People ex rel. Swigert v. Golden Rule

1. Quo WARRANTO—by Auditor against insurance company—nature of the proceeding, as a private or public prosecution. The Auditor of Public Accounts is given, by statute, supervision over life as well as other insurance companies; and when companies assume to insure without having sufficient legal authority, it is within the line of his duty to cause them to be prosecuted, and to be deprived of their assumed franchises. An information in the nature of a quo wm'ranto, filed by the Attorney General on the relation of the Auditor, against a private corporation assuming to insure, is not a prii vate but a public prosecution. In this regard, such a case is not analogous to that of The People ex rel. v. North Chicago Ry. Co. 88 Ill. 538. There the application was by a private party to file an information, while here it is by the Attorney General, at the instance of the Auditor of Public Accounts, in the performance of his duties as a public officer. 2. Same—leave to file information without a rule nisi. Under the present statute the court, or judge thereof in vacation, may act upon the petition of the relator for leave to file an information in the nature of a quo warranto, without first laying a rule upon the respondents to show cause against granting the leave, and, if satisfied that there are probable grounds for the filing of the petition, allow it to be filed. 3. Same—proceedings after leave granted—power of the court to vacate the order granting leave—upon what groimds. Where a circuit court, in term time, allows an information in the nature of a quo warranto to be filed, and orders a summons to be issued, the discretionary powers of the court are exhausted, and the issues of fact or of law presented by the pleadings must then be tried. If the information is insufficient, the respondents should demur, otherwise they should, by plea, set up any defence they may have. 4. If leave to file the information is granted, and an order made by the court for the issue of summons, upon a misapprehension of some fact material to be known before making such order, but for the supposed existence of which it would not have been made, it is competent for the court to vacate the order at any time during the term at which it is made. 5. Where the court has, on a proper affidavit showing probable cause, granted leave for the filing of an information by the Attorney General, it will be error to vacate the order granting leave for reasons or grounds which should be interposed as a defence on the final hearing. 6. Life insueance—when in the nature of a wager. It would seem that a policy or certificate for the payment of a premium to one who may hold a number next to that held by the one who dies, and solely because he does die, makes the transaction in the nature of a wager upon the life of one in whom the party thus benefited has no interest, and is therefore illegal. 7. PoWEBS OF judge in vacation. A judge of a circuit court in vacation can make orders only to the extent the statute authorizes him to do. The statute is the measure of his authority in vacation. He can enter no general orders, and can render no judgment in vacation, merely by virtue of his general powers as judge.

Appeal from the Circuit Court of Warren county; the Hon. John J. Glenn, Judge, presiding. On the 6th of January, 1885, the Attorney General entered a motion in the Warren circuit court for leave to file an information in the nature of a quo warranto, in the name of the People of the State of Illinois, on the relation of the Auditor of Public Accounts, -against the “Golden Rule, ” 0. S. Barnum, T. S. Stamps, J. H. Wallace, John Troutman and W. B. Young, and in support of the motion he filed the following affidavit: “Charles P. Swigert, being duly sworn, upon oath deposes and says that he is Auditor of Public Accounts of the State of Illinois, and has been for one year last past; that as he .is informed and believes, 0. S. Barnum and others filed in the office of the Secretary of State of the State of Illinois, on the 21st day of February, 1884, a certificate signed and acknowledged, and proposing to organize a body corporate, not for pecuniary profit, under an act concerning corporations, in force July 1, 1872, and that on said February 21, 1884, said Secretary of State issued his certificate, under his hand and the great seal of State, declaring the said corporation duly organized under the name ‘The Golden Rule.’ 0. S. Barnum, J. H. Wallace, T. S. Stamps, John Troutman and W. B. Young were elected as directors to manage and control the business of its corporate existence, and they accepted said office and entered upon the performance of its duties. Affiant is informed, and understands from information furnished him by the officers of said association, that the real and actual business of said corporation, as carried on by and under the direction of said directors since its organization, is, and has been, to solicit and receive applications for membership in said corporation, and to grant to such persons as were and are accepted as members, a certificate, which, together with the rules and regulations of said corporation, bound it, upon the death of a member, to serve notice of such death upon the surviving members thereof, and to make collections of money, or receive contributions from the surviving members, and to pay out seventy-five per cent of the money so received, not exceeding $1500, to a person named therefor in the deceased member’s application, and twenty-five per cent thereof to the two persons who hold or held valid existing certificates’of, membership in said corporation, number next above and below the number of the certificate held by the deceased member. “As further and more fully illustrating the manner of doing business, and the kind of business done by said corporation, affiant attaches hereto, and refers to, a blank form of application for membership, and marked ‘Exhibit A.’ Also blank form of certificate, marked ‘Exhibit B.’ Also book of consti- ■ tution and by-laws of said corporation, marked ‘Exhibit C.’ All of which papers and exhibits were received by me from the officers of said corporation, as illustrative of the business done by it. [Signed] Charles P. Swigert. ” A sufficient jurat is attached. It is not deemed necessary to set out the exhibits. The court allowed the motion, and thereupon the Attorney General filed the following information, omitting the caption: “James McCartney, Attorney General of the State of Illinois, who sues for the People of the State of Illinois, comes now, etc., and at the relation of Charles P. Swigert, Auditor, etc., gives the court to understand (setting forth in detail the organization of the ‘Golden Buie,’ as shown by the preceding certificate, its objects, the election of officers as therein shown, and that said corporation and its said officers entered upon the exercise of their respective powers,) and that February 21, 1884, said corporation, under the direction of said directors, unlawfully solicited and received applications for membership therein; that by the rules of said corporation each member was required to pay five dollars for his admission to membership, also a semi-annual fee of fifty cents, and to make payments upon the death of a member, from which is established a fund denominated by said corporation a beneficiary fund. Said corporation received from its members applications for an interest in said fund. Such applicants were required to accompany said application with their agreement that in case they should be admitted to participation in such beneficiary fund, if they should cease to be a member of the order in accordance with the rules, or fail to pay all dues promptly when notified by the secretary, said applicant should forfeit all rights to participate in said beneficiary fund. Applicant was also required to state the name of a person to whom he desired benefits paid upon his death. Applicant was required to state his age, race, place of birth, occupation, habits and physical condition, age, or cause of death, of his parents; that to members accepted, the corporation gave a certificate in writing, under the corporate seal, signed by the president and secretary, which certificates were numbered according to their order of issue, binding itself to pay to the person named therefor in the application and in the certificate, upon the death of the member, seventy-five per centum of the money received by said corporation from the surviving members in response to notices of such death, issued by the secretary, and not exceeding $1500, and to pay to persons holding certificates numbered next above and next below that of the deceased member, twenty-five per cent of said amount, and not exceeding $500, all of which powers, etc., said corporation and said directors have usurped, etc. “Second count—After setting forth the incorporation of the ‘Golden Buie,’ as before, and the selection of directors to manage the business, as before shown, charges that said corporation, by and through its directors, officers, etc., wrongfully, and without authority of law, did engage in and transact a life insurance business, and for a valuable consideration did obligate said corporation to pay, upon the death, and proper proof thereof, of a member of said corporation, a sum of money to other persons not the widow, orphans, heirs' or devisees of such deceased member, which powers, franchises, etc., said corporation and its officers, during, etc., have wrongfully usurped, etc. “ Third count—Sets forth the organization of the corporation and selection of officers. Said corporation, under the direction of said directors, unlawfully solicited and received applications for membership and participation in the benefits arising therefrom, and to such as were satisfactory said body corporate and directors issued a certificate, under the corporate seal and the hand of the president and secretary, in and by which certificate, in connection with the application therefor and the rules of said corporation, said corporation unlawfully bound itself, for a valuable consideration, upon the death of a member thereof, to notify the surviving members, and to collect and receive such payments or contributions of money as might be made by the surviving members, and to pay to a person named therefor in the deceased member’s certificate, seventy-five per cent of the money so collected, not exceeding $1500, and to pay the remainder, not exceeding $500, equally to the two persons holding certificates next above and next below, in numerical order, the certificate of the deceased members,—all of which powers and franchises said defendants have unlawfully usurped, etc., to the damage and prejudice of the People of the State of Illinois, and against the peace and dignity of the same; prays the consideration of the court, and process against the ‘Golden Bule,’ O. S. Barnum, T. S. Stamps, J. H. Wallace, John Troutman and W.. B. Young, to make them answer to the said People by what warrant they claim to hold and exercise the franchises aforesaid. James McCabtnev, Attorney General.” Summons was thereupon issued to the respondents by order of the court, returnable to the same term of court, on the 13th of January, the then present month. The summons was returned served upon all the respondents, the next day after it was issued,—i. e., the 7th of January. On the return day of the summons the respondents appeared in open court, by their attorneys, and filed their motion to vacate the order granting leave to file the information, and also to quash the writ and dismiss the suit, and in support of the motion they filed an affidavit. The Attorney General objected that the court should entertain jurisdiction of the motion, but the court overruled the motion, to which ruling exception was taken. The following reasons were assigned in support of the motion: First—Because no notice was given of the application for leave to file the information. Second—A rule nisi was not entered, and served on the defendants, before leave given to file information. Third—The petition, and affidavit in its support, and the exhibits made a part thereof, show upon their face the right of the defendants to exercise the corporate powers charged to have been usurped. Fourth—The petition, affidavit and exhibits filed by the plaintiff show no cause of action. Fifth—There is no probable ground for the proceeding in this case. Sixth—The leave to file the information was improperly granted. Seventh—The information does not set forth any cause of action mentioned in the statutes, against the defendants, on which an information in the nature of a quo warranto may be prosecuted. Eighth—The defendant order of the “Golden Buie” is a secret society, having a supreme and subordinate council, and is therefore exempted by law from the control of the Auditor of Public Accounts. Ninth—The order of the “Golden Buie” makes no assessments upon its members for its beneficiary fund, and therefore it is a purely social, and not a benevolent, organization, making assessments upon its members, and in no manner is an insurance company over which the Auditor has control. Tenth—The “Golden Buie” is an organization of a purely social and benevolent character, where no commissions are paid, and no salaried officers or agents employed, and is therefore exempt from the laws governing insurance companies, and corporations, associations or societies for the purpose of furnishing life indemnity or pecuniary benefits to widows, orphans, heirs, relatives and devisees of deceased members, or accident or permanent disability indemnity to members thereof. The court sustained the motion, and entered an order vacating the order for leave to file the information, quashing the writ, and dismissing the suit, to which there was exception.