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Kern v. Chicago & E.i.r. Co.

NOVEMBER 27, 1963.




Appeal from the Superior Court of Cook County; the Hon. SAMUEL B. EPSTEIN, Judge, presiding. Decree affirmed.


This is an appeal by defendants from a declaratory decree in a class action brought by plaintiffs as two holders of Class A stock of the defendant company, who are suing on behalf of all such stockholders. The suit concerns the validity of a bylaw designed to change and modify the rights of the Class A stockholders with respect to cumulative voting.

The case is before us for the second time, the first opinion appearing in 31 Ill. App.2d 300, 175 N.E.2d 408 (1961), where the facts are fully set forth. At that time we reversed a summary decree for defendants and remanded the cause with directions. Thereafter the chancellor held further hearings and granted plaintiffs' motion for judgment on the pleadings and for summary judgments. The chancellor found that the certificate of incorporation of the defendant company required that it have a board of thirteen directors elected for uniform terms of one year each by cumulative voting by the shareholders, and further required the consent of the holders of at least two-thirds of the outstanding Class A stock to amend, alter or repeal the aforesaid provisions. The court decreed that the defendant company be restrained from reducing the number of directors of the corporation or from changing their terms of office from the uniform period of one year, except with the consent of the holders of at least two-thirds of the outstanding Class A stock.

Two days after institution of the instant suit the defendants revoked the offending bylaw and restored the provision for the annual election of all directors. Defendants contend that this made the case moot. We held in our former opinion that the cause was not moot and that plaintiffs were not estopped because of their alleged participation and acquiescence in the illegal system of staggered elections nor because of their failure to make a formal demand. We found that the equities favored the maintenance of this suit in behalf of all Class A stockholders since one plaintiff persistently urged a change in the illegal system of voting for a period of years, and that no further demand in exhaustion of non-judicial remedies was necessary. On this appeal the defendants still argue at length that the bylaw in question was valid, and at the same time they also argue that the case is moot. Nothing presented to us forms any basis for changing the conclusions reached in our previous opinion. Since the court was divided however on the question of mootness, we have further examined and desire to restate our position on that issue.

The continued alleged power of defendants to change the bylaws and thereby dilute the voting powers of the Class A stock distinguishes this case from cases of ordinary mootness such as arise where an event makes the subject matter of an issue no longer controversial and future litigation on the particular issue impossible or in any event remote.

The origin of the doctrine of mootness is not clear, but an examination of the available authority has helped in finding the true scope of its operation. The word "moot" originally meant "meet" or "a meeting," especially an assembly of people, as a court of adjudicature. Gradually the word came to be used in litigation as an action at law, a plea or an accusation. It did not then have the hypothetical character it later assumed. In England it survives as the discussion of what is now called a "moot" case by students at the Inns of Court (see Oxford English Dictionary, vol 6, p 648 (1933)). The origin of the doctrine seems to have escaped the careful historical and analytical scrutiny of either judges or legal writers. The best explanation of its transformation from reality to the hypothetical rests, we believe, in the development or refinement of the earlier feigned or collusive suit doctrine. In those cases the courts showed an early concern for saving judicial time for real controversies and for protecting the rights of third parties whose interests might be impaired because of prior litigation.

The chronology of the earliest discovered cases in England and in this state bear out the foregoing theory. The following are feigned, fictitious or collusive cases selected for this purpose:

In Henkin v. Guerss, 12 East (KB) 247, 104 Eng Rep 97 (1810) it was held that courts of justice were constituted for the purpose of deciding really existing questions of right between the parties and were not bound to answer any impertinent question which persons thought proper to ask in the form of an action on a wager.

In McConnell v. Shields, 2 Ill. 582 (1839) the court thought that a feigned case was presented, and required proof at the next term that the case was not fictitious.

Spraggins v. Houghton, 3 Ill. 211 (1840) was a qui tam proceeding to collect a fine from a judge of election for allowing an alien to vote in the 1838 election for state and county officials. The court continued the case until further records and briefs were filed because in the form presented it was simply a fictitious suit to decide whether an alien could vote in Illinois.

People ex rel. Roberts v. Leland, 40 Ill. 118 (1865) was a writ of mandamus to compel the Clerk of the Superior Court of Cook County to remove the record of a case to the Supreme Court, despite the defendant's failure to furnish a revenue stamp as required by the federal act. The court held the suit was fictitious as no notice was given the plaintiff in the suit of record and it was presumably an attempt with the clerk's blessing to get a construction of the federal revenue act.

In Washburne v. People ex rel. King, 50 Ill. App. 93 (1892) an appeal from the award of a writ of mandamus to the Mayor of Chicago to issue a liquor license was dismissed as fictitious. The court found that a liquor license had already been granted and suspected that the writ was not prosecuted for any direct result, but for use that might be made of the judgment upon subsequent application for licenses.

In Hoskins v. Mann, 143 Ill. App. 49 (1908) John Henton, after retaining a life interest, conveyed certain farmland to his granddaughters. Henton then rented the property to John Hoskins. After Henton's death, Hoskins brought a bill of interpleader to determine who was entitled to the rent prior to Henton's death. The bill was dismissed as collusive, since the suit had been instituted by Hoskins at the insistence and coercion of the father of one of the granddaughters who had agreed to indemnify the plaintiff for attorneys' fees, and no demand for payment of the rent claim had been made by either Henton's widow or the three grandchildren.

The foregoing cases are the progenitors of the mootness doctrine. In all of them it was the lack of a genuine controversy ...

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