenting. I cannot concur in either the reasoning .or conclusions of tire .decision.

*3551. Because tbe bill, as I understand it, contains no equity. It sets out with a statement, on tbe part of tbe complainants, of tbeir design, by a subscription of one thousand shares and tbe payment of one thousand dollars, to secure in tbeir own bands an election of directors, and tbe sole control of tbe corporation. It admits that they apprehended an intention by tbe defendants and others to make subscriptions to a greater amount, and that they were induced by a denial of such intention to become subscribers, and that they bebeved “that as soon as tbe reqmred number of one thousand shares of tbe said stock should be subscribed for, so that tbe said commissioners could proceed to organize tbe said company, tbe said books of subscription to tbe capital stock of tbe said company would be closed, and tbe said commissioners would at once proceed to organize tbe said company, to be composed of the said subscribers of such-one thousand shares, by calling an election of a board of directors of tbe said company, in pursuance of tbe provisions of tbe said act of incorporation.”

It further sets forth that they bad a “ resolution,” or express promise of tbe board of commissioners to that effect, and that, bad they known of certain further subscriptions to tbe stock, “they would not have become subscribers to tbe capital stock, or have paid tbe sum of one dollar on each share thereof to tbe said commissioners.”

These, then, were tbe objects and inducements — I should rather say this was, the bargain between tbe complainants'and a majority of tbe commissioners, for it is nothing less — on which tbeir subscriptions were made, and tbe equitable interference of this court is invoked to protect them. To say tbe least of tbe matter, it was a speculating transaction, in which tbe public bad no' concern. Tbe state grants corporate franchises for public purposes ; but when sqch franchises are converted, as in this instance, into mere instruments of private gain, courts of equity cannot lend tbeir aid to secure tbe objects of either party. Parties coming into court for such *356purposes, stand upon the old rule, “ in pari delictu, potior est conditio defendentis

The court should spurn the invitation to.become a party to a mere scramble for the control of a corporation which was created with a capital stock of three hundred thousand dollars, and which was attempted to be seized upon and appropriated by a few individuals by a subscription of one-tenth part of its capital stock and by the payment of one-three hundredth part of the money.

For these reasons, on the complainants’ own showing, I think the court below ought to have dismissed the bill.

2. Because the decision is not consistent with itself. If the corporation is organized and in existence, as the majority of the court hold it to be, then the defendants are its officers de facto, prosecuting the work, and exercising all the powers conferred by the charter, under color of law. The bill asks this court not only to take away their corporate property, but to oust them from their offices, and abrogate all their corporate rights.

I do not believe a court of chancery has inherent original power to make such a decree in any case; much more, on the complaint of individuals, without the aid of the state. This principle was settled, if anything ever can be settled, in the case of the Attorney General v. The Utica Insurance Company, 2 Johns. Ch. 386. It is sufficient to say that it was never before claimed or exercised in Wisconsin, however much the profligacy of corporate bodies may have provoked the restraining power of courts of chanceiy.

The statutes of Wisconsin, passed in 1841 and 1846, confer on this court, in my judgment, whatever right or power, and all the right or power it possesses over public grants of franchises, and over officers and bodies assuming to exercise corporate rights, under color of law. Without stopping to discuss the nature or extent of the powers conferred, I desire only to say here, thqt J. think, by the express terms of the *357statutes, this court can only exercise those powers when called upon by the attorney-general, in a proceeding on behalf of the state, or of parties concerned.

And when this court makes the use or abuse of its process by individuals, in another case, the pretext for the exercise of powers not inherent in itself or conferred by the statute, it overridés justice and abrogates law.

But again : if the corporation is not organized and in legal existence, as the bill maintains, then, on the case made by the. bill, there is no impediment to the legal action of the commissioners in the prosecution of their duties under the act.

The Blossom bill has long since been withdrawn, and all the parties to it are hable at law, for ah the frauds and perjuries which they are alleged to have committed to the complainants. Not only, then, have the complainants ample and perfect legal means of redress, but the commissioners are fully authorized to call an election of directors, by the legal stockholders, without the aid of this court, and all the powers and privileges of the franchise await their acceptance. Why, then, shah we assume a doubtful power for a questionable purpose, at the bidding of those whose hands, to say the least of it, are not clean ?

In conclusion, then, whether I assume the decision to be correct, contrary to the bill, or the bill to be correct, contrary to the decision, on neither horn of the dilemma can I hang a reason for reversing the decree of the court below. I think on principle and authority it ought to be affirmed, and this appeal dismissed.