should be paid into the county treasury, with a proviso that the town board of auditors might reduce the compensation to an amount below $1,500. However, when the town board attempted to reduce the compensation, the Supreme Court held that this statute violated sections 11 and 12 of article 10 of the constitution. The court said: "The plain purpose of sections 11 and 12 of article 10 of the constitution was that the fees should be uniform in order to bring about a reasonable compensation for services actually rendered; that this uniformity might be based upon the classification of counties into three classes, regulated according to class. If the argument of counsel for appellant on this point is upheld it would place such a construction upon these constitutional provisions as would justify the fixing of a different salary in the manner herein provided for every town collector in the state. One town might pay a very large salary and another town of the same size with the same amount of work, immediately adjoining, might pay a very small salary. Such a construction would effectually destroy all regulation of fees according to the three different classes of counties, and also the purpose of the constitution that various town officials should receive a reasonable compensation for services actually rendered". The court in deciding this case made no reference to the constitutional debates, nor did it refer to the previous decision in the case of Board of Supervisors v Johnson. It thus appears that there are directly conflicting decisions of the Supreme Court upon the question of whether sections 11 and 12 are limited in their application to the regulation of the fees to be charged the public by county or township officers, or whether those sections include within their purview also the regulation of the personal compensation of town and county officers. Section 13. Every person who is elected or appointed to any office in this State, who shall be paid in whole or in part by fees, shall be required by law to make a semi-annual report, under oath, to some officer to be designated by law, of all his fees and emolu ments. "Following the directions of the constitution, the legislature enacted laws requiring every county officer who shall be paid, in whole or in part in fees, to keep a full, true and minute account of all fees and emoluments of his office, and on the first days of June and December of each year to make a return in writing under oath to the chairman of the county board, of all fees and emoluments of his office, of every name and character, and it is made the duty of the county board to examine such report and ascertain the balance of such fees, if any, and order such officer to pay over such balance, if any, to the county treasurer" 70 The Supreme Court has held that this section of the constitution relates to constitutional officers and does not refer to statutory officers. Thus an act providing for an official court reporter is not invalid for failing to require a report of the fees of the reporter." (For statement as to what are fees, see discussion article 10, section 10, subheading, “Fees”). 70 Watson, J. in People v Witzeman, 268 Ill. 508 (1915). See Hurd's Revised Statutes, Chap. 53, Secs. 51-2. 71 People v Chetlain, 219 Ill. 248. ARTICLE XI-CORPORATIONS Section 1. No corporation shall be created by special laws, or its charter extended, changed, or amended, except those for charitable, educational, penal or reformatory purposes, which are to be and remain under the patronage and control of the State, but the General Assembly shall provide, by general laws, for the organization of all corporations hereafter to be created. Effect on existing laws. This section did not repeal the general law relating to the organization of private corporations in force at the time of the adoption of the constitution. That law remained in effect until repealed by the General Assembly.1 Municipal corporations. The provisions of this section apply only to private corporations. They have no effect upon a special law organizing a municipal corporation, such as a drainage district.2 (As to the restrictions upon special legislation relating to municipal corporations, see discussion article 4, section 22, subheading, "Necessity for general laws in other cases.") 3 Amendment of charters. The Supreme Court held in the case of Braceville Coal Co. v People, that no corporate charter, under this section, may be either expressly or indirectly extended, changed or amended by the General Assembly, except "by general laws, applicable alike to all occupying like circumstances and existing under the same conditions; and it necessarily follows that special acts applying to particular corporations only, and not to the general body of corporations created under the act, would fall within the prohibition of this section." In this case, the court held invalid as an indirect amendment of corporate charters, by a special law, an act which required certain types of industrial corporations to pay wages weekly, for the reason that this act restricted the original charter powers of these corporations to contract in and about their business. Section 2. All existing charters or grants of special or exclusive privileges, under which organization shall not have taken place, or which shall not have been in operation within ten days from the time this constitution takes effect, shall thereafter have no validity or effect whatever. Meeker v Chicago Steel Co., 84 Ill. 276 (1876). 2 Owners of Lands v People, 113 Ill. 296 (1885). 3 Braceville Coal Co. v People, 147 Ill. 66 (1893); see, also, People v P. G. L. & C. Co., 205 Ill. 482 (1903). Burden of proof. This section, it was held, did not operate to require a railroad corporation created under a special act of 1869, whose right to exist as a corporation was collaterally attacked in 1882, to prove, in the first instance, that it had completed its organization and complied with its charter within the time prescribed by this section. That is, this constitutional provision did not change the rule of evidence whereby a corporation is presumed to be at least a corporation de facto upon the introduction in evidence of its charter and of proof of the exercise of corporate powers. Non-compliance with the constitution must be proved by the party attacking the corporate existence.* Additional privileges. It was held by the federal circuit court, that this section did not invalidate additional land grants and special privileges conferred upon a fully organized and operating railroad corporation in 1869, even though they enlarged the corporation's original charter powers, when these additional grants and special privileges had not been accepted by the corporation within the time prescribed by the constitution.5 Extent of operation. This section does not prescribe the extent to which the charter must have been in operation at the date specified. It requires, only, that it must, at that time, have been in operation to some appreciable extent. So, where the case was not that of a mere paper organization, nor that of a dormant charter, but one where there had been an actual organization and a considerable amount of corporate activity leading to the construction of a railroad, the completion thereof being hindered by injunction proceedings, it was held that the charter was in operation at the time prescribed within the meaning of this section." Section 3. The General Assembly shall provide, by law, that in all elections for directors or managers of incorporated companies every stockholder shall have the right to vote, in person or by proxy, for the number of shares of stock owned by him, for as many persons as there are directors or managers to be elected, or to cumulate said shares, and give one candidate as many votes as the number of directors multiplied by the number of his shares of stock, shall equal, or to distribute them on the same principle among as many candidates as he shall think fit; and such directors or managers shall not be elected in any other manner. In general. The purpose of this section was to afford representation to minority stockholders. In the opinion of the Attorney General, its provisions are mandatory and self executing, and are applicable alike to all corporations, including banks. No other method may be devised for the election of directors. The Attorney General has ruled that a statute providing that "no director shall be elected unless he shall have received votes representing at least a majority of the shares" of stock must, in view of this section, be construed to mean, not that the directors must be elected by a majority of all 4 P. & P. U. Ry. Co. v P. & F. Ry. Co., 105 Ill. 110 (1882); St. L. A. & T. Co. v Belleville Ry. Co., 158 Ill. 390 (1895). 5 State v I. C. Ry. Co., 33 Fed. 730 (1888). 6 Mc Cartney v C. & E. Ry. Co., 112 Ill. 611 (1884). 7 Durkee v People, 155 Ill. 354 (1895); Report Attorney General 1900, p. 109; votes cast, but that they must receive at least a number of votes equal to a majority of the shares of stock. That is, where there were 300 shares of stock, 9 directors to be elected, and, under the cumulative plan of voting prescribed by the constitution, a possible total of 2,700 votes, a director, to be elected, must receive at least 151 votes, representing a majority of the shares of stock, and not necessarily 1,351 votes, representing a majority of the total vote cast. To require otherwise, would, in his opinion, defeat the purpose of the constitution, namely, that of affording representation to minority stockholders." (See discussion article 4, sections 7, 8). Bondholders. This section prohibits a corporation from providing, in either its by-laws or its corporate bonds, that bondholders may vote for directors. That privilege is confined, by the provisions of this section, to the stockholders." Preferred stockholders. The Attorney General has ruled that this section does not secure to holders of preferred stock the privilege of voting for directors. An arrangement may be entered into, in his opinion, so far as the constitution is concerned, whereby the sole voting power is confined to holders of the common stock, while the holders of preferred stock are given preference in the payment of dividends, but are denied the power to vote.10 Voting trusts. Under the provisions of this section, the privilege of voting for directors may only be exercised by the stockholders, in person or by revocable proxy. They may not, by contract, deprive themselves of that privilege by conferring an irrevocable authority for a period of years upon one minority stockholder, as a trustee, to vote the great majority of the stock for directors, according to his sole discretion, and without any control by the stockholders. Such a contract is contrary to the policy established by the constitution, and may be avoided, by the stockholders who were parties thereto.11 Section 4. No law shall be passed by the General Assembly, granting the right to construct and operate a Street Railroad within any city, town, or incorporated village, without requiring the consent of the local authorities having the control of the street or highway proposed to be occupied by such Street Railroad. Local authorities. The federal circuit court held that the term "local authorities," as used in this section, means the officers of the municipal corporation elected by the people or appointed in a manner to which they ⚫ have given their consent, as for instance, the mayor and common council of a city.12 (See discussion article 9, section 9, subheading, "Corporate authorities.") Municipal control. The Supreme Court has held that this section "merely means that the constitution has conferred upon the city power 8 Report Attorney General 1908, p. 679. 10 Report Attorney General 1916, p. 164. 11 Luthy v Ream, 270 Ill. 170 (1915). 12 Potter v C. & E. S. Ry. Co., 158 Fed. 521 (1908). 9913 to determine whether street railways shall be operated upon its streets, and if so, upon what streets. To this extent, and no further, the constitution has committed to the city, the control of the operation of street railways in its streets." While, in granting its consent to the use of its streets by street railways, the city may impose such reasonable conditions as, in its discretion, the public welfare may require, such as an annual license fee for each car or an annual mileage tax,14 (see discussion article 9, section 1, subheading, "License fees"), nevertheless, this power of the city to impose such conditions is subject to the paramount power of the state to regulate public utilities. (See discussion article 2, section 2; article 13, sections 1, 7.) For example, in the case of C. & S. T. Co. v I. C. Ry. Co.,15 where a city had granted the use of a street to an interurban electric railway on the condition that the railway conform to the grade of the street, throughout its length, including the crossing of a steam railroad, it was held that the state, acting through the railroad and warehouse commission, could, for the public safety, refuse to permit the crossing of the steam railroad by the electric line to be effected at grade. Similarly, in the case of City of Chicago v O'Connell,16 where an ordinance contract, entered into between a city and a street railway, specified, as the conditions of the grant of permission to use the streets, regulations as to rates of fare, transfers, routing, equipment, and number of cars, it was held that these regulations could be superseded by an order as to the same matters made by the state, acting through the public utilities commission. Section 5. No State Bank shall hereafter be created, nor shall the State own or be liable for any stock in any corporation or joint stock company or association for banking purposes, now created, or to be hereafter created. No act of the General Assembly authorizing or creating corporations or associations, with banking powers, whether of issue, deposit or discount, nor amendments thereto, shall go into effect or in any manner be in force, unless the same shall be submitted to a vote of the people at the general election next succeeding the passage of the same, and be approved by a majority of all the votes cast at such election for or against such law. Foreign banking corporations. The Attorney General has ruled that sections 5 to 8, inclusive, of this article, establish a public policy against the granting of permission to banking corporations existing under the laws of other states or of foreign countries, to do business, through branch banks, in Illinois. In his opinion, the regulations prescribed by these sections of the constitution could not be effectually enforced against any but Illinois corporations." Validation of special charters. The Supreme Court held, in the case of People v Lowenthal,18 that sections 2, 5 and 7 of this article impliedly 13 City of Chicago v O'Connell, 278 Ill. 591 (1917); (recently affirmed by the United States Supreme Court). 14 Byrne v Chicago General Ry. Co., 169 Ill. 75 Ry. Co., v City of Chicago, 176 Ill. 253 (1898). 15 246 Ill. 146 (1910). (1897); Chicago General 16 278 Ill. 591 (1917); (recently affirmed by the United States Supreme Court); Public Utilities Commission v C. & W. T. Ry. Co., 275 Ill. 555 (1916). 17 Report Attorney General 1916, p. 190. |