« AnteriorContinuar »
CORPORATIONS-PURPOSES NOT EXTENDED BY GENERAL WORDS OF STAT.
UTE. — Under a statute authorizing the formation of corporations for certain designated purposes the general words “ or for any lawful busi. ness or purpose whatever, except,” etc., extend only to things of a nature kindred to those specifically mi ntioned. ACTION to annul the charter of a corporation, brought under section 3241 of the Revised Statutes. The company appears to have been incorporated July 7, 1893, but its original articles of organization and incorporation were amended on December 8, 1893, so as to provide for the salaries of the officers, directors, and agents of the company. The company was to do business as stated in the opinion, and had no capital stock. It was composed of incorporators and members. It was provided that the corporation should issue incorporators' shares, originally, only to the persons who signed the original articles, and to such other persons as the said incorporators or their assignees should nominate, but not more than twelve incorporators' shares were to be issued, one to each. Contracts of membership were provided for, but one person could hold and own any number of such contracts, and the same were assignable. Fines and forfeitures for the nonpayment of monthly dues were provided for. No person except those holding incorporators' shares could be a member unless he held a contract of membership, but every person holding such a contract could be a member, and not less than four contracts of membership could be issued upon any single application. All the rights and benefits of the company were granted to members in consideration of a membership fee of five dollars, and to keep certain promises and agreements, but not longer. The monthly dues were two dollars. The company was to pay out of a reserve fund a benefit of one thousand dollars, forty-three years after date of the contract, under certain provisos and conditions, or to pay out of a members' trust fund that sum, subject to discount and certain other provisos and conditions. The contracts issued were to be numbered in numerical order, and to be issued only in blocks of four. The company was not required to give any notice of the maturity of installments or the assessment of fines, or of forfeiture or lapse of contract. To the "members' trust fund” provided for by the rules there was to be applied one dollar from each monthly installment received, and all fines and transfer fees collected, and from which should be made the payment upon contracts mentioned in article 12.
Article 12 provided that, as often as there should be in the members' trust fund the sum of one thousand dollars, there should be paid to the holder of one outstanding contract of membership the sum of one thousand dollars, subject to cer. tain conditions; that the first contract upon which payment should be made should be contract No. 1, the second payment should be upon contract No. 4, the third payment upon contract No. 2, the fourth payment upon contract No. 8, and so on, reverting back to the first issued, unforfeited, unpaid non niultiple contract, and alternating with the lowest unpaid, unforfeited multiple of four, until like payments had been made to the holders of all issued, unpaid contracts; but the company was not required to make payment upon any contract until there was sufficient money in the members' trust fund therefor, nor until such contract was regularly reached in its order for payment. Article 14 provided that in case there should have been less than sixty monthly installments paid upon any contract of membership up to the time that it was canceled by payment, then there should be deducted and reserved twenty per centum of the amount due upon every such contract. Article 15 provided for a “reserve fund,” and that whenever any contract should mature, under the provisions for payment, forty-three years from and after the date thereof, provided it had not been paid before that time, there should be paid to the holder thereof the sum of one thousand dollars from said reserve fund. The attorney general, on application, refused to bring an action to vacate the charter and to annul said corporation, and the relator was allowed to file his petition in the supreme court, alleging in effect that the business of the alleged corporation was illegal, for the reasons that it had in it the element of chance and uncertainty, and was in violation of the statutes against lotteries; that its manner of doing business was intended to deceive persons becoming members thereof; and that its business was illegal and contrary to law, and a common and public fraud. The defendant answered by way of admissions and denials, and alleged that it had about five hundred members and contract holders, and a large number of agents soliciting persons to become members; that it had not yet paid a contract of membership, for the reason that it had not continued business long enough, nor extensive enough, for the purpose. The answer was demurred to on the ground that it did not state facts sufficient to constitute a defense.
Hugh Ryan, for the plaintiff.
617 CAS8ODAY, J. There is really no dispute in the facts. The jugglery with figures provided for in the articles of incorporation, and mentioned in the foregoing statement, may be such as to make the rights of contract holders a matter of 80 much uncertainty and chance as to bring the defendant under the condemnation of the statutes against lotteries and gambling, as contended by counsel for the 518 relator: Como monwealth v. Wright, 137 Mass. 250; 50 Am. Rep. 306; Wilkinson v. Gill, 74 N. Y. 63; 30 Am. Rep. 264. But the view we have taken of the case makes it unnecessary to determine that question.
Of course there can be no valid incorporation without legis. lative authority. As will be observed in the foregoing statement, the charter declares, in effect, that the business of the corporation shall be to encourage frugality and economy in its members; to create, husband, and distribute funds from monthly installments, dues, or investments from its members; to purchase, take, hold, sell, convey, lease, rent, and mortgage real estate and personal property; to loan surplus accumulations; and to carry on and conduct a general investment business.” But we find nothing in the articles of incorporation "to encourage frugality and economy in its members." Besides, we find no statute authorizing an incorporation for any such purpose. The same is true in regard to creating, husbanding, and distributing funds from monthly install. ments, dues, or investments from its members, as mentioned. The only statutory authority relied upon is section 1771 of the Revised Statutes, as amended. Thi
This statute does authorize the formation of a corporation " for buying, selling, exchanging, and dealing in all kinds of property, real or personal, or both "; but it is manifest, from the articles of incorporation before us, that the buying, holding, leasing, and selling property is not the primary object of this corporation. On the contrary, its primary and most important object is to obtain moneys from its members, and its incidental or secondary object is the disposal of the moneys after they are so obtained. If, therefore, the general scheme for obtaining the moneys is without statutory authority, then the corporation has no legal existence. So, the statute authorizes the formation of a corporation "for loaning money on secu
rities or otherwise." But "to loan surplus accumulations, and to carry on and conduct a general investment business,” is 619 not the primary object of this corporation. On the contrary, and as already observed, its primary object is to first obtain the moneys from its members, and its incidental or secondary object is to dispose of moneys so obtained. If, therefore, such primary object is without statutory authority, then the whole scheme must fail. Counsel for the defendant was asked on the argument to state the real business of this corporation, and he answered that it was a “species of philanthropy.” But there is nothing in the articles of incorporation to justify the conclusion that its purpose is to do good or bestow benefits upon its members—much less upon mankind in general. If it is designed to confer favors upon any persons it must be its officers and managers. Besides, the section of the statute cited does not authorize the formation of a corporation for such philanthropy. The nearest approach to it is the authority to form a corporation " for the establishment and maintenance of any benevolent, charitable, or medical institution, hospital, or asylum.” Of course there was no authority to form this corporation under that clause.
Counsel does not claim that this corporation belongs to any of the classes of corporations specifically authorized by the section, but he contends that the formation of such a corporation is authorized by the general clause following the several specific classes mentioned, to wit, “or for any lawful business or purpose whatever, except” as therein stated. But, by a well-settled rule of construction, these general words extend only to things of a kindred nature to those specifically authorized by the section. Noscitur a sociis: Wisconsin Telephone Co. v. Oshkosh, 62 Wis. 38. That rule has been repeatedly applied by this court to numerous statutes, where general words have followed specific authority: Bevitt v. Crandall, 19 Wis. 581, 583; Edson v. Hayden, 20 Wig. 684; Morse v. Buffalo F. & M. Ins. Co., 30 Wis. 534; 11 Am. Rep. 587; Attorney General v. Railroad Cos., 35 Wis. 520 519; Campbell v. Campbell, 37 Wis. 218; Sawyer v. Dodge County Mut. Ins. Co., 37 Wis. 503; Cleaver v. Cleaver, 39 Wis. 102; 20 Am. Rep. 30; Gibson v. Gibson, 43 Wis. 33; 28 Am. Rep. 527; Kelley v. Madison, 43 Wis. 645; 28 Am. Rep. 576; Wisconsin Cent. R. Co. v. Smith, 52 Wis. 144; Blake v. Blake, 75 Wis. 343. Any other construction would enable parties,
by mere agreement, to form a corporation for any conceivable "business or purpose whatever," not in violation of law. Certainly the legislature never intended to grant such unlimited authority.
It does not appear that the relator is an elector, citizen, or taxpayer of the state, nor that he is a member of, or in any way interested in, this corporation. It is nierely alleged that he is a “resident” of the city and county of Milwaukee. It may be a serious question whether a mere private person who happens to reside in the state can, as relator, maintain such an action: State v. Tuttle, 53 Wis. 45. But no such objection has been made. The question of the authority to form such corporation is so important that we deem it our duty to decide it.
By the Court. The demurrer to the answer is sustained, and judgment is hereby directed, vacating, dissolving, and annulling the corporate existence of the defendant, and ousting it of its franchises.
IF THE PURPOSE OF A CORPORATION as disclosed in the artioles is one pot sanctioned by law no corporation is created thereby: See monographio note to People v. Montecito Water Co., 33 Am. St. Rep. 178, on defectivo formation of corporations.
GIFFORD V. HARDELL.
(88 WISCONSIN, 538.) CHECKS—DILIGENCE AS TO PRESENTMENT.—The rule of diligence as between
indorsee and indorser is the same as between payee and drawer. Hence the indorser of a check is not liable thereon if it is not presented for
payment within a reasonable time after its indorsement and delivery. CHECKS_COMMENCEMENT OF ReasonABLE TIME FOR PRESENTATION.--As
between the indorsee and indorser of a check the period of reasonable time for presentation begins when the check is delivered to the in.
dorsee or to his agent. CHECKS-DILIGENCE AS TO PRESENTMENT in Distant PLACE. —The general
rule of diligence as to the presentation of a check received in a place distant from that of the bank upon which it is drawn is, that the check must be forwarded to the latter place on the next secular day after its receipt, and be presented for payment on the day after it has reached
such place by due course of mail. CHECKS — PERIODS FOR PREZENTATION.—Each indorsee of a check is
allowed the same period of time for presentation for payment, as between himself and his immediate indorser, that the payoo bad as between himself and the drawer.