Hickory Farm Oil Co. v. Buffalo, N. Y. & P. R.

32 F. 22 | U.S. Circuit Court for the District of Western Pennsylvania | 1887

Acheson, J.

By consent of the parties, a verdict was taken in favor of the plaintiff, subject to the opinion of the court as to the law, upon the following agreed state of facts:

“(1) It is admitted that the plaintiff has a good record title to the land described in the writ, which is part of a larger tract, containing in all about 400 acres, purchased by and conveyed to plaintiff in 1864.

“(2) That the plaintiff is a corporation, organized under the laws of New York, in the year 1864, under the provisions of an act of the legislature of the stale of New York entitled ‘An act to authorizes the formation of corporations for manufacturing, mining, mechanical, and chemical purposes, passed February 17, 1818, and the several supplements thereto.

“(3) The articles of association of said corporation contain, inter alia, the following paragraph: ‘(11) The objects for which said company is formed are to acquire by purchase, lease, or otherwise, and to hold and convey lands in the mineral oil producing regions of Pennsylvania, and elsewhere, and to carry on the business of mining and boring for petroleum or mineral oils, and other mineral products of such lands, and extracting the same from the earth.’

“(4) If the court shall be of opinion that, under the law, the plaintiff is entitled, upon the facts as recited, to recover, then judgment to be entered on the verdict for the plaintiff; otherwise judgment to be entered for the defendant non obstante veredicto.”

By the fifth section of the act of assembly of the commonwealth of Pennsylvania of April 26, 1855, (P. L. 829; 1 Purd. 361,) it is enacted that “no corporation other than such as shall have been incorporated under the laws of this state, nor shall any foreign government, potentate, or power, hereafter acquire and hold any real estate within this commonwealth, directly in the corporate name, or by or through any trustee or other (lerdee whatsoever, unless specially authorized to hold such property by the laws of this commonwealth.” And by the ninth section of Said act (1 Purd. 719) it is provided that all property hereafter “acquired and held” by corporations forbidden by said act to hold the same, or held contrary to the intent of the act, shall escheat to the commonwealth; and, upon the same being adjudged to have escheated under judicial proceedings by quo warranto, it shall he taken into possession, and disposed of as in cases of property escheated for defect of heirs.

The question of law arising upon the agreed state of facts is whether the plaintiff, in view of the above recited provisions of the act of April 26, 1855, by its purchase of the land in controversy, and the conveyance to it of the title thereto, acquired the legal estate therein. If the plaintiff has the legal estate in the land, it can of course recover, for the defendant has shown no title whatever, but, as against the plaintiff, is a mere intruder.

The loading case in Pennsylvania on the subject of the effect of a conveyance of real estate to a corporation forbidden by law to “purchase and hold” the same, is that of Leazure v. Hillegas, 7 Serg. & R. 313, in which it was held that such corporation might purchase and take title to the real estate; its title, however, like that of an alien, being defeasible at the pleasure of the commonwealth. That case, and the later case of Goundie v. Water Co., 7 Pa. St. 233, settle the principle that the commonwealth alone can object to a want of capacity in a corporation to hold land. In Runyan v. Lessee of Coster, 14 Pet. 122, (a Pennsylvania case in its facts singularly like the present ease,) tlie supreme court of the United States, following the ruling in Leazure v. Hillegas, sustained the right of a foreign corporation to maintain an action of ejectment for land which it was not licensed to hold under the laws of Pennsylvania, the commonwealth not having exercised its right of escheat. The supreme court of Pennsylvania had occasion to consider the act of April 26, 1855, in the case of Slate Co. v. Savings Bank, 8 Wkly. Notes Cas. 430, and therein declared that it was a mortmain act, disabling foreign corporations from acquiring and holding real estate, but the commonwealth only can take advantage of the disability, and that it was not intended that a deed to a foreign corporation should be void so as not to pass the estate of the grantor. Evidently these cases are decisive in favor of the plaintiff’s right, upon the agreed facts, to maintain this action.

The court, then, being of opinion that under the law the plaintiff is entitled, upon the facts agreed on, to recover the land described in the writ of ejectment, it is ordered that judgment be entered on the verdict in favor of the plaintiff.