38 Cal. 166 | Cal. | 1869
This is an action to quiet the title of the State of California to a tract of one hundred and sixty acres of land, situate near the City of Oakland, on which it is proposed to erect the State University; and the only question for our decision on this appeal is, whether or not the conveyance from the President and Trustees of the College of California to the State, under the facts stated in the agreed case, was and is operative in law to vest the title in the State. In other words, whether or not, upon the agreed facts, the President and Trustees of the College had the power in law to convey
The College was incorporated under the Act of April 20, 1850, entitled “An Act to provide for the incorporation of Colleges,” (Stats. 1850, 273), and the Act amendatory thereof, passed April 13, 1855. (Stats. 1855, 110.) In defining the powers of the Trustees, it is provided in Section 7, that they shall have power “ to receive and hold by purchase, gift or grant, any real or personal property, provided that the yearly income of the College shall not exceed its necessary yearly expenses ten thousand dollars;” and “to sell, mortgage, lease and otherwise use and dispose of such property in such manner as they shall deem most conducive to the prosperity of the College.” The general Corporation Act provides (Sec. 1) that every corporation, as such, shall have power “to hold, purchase and convey such real and personal estate as the purposes of the corporation shall require, not exceeding the amount limited by law.” Under these provisions, it is quite evident the Trustees have an unlimited discretion in respect to the sale or other disposition of the corporate property, for the advancement of the interests of the College; and it is equally plain that so long as they act in good faith, their discretion, in this respect, is absolute. They alone are to decide whether the proposed disposition of the property will be “most conducive to the prosperity of the College.” There is no room for argument on this point. But it is suggested that the action of the President and Trustees of the College of California, in alienating its property, is not only not “conducive to the prosperity of the College,” but is avowedly intended to terminate its existence in order that its corporate property may be devoted to the building up of a new institution of learning, with a different name, and under a new management; that the conveyance of the tract in question to the State was in part execution of this general plan; and that when the State, through its authorized agents and officers, accepted the conveyance, it had notice of the intention and purposes of the Trustees in making it; that whilst the Trustees may make such dispo
In the recent case of Miners Ditch Company v. Zellerback (37 Cal. 543), we had occasion to examine with much care the power of a corporation over its corporate property; and we held that all corporations capable of taking and holding property have thefts disponendi as fully as natural persons, except in so far as they are restrained by statute; that under this general power, a corporation, unless restrained by statute, may dispose of the whole of its corporate property for any lawful purpose; and that if it conveys its property for a purpose apparently lawful, and within the scope of its powers, to a bona fide purchaser without notice, the transaction will be valid as between the corporation and the purchaser, even though the secret purpose of the corporation was unlawful; that if the purchaser had notice of the unlawful purpose, and if the contract was fully executed and the purchaser was let into the possession, the Court would refuse its aid to enable the corporation to recover the property, on the ground that “ in pari delicto, potior est conditio defendentis.” The first point, therefore, to be ascertained in the case we are considering is, whether the conveyance from the President and Trustees of the College to the State was in part execution or in furtherance of an unlawful plan for the disposition of the corporate property of the College. The agreed case shows that the President and Trustees were actuated by the most laudable motives in the disposition they proposed to make of the property. The bona fides of the transaction is not open to suspicion; on the contrary, it appears affirmatively that the President and Trustees were actuated only by a praiseworthy desire to build up an institution of learning commensurate with the wants of the State, and capable of dispensing
The Act for the incorporation of Colleges provides no method by which they may be disincorporated or dissolved. But the general Corporation Act (Sec. 31) prescribes a mode for dissolving trade corporations on the petition of the stockholders. This provision, however, can have no application to a corporation for literary purposes having no stockholders; and we are not aware of any statutory provision for dissolving a corporation of this character. But at common law both municipal and private corporations may be dissolved by a surrender of their franchises. In Angell and Ames on Corporations (Sec. 772), after announcing that some doubt has existed in England touching the power of a municipal corporation to surrender its corporate existence, the author concludes that, “by far the better opinion is, that where the surrender is duly made and accepted, it is effectual to dissolve a municipal body. In this country, the power of a private corporation to dissolve itself by its own assent seems to be assumed by all Judges who touch upon the point.” The authorities quoted in support of the last proposition are Riddle v. Proprietors of Locks, etc. (7 Mass. 185); Hampshire v. Franklin, (16 Mass. 86); McLaren v. Pennington, (1 Paige 107); Enfield Toll Bridge Company v. Connecticut Railroad Company (7 Conn. 45); Slee v. Blum, (19 John. 456); Canal Company v. Railroad Company (4 Gill, and J. 1); Trustees, etc. v. Zanesville C. and M. Company (9 Ohio, 203); Penobscot Boom Company v. Sampson, (16 Maine, 224); Mamma v. Potomac Company (8 Peters, 281.)
Chancellor Kent says : “The better opinion would seem to be that a corporation aggregate may surrender, and in that may dissolve itself; but then the surrender must be accepted by Government, and be made by some solemn act to render it complete.” (2 Kent’s Com. 311.)
When the statute prescribes a particular method for dis
The fact that a portion of the funds of the College were the result of voluntary donations to it can, in no degree, impair the power of the Trustees to surrender its franchise and dispose of its property in the manner proposed. The donors must be presumed to have known the law; and must be held to have assented in advance to any lawful exercise of
On the whole, we see no error in the record.
Judgment affirmed.
Bhodes, J.: I concur in the judgment.
Sanderson, J., expressed no opinion.