author: Tuley, J.

text:
      (Circuit Court of Cook County. In Chancery.)

    The South Shore Transportation Co., et al. vs. The World’s Columbian Exposition, the World’s Fair Steamship Co., et al.
    (1893.)
    1. Public Parks — Open on Sunday Where Used as Exposition — ■
    Right oe Taxpayer. Where a public park is used as an exposition by authority of the legislature a taxpayer is not entitled to have the exposition remain open on Sunday for the reason that it is located in a public park. The remedy of such taxpayer is to challenge the power of the legislature to surrender the use of a public park for exposition purposes.
    2. Taxpayer — Right to Prevent by Injunction Misappropriation
    or Diversion oe Public Property in Absence oe Special Damage. A citizen or taxpayer who suffers no special damage or injury different from the public at large by reason of the misappropriation or diversion of public property cannot maintain a bill in his own name for an injunction to prevent the same.
    Such a bill must be brought by the attorney general.
    3. Same — Right to Prevent Diversion or Misappropriation oe Pub-
    lic Property by Injunction — Laches. Where a public park is appropriated by the legislature for the purposes of an exposition a taxpayer cannot question the right of the legislature so Í
    to do where action is not taken until a large sum of money has been expended on such exposition. The complainant is barred by laches.

    4. Public Property — Cession to United States. Where public park
    property is ceded by the state to a commission appointed by the United States for the purpose of an exposition it is doubtful whether the courts of the state have power to interfere with such property.
    5. United States — Officers oe — Power oe State Over. A state
    court has no power to interfere with officers of the United States in the discharge of duties imposed upon them by act of congress.
    6. Equity — Relief in — Complainant Must Do Equity. Where the United States donates a sum of money to an exposition on the condition that such exposition remain closed on Sunday, a taxpayer cannot compel the keeping open of such exposition on Sunday without offering to return the amount of the donation. A court of conscience should also be a court of honor.
    7. Riparian Rights — Building Piers and Wharves. The right to build wharves and piers in navigable waters as appurtenant or incident to the ownership of the adjoining land, is a riparian right.
    8. Same — Dependent Upon Title to Bank. Riparian rights are dependent upon the title to the bank and not upon the title to the bed of the lake or stream in front of the bank.
    9. Same — Where There is Ebb and Flow of Tide. There is no dif- - ference between the rights of a riparian proprietor’s bordering a navigable stream whether the waters be inland rivers or have the ebb and flow of the tide.
    10. Lake Michigan — Riparian Rights in. Riparian proprietors on Lake Michigan have the right to build piers, wharves and landings for their own exclusive use and enjoyment

    11. Wharves — Whether Public When Built in Connection With Public Property. Where wharves are built by the public authorities in connection with public property or as an extension of a public street, they do not thus become public wharves open to indiscriminate use.
    12. Waters — Whether Riparian Owner Can Extend His Structure Beyond the Point of Navigation. A riparian or littoral owner must not extend his pier or wharf beyond the line of navigability. He is not required, however, to stop at the exact point where navigation begins, but as such structures are permissible only in aid of navigation they may extend as far as necessary for the purposes intended.1
    13. Public Nuisance — Right of Individuals to Redress. Individuals who sustain no private injury are not entitled to redress against a public nuisance. Only the attorney general can take action.
    , 14. Monopolies — What Constitutes. It does not constitute a monopoly for an owner of a private wharf to give an individual an exclusive right to run a line of steamers from or to such wharf.
    15. Wharves — Whether Public or Private. Wharves, docks or landing places may be private or public, depending upon the purpose for which the same are built, the uses to which applied, the place where located and the nature and character of the structure.
    16. Same — Whether Affected With Public Use. When a private
    wharf is thrown open to the use of the public it becomes affected with a public use and must be open to all upon the same terms and conditions.
    17. Same — Discrimination Against Particular Ports and Vessels
    in Use of. Where the owner of a wharf permits its use to one steamship line generally but denies the use of such wharf to vessels from particular ports, such discrimination is illegal and tends to obstruct commerce. There can be no discrimination between different members of the public or between vessels from different ports.
    18. Public Use — Right to Abandon. Where a pier has for a long
    time been used as a public landing place the owner of the pier has a right to discontinue its use for that purpose. It does not follow that because the public was permitted to use it that the public has the right to use it forever.
    Bill for injunction. Heard before Judge Murray F. Tuley. The facts are stated in the opinion.

       But see 202 Ill. 427, 177 Ill. 468. — Ed.

   Tuley, J.

The main complainant in this case is an Illinois corporation, owning a number of vessels engaged in carrying passengers from the city to the different public parks and other points of interest. There are three citizens owning vessels joined with the corporation as complainants. Some of the complainants are alleged to be taxpayers in South Chicago.

In 1869, under legislative act, Jackson Park was established as a public park, was paid for and is still maintained by taxation of the towns of South Chicago, Hyde Park and Lake, now a part of the city of Chicago. The park was established as a public park for the recreation, etc., of the public, and declared to be “free to all persons forever.”

A part of section 15, town 39 north, range 14, extending along the lake shore in the heart of the city was dedicated by the commissioners of the Illinois & Michigan Canal, originally as “Michigan Avenue,” a street of irregular width, having for about -a half a mile frontage on the shore of Lake Michigan as its eastern boundary. This part of Michigan avenue next to the lake shore and next to the Illinois Central Railroad right of way, became known and was recognized by the state legislature as “Lake Park.”

Subsequently, in 1850, the Illinois Central Railroad was granted by the state a right of way 200 feet in width and Chicago was made one of its terminals. The railroad had the right to lay its tracks within the city upon such terms as it might agree upon with the city council. An ordinance was passed by which the city consented to the railroad laying and 'locating its right of way along the lake shore in front of section 15, at a distance of 400 feet east of the west line of Michigan avenue. Among other terms and conditions of the ordinance was a provision that the railroad should build and maintain a stone pier work at a distance of 300 feet east of and parallel with said 400 foot line. The ordinance was accepted and the pier built. In the course of a few years the space between Michigan avenue (which had been narrowed to 100 feet) and the right of way of the railroad became filled with debris from the city, and became a common or park of about 22 acres known as Lake Park. Afterwards, and in 1869, the state legislature attempted to grant the railroad all the submerged lands in front of Lake Park which it is alleged by the recent decision of the United States supreme court, only amounted to a license 'to improve the harbor of the city, which license has been subsequently revoked by the state; that the United States several years ago constructed a harbor of refuge for vessels in front of said Lake Park, and it is alleged that the shores, wharves and landings at said Lake Park have been since used for interstate and foreign commerce; and that among the vessels so using the same were those of the complainants; that the waters in front of Jackson Park are navigable waters and that the park commissioners some years ago erected landing places which were used by complainants’ vessels and others to land passengers visiting said Jackson Park.

In 1890 the congress of the United States passed an act to provide for celebrating the 400th anniversary of the discovery of America by Columbus by holding an international exhibition of art, industries, etc., at Chicago; that the act of Congress provided for the appointment of United States commissioners, to be known as the “World’s Columbian Commission,” with power to determine the plan and scope of the exposition, award premiums, etc., and to accept, in its discretion, such sites and plans, etc., for buildings (to be erected by and at the expense of) as might be tendered by the “Worlds’ Columbian Exposition Co.” a corporation organized under the laws of Illinois; and that the plans for and. the rules and regulations of the Illinois corporation for entrance fees, or otherwise affecting the rights, etc., "of exhibitora or of the public, should be subject to such modifications as the United States commission should impose.

The World’s Columbian Exposition Co. was organized for the purpose of promoting and carrying on the World’s Fair or Exposition, and in 1890 the Illinois legislature passed an act granting “to the authorities having the charge and management of said World’s Columbian Exposition” “the use and occupation of all lands or right therein of the state of Illinois, whether submerged or otherwise, within the present limits of the city of Chicago or adjacent thereto, which may he designated and selected by said authorities as the site or sites for the holding of said World’s Columbian Exposition,” and the use and enjoyment, with the consent of the city, of any public or park grounds, and rights appurtenant thereto, the title or control of which was in the city, with “authority to improve the same * * * in such manner as to said authorities” should seem necessary or expedient, and in case any public park should be selected for a site or sites, for such exposition; authority was granted to its park commissioners to allow the use of the same for the purposes of the exposition, on such terms and conditions as might be agreed upon between the park commissioners and said authorities; that the Exposition Co. tendered to the U. S. Columbian Commission, •Jackson Park and Lake Park as sites for the exposition and' the same were accepted; that in September, 1890, the city council, by ordinance, did grant to the Exposition Co. authority to take possession of and control and exercise ah the jurisdiction the city possessed over Lake Park and its appurtenances, to be used exclusively for the purposes of the exposition or fair, which ordinance was to be accepted in 30 days or to be null and void. The ordinance was not formally accepted, but was acted upon as if accepted; that the commissioners of South Park and the directors of the Exposition Co. had agreed upon terms for the use of said Jackson Park for the purposes of the exposition.

It is alleged that in June, 1892, the directors of the Exposition Co. made a concession or contract with Stone and others, who acted for and who were given power to assign the same to a corporation known as the World’s Pair Steamship Company, whereby the Steamship Company was given the -exclusive right and privilege to transport passengers by water to and from the World’s Pair or Exposition grounds, and to and from all points between the city of Kenosha, — 50 miles from Chicago, — on the north and East Chicago Harbor on the south, and to make the privilege more valuable, agreed that the Exposition Co. would not allow vessels, or passengers from the same, from said points and points between, and the Exposition grounds to land at any pier or piers at the Pair grounds, saving only the boats (and passengers thereon) of said Steamship Co. and that no gate or entrance should be established on the north side of said grounds, if any pier or landing place should be established or built within 3,000 feet of the north line of the fair grounds at Jackson Park, nor •any gate on the south side of said fair grounds; that by said •contract the Exposition Co. agreed to build at Jackson Park and at Lake Park piers with not less than 2,000 feet frontage and to cause to be constructed over the Illinois Central Railroad tracks a viaduct to the pier at Lake Park; that the pier •at Lake Park should not be used for any other purpose than the business of the Steamship Co., but the Exposition Co. reserved the right for the landing and embarkation of passengers at Jackson Park from vessels coming from points outside of said limits, Kenosha on the north and East Chicago' Harbor on the south, but such use should not interfere with the Steamship Co.’s business or use of such pier; the Steamship Co. agreeing to put into service vessels with capacity to carry 15,000 passengers an hour, not to charge more than 25 cents for the round or 15 cents for a single trip, between Lake Park and Jackson Park; to police the piers, etc., and to> pay the Exposition Co. 20 per cent, of the gross receipts; that piers extending into the lake a distance of 1,000 feet have-been built at Lake Park and at Jackson Park; that the directors of the Exposition Co. threaten to make such rules and regulations as may be necessary to carry out said agreement and to prevent complainants from landing at, or receiving and discharging passengers at said wharves or piers or at the-landings at Jackson Park constructed by said park commissioners, although complainants are willing to pay such tolls or fees as may be charged to other vessels.

An amendment to the bill sets out the passage of an act of" congress in 1892 appropriating two and one-half millions of dollars for the World’s Pair on condition that the fair, should be closed upon Sundays, and making it the duty of the United States Commission to see that the proper rules and regulations are made for that purpose.

The relief prayed is for an injunction restraining the directors of the Exposition Co. from closing the gates of the fair-on Sunday; also to enjoin the Exposition from diseriminatingagainst complainants as to landing at and receiving passengers to and off said piers or wharves from complainants’ vessel; also from refusing to permit such passengers to land on-said piers and enter said Jackson Park on the same terms as-the vessels and passengers from other boats are permitted so-to do; and from carrying out said contract with the Steamship Co. or according to said Company or its vessels any rights or privileges not accorded to complainants and their vessels.

The only defendants served with process are the Exposition Co. and the Steamship Co. The former has demurred to the bill, and the latter has filed an answer. A number of affidavits in support of the answer and of the bill have been read. The averments of the bill as to the laws and ordinances set out are admitted, as is also the contract with the Steamship Co., which is defended upon the ground that it is lawful and for the best interest of the fair and of the public.

It appears from the affidavits that heretofore there has been no wharf or dock at Lake Park, but that the complainants and others have used the pier of the Illinois Central Railroad as such and have carried passengers therefrom to a small pier built by the Park Commissioners at Jackson Park, and to other places.

The Sunday Question.

The complainants insist they have the right to an injunction against closing the exposition upon Sundays because Jackson Park was created and dedicated by the general assembly of Illinois and paid for by the taxation of property in South Chicago, Hyde Park and Lake, as "a public park for the recreation, etc., of the public and free to all persons forever;” that it was beyond the power of the state legislature or the park commissioners to pass any act or ordinance closing the park on Sunday, or any other day.

If a bill had been filed in apt time by a complainant having the right to challenge the power of the state legislature to surrender this public park to the World’s Exposition purposes, it would have presented a very serious constitutional questions. The complainants cannot now raise it for the following reasons:

1st. That the law is well settled that a citizen or taxpayer who suffers no peculiar damage or injury different from that of the public at large, by reason of the misappropriation or diversion of public property, such as a street or commons, can not maintain a bill in his own name for an injunction to prevent the same, but such a bill must be brought by the attorney general as representing the public at large. The case of City of Chicago v. The Union Building Association, 102 Ill. 379, is directly in point. There a property owner on La Salle street filed a bill to restrain the closing up of La Salle street, where the present board of trade stands, alleging that his property had been largely assessed for, and had paid for opening La Salle street at the point where the city council proposed to vacate and close it, but the supreme court held that such a bill could not be brought except by the attorney general. In this case these complainants suffer no other or different injury than other citizens or tax payers suffer, the injury being common to all alike, and the attorney general only can represent the public.

2nd. Even if the bill would lie by these complainants, it is not brought in apt time so far as this question is concerned, as they would not 'be allowed to lie still until twenty million dollars have been expended, and then question the right to appropriate the park to the purposes of the fair. The state having authorized the “authorities having in charge the World’s Columbian Exposition” to take possession of Jackson Park and use it for the World’s Fair, it is certainly a debatable question whether or not the jurisdiction over the park has not been ceded to the United States for the World’s Fair purposes. The cession is to the authorities having in charge “the World’s Exposition.” The United' States, by its “World’s Columbian Commission” accepted the sites. The P Commission” by the act of congress is given large independent powers and a supervising power over the acts of the Illinois corporation. The act of congress created the fair and made it an “international exposition” and located it on sites determined by its own “Commission.”

It is true that the United States graciously permitted the Illinois corporation to raise the money and pay all the ‘ expenses, but that does not make it any the less an “Intemaitonal Exposition” under the control of the United States government. The United States did make a donation of two and one half minions of dollars (it seems like sarcasm to call it a donation) on condition that the fair be closed upon Sundays. It, by the same act, directed its “Commission” to see that the requirement as to closing the fair upon Sunday was complied with.

It is also a serious question as to whether the state courts have any jurisdiction or power to interfere with the acts of this “Commission.” The “Commission” is a United States agency and its officers may be said to be — as to the fair — pro hoc vice officers of the United States. It is a general rule that a state court has no power to interfere with the United States officers in the discharge of duties imposed upon them by an act of congress.

The bill is deficient in another respect in that it asks the court to enjoin the closing of the fair upon Sundays without requiring the return to the United States treasury of the two and one-half million dollars donation. This would not be honest. A court of conscience should be also a court of honor.

The proper parties, neither complainants nor defendants,' are before this court so as to enable it to pass upon the right to close the fair upon Sundays.

As to the Piers and Wharves.

Admitting that in the act referred to, the legislature, by the words “the authorities having in charge” the World’s Fair intended to make the grant to the corporation “The World’s Columbian Exposition,” then that corporation has become vested with the use and occupation and with all the right, title and interest of the state, and of the city of Chicago, in Lake Park, its appurtenances and the submerged land in front of the Park, with “the right and authority to improve the same for the purpose of the World’s Exposition in such manner * * * as should seem necessary or expedient.”

By th'e same act and the ordinance of the South Park Commissioners the Exposition Co. became vested with all the power, for World’s Fair purposes, over Jackson Park that the commissioners could confer. But the parks being upon the banks of Lake Michigan, the Exposition Co. became vested, temporarily, with all the rights of a riparian proprietor.

. The right to build out piers or wharves into public or navigable waters as appurtenant or incident to the ownership of the adjoining land is a riparian right. This riparian right is dependent upon the title to the bank and not upon the title to the bed of the lake, in front of the bank. Dutton v. Strong, 1 Black, 23; Railroad v. Schurmeir, 7 Wall. 272; Yates v. Milwaukee, 10 Wall. 497; Ensminger v. People, 47 Ill. 384; City v. Lafflin, 49 Ill. 172; Gould, Law of Waters, sec. 148, and cases cited.

If I understand the senior counsel for' complainant, he contends that there can be no private piers or wharves upon Lake Michigan or upon navigable waters where there is an ebb and flow of the tide, whatever right there may be to build such upon navigable rivers and interior small lakes. The case in 7 Wallace, 272, ante, decides that there is no difference between the rights of a riparian proprietor’s bordering navigable waters in this country, whether the waters be inland rivers or have the ebb and flow of the tide. Nor is it true that there can be no private piers or wharves upon navigable waters where there is an ebb and flow of the tide. The right is a common law right as incident to the ownership of the bank. Lyon v. Fishmonger’s Company, L. R. 1 App. Cas. (1876) 662.

In Dutton v. Strong, ante, the question arose as to the right to build out into Lake Michigan a private wharf and the court held that “undoubtedly, a riparian proprietor may construct a pier, wharf or landing place for his own exclusive use and enjoyment,” and “may have the right to exclude all other persons from its use. ’ ’

It is contended that these wharves being built in front of public parks, they became a part of the public parks and must be, as those are, common to everybody; that the wharves are mere extensions of the public grounds. This precise question arose in a Detroit case. The city of Detroit having authority by its charter to build public wharves and lease the same, built one at the end of a street and leased it to a private party. It was contended, as here, that the wharf was merely an extension of the public ground or street and was therefore open to the use of the public. The court held: (Syllabus.)

“The wharves in the city of Detroit, whether terminating highways or not, are not highways, but are private property, and where they are owned by the city, may be leased like other corporate property to private lessees. The title is proprietary, and not a public easement.”

That the term “public wharf” did not mean that it was dedicated to public use like a highway, and meant only that it belonged to the city, “and that such wharves are not open to indiscriminate use.” Horn v. People, 26 Mich. 221. See, also, Backus v. Detroit, 49 Mich. 110; Scott v. Lyng, 59 Mich. 43.

These cases hold that a municipal corporation may exercise the same rights as to streets terminating at the water’s edge to build wharves and piers out to navigable waters, that an individual riparian proprietor has to build in front of his own land and that such wharves are not necessarily public wharves. The reasoning of those cases commend them to my judgment and induce me to follow them as good law.

Independent of the right of the Exposition Co. as riparian owner (for the time of the fair) to build such wharves, there is another ground upon which the Exposition Co.’s right to build such wharves and to enter into the contract for the putting on and running a line of steamers from Lake Park wharf to the Jackson Park wharf, can be sustained. It has not only the right to improve the submerged land as it should deem necessary or expedient, but it has the right to do any and every thing that may be necessary to promote the interests of and make the World’s Fair a success.

It appears that both Lake Park and Jackson Park — distant from each other about eight miles — have been selected as sites for the World’s Fair. Upon Lake Park is the Art Exposition and the remainder of the fair is at Jackson Park. The Exposition Co., under the broad powers given it, if it deemed it necessary for the public interest and the success of the fair, could build these piers or wharves and itself or by its agents could put on a line of steamers and boats to transport passengers between the fair grounds at Lake Park and the fair grounds at Jackson Park. The doing so would be no more an interference with complainant’s rights to navigate the lake and carry passengers to and from the parks, than it would be an interference with the Illinois Central Railroad’s right to carry visitors to and from the fair if the expedition having a right of way should build a railroad of its own between the two parks.

It is contended by complainants that the piers or wharves in question, being one thousand feet in length, extend beyond the point of navigability and so far as they extend beyond such point, become common property, open to the use of all vessels and persons.

The general rule undoubtedly is that a riparian or littoral owner must not extend his pier or wharf beyond the line of navigability. By this it is not meant that he must stop at the exact point where navigation begins, but as such structures are permissible only in aid of navigation, they may extend as far as necessary for the purposes intended. “To reach navigable water,” says Chief Justice Ryan, “necessarily implies reaching it with effect” and necessarily implies “some intrusion into navigable water and the peril of obstructing navigadon.” If such structures extend too far and obstruct navigation, they become a common or public nuisance, but the rule is that individuals are not entitled to redress against a public nuisance. By the building or too great extension of these piers there is no injury peculiar to complainants and different from that suffered by the public at large. Unless he sustains a private injury, he cannot maintain an action to remove the public nuisance, nor abate the same, nor can he appropriate such structure or materials composing the same to his own use. Gould, Law of Waters, sec. 128 and cases cited. I am not prepared to say that the wharves in question, considering the purpose for which they are built, extend beyond a point necessary and justifiable. It is sufficient, however, to say that only the state, by its attorney general, can raise that question.

As to Monopoly and Discrimination.

The building of the wharves and the running of a line of steamers between them, carrying passengers, no more constitutes a monopoly than would it be a monopoly for an individual to run a line of steamships between his private wharf in the Chicago river and his private wharf in Buffalo or other point; nor can it be said to be any discrimination between vessels or persons so long as no other vessels than those of the Steamship Co. use the wharves in question.

Public Wharves.

The same authority, Dutton v. Strong, ante, lays down the correct rule, that “piers or landing places, and even wharves, may be private, or they may be in their nature public, although the property may be in an individual owner; * * * whether they are the one or the other may depend * * * upon the purpose for which they were built, .the uses to which they have been applied, the place where located, and the nature and character of the structure.” See: State v. Jersey City, 25 N. J. L. 525; The Wharf Case, 3 Bland, 361; Swords v. Edgar, 59 N. Y. 28; Gould, The Law of Waters, sec. 119.

Does the contract in question limit the use of the wharves to the Steamship Co. so as to make them private wharves? When a wharf belonging to an individual or a private wharf is thrown open to the use of the public, it becomes affected with a public interest and must be open to all upon the same terms and conditions. De Portibus Maris, 1 Harg. Law Tracts, 78; The Wharf Case, 3 Bland, 361; Munn v. Illinois, 94 U. S. 113, 151.

There can be no discrimination between different members of the public or between vessels from different ports.

The Columbian Exposition Co. built these wharves and has the control of them. In the contract with the Steamship Co. it reserved the right for the landing and embarkation of passengers at the pier at Jackson Park from and to boats coming from, and returning to points outside of the points specifically named which are, Kenosha upon the north and East Chicago Harbor on the south. This in effect is to declare that complainants and others running boats from points between Kenosha and East Chicago to Jackson Park or the pier, shall not use the pier, but that all boats from those points and all places outside of those two points, without regard to the ports from which they come or the ownership thereof, may use this pier at Jackson Park.

The people owning vessels between those two ports are as much a part of the public and are entitled to as many privileges as to the use of the pier as those from and outside of the two points mentioned. It is an illegal discrimination between ports and vessels and tends to obstruct commerce.

I am of opinion that the contract referred to is a legal one, made in the interests of the public, and is to the great advantage of the public as to the transportation between the two parks and parts of the fair, but that the reservation above specified, if acted upon, will entitle the complainants and others to the same rights and privileges at least as may be accorded to boats coming from points outside of Kenosha on the north and East Chicago Harbor upon the south.

The complainants are entitled to an injunction restraining the defendants, the Columbian Exposition Co. and the Steamship Co. from preventing the complainants from landing their vessels and embarking and disembarking passengers and freight at the Jackson Park pier upon the same terms and conditions that it may permit other vessels from Kenosha on the north and East Chicago Harbor on the south, and points beyond those ports, to land at, and embark and disembark passengers from said Jackson Park pier.

As to the small pier heretofore used to land and disembark passengers at Jackson Park, it was within the power of the park commissioners to discontinue its use as a landing place and is clearly within the power of the Exposition to do so. It does not follow because the public was permitted to use it that the public has the right to use it forever.

As the Illinois Central Railroad and the city of Chicago, defendants- herein, have not been served with process, no rulings now made will be taken to affect their respective rights and interests.

        Illinois Central R. R. Co. v. Illinois, 146 U. S. 387. — Ed.

       Sess. Laws of Ill. 1890, pp. 5, 6. — Ed.


source: Caselaw Access Project

author: Windes, J.:—

license: Public Domain

text:
      (Circuit Court of Cook County.)
    Havemayer, et al. vs. Bordeaux Co., et al.
    (March 19, 1894.)
    1. Corporations — Preferred Stock, Right of an Illinois Corpora, tion to Issue. A corporation can issue preferred stock when authorized by its charter, or by statute, or if all stockholders give their consent thereto.
    :2. Same — Estoppel to Question Validity of Preferred Stock. Even in the absence of power to issue preferred stock a corporation may be estopped from avoiding its preferred stock where all the stockholders consented to the issuance thereof, and where the claim of the corporation is inequitable.
    S. Same — Right to Deal in Their Own Stock. A corporation may deal in its own stock at least to the extent of receiving payment, or to secure á debt due to the company, but the purchase by the directors of the company’s stock will be upheld as within their power, if not fraudulent. Generally it will not be upheld, if in violation of the rights of creditors.
    ■4. Corporate Stock — Right of Pledgees of Corporate Stock to Vote Same, or to Notice of Acts of Directors. Pledgees do not stand in the place of the owners of stock, as they are not liable as stockholders, have no right to vote the stock, and are not entitled to any notice of the acts of the directors.
    .5. Foreclosure Proceedings — Solicitor’s Fee, Reasonableness of. A fee of fifteen hundred dollars to complainants’ solicitor for foreclosure of the mortgage is reasonable, considering the amount and nature of the services rendered and necessary to be rendered to final decree.

      Circuit court of Cook county. Foreclosure bill filed by bondholders and trustee, to foreclose the property of the corporation. Intervening petition by stockholder, making the same defense as the company. Exceptions to master’s report overruled. Order for decree. Heard before Judge Thomas G-.. Windes.
    Statement op Facts.
    Prior to July 24, 1890, one Edward 0. Russell was the owner of a ground lease for a term of 198 years from May 1, 1890, of the real estate described in the bill and known as Nos. 339 and 341 Michigan avenue, Chicago, the rent thereon being payable yearly. Said Russell, Charles E. Rand and Hulburd Dunlevy some time prior to July 24, 1890, organized the Bordeaux Company, an Illinois corporation, for the purpose of carrying on a hotel business on said premises, subscribed for all the stock of said corporation, consisting of 1,000 shares of the par value of $100 each, the said Russell taking 998 shares and said Rand and Dunlevy one share each. The said subscribers for stock were also the first board of directors of said company.
    At the first meeting of directors held July 24, 1890, at which all the stockholders were present, said Russell was elected president and treasurer and said Rand secretary of the company; by-laws were adopted, an assessment of 100 per cent upon all stock was levied, and it was resolved to issue $25,000 of the company’s stock as preferred stock on the terms set out in the master’s report. At the same meeting it was also resolved to purchase said leasehold from said Russell for $25,000 cash, or, if Russell would accept it, the treasurer was authorized to issue said preferred stock in payment for said lease. At a subsequent meeting held on September 27, 1890, at which all the directors and stockholders were present, the action of July 24 in regard to preferred stock was rescinded, and the same amount of stock was made preferred stock and entitled to eight per cent cumulative dividends after May 1, 1891, over all other stock, and also to payment in full at pax in case of a sale of the company’s property, and also to share ratably with the common stock in any excess, above par value of all the stock, which might be realized by sale.
    The resolution for the purchase of the lease was also reaffirmed, and Russell was empowered to erect a building on said leased premises at a cost of $108,000 to be paid as follows: $33,000 in first mortgage bonds of the company, $74,-800 in the common stock of the Bordeaux Company and $200 in cash. The first mortgage bonds were secured by trust deed to John R. Walsh and became due on the first day of July, 1910, and bore interest at the rate of 6*4 per cent per annum, and payable semi-annually, as evidenced by coupons thereto attached, and provided, among other things, that in case of default for thirty days in payment of any installments of interest the whole of the principal secured by said bonds might be declared due and payable. This action in making said stock preferred and in the purchase of said lease was assented to in writing by all of the then stockholders in said corporation.
    . The preferred stock was issued to Russell and he proceeded with the erection of a building upon said premises which was intended for a hotel, and completed it in August, 1891. Russell received from time to time after the 27th of September, 1890, and in pursuance of the terms of his contract with said company, said first mortgage bonds and the common stock contracted for by him. Portions of the building were rented and the company continued business with the original directors until July 8, 1892, when said Rand and Dunlevy resigned and John A. Ryerson and Edward Peters were elected directors in their stead. July 8, 1892, the company had contracted a floating indetedness of about $24,000, besides its said first mortgage bonds; and while its assets at a fair valuation exceeded its liabilities by about $82,000, the affairs of the company were in a critical condition and its insolvency was imminent, it was still a going concern, and, before the law, solvent.

      At this date, and in order to make provision for said floating indebtedness, to reduce the charges on the company’s net earnings and profits and for putting improvements upon and furnishing parts of the company’s building to the extent of $3,500, the directors on behalf of the company, the holders of the preferred stock and John A. Ryerson as trustee, entered into an agreement by which the company agreed to exchange said preferred stock at $109.33 per share for an equal amount in par value of seven per cent second mortgage bonds of the company, and the holders of said preferred stock agreed to surrender said stock to the company and accept said bonds and also to furnish the money to pay said floating indebtedness, and to make said improvements, and to furnish parts of said building not to exceed $3,500, and also to pay the expenses and attorney’s fees incurred in negotiating and carrying into effect said contract.
    Pursuant to and in compliance with terms of said agreement said company executed and delivered to said Ryerson, as trustee, its seven per cent second mortgage bonds to the amount of $57,000 becoming due on or before July 1, 1897, and bearing interest at the rate of seven per cent per annum, payable monthly, the principal and interest to be payable in gold, and to secure said bonds and interest the company executed and delivered to said Ryerson its trust deed of the same date as said bonds, by which was conveyed to said Ryerson, as trustee, all the property of said company of every kind.
    This trust deed, among other things, provides that said interest should be paid promptly when the same became due according to the provisions of said bonds and trust deed, and that the company should deliver to said trustee on or before the 10th day of each month, beginning with the month of August, 1892, and continuing during the life of said trust deed, a statement in writing, over the signature of the president of said company, showing in detail the receipts and disbursements of the company received and paid out during the preceding month, and also showing in detail the indebtedness of the company exclusive of bonded indebtedness as it stood on the first day of the preceding month, and also that if any default whatever should be made in any of the covenants or agreements and provisions in said deed, and if such default' should continue for 30 days after the same occurred, then at the option of the holder of any of said bonds after the expiration of 30 days, without notice to said company or its successors or assigns, might declare the whole of said indebtedness due and payable, and file a bill to foreclose said trust deed in any court having competent jurisdiction, and out of the proceeds of any such sale there should be paid reasonable attorney’s fees for the complainants in such suit.
    It will be noted that John A. Ryerson, who was one of the directors of the company, was also one of the holders of the preferred stock, the trustee in said trust deed, and was charged with carrying out the provisions of said agreement between the company, the holders of preferred stock and himself as trustee.
    Further, in pursuance of the terms of said agreement, the holders of said preferred stock paid to said Ryerson as trustee $27,666.68 in cash, and assigned their certificates of stock to the company which are now in the possession of the company.
    Of the said second mortgage bonds delivered to said Ryerson he distributed $55,000 among said preferred stockholders, $27,333.32 on account of said stock and $27,666.68 for said cash advanced. The remaining $2,000 of said bonds are still held by said Ryerson and have never been issued. The owners of the common stock on July 8th, 1892, to wit: The said Russell, Peters and Dunlevy, in writing, ratified, confirmed and consented to the foregoing contract. The provisions of this contract were carried out by said Ryerson, except that he had in his hands $162.62 to be paid on certain debts of the company named in said agreement, and the further sum of $602.13 which was applied and credited on the principal of the said bonds under said contract.
    The company made default in its payments of installments of interest on said bonds becoming due September 1st and October 1st, 1892, respectively and also failed to make the statements of receipts, expenditures and financial condition each month after the date of said trust deed, as required thereby, and by reason of said defaults on November 4, 1892, the complainants, the then' owners of said second mortgage bonds, under the terms of said trust deed, and after default in payment of interest due on November 1st, 1892, elected to and declared all said bonds due, and directed said Eyerson to file the bill in this case, which was done in the names of the bondholders and said trustee the same day. Prior to July 8th, 1892, said Bussell, the then owner of 592 shares of the common stock of said company, had hypothecated the same with divers parties as collateral security for advances made to him. The persons holding said hypothecated stock did not consent to the agreement and trust deed of July 8th, 1892.
    The intervening petitioner, William P. Porter, is the owner of five shares of said common stock and makes the same defense to the complainants’ bill herein as is made by the company.
    In this court on November 18, 1892, the complainants, Havemeyer and others, obtained judgment by confession upon ten of said bonds under the power of attorney in said bonds contained for $10,308.05 and costs.

      Quigg & Bentley, solicitors for complainants.

      Tewkesbury & Culver, solicitors for defendants.
   Windes, J.:—

It is contended for the defendants that said Eyerson made wrongful payments in several instances in the disbursements of the cash paid to him by the preferred stockholders' under the agreement of July 8, 1892, but after full consideration of the evidence, the master’s report and arguments of counsel, the court sees no reason to conclude differently from the master in regard to those payments, and is of opinion that all said payments were rightfully made.

It follows that if all the payments made by said Byerson under said agreement of July 8, 1892, were rightfully made, then the statement above made by the court, that there was a default in the payment of the interest due on said bonds, is also well founded, unless the balance of $602.13 left in the hands of the trustee, Byerson, should have been applied upon interest, the interest then due being less than that amount, instead of upon -the principal of said bonds. This sum was properly applied to the principal of said bonds because the agreement of July 8, 1892, by a fair construction of its provisions, provides that any surplus remaining after the disbursements provided for by said contract should be divided .among the parties contributing to the fund placed with said Byerson.

As to the default of defendant, above stated by the court, in failing to make the statements of its receipts and disbursements, and a detail of its indebtedness, the court is of opinion that this was a material and important provision of said trust ■deed when considered in connection with the nature of the property conveyed by said trust deed and the business of the company, and the complainants were, under the evidence in the record and finding of the master, entirely justified in their action by reason of the default of the company in this record, in declaring the principal of said bonds due and directing the foreclosure of said trust deed.

The court has deemed it unnecessary to go into any discussion of the evidence as to the solvency of the, defendant corporation or the payments made by the trustee under the .agreement of July 8, 1892, or the default of the company in payment of interest or making statements, but has considered it sufficient to state only the conclusions arrived at after full •consideration, which has been done.

Great stress has been laid by counsel for defendants upon the remarkably complicated relations sustained by the complainant, John A. Byerson, to the parties in this case. He was a director of the defendant, corporation, the representative of the preferred stockholders, himself also a preferred stockholder, in one instance, at least, the attorney of the corporation in litigation prior to the commencement of this suit,, and the trustee and agent of the corporation and preferred stockholders during a period of about one year prior to the filing of this bill, and also for a time one of the company’s, solicitors in this case. It must be admitted that this complication and blending of apparently inconsistent and diverse interests are such as are calculated to cause the court to look with scrutiny at Mr. Ryerson’s testimony, which has been done; but inasmuch as all his acts appear to have had the approval of the other directors of the Bordeaux Company, and in conformity to the agreement of July 8, 1892, unless it be in. the matter of the amount of attorneys’ and trustees’ fees, there being no proof of fraud, it seems to the court there is no sufficient foundation in the record to justify it in holding that, any of the payments made by him except such as have been corrected, were improperly made. The payments made for these fees appear to be reasonable under all the circumstances, shown. Even if these payments were held to be wrongful the only effect would be, under the agreement of July 8, 1892, to reduce the amount of complainants’ claim. That Mr. Ryerson should claim one-half the fees allowed to complainants’’ solicitors in this case seems rather remarkable, but that claim should not prejudice complainants’ rights in any way, especially since these rights are not dependent upon Mr. Ryerson’s testimony.

There remain but two principal questions to be considered, as follows: First. The validity of the preferred stock. Second. The validity of the contract of July 8, 1892, and' the exchange of the preferred stock for bonds. The textbooks, it is' true, state as a general rule, that to enable a corporation to issue preferred stock it must have authority by statute, or its charter. Cook, Stockholders (1st Ed.) sec. 268; 2 Beach, Private Corporations, sec. 498. It is argued that under these authorities, and because there is no authority given by the charter of the Bordeaux Company, or by our statute, therefore the act of the company in issuing preferred stock is void. The later edition of Mr. Cook on Stockholders, section 267, as also Mr. Beach, section 500, say, in substance, that there is no principle of law which forbids the issuance of preferred stock if all the stockholders give their consent. This seems to the court to be reasonable and in accordance with the decisions of the later cases and text writers. Morawetz, Corporations, sec. 464; Harrison v. Mexican Railway Co., 44 L. J. Ch. 403; Hazlehurst v. Savannah, etc., Ry. Co., 43 Ga. 13; Lockhart v. Van Alstyne, 31 Mich. 76; Branch v. Jesup, 106 U. S. 468; Warren v. King, 108 U. S. 389.

Besides this, if there was a want of power to issue preferred stock, the proof in this case that all the stockholders consented to making this preferred stock, and agreed to its issuance in payment for a valuable leasehold worth at least its face in cash at the time, and now worth many thousands of dollars in excess of that sum, would make it highly inequitable for the corporation now to claim the benefit of this leasehold, as it does, and claim that the consideration paid for it was worthless at the time. By the plainest principles of equity there is an estoppel against the corporation from making any such claim. Hazlehurst case, supra. Cook, Stockholders, sec. 267, and 500. C., R. I. & P. R. R. Co. v. Joliet, 79 Ill. 25; Darst v. Gale, 83 Ill. 136 and cases cited; City of East St. Louis v. East St. Louis, etc., Co., 98 Ill. 415; P. & S. R. R. Co. v. Thompson, 103 Ill. 187.

That there appears to be nothing in the statutes in this state which in express terms authorizes the issuance of preferred stock, the court does not deem important, in view of the foregoing conclusions and authorities, and has therefore not mentioned in detail the arguments of defendant’s counsel in that regard.

As to the next question, the validity of complainant’s bonds received in exchange for the preferred stock, it should be noted that this stock was entitled to a cumulative dividend of eight per cent per annum from May 1, 1891, before any dividend should be paid on the remaining stock of the company, and in case of a sale of the property of the company was entitled to receive out of the proceeds of sale full par value before any payment on account of other gtock.

'. This stock was exchanged under the agreement of July 8, 1892, for bonds at a premium of 9 1-3 per cent, or an advance of $2,333.33. This, it is claimed by defendants, was fraudulent as to the . other stockholders, but the court is of opinion this contention is not sustained and is very unreasonable in view of the admitted facts of the case. The agreement of July 8, 1892, should be considered as a whole and in view of the financial situation of the defendant company. Without the aid of the preferred shareholders the company could not have continued long in business after that date. Its floating indebtedness exceeded $20,000 and was pressing, and the first mortgage indebtedness might have been foreclosed in default of interest being paid for thirty days, and for divers other reasons. If the preferred shareholders had conceived the idea of wrecking the company, as claimed by defendants, it would have been very easy for them to have declined to assist the company, and allowed its property to go to sale under proceedings in court by the holders of the floating indebtedness or by the holders of the first mortgage indebtedness and bought at such sale, or could have obtained their money for the preferred stock from the proceeds of such sale in preference to the holders of the common stock, or if the business could go on and there were profits realized the preferred shareholders could take all these profits to the extent of the dividends of eight per cent from May 1, 1891.

If the contention of defendants is1 true that the property was valuable, and there was a large margin for the stockholders, then, certainly, it was to the interest of the common stockholders for the business of the company to continue and profits to be made. If there was a possibility of profits for the holders of the common stock, then certainly the preferred stockholders had a most excellent investment which, in view of what appeared to be the prospects of the company on July 8, 1892, on the basis of its floating indebtedness being paid and its building and property being improved so as to yield a good income, made the preferred stock worth a premium and all that was claimed for it in the exchange.

Also, if it could not be considered as worth the premium paid, the fact that the preferred stockholders furnished the money to pay the debts of the company and to buy furniture and improve its property, so as to make it possible for the company to continue its business, when the officers of the company had theretofore been unable to raise the money to pay the floating indebtedness, and assigning their stock which entitled them to eight per cent interest, was an ample and full consideration for the bonds which drew seven per cent interest. There then being a .valid and a sufficient consideration given by complainants for these bonds, they must be valid obligations of the company, if it had the power to exchange them for the stock.

The.defendants contend this exchange was ultra, vires, and to the extent of $27,666.66 the complainants have no right of recovery in this case. It seems to be the established law, as laid down by the text writers and the best considered cases, that a corporation may deal in its own stock, at least may receive i'ts own stock in payment of, or to secure a debt due the company. Brice, Ultra Vires (2nd Ed.) p. 177, and eases cited; Dupee v. Boston, etc., Co., 114 Mass. 37; Fraser v. Ritchie, 8 Ill. App. 554, and cases cited; C. P. & S. W. R. R. Co. v. Marseilles, 84 Ill. 643, and cases cited; Chetlain v. Republic Life Ins Co., 86 Ill. 220. The contention is made that this exchange amounted to a retiring or decrease of $25,000 of the capital stock of the company, that the statute provides a way in which that should be done and therefore excludes this way of decreasing the capital stock. The answer to this is that the stock in this case was not cancelled but only assigned to the company, and may again be resold. Cook, Stockholders, sec. 314. In any event, unless prohibited by the charter, as was not the case at bar, the purchase by the directors of the company’s stock is a matter within their power and will be upheld if not fr&udulent. Generally it will not be upheld if in violation of the rights of the creditors.

In the case at bar no creditor is complaining, the act was approved by all the stockholders, and, as it seems to the court, it appeared at the time it was done to have been highly advantageous to the company, had its officers’ expectations as to business been realized. Cook, Stockholders, sees. 907, 712.

It was also contended in the argument that inasmuch as a large amount of the common stock had been pledged by Russell prior to the making of this agreement of July 8, 1892, and these pledgees had no notice of this agreement and exchange, it was a fraud as to those pledgees and should be so held. The pledgees do not stand in the place of the owners of stock, are in no way liable as stockholders, and have no right to vote the stock and have no right to any notice of the acts of the directors. Revised Statutes, Illinois “Corporations,” ch. 32, sees. 23, 24; Cook, Stockholders, sees. 40, 612, 733; McDaniels v. Flowerbrook Manufacturing Co., 22 Vermont, 274; Gibson v. Richmond & D. R. Co., 37 Fed. 743; Mann v. Currie, 2 Barb. 294; Parsons v. Hayes, 14 Abbott’s New Cases, 419.

The master’s report will be confirmed, and unless counsel can agree as to what will be a reasonable fee for the master’s report the court will, after hearing counsel, fix master’s fee.

The fee for complainants’ solicitor may be fixed by the decree at $1,500 which the court regards as reasonable considering the evidence and the amount and nature of the services rendered and necessary to be rendered in case no appeal should be taken.

NOTE.

(The above case is cited in Cook on Corporations (5th Ed.) pp. 584, 599, 670, 949.)

Right or an Illinois Cobporation to Issue Pbeeerbed Stook.

In Higgins v. Lansingh, 154 Ill. 301, 389 (1895), it appears that some time after its incorporation, The Rosehill Cemetery Company, at a meeting of the managers, authorized an issue of $25,000 of preferred stock to pay the debts of the company. A meeting of the stockholders had previously been called and by resolution had authorized the board of managers to issue that amount- of preferred .stock. It does not appear that any holder of stock or certificates of Interest objected to such issue. In pursuance of this action of the stockholders and managers preferred stock to the amount of $25,000 was issued and used in paying various liabilities incurred by the company. The resolution authorizing its issue provided that the holders of this stock should be entitled to receive thereon a semiannual dividend at the rate of ten per cent, per annum prior to the payment of any dividend on the other stock of the company. This dividend was paid, as authorized for many years, and the issuing of the stock appeared to have been acquiesced in by all the holders of the stock. It was held that after such acquiescence a stockholder was estopped from questioning the validity of this preferred stock. The court there said (p. 392): “The objections to the issue of pre-

ferred stock without power therefor under the charter are based upon the assumption that such issue would be in violation of the contract rights of the existing shareholders. If the existing shareholders unanimously give their consent to an issue of preferred shares, these objections would have no application. ... It is, however, held that if otherwise properly issued and outstanding as corporate stock it may be valid as preferred stock by the original authority and consent of all the shareholders, or by their subsequent ratification or long acquiescence, notwithstanding the charter contains no authority for the issue of preferred stock.”

In First National Bank v. Peoria Watch Co., 191 Ill. 128, 135 (1901), it was held that a corporate creditor could not object to the issue of preferred stock so long as it was 'fully paid for, even though such stock was made preferred stock by agreement of stockholders, and not in accordance with any statute. The court there said (p. 135): “It can make no difference to a creditor if some part of the stock was issued as preferred stock, so long as the money went into the treasury and the dividends on such preferred stock were not paid or to be paid except out of net profits.”

In Cratly v. Peoria Law Library Association, 219 Ill. 516 (1906), where at the incorporation of a law library association a preferred or guaranteed stock was created, the preferred stock was held to be validly issued, and dividends thereon were held enforceable from the net income, but not out of the capital stock. The court said (p. 523): “There is no objection to an agreement for preferred or guaranteed stock in the original organization of a corporation, where, as in this case, all the parties agree to it. Whether the stock is to be called interest-bearing stock, preferred stock or guaranteed stock makes no difference, as the terms when applied to shares of stock mean practically the same thing.”

It is apparent, therefore, from the above cases that in Illinois a corporation of that state may by unanimous consent of all its stockholders issue preferred stock. — Ed.


author: Dunne, J.:—

text:
      .(Criminal Court of Cook County.)

    People vs. J. W. Reeves.
    (January, 1896.)
    1. Pharmacy Act, Penalties Thereunder, How Recoverable, Civil
    Suit. Where the legislature declared in the penal clause of the Pharmacy Act that “all suits for the recovery of the several penalties . . . shall he prosecuted in the name of the people ... in any court having jurisdiction,” it intended that a civil suit in debt might be commenced before a justice of the peace or in a civil court of record.
    2. Same — Criminal Prosecution. The words in the penal clause of
    the Pharmacy Act “and it shall be the duty of the state’s attorney ... to prosecute all persons violating . . . this act upon proper complaint being made” indicate that the legislature be-' sides civil suits contemplated that criminal prosecutions might he instituted for the recovery of the penalties prescribed by the' act.
    3. Same — Violations of as Misdemeanors. As in Illinois the doing
    of the act prohibited by statute is a misdemeanor when not amounting to a felony, violations of the Pharmacy Act are misdemeanors.
    4. Statutes — Penal—Construction of — Remedy Provided Therein.
    Where a statute gives a penalty and prescribes a form of action, in which the remedy may be had, that form of action must be followed and no other.
    5. Criminal Court — Prosecutions Therein — Procedure. The only
    method of prosecution known to Illinois law in the criminal court is by indictment.
    6. Pharmacy Act — Construction of — Manner of Criminally Pros-
    ecuting Violations of — Policy of Legislature. Construing the Pharmacy Act in conjunction with other statutes and in the light of the established policy of the legislature to provide other tribunals than the criminal court for the collection and enforcement of fines and penalties, it is apparent that a violation of the Pharmacy Act is not indictable although the penalties provided therein may be recovered by the state’s attorney by a criminal complaint before a justice of the peace.
    Motion to quash indictments. Nos. 3066, 3073. The facts are stated in the opinion. Heard before Judge Edward F. Dunne.
   Dunne, J.:—

Defendant Reeves has been indicted on eight different charges, setting up eight different violations of the amended act relating to the practice of pharmacy in the state of Illinois, in force June 27th, 1895. The penalties for said violations, as provided in said act, are not less than $5 and not more than $100.

Defendant has moved to quash each and all of said indictments upon the ground of no jurisdiction in the criminal court.

The contention of counsel for defendant is that the act in question is not comprised in the criminal code, that the violations of the act complained of are not declared to be misdemeanors, that the penalties provided for are penalties recoverable by civil suit and not fines collectible by criminal prosecution, and that therefore, the proper procedure for the collection of said penalties is a civil action in de~bt for the recovery of the penalties and not a crimmal prosecution by indictment in the criminal court.

To determine the question as to whether or not a violation of the provisions of the act in question is a misdemeanor and therefore a criminal offense, a careful examination of the act and of our statute defining a misdemeanor, becomes necessary.

The pharmacy act, as amended, contains seventeen sections, the first sixteen of which contain the requirements of the act and the penalty for its violation, and the last of which provides for the method of the enforcement of the penalties. The violation of the act set forth in the eight indictments un)der consideration are publishable with “penalties” not fines ranging from $5 to $100. On the matter of the enforcement or collection of these penalties, section 17 provides: “All suits for the recovery of the several penalties prescribed in the act shall be prosecuted in the name of the People of the state of Illinois in any court having jurisdiction, and it shall be the duty of the state’s attorney * * * to prosecute all persons violating the provisions of the act upon proper complaint being made.”

In enacting this section, the legislature evidently did not understand or apprehend the distinction between criminal and civil proceedings or it contemplated and intended the enforcement of these penalties both civilly and criminally. The latter is the more probable and it is the duty of a court in construing a statute to give it such interpretation as will give force and vitality to all its provisions which are consistent with each other. I conclude, therefore, that when the legislature declares in section 17 that “all suits for the recovery of the several penalties prescribed in this act shall be prosecuted in the name of the people * * * in any court having jurisdiction,” that it intended that a civil suit in debt might be commenced either before a justice of the peace or in a civil court of record. The fact that the words “prosecute a suit” as distinguished from a criminal proceeding were used in close context with the words “in any court having jurisdiction” satisfies this court that the legislature had in contemplation the commencement of a civil suit in one of many different courts having jurisdiction.

Now immediately following this language, appears the following: “And it shall be the duty of the state’s attorney * * * to prosecute all persons violating the provisions of this act upon proper complaint being made. ’ ’ As the preceding words clearly indicate that the legislature had in mind the commencement of civil suits so do these words clearly indicate criminal prosecution.

We must conclude, therefore, that the legislature authorized the collection of these penalties in both civil and criminal proceedings in courts having jurisdiction of the same.

But counsel for the defendant contends that a violation of the statute in question is not a misdemeanor or criminal offense, that the violation of the provisions thereof merely subjects the person so violating to the payment of a penalty to the State Board of Pharmacists to be collected by an. action of debt in the name of the people.

In the absence of the statutory definition of a misdemeanor there might be some force in counsel’s position but the definition of a misdemeanor as contained in our criminal code removes the matter from the realm of discussion. Sections 277 and 278 of our criminal code are as follows: See. 277: “A felony is an offense punishable with death or imprisonment in the penitentiary.” Sec. 278: “Every other offense is a misdemeanor. Where the performance of any act is prohibited by any statute and no penalty for the violation of such statute is imposed, the doing of such act is a misdemeanor.” The violation of any statute then, which does not amount to a felony is a misdemeanor. The court is therefore forced to ■conclude that a violation of the pharmacy act is a misdemeanor. But assuming that the violations of the Pharmacy Act set up in the indictments are misdemeanors and that the legislature has provided for the enforcement and collection ■of the penalties therein by both civil and criminal proceedings, it does not follow that the motion to quash must be overruled. Defendant, in support of his motion to quash urges upon the court the further ground that where the statute •creating the offense provides a method and tribunal for the ■enforcement and collection of the fines or penalties, the fines ■or penalties should not be enforced or collected in any other method or tribunal.

This contention of counsel is supported by authority. In Confrey v. Stark, 73 111. 187, our supreme court declared the law to be as follows: “It is a uniform rule, well recognized by all courts that where a statute gives a penalty and prescribes a form' of action, in which the remedy may be had, that courts are powerless to change the remedy and permit a recovery to be had in any other form of action. The will of the general, assembly is supreme and must' be obeyed as expressed.” State v. Meyer, 1 Spear (S. C.), 305; State v. Helgen, 1 Spear (S. C.), 310; State v. Maze, 6 Humphrey (Tenn.), 17.

That it is the settled policy of the law in the state of Illinois to provide in special ways for the collection or enforcement of fines and forfeitures created and provided by .general laws not comprised in the criminal code is evidenced by an examination of the revised statutes. The same examination further discloses the fact that the legislature has been decidedly averse to the enforcement and collection of such fines or forfeitures by indictment. The court has examined at random some fifty different statutes in the revised statutes of this state providing for fines, forfeitures and penalties for violations of certain acts not contained in the criminal code and has found only five.of the same provide for the recovery of the fine or penalty by indictment. The penalties and fines in all other cases are recovered by civil suit before either justice of the peace or a court of record or by criminal complaint before a justice of the peace.

The reason for this plain policy of the legislature is manifest. Not for every small violation of the statutes creating" misdemeanors which are mala prohibita and not mala per se shall a citizen be exposed to the ignominy and public humiliation of an indictment in the criminal court. If the penalties can be enforced and collected by a civil suit or by prosecution in a justice court, why should the reputation of the offender be smirched in addition? It is well known that the finding of one indictment against a person becomes by the publication thereof, the subject of more comment and notoriety in a community than the commencement of fifty suits before a justice of the peace for fines or penalties.

The legislature, in providing for the enforcement and collection of fines has evidently kept this in mind and in nine out of .every ten eases have therefore provided for the collection of the same in a manner which will not expose a citizen to unnecessary and uncalled for humiliation and disgrace.

Keeping in mind this policy of the legislature, as evidenced by these laws, let us endeavor to ascertain the intent of the legislature when in the pharmacy act it uses the words “it shall be the duty of the state’s attorney to prosecute all persons violating the provisions of this act upon proper complaint being made.” This language plainly indicates a eriminal prosecution and if the duties of the state’s attorney were confined to the criminal court it would follow that the state’s attorney should prosecute in the first instance in the criminal court and by indictment. The only method of prosecution-known to our law in the criminal court is by indictment. Grim. Code, sec. 384. Upon turning to the act on state’s attorneys, however, we find that among the duties of state’s attorneys are: “Sixth — To attend before justices of the peace and prosecute charges of felony and misdemeanor * * * Avhen in his power so to do. ’ ’

By construing sec. 17 of the pharmacy act in conjunction with the act governing state’s attorneys in the light of the established policy of the legislature as indicated by the provisions of the fifty different statutes above mentioned, to provide other tribunals than the criminal court for the collection .and enforcement of fines and penalties this court has come to the conclusion that the penalties provided in the pharmacy act should be collected either by civil proceedings in any court or by criminal complaint before a justice of the peace “upon proper complaint being made.”

The motion of the defendant should therefore be sustained and the indictments quashed. And it is so ordered.

NOTE.

See Hodgman v. People, 4 Denlo (N. Y.), 235; State v. Corwin, 4 Mo. 609. — Ed.


author: Knickerbocker, J.:—

text:
      (Probate Court of Cook County.)

    In re Estate of James Long, Deceased.
    (1879.)
    1. Marriage Settlement — Real Estate — Limitations to Heirs of Body of Contracting Parties, Etc. — Effect in Equity. It is a fundamental principal of the law of marriage settlements that if the real estate of the husband or wife is limited to the heirs of the body or to the issue of the contracting parties, or either of them, or to the issue of their body, or to the issue and their heirs, equity will not. take the words in their legal sense, but will limit the estate to the parents for life and the children will take at the death of their parent or parents as purchasers.
    2. Same — Marriage settlements in which the provision for the issue of the marriage, heirs of the body or the issue of the contracting parties, or either of them, or to the issue and their heirs is wanting, form no exception to the general rule and the parents can defeat the estate of the children.
    3. Rule in Shelley’s Case — Defined. When a person takes an estate of freehold legally or equitably under a deed, will or other writing and in the same instrument, there is a limitation by way of remainder, either with or without the interposition of another estate of an interest of the same legal or equitable quality to the heir or heirs of his body as a class of persons to take the succession from generation to generation the limitation to the heirs entitles the ancestor to the whole estate.
    4. Trusts — Real Estate — Declaration to A’s Heirs Subject to Occupancy During Joint Life of A and Wife and the Survivob — Effect. Where a trust in land is declared for the use and occupation of A and his wife during their natural lives; for the wife during life if she survived A; for A and his heirs in case he survived; and after her death, in case she survived A, to such persons as he should by will appoint, A takes a fee simple estate encumbered only by the life estate of his wife.
    Application by administrator for order to sell land to pay debts. The facts are stated in the opinion. Heard before Judge Knickerbocker.

      C. A. Burley, for administrator.

      Beam & Cooke, for A. H. Fisburn, a judgment creditor.

      Van H. Higgins, in opposition to petition.

      Barker, Buell & Barber, for heirs.
   Knickerbocker, J.:—

On September 23rd, 1874, James Long was seized in fee simple of the title to lots 18 and 19, in block 2, in Hyde Park, in this county, and on that day he conveyed the same by warranty deed to one Emma 0. Church, for an expressed consideration of $25,000. October 2, 1874, Emma C. Church executed her declaration in writing, reciting said conveyance to her from James Long, and stating in the declaration that the consideration of Long’s conveyance to her was a marriage contemplated soon to take effect between said James Long and herself, and for the purposes and upon the uses and trusts as in the instrument stated, which are substantially as follows, viz:

1. For the joint use and occupation by herself and said James Long, during their natural lives.

2. For her own use and occupation during her natural life, in case she survived said James Long.

3. In trust for said James Long, his heirs and assigns forever, in fee simple, after her decease, in case said James Long survived her.

4. In trust, in case she survived said James Long, and after her decease, for such persons and in such manner as said James Long might, by his last will and testament, direct and appoint, and in case said James Long should not, by his last will and testament, so direct and appoint, then, for the heirs at law of said James Long, after her decease.

On October 3d, 1874, marriage was solemnized between said James Long and Emma C. Church. James Long died intestate April 10, 1876, leaving him surviving Emma C. Long, his wddow, and Francis M. Barker, Clara C. Wait, Eugene C. Long, James H. Long and John C. Long, his five children by a former marriage, his only heirs at law. The administrator of his estate has applied for an order to sell the land in question to pay debts, claiming that by the terms of said deed and declaration of trust, the heirs of said James Long take the title to said real estate by descent, encumbered by the life estate of said Emma C. Long, and charged with the payment of the debts of said Long, in ease of a deficiency of personal estate.

The heirs of James Long insist that, at the time of his death, he was not seized of such claim or title to this land as can be sold or reached by the administrator, and that under the declaration of trust they take as purchasers and not by descent.

By this declaration of trust, no intention of providing for the issue of the marriage between James Long and Emma C. Church is expressed, nor can any be inferred; therefore this ease must stand on an entirely different footing from the cases cited by the counsel for the heirs, in which provision is made by way of marriage settlement for the issue of the marriage. It has long been recognized by the courts as a fundamental principle of the law of marriage settlements, ■that if the real estate of the husband or the wife-is limited to the heirs of the body or to the issue of the contracting parties, or either of them, or to the issue of the body, or to the issue and their heirs, so that the words and limitations taken in their legal sense, would enable the parents or one of them to defeat this provision for the children, equity will construe the articles to mean that the estate is limited to the parents for life, and the children will take at the decease of their parent or parents as purchasers: Perry on Trusts, 361; Lewin on Trusts, Am. Ed. side paging, 147; Davies v. Davies, 4 Beav. 54; Preston on Estates, 398.

Marriage articles in which this provision for the issue of the marriage, heirs of the body, or the issue of the contracting parties, or either of them, or to the issue and their heirs, is wanting, seem to form no exception to the ordinary rule of ■construction: Carroll v. Renich, 7 Smedes & Marshall, 798; Tillinghast, et al. v. Coggeshall, et al., 7 R. I. 383.

Through her declaration of trust Emma C. Church declared an estate of freehold in the land in question, for James Long and herself, and the survivor of them, and gave an expressed power to James Long to make disposition of the remainder by his last will and testament, and in default of such disposition declared the remainder should pass to the heirs at law of James Long. Here is a life estate in James Long and Emma C. Long, his wife, with remainder to the heirs at law of James Long, with an expressed power to James Long to defeat the descent of the remainder.

The rule in Shelley’s Case, which has always been regarded, not as a rule of interpretation, but as an inflexible rule of property, and one of the most firmly established, and which by the supreme court of this state was recognized as in force here in the case of Baker, et al. v. Scott, 62 Ill. 86, and again recognized in Butler v. Huestis, et al., 68 Ill. 594, although the facts in the last named case were not regarded by the court as justifying its application, seems to be entirely applicable to the case at bar.

The rule may be briefly stated as follows: “"When a person takes an estate of freehold, legally or equitably, under a deed, will, or other writing, and afterward, in the same deed, will, or writing, there is a limitation by way of remainder, with, or without the interposition of any other estate, of an interest of the same quality, as legal or equitable, to his heirs generally, or the person or heirs of his body by that name in deeds or writings of conveyance and by that, or some such name in wills, and as a class or denomination of persons to take in succession from generation to generation, the limitation to the heirs will entitle the person or ancestor himself to the estate or interest imparted by that limitation. ’ ’

To quote an example from Williams on Real Property, 246, et seq.: “Thus let the estate have been given to A and his heirs, but with a vested estate to B for his own life, to take effect in possession next after the decease of A, — thus suspending the enjoyment of the lands by the heir of A, until ■after the determination of the life estate of B. In such a •case it is evident that B would have had a vested estate for his life, in remainder, expectant on the decease of A; and the manner in which such remainder would have been limited would, as we have seen, have been to A for his life, and after his decease to B for his life. The only question then remaining would be as to the mode of expressing the rest of the intention, — namely, that, subject to B’s life estate, A should have an estate in fee simple. * * * The heir, in this -case, would, not have taken any estate independently of his ancestor any more than in the common limitation to A and his heirs: the heir could have claimed the estate only by its descent from his ancestor, who had previously enjoyed it during Ms life; and the interposition of the estate of B would' have merely postponed that enjoyment by the heir, which would otherwise have been' immediate. But we have seen' that the very circumstance of a man’s having an estate which-is to go to his heir will now give him a power of alienation-either by deed or will, and enable him altogether to defeat his heir’s expectations. * * *

“The example we have chosen, of an intermediate estate to-B. for life, is founded on a principle evidently applicable to any number of intermediate estates, interposed between the enjoyment of the ancestor and that of his heir. Nor is it at all necessary that all these estates should be for life only; for-some of them may be larger estates. * *

The court is of opinion that by the execution of the declaration of trust by Emma C. Church, James Long became seized: of an estate in fee simple in the lots in question, encumbered, by the life estate of Emma C. Long only; that the clause in-the declaration purporting to give him power to devise said-land added notMng to his already complete power to alienate said land, subject to said life estate of Emman C. Long.

It therefore follows that subject to said life estate, the lots-in question are subject to sale by the administrator, to pay any deficiency of the personal estate of said James Long to-pay his debts.

The order will be entered accordingly.

       See Preston on Estates, quoted in Baker v. Scott, 62 Ill. 86, 90, 91. — Ed.


author: McAllistee, J.

text:
      (Criminal Court of Cook County.)

    People vs. J. J. Walser.
    (Sept. 23, 1878.)
    1. Constitutional Law — Validity of Act of April 9, 1875, Peohibitino Sai.es of Railroad Tickets by Unauthorized Persons.. The act of April 9, 1875, entitled “An act to prevent frauds upon * travelers and owner or owners of any railroad, steamboat, or-other conveyances of passengers” is constitutional and valid, being a matter of mere police regulation of a public business, and the subject matter of the act is sufficiently expressed by the title of the act.
    2. Police Regulations of Railroad Companies, Nature and Extent of. The business of railroad companies and all its common incidents are proper subjects of the police power and the nature and character of the police regulations must be determined by the legislative and not the judicial branch of the government.
    3. Indictment for Violation of Act of April 9, 1875. The defendant was indicted for violation of the act of April 9, 1875. Upon motion to quash the indictment on the grounds that the act was unconstitutional and was not constitutionally passed, held, overruling the motion, that the act was constitutional, and that in the absence of competent evidence the question as to the passage of the act in compliance with the requirements of the constitution could not be considered.
    Indictment for violation of act of April 9, 1875. Heard upon motion to quash before Judges W. K. McAllister and S. M. Moore. Opinion by Judge McAllister. The facts are stated in the opinion of the court.
   McAllistee, J.

(Moobe, J., concurring):—

This is an indictment under the act of April 9, 1875, entitled “An act to prevent frauds upon travelers and owner or owners of any railroad, steamboat, or other conveyance of passengers.” Motion is made to quash the indictment on two grounds: (1) That the act is not within the scope of the police power — is an unwarrantable restriction upon the rights of private property, and therefore, unconstitutional. (2) It was not constitutionally passed.

The act relates to the business of common carriers. It has been the settled law in England and in this country, that the business of a common carrier is not only affected with a public interest, but is a public employment. This proposition is so elementary that a multiplication of authorities is unneesary. So far as relates to railroads acting under charters or acts of incorporation, their franchises are partly of a public and partly of a private nature. So far as the safety, convenience and comfort of passengers are concerned, they are “publici juris;” so far as they relate to capital and the production of revenue, tíhey are ‘‘pñvati juris.” There never has been any question of the power of the state legislatures to pass laws in the nature of police regulations affecting the exercise of such franchises so far as they were “puiblid juris” — such as those designed to secure passengers from not only danger, but imposition. The hinging point in Munn and Scott v. Illinois, 94 U. S. 113, carried by writ of error to the United States supreme court from our supreme court, and taken into and decided by the former, was, whether the business of keeping a grain warehouse as a mere private enterprise was a public employment, so as to subject it to the police power which might extend to a full suppression of the business. By the common law it was not such public employment, nor was there any valid statute changing that law- But a majority of the United States supreme court diverting, as many think, from established legal principles, affixed to that business a character which the law of the state did not give to it more than to any other business, viz: That it was so affected with a public interest as to be entirely subject to the police power of the state.

But all good lawyers and all courts concede that, ever since the decision in Coggs v. Bernard, common carriers are recognized as being engaged in a public employment, and nothing can be clearer than that, in this state, "railroad companies, so far at least as concerns the safety, comfort and convenience of passengers, are proper subjects of the police power. Of this there can be no question. If the business itself be subject to the police power, then so must all its incidents and accessories be subject to it. All experience teaches that the necessities of the business require the issuing and use of tickets. They are as necessary to the convenience of both traveler and carrier as baggage checks or waybill in case of freight. Tie business and all its common incidents being proper subjects of the police power, then it follows from settled principles that the nature and character of the police regulations must be determined by the legislative, and not the judicial branch of the government. After giving this matter much consideration, we are of the opinion that the act in question, being a matter of mere police regualtion of a public business, is constitutional and valid. There may arise cases where the contract for carriage was made in another state, which constitutional principles would prevent falling within the range of this act, but that is no ground for holding the act void as to all cases.

The question was made that this act was not passed in compliance with the requirements of the constitution, and an unauthenticated paper, said to be a copy of the legislative journals, was put into our hands. We cannot act upon that question without evidence — competent evidence — to establish the facts upon which decision is to be made. We are also of opinion that the subject matter is sufficiently expressed by the title of the act. The motion is overruled.

This opinion having been read to Judge Moore, who sat with me at the hearing of the motion, he authorizes me to say that he concurs in the conclusions arrived at.

NOTE.

See the note to the case of People ex rel. v. Pease (in this volume) and the cases therein noted and reported in this volume holding the act in question unconstitutional and void.


author: Tuthill, J.: McConnell, J.: — •

text:
      (Circuit Court of Cook County.)

    The People ex rel. vs. James Gilbert, Sheriff.
    (April 26, 1893.)
    1. Constitutional Law — Act of Apbil 19, 1875, Unconstitutional. The act of April 19, 1875, entitled “An act to prevent frauds upon travelers and owner or owners or any railroad, steamboat, or other conveyance for the transportation of passengers” comes within the section of the Constitution (Art. IV) which declares that the General Assembly shall not pass any special law granting to any corporation, association, or individual, any special or exclusive privilege, immunity or franchise whatever, and is unconstitutional and void.
    2. Act of April 19, 1875 — Construction of. Even under the act of April 19, 1875, a duly authorized ticket agent may sell tickets not only of the company from which he holds the authority but those of any railroad or -steamboat owner.
    3. Habeas Corpus. Petitioners were arrested under an indictment for selling railroad tickets, not being authorized to do so by the railroad whose tickets they sold. Held, that this was no violation of the act of April 19, 1875.
    Habeas corpus. Circuit court of Cook county. Heard before Judges Richard S. Tuthill, Edward F. Dunne and Samuel P. McConnell. ' Opinion by Judge McConnell.
    Statement of Pacts.
    At the November term, A. D. 1892, of the criminal court of ' Cook county, six indictments were returned against railroad ticket brokers doing business in the city of Chicago, for selling tickets in violation of the statute of Illinois, passed in 1875 and entitled, “An act to prevent frauds upon travelers and owner or owners of any railroad, steamboat or other conveyances for the transportation of passengers (approved April 19,1875, in force July 1,1875). On April 3,1893, two of the brokers filed a petition for habeas corpus before Judge McConnell, two before Judge Tuthill and two before Judge Dunne. The petition averred that the indictments charged no offense known to the law of the state of Illinois; also that the statute was in violation of the commerce clause of the federal constitution, and in violation of the 14th amendment to the federal constitution, and in violation of the various provisions of the constitution of Illinois. The three judges sat together and heard the cases.

      Richard Prendergast, attorney for relators.

      Wm. S. Forrest and Moritz Rosenthal, attorneys for defendant.
   Tuthill, J.:

— Inthe matter of the petition for habeas corpus filed before each of the judges sitting, I wish to say that in the opinion which will be rendered the judges all agree «on all the points of it, having discussed it fully, and Judge • McConnell has prepared the opinion and I will ask him to read it.

McConnell, J.: — •

This law is a very peculiar one. It provides that it shall be the duty of the owner or owners of any steamboat or railroad to provide their agents with a certificate setting forth the authority of such agents respectively to make such sales. In sec. 2 of the act it provides that it shall not be lawful for persons not provided with such authority to sell, barter, or transfer any tickets or any evidence of the holder’s title to travel on any railroad or steamboat. The second section reads •as follows: “That it shall not be lawful for any person not possessed of such authority, so evidenced, to sell, barter, or transfer, for any consideration whatever, the whole or any part of any ticket or tickets, passes or other evidences of the holder’s title to travel on any railroad or steamboat, whether the same be situated, operated or owned within or without the limits of this state.” The plain reading of this act is, that any duly authorized agent of any railroad or steamboat may sell not only the tickets and parts thereof of the company from which he holds this authority, but those of any railroad or steamoat owner. The indictments in these eases before us are all based upon the theory that this law is violated if a person shall sell the ticket of a railroad company if not authorized by that particular company to do so. The law is plainly otherwise. He may not be authorized by a Wabash company to sell tickets, but he may sell tickets over the Wabash line if authorized by the Rock Island company to sell tickets over the Rock Island line. In each of the indictments before us it is averred that the defendant sold a ticket over a particular line, not being authorized by the corporation owning that line to sell its tickets. It does not follow that each of the defendants may not have been authorized by the owner of some other railroad to do so. The consideration alone makes these indictments bad. None of them show a violation of this statute. Upon this ground the petitioners must be discharged.

Taking this view of the ease it is unnecessary for us to pass upon the constitutionality of the law which was so fully argued before us; still we can not forbear to call attention to some striking peculiarities of this statute.

In the peculiar provision just discussed and in others, also, there is a difference between our statute and those of either Pennsylvania or Indiana, where statutes of similar import have been declared by the courts of these states respectively to be valid. Under our statute any railroad or steamboat corporation may appoint agents to sell, barter or transfer the whole or parts of railroad tickets on any line, excluding any other person or corporation from such a privilege. It may be suggested that this is a very remarkable and unusual delegation of the sovereign power of the state. It may also be remarked that it comes within the constitutional inhibition of see. 22, art. 4. of the state constitution, which declares that the general assembly shall not pass any special law granting to any corporation, association or individual, any special or exclusive privilege, immunity or franchise whatever.

Again it may be observed that considering this law as a police regulation by the state by means of license, it is unique in that it delegates to corporations not vested of governmental power, the licensing power of the state. The act also bears intrinsic evidence of hasty preparation and slight legislative reflection.

In sec. 1 of the act it is made the duty of the owner or owners of any railroad or steamboat for the transportation of passengers to provide each agent who may be authorized to sell tickets or other certificates entitling the holder to travel upon any railroad or steamboat, with a certificate setting forth the authority of such agent to make such sales; which certificate shall be duly attested by the corporate seal of the owner of such railroad or steamboat.

See. 2 makes it unlawful for persons not1 possessed of such authority, so evidenced, to sell, barter or transfer, for any consideration whatever, tickets over any railroad or any steamboat. It seems to follow from this that the owner of a railroad or steamboat, if not incorporated, may not appoint agents, because he can not give a certificate with a corporate seal. It seems also to follow, that it would be unlawful for any agent of a private owner of a railroad or steamboat to sell tickets for the owner thereof. If the statute is susceptible of this construction, it can not be held to be valid.

It seems proper to us to make these comments, in view of the elaborate arguments made before us, and the extended consideration we have given the question involved.

NOTE.

The above opinion was referred to by the supreme court in Re Burdick, 162 Ill. 48, 63. See, also, the note to the case of People ex rel. v. Pease (in this volume) referring to the above case. — Ed.