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OSSIPEE HOSIERY AND WOOLLEN MANUFACTURING Co. v. CANNEY.

[No. 12.

Vol. II.] between certain places, a contract by such company for the breaking of ice and towing of vessels through the track broken to another place is invalid, and cannot be enforced against them. Penn., &c. Co. v. Dandridge, 8 Gill & Johns. (Md.) 248.

So, where an insurance company, prohibited by its charter from doing banking business, brought a suit upon a promissory note as indorsee, which it had discounted, it was held that the note was void, as received by the corporation in the course of a transaction forbidden as a banking transaction by its charter. N. Y. Fireman's Ins. Co. v. Ely, 2 Cow. 678; Utica Ins. Co. v. Scott, 19 Johns. 1. But it was so held under that section of a restraining act, which declares that" all notes and securities for the payment of money, or the delivery of property made or given to any such association, institution, or company, not authorized for banking purposes, shall be void."

It will be seen there is a wide difference between those cases and the case at bar. In New York the notes were declared by statute to be void. As to the debts involved in this suit, our statute does not pronounce them void, but makes the directors individually liable therefor.

And so, too, there are numerous decisions, that where contracts with corporations are illegal, although the other party can maintain no action against the corporation on the contract, he may recover back the consideration paid, the parties not being in pari delicto. White v. Franklin Bank, 22 Pick. 181; 2 Com. on Cont. 109; Hawson v. Hancock, 8 T. R. 577; Robinson v. Bland, 2 Burr. 1077; Utica Ins. Co. v. Scott, 19 Johns. 1; Same v. Cadwell, 3 Wend. 296; Same v. Bloodgood, 4 Wend. 652; Little v. O'Brien, 9 Mass. 423; Epis. Soc. v. Epis. Ch. in Dedham, 1 Pick. 372; Rich v. Errol, 51 N. H. 361.

In Monument National Bank v. Globe Works, 101 Mass. 57, it is remarked by Hoar, J., with great clearness, that "The doctrine of ultra vires has been carried much further in England than the courts in this country have been disposed to extend it; but with just limitations the principle cannot be questioned, that the limitations to the authority, powers, and liability of a corporation are to be found in the act creating it; and it no doubt follows, that when powers are conferred and defined by statute, every one dealing with the corporation is presumed to know the extent of those powers. But when the transaction is not the exercise of a power not conferred on a corporation, but the abuse of a general power in a particular instance, the abuse not being known to the other contracting party, the doctrine of ultra vires does not apply."

In Bissell v. Railroad, 22 N. Y. 289, Selden, J., says: "When the want of power is apparent upon comparing the act done with the terms of the charter, the party dealing with the corporation is presumed to have knowledge of the defect, and the defence of ultra vires is available against him. But such a defence would not be permitted to prevail against a party who cannot be presumed to have had any knowledge of the want of authority to make the contract. Hence, if the question of power depends not merely upon the law under which the corporation acts, but upon the existence of certain extrinsic facts resting peculiarly within the knowledge of the corporate officers, then the corporation would be estopped from denying that which, by assuming to make the contract, it had virtually affirmed."

Vol. II.]

OSSIPEE HOSIERY AND WOOLLEN MANUFACTURING Co. v. Canney.

[No. 12.

Applying this doctrine as thus laid down in the courts of Massachusetts and New York, it will, of course, be apparent that the general provisions of the statutes, in regard to the power of corporations to contract debts, are to have the same force as if incorporated in the charter of this corporation.

Every one, then, dealing with this corporation must be presumed to know the limitation imposed by sec. 4 of ch. 135 of the Gen. Stats. upon its power to contract debts. But, at the same time, it is equally clear that the contracting of these debts beyond the limit fixed by statute was not the exercise of a power not conferred on the corporation, but was the abuse of a general power in these particular instances, of which abuse the other contracting parties (the creditors) cannot ordinarily be presumed to have known; nor can they be said to be put upon inquiry, because, supposing the inquiry to have been made, it would have been difficult, for reasons before given, to have ascertained the amount and value of the assets of the corporation with any certainty or definiteness. The value and amount of the assets and property of this corporation were extrinsic facts resting peculiarly within the knowledge of the corporation, and of which the creditors cannot be presumed to have had any knowledge or notice.

The books and documentary evidence used at the trial were made a part of this case, but none of them have been exhibited to us, and we only know their contents from statements made in the argument. It is represented "that some of the debts included in the assessment were incurred after the auditor's report in 1869, when the corporation owed some $9,000, as the books show and the report states; and a part of this last amount is debts due to John Chick, treasurer and president of the corporation and a director, and to Levi Smith, a director, and to Pepper, and to sundry stockholders." These parties, being officers of the corporation, are charged with knowledge of the matter of ultra vires at the time they in their capacity of directors allowed the corporation to become their debtors.

Assuming these facts to be as stated in the defendant's brief, it does not appear whether the sum of $9,000, which the corporation owed in 1869, was equal to or exceeded the limit fixed by the fourth section, nor to what extent the corporation was indebted to Chick, Smith, and Pepper, nor whether the same or other debts were due to them February 19, 1871, nor whether the corporation was indebted to them at all at that date. If the limit fixed by section 4 for contracting debts had not been reached in 1869, when the auditor's report was made, then the debts due to Chick, Smith, and Pepper were valid debts. There is nothing in the case by which we can tell whether or not that limit had then been reached, and if reached, whether Chick's, Smith's, and Pepper's debts were contracted before or after the limit had been reached. Nothing is to be presumed in favor of fraud; and if we are to draw any inference in regard to their debts, it must be that they were properly contracted.

We have only briefly discussed the doctrine of ultra vires in this case, a further examination not being necessary to its decision. There is nothing, then, in this case that shows that any of the creditors had knowledge that at the time their respective debts against the corporation accrued, the cor

Vol. II.]

MCBRIDE v. COMMON COUNCIL OF GRAND RAPIDS.

[No. 12.

poration had already contracted debts or incurred liabilities exceeding one half of its capital stock then actually paid in and unimpaired, and of its other property and assets; and we are of the opinion that the debts were such debts as the stockholders could assess themselves to pay, under the provisions of chapter 136 of the General Statutes. The exceptions must be overruled, and there must be

Judgment on the verdict.

SUPREME COURT OF MICHIGAN.

[OCTOBER, 1875.]

MANDAMUS. CONCERNING THE POWER OF INFERIOR COURTS TO ISSUE WRITS OF MANDAMUS AND OTHER WRITS OF A SIMILAR NATURE.

MCBRIDE v. COMMON COUNCIL OF GRAND RAPIDS.

Writs of injunction, certiorari, and habeas corpus, and informations in the nature of quo warranto, are necessary to the ordinary jurisdiction of circuit courts; but the jurisdiction given to such courts by article 6, section 8, of the Michigan Constitution, does not authorize them to issue such writs, and especially writs of mandamus, except for the purposes of the jurisdiction that is conferred in general terms upon them. The history and nature of the writ of mandamus examined and expounded.

THE facts are sufficiently stated in the opinion.

COOLEY, J., delivered the opinion of the court. This case comes before us on writ of error to the circuit court for the county of Kent. The proceeding in the court below was an application for a mandamus to compel the respondents to issue a warrant in payment of a salary claimed to be owing to him by the applicant. The circuit court denied the writ, and is understood to have done so on the ground of want of authority.

The authority, if there be any in the circuit court, comes from the Constitution. By section 8 of article 6 of that instrument, it is provided that"The circuit court shall have original jurisdiction in all matters, civil and criminal, not excepted in this Constitution, and not prohibited by law; and appellate jurisdiction from all inferior courts and tribunals and a supervisory control of the same. They shall also have power to issue writs of habeas corpus, mandamus, injunction, quo warranto, certiorari, and other writs necessary to carry into effect their orders, judgments, and decrees, and to give them a general control over inferior courts and tribunals within their respective jurisdictions." If this section gives the power to the circuit court to award the writ in all cases to which it is applicable, then it might have been awarded in this instance; but if not, then the circuit judge was right in his conclusion.

The argument on one side is that the section does not undertake or purport to confer the power to issue the enumerated writs generally, but only to issue them when "necessary to carry into effect their orders, judgments, and decrees, and to give them a general control over inferior

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MCBRIDE v. COMMON COUNCIL OF GRAND RAPIDS.

[No. 12.

courts and tribunals within their respective jurisdictions." This argument is supported by what seems to be the most obvious meaning of the section; a meaning that should control unless difficulties of construction arise which must lead to the conclusion that the most obvious meaning was not the one intended.

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The difficulty which was suggested on the argument is that some of the enumerated writs are not adapted to carrying into effect the orders, judgments, and decrees of the circuit court, and to giving them control over inferior courts and tribunals; and consequently, the restrictive words of the section must be confined in their application to the "other writs which the circuit courts are empowered to issue. In other words, that the meaning of the section is that the circuit courts shall have general power to issue the writs of habeas corpus, mandamus, injunction, quo warranto, and certiorari, and they shall also have power to issue such other writs as may be necessary to give effect to their general jurisdiction.

This argument renders it necessary to consider how far these several enumerated writs are essential to the jurisdiction which it is conceded is conferred upon the circuit court by the Constitution. That jurisdiction is a general" original jurisdiction in all matters civil and criminal," with a few exceptions, and appellate and supervisory jurisdiction over the inferior courts. It is not contended that the writs of injunction and certiorari are not appropriate and necessary to this general jurisdiction. Indeed, without them or some process devised by legislation to take their place, this general jurisdiction could not be exercised. But it is said that the writ of quo warranto finds no necessary employment in the exercise of this general jurisdiction, and consequently the grant of power to issue it is futile, unless it is to have some further office.

The enumeration of the writ of quo warranto in this section is somewhat remarkable, as the writ itself long since passed out of use, and it is not at all probable that the constitutional convention designed to restore it. If, as was undoubtedly the case, an information in the nature of a writ of quo warranto was intended instead of the writ itself, then it is by no means apparent that it is not a proper process in the exercise of the ordinary jurisdiction of the circuit courts.

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This information is adopted for the cases of intrusions and usurpations of office, and the unlawful exercise of franchises. It is the ordinary proceeding in which all questions of this nature are disposed of. Public rights and private rights are concluded by the trials which are had upon it; and whether considered as a "civil" or a "criminal matter," the cases which are disposed of by means of it are among the most important which are known in the law. Now there is an express exception of these cases from the jurisdiction conferred upon the circuit courts, in such general terms, and I can conceive of no sufficient reason for a suggestion that those general terms do not embrace them.

So far as the writ of habeas corpus is concerned, it is undoubtedly necessary in many cases to employ it as an auxiliary writ in both civil and criminal cases. But I think authority over the cases in which this writ is called for is also granted in the general grant of jurisdiction over all matters civil and criminal. It cannot be contended for a moment that those general words do not give jurisdiction over many of the cases which are

Vol. II.]

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MCBRIDE v. COMMON COUNCIL OF GRAND RAPIDS.

[No. 12.

adjudicated on this writ. All cases, for instance, where civil rights are involved cases of the custody of children and other dependent persons, and the like. But then the adjudications in other cases are equally final as regards the particular matter determined; made so by the express terms of the statute which was in force when the Constitution was adopted. Comp. Laws, § 7033. And I think, without any enumeration of writs whatever, we should have no difficulty in holding that authority over this writ of habeas corpus was a part of the general jurisdiction of the circuit courts. It has belonged to the jurisdiction of those courts ever since they have been in existence in the state; and we can hardly understand why it was mentioned here at all, unless it was to preclude the legislature from depriving the court of this portion of its former authority. But we may say the same of the mention of the writs of injunction and certiorari. No one will pretend that the general grant of jurisdiction in all matters civil and criminal is enlarged by the mention of these writs as process the circuit court may issue.

As regards the writ of mandamus the case is quite different. It is a very proper writ to enable the circuit courts to give effect to their appellate and supervisory authority in some cases, and is often made use of for such purposes. See Layton v. State, 28 N. J. 575, 577. But beyond that it has no necessary office in the scope of circuit court powers. The writ is not a judicial, but a prerogative writ. 3 Bl. Com. 110. It was so defined by Lord Mansfield, who spoke of it as a prerogative writ, flowing from the king himself, sitting in the court of king's bench, superintending the police and preserving the peace of the country. The King v. Barker, 2 Wm. Black. 352; 3 Burrow, 1266. Formerly no issue could be made upon the return to it; but if the return made sufficient answer to the application the proceeding must stop there, and the party injured by its falsity was put to his action on the case for damages. 3 Bl. Com. 111. The statute 9 Anne made provision for a traverse in some cases, but it was not until that of 1 Wm. 4, c. 21, that the right to take issue on the return was given generally. Even after that statute, a writ of error did not lie to review the final determination of the court of king's bench. Rex v. Dean & Chapter of Dublin, Stra. 536; Same Case in error, 2 Bro. Par. Cas. 554. The writ of error was given by stat. 6 & 7 Vict. c. 67; 3 Broom & Hadley, Com. 458. The difficulties in the way of a review in the customary method are pointed out in the New Jersey case to which reference has already been made. "The nature and design in the proceeding in its original institution precluded the idea of a review by writ of error. It was not in the nature of a civil suit between parties to settle private rights. The award of a mandamus does not purport to adjudge decide any right. It is rather in the nature of an award of execution than of a judgment. It is the mode of compelling performance of acknowledged duty, or enforcing an existing right, rather than deciding what that right or duty is. The award is no finality. It concludes nothing. If the writ is denied, the relator cannot have error; and if granted, the award could not be pleaded in bar. Like a procedendo or a prohibition, it was a simple command to perform a duty. The award of a mandamus to an inferior court to proceed to judgment, to issue an execution, to resolve an appeal,- to a public officer to perform a specified duty,

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