25 Mich. 214 | Mich. | 1872
This was an action of ejectment brought by the plaintiff in error against the defendant in error in the circuit court for the county of St.-Joseph, to recover the north half of the south half of section 24, township 7 south, of range 11 west," situated in said county of St. Joseph.
Both parties claimed title through J. Eastman Johnson, who owned the land previous to the deeds stated below.
The plaintiff’s claim of title was this: On the 20th of July, 1853, Johnson, by warranty deed, conveyed the land to the Eort Wayne & Chicago Railroad company, a company incorporated under the laws of Indiana. By several acts passed by the legislatures of the states of Pennsylvania, Ohio, Indiana, and Illinois, authorizing the consolidation of railroad companies, and by the articles of consolidation of the 6th May, 1856, consolidating the Ohio & Penn. R. R. company, the Ohio & Indiana railroad company, and this Eort Wayne &. Chicago railroad company, under the name of “The Pittsburgh, Eort Wayne & Chicago Rail
The defendant claimed title under the following conveyances:
1st. A quit claim deed from J. Eastman Johnson to Benajah G-. Merrick, dated November 29, 1860; and
2d. A quit claim deed from Merrick to defendant, dated November 30, 1866; both of which deeds are duly recorded. The lands lie at least fifty miles from any part of the railroad in question.
The court charged the jury at the request of the defendant, "that the Fort Wayne & Chicago railroad company, at the time of the execution of the conveyance from Johnson to it, had no power to purchase and hold the lands in question in this state,” and, " that the jury will find for the defendant.”
This raises the only question in the case which needs to be noticed. Was the Fort Wayne & Chicago railroad company, being a corporation created by, and existing under, the laws of the state of Indiana, competent to take the title to this land in this state, under the deed executed to it by Johnson?
This question depends, first, upon the laws of Indiana;
1st. As' it was an artificial being, created only by the laws of Indiana, and by them alone endowed with whatever powers and capacities it possesses, it could have no capacities nor exercise any powers anywhere, which were not, expressly or by implication, given by those laws; or, in other words, no powers or capacities which would not be recognized and sustained by the courts of that state, had the same question of capacity to take these lands come before them for adjudication.
The Fort Wayne & Chicago railroad company, to whom this land was conveyed, was organized under the general railroad law of that state, entitled, “ An act to provide for the incorporation of railroad companies,” approved May 11, 1852. Most of the provisions of this act, in reference to the powers of companies to take lands, confine the power to such as the necessities of the company require, in exercising its franchises of building and maintaining the road.
The second subdivision, however, of the thirteenth section, gives power to “ receive, hold, and take such voluntary grants and donations of real estate and personal property as shall be made to it, to aid in the construction, maintenance, and accommodation of such railroad; but the real estate thus received, by voluntary grants, shall be held and used for the purpose of such grants only. It might admit of a question whether, under this provision, there was not power to acquire lands to be converted into money for the use of the company; but the question is quite immaterial, since the act of the legislature of the state of Indiana, of January 20th, 1852, — which, if it did not take effect at an earlier date, took effect at least with the Revised Statutes of that state, of which it is a part
And I see no reason to doubt that the courts of that-state would recognize, the right of the company to take lands in another state, in payment of a debt due the company, accruing in the legitimate prosecution of its business,, and which would, therefore, be represented by the stock of the company. Iudeed, independent of this act of January 20th, 1852, I see no reason why the courts of that state should not recognize the right of the company to take such lands in payment of a debt so accruing, though they might-not allow them to take the funds of the company to invest
We may, therefore, safely assume that the courts of Indiana would not refuse to recognize the right of this company to take lands in this state, in payment or security for debts due to it here.
But these considerations only go to show that the laws
But the laws of Indiana have no force or operation (as latos, giving powers, or creating or enforcing obligation) within the state of Michigan. No state has the power to create corporations, or to regulate their powers, or to authorize the exercise of corporate franchises, in other states. It may confer powers, in the nature of a commission, to be exercised anywhere, upon condition, that their exercise be assented to by the state or sovereignty where their exercise is sought; but without this assent, express or implied, such ■ powers would be nugatory outside of the state granting-them. Each state, by its own legislature, must determine for itself all such questions of public policy arising within-its limits.
But, upon the principle of comity, which is a part of' the voluntary law of nations, recognized, to a greater or less extent, by all civilized governments, effect is frequently given in one state or country to the laws of another, in a great variety of ways, especially upon questions of contract rights to property, and rights of action connected with, or depending upon, such foreign laws, without which commercial and business intercourse between the people of different states and countries could scarcely exist.
And, among the states composing the federal union,— whose relations and intercourse are much more intimate than those of foreign states (properly so called), and the interests of whose citizens are so intermingled that, in commercial and business enterprises, state lines are scarcely more regarded by the people than county and township-lines, — it is the common interest of all to encourage the-
Upon scarcely any subject has this comity been more generally admitted and administered, than in reference to corporate rights and interests.
The rights which they have generally been allowed to enjoy, and the powers they have been allowed to exercise, in states other than that of their creation or domicil, have varied considerably, according to the nature and objects of the different corporations, and the corresponding differences in the mode of doing their corporate business. • An insurance company in doing its business in another state, owing to the nature of the business itself (making contracts of insurance), would seem to be exercising through agents, its corporate franchises, in the same way as in the state of its creation, with the exception of corporation meetings and the strictly official action of its officers; and for this, as well as the prudential reason of protecting their citizens from imposition, and, perhaps, encouraging home companies, other states have, quite generally required their compliance with certain rules and regulations fixed by the legislature, as conditions, upon which alone, they are allowed to do their business within such state. Such has been the case in reference to insurance companies in our own state; and somewhat similar regulations have sometimes been adopted in some states, with reference to a few other
A corporation, however, in any aspect in which it is here essential to consider it, is but an artificial. person, whose strictly legal existence, by force of obligatory law,
And, as well observed by Judge Story, in reference to questions of. this kind (Conflict of Laws, §§ 85 and 87), fully approved by the supreme court of the United States, in Bank of Augusta v. Earle, 13, Pet., 589: “ In the silence of any positive rule, affirming, or denying, or restraining the operation of foreign laws, courts of justice presume the tacit adoption of them by their own government, unless they are repugnant to its policy or prejudicial to its interests. It is not the comity of the courts, but the comity of the nation ” [or state] “ which is administered, and ascertained in the same way, and guided by the same reasoning by which all other principles of municipal law are ascertained and guided.” See also Runyan v. Coster’s lessee, 14. Pet., 122; Bard v. Poole, 12 N. Y., 495, and Merrick v. Van Santvoord, 34 N. Y., 208.
As it is not, then, the comity of the courts, but that of the state, and the question is upon the adoption or qualified adoption in this state, of the laws, or rather certain' incidents growing out of the laws, of Indiana, it follows that the power of determining the question whether, and how> far, or with what modification, or upon what conditions, the laws of that state, or any rights dependent upon
But it is insisted that the question of the power or'
Among the powers or capacities incident to a corporation at common law, without any special mention in their -charter, was that of taking, holding and conveying lands; and these incidents still remain even in this country, where 'Charters are granted only by the legislature; subject only to such restrictions as the legislature has seen fit to impose, by express provision or tacit implication. The act of incorporation, in effect, gives to the corporation substantially the powers and faculties of a natural person, except as they are in some way restrained by the act of incorporation, or some other law of the state creating it.
When, therefore, a corporation is created in the state of Indiana, with powers, so far as that state can give them, of taking, holding and conveying lands in this state, I do .not see upon what principle it can be held that an affirm
In accordance with the principles already explained, it was held in State v. Boston, Concord & Montreal R. R. Co., 25 Vt., 433 (Judge Bedfield giving the opinion), that a railroad company, chartered in the state of New Hampshire, had the right and the capacity to purchase lands in the state of Yermont, without any act of the latter state affirmatively authorizing it; though the land was not taken in payment of, or security for, a debt due the company, but for the purpose of being used in connection with their road, if it should ever be connected, with a road authorized in the latter state. And it may, or may not, also legitimately result from the principles I have already expressed, that in the case now before us, the Fort Wayne & Chicago railroad company had the capacity to take this land by the convey-anee from Johnson, and to hold and convey the same, though the conveyance were shown to have been made to the company in consideration and in payment of Johnson’s
But I express no opinion in this case, - upon the ques- ■ tion, what would be the effect of the conveyance by Johnson to the company, if made in consideration of, or in payment for, stock. This question is not involved in the case. The record does not show that such was the consideration of that conveyance, nor, in fact, what the consideration was, except that the deed expresses upon its face the consideration of sixteen hundred dollars. But this is equally consistent with the fact, that the conveyance was made in payment of a debt, due from Johnson to the company, as that it was paid in any other way. Now, as it does not appear from the record that the conveyance was made in payment for stock, nor Avh'at was the actual con- ■
• If, therefore, this company had the power or capacity to take this land, in satisfaction of a debt due it .from Johnson, accruing in the legitimate prosecution of its business, the conveyance must be held valid, and the'company must be held to have had the capacity to take the title • and the power to convey it.
Now, whatever danger might be apprehended from ■ allowing corporations of other states to take lands for stock, or for -purposes of speculation, I cannot conceive that the privilege of taking - lands, in good faith, in payment of debts, and which must, therefore, be merely occasional, and with the intention and -for the purpose of converting them into money for the realization of the proceeds, can be so dangerous to the public interest of this state or its citizens, as to authorize the courts to declare such conveyance void, on that ground; especially as the property could only be held for ten years, under the constitutional provision already cited. And I think it may be laid down as a safe and sound principle that, unless the consti-* tntion of the state, or its legislature, have, either expressly
Most of these decisions expressly, and the others tacitly, go upon the ground that, irfasmuch as corporations have the right to make contracts in states other than that of their creation, and to enforce them in the courts of such states (a right not disputed in the present case), in the same manner as an individual of another state is allowed to contract and to sue, they must, in the absence of any legislation to the contrary, be allowed to enforce their judgments in the same way, and have the right to avail themselves of all the same means and facilities for that purpose; and, consequently, that where the individual has the right to obtain the title to lands under execution, the same right must be accorded to such corporations; and that, having the right thus to acquire the title by the compulsory means of an execution, the debtor may, by voluntary agreement, do what, without his consent, the law would compel; and that he may, therefore, convey, by his
This power of foreign corporations to take lands in payment of debts, has not, so far as I have been able to find, been anywhere treated as one which is in any way dangerous to the citizens, or inconsistent with the public
But we have ourselves, in this court, already held that a foreign banking corporation may take the title to lands in this state, in payment of debts, and impliedly that such corporation may sell such land. — See Ives v. Bank of Lansingburgh, 12 Mich., 361, a case which arose since our present constitution. And we have in several instances recognized' the right of such foreign corporations, as cestui que trusts, when the legal title was vested in a trustee.— See Trask v. Green, 9 Mich., 358; Taylor v. Boardman, 24 Mich., 287; and, so far as affects any question of state policy, or danger to be apprehended from foreign corporations owning lands in this state, or any question of comity,. I can see no difference between the recognition of. such equitable interest, and the legal estate; since the corporation would ordinarily, in both cases alike, control the land. And, in every case of a naked trust, the statute itself executes the trust and places the legal estate in the cestui que trust. — Rev. St at. 18J/.6, ch. 68, § 8.
Now, as already remarked, there is nothing peculiar to railroad corporations, so far as any question of comity, or danger, or prejudice to the interests of the people or the public interests, is involved. But all the same objections of this nature would apply as well and as strongly in the case of a foreign banking, as a foreign railroad, corporation; so that I think the question in the present case may be looked upon as decided in favor of the right of this com
It' remains, therefore, only to see whether such prohibition is to be found in our statutes. The only provisions, to be found in our statutes expressly in reference to foreign corporations, which can be claimed to have any bearing upon the question, are the following, which I think do not tend to negative the rule which I have endeavored to show is the rule of comity: Section 1 of chapter 116 of the Itev. Statutes of 181fi (Comp. L. 1857, § 4888) provides: “ A foreign corporation, created by the laws of any other state or country, may prosecute in the courts of this state, in the same manner as corporations created under the laws of this state, upon giving security for the payment of the costs of suit, in the same manner that non-residents arc required by law to do.”
This section, instead of rejecting or modifying the rule of comity, expressly adopts the substance of that rule, so far as the enactment extends, and goes only to confirm the conclusions at which I have arrived.
The next section provides: “But when, by the laws of this state, any act is forbidden to be done by any corporation, or by any association of individuals, without express authority by law, and such act shall have been done by a foreign corporation, it shall not be authorized to maintain any action founded upon such act, or upon any liability or obligation, express or implied, arising out of, or made or entered into in consideration of, suqh act.”
This section applies only to acts which, by the laws of this state, are forbidden to be done “ by any corporation or association of individuals, without express authority of law.” It does not apply at all to cases where only some particular corporation, or even a particular class of corporations, is forbidden by the laws of this state to do certain things,.
This again is, I think, the proper and generally recognized measure of state comity. A subsequent section makes provision for attachment against foreign corporations. These are all the provisions to be found in our statutes, at the time of this conveyance, having express reference to foreign corporations, which have any possible bearing upon the question here involved.
If we look to the several separate acts of incorporation in force at the time, and endeavor to extract from them a legislative policy in reference to our own domestic corporations, as to the power or capacity in question, we shall find that, owing to the great variety and dissimilarity of the several acts in this respect, no reasonably certain or satisfactory conclusion can be drawn; and no court can safely declare a state or legislative policy upon grounds so utterly unstable and conjectural. Some of these acts gave express power to take and dispose of real and personal estate without any restriction whatever, leaving, them exactly upon the same footing as corporations at common law; others allowed them to hold and dispose of real estate up to a certain amount in value; others limited the right, by the quantity of acres; some of them restricted the right to such lands as might be required for the proper corporation buildings and such as might be taken or conveyed to it in payment, satisfaction or security for debts due the corpora-, tion; some neither expressly gave or restricted the power
Bearing in mind the great variety and discrepancy, in this respect, in the great number of separate charters or acts of incorporation, as well those granted prior, as those subsequent, to chapter 55, of the Revised Statutes of 1846, let us examine the seventh section of the chapter, remembering, however, that it was not competent for the legislature, by these general provisions, to take away from any previously existing corporation any corporate right granted by the charter, and that it was equally incompetent, by any of these provisions, to tie the hands of future legislatures, should they see fit to make any different provisions either in a special charter or by general law. Section seven, which, by its context, applies generally to all corporations, created or to be created, in this state, declares: “Every such corporation may hold land to an amount authorized by law, and may convey the
I agree with the circuit judge, that no title ever existed in the Indiana corporation under which plaintiff claims. I do not regard the collateral questions, arising in the cause, as of much consequence, and shall assume, without discussing any of them, that this railroad company had all the right to take the lands in question that the state of Indiana could give it. Taking this for granted, I think it has no right whatever, under the laws of Michigan, which is the only state whose laws have, in my opinion, any important bearing on the controversy.
The only authority which any one has ever relied upon to justify the recognition of rights of foreign corporations to hold lands, is the entirely vague and undefined idea of what is spoken of as comity. Whatever this word may properly include within its meaning, it is only another way of expressing what may be more properly classed as private international law. No court or jurist would venture to suggest that there is any claim which is not dependent upon settled law. When courts hold certain things as
There is no foundation for any claim that the law of Indiana can have force in any other state! If there is any right here, it can only depend on the constitution and laws of the United States, or those of the state of Michigan. It is not claimed that there is any thing, in the case before us, dependent upon the authority of the United States. The common, or statute, law of Michigan alone, must decide the cause. Natural citizens of another state, have the same rights here that our own citizens have, but they cannot import into this state any rights that our citizens do not have here. We recognize many relations created elsewhere, hut we do not allow persons, in those relations, to set up any rights, when they come here, which differ from the rights attendant on similar relations, existing here. If marriage in another state, gives personal authority, or property interests, different from ours, the married persons coming here to reside, cannot exercise those privileges. If it subjects persons elsewhere to different disabilities, they are emancipated when they come here. And whatever character the laws of another state may affix to an artificial person, that character, if respected here, is respected, not because of the foreign law, but because of our own law; as the canon law, so far as it was in force in
As most of the decisions which have recognized any right in foreign corporations to become land owners, rest it upon a supposed analogy to other rights universally recognized, it will not be out of place to refer to those which have been supposed to furnish the best support to the doctrine. The number of decisions distinctly asserting the right upon a state of facts calling for a decision, is not very great. But there are some such cases.
We shall escape some confusion by keeping in mind some peculiarities especially belonging to this subject. Corporate existence is by universal law regarded as a franchise, which can never exist except by a positive authority. Accordingly, a corporation, as such, can never have corporate existence outside of the state which grants or confirms that franchise. And when two governments eoncur in granting the power or confirming it, the existence in each state is recognized to depend on its laws alone, the foreign law having no force except by adoption. And it is the settled law of Michigan, that a corporation may be eomfined to a smaller range, and that, if its corporate existence is fixed by its charter in a city or town, any attempt to exercise elsewhere those powers whieh are essential corporate franchises will be illegal and subject it to forfeiture.—People v. Oakland Co. Bank, 1 Doug., 282.
The acts which a corporation may do are not necessarily separate, franchises. Some of its business may be peculiar, and some of its powers may in themselves be franchises, which no one, whether an individual or a corporation, can exercise without state permission. On the other hand, most of its business is usually sueh as any one can do if he pleases, and as to such business a corporation stands precisely on the same footing with a private person.
It has always been competent, as a matter of common laAV, for foreign corporations, public and private, to sue in the courts of law and equity. It has always been understood that they may deal in personal property and securities, where there are no restraining acts. The general doctrine, that personalty follows the person, has been applied to their transactions; and as such dealings can always he done through agents, or correspondence, they are in no way affected by corporate residence. But this rule has never been so extended as to allow the corporate residence to be changed, so as in laAV to bring the corporation itself, with its franchises, into another jurisdiction, without a new franchise from the authority of that new domicil.
There is no process known to the common laAV, Avhereby personal jurisdiction can be gained over a foreign corporation, against its consent. Such a corporation could not be divested of its corporate powers, by any foreign forum; and the effect of giving it plenary poAvers of action, would be to confer privileges much beyond any that could be' given to a domestic corporation. No system of law, which is at all familiar among any people we are connected with, has gone far enough to allow any franchises to be asserted, except by those who can be controlled in their exercise.
To draw from the general acquiescence in the right of foreign corporations to sue and deal in personal estate, a
Another consideration is also to be borne in mind. There is no room nor authority for any arbitrary distinctions between corporations. If the doctrine is to be applied to any, it must extend to all. The common law recognized no corporation, public or private, as incapable of owning lands. And if the authority is not to be sought in our own legislation, or, in other words, if it exists unless prohibited by our laws, then it has no limits in character or in quantity. Foreign states and sovereigns, and foreign municipal and religious bodies, would stand on the same footing, in this respect, with railroads, or banks.
No legal difference can exist between the corporations of another state and those of foreign countries. Corporations of sister states have not the civil position of citizens, so as to give them any rights here, unless we choose to give them. Yery probably, if there-were legislation on the subject, a difference would be made, but the courts can make none.
Neither can it make any difference in laAV, whether the foreign corporation has any power -to hold lands at home. This will not prevent it from holding abroad. It is no uncommon thing for corporations to be created by one jurisdiction, for the very purpose of doing business in some other country, whose laws will permit it. One of the few foreign corporations, permitted by our laws to take lands here, was organized by the state of New York, with our
I think it would be impossible to draw any rule from the charters of our own corporations, which would enable us to determine what was the general policy of the state, even as to them. I do not conceive that, if we could do so, it could be extended to foreign corporations. But any one, who will examine our charters and statutes, must see that the only rule we can deduce is, that each has just such power as is given to it, and no other. Some corporations have no power to take lands. Some can take for their offices and buildings. Some can take for extended mining, lumbering, and other business operations. Some can take in payment of debts, and some have no such power granted. I think the key to the whole powers of our own corporations is to be found in Comp. L., § M%9, which declares that every corporation “may hold land to an amount authorized by law.” If this does not mean the statutes and charters of the state, it means noth
I do not know of any legal reason which should make the capacity of foreign corporations to take land here, depend at all on any analogies of our own. I cannot conceive that any right of that importance can depend on analogy at all. It must, as already, intimated, be a pure question of positive law.
Our law, as before stated, is all common, or statute law. We have no statute law which covers the case before us. Our constitution and statutes were designed to regulate our own corporations. There are several statutes, under which foreign corporations can hold, but none in point here. How, then, does the case stand at common law?
There is nothing in any original common-law authority, discovered as yet by any one, which recognizes, the power of a foreign corporation to take land. It has generally been understood, and such is the language of the writers on corporations, that the power to take land in a corporate capacity, is itself a franchise; and the reason of this is, that changes by death or otherwise, among the corporators, create a title by succession, entirely different from any private holding. And no franchise can exist without grant from the sovereignty.
But the nature of land titles is quite as plain and distinct a reason why no such power can be inferred. There is no trace, anywhere, among respectable authorities, of any general extension of what are called the rules of comity to estates in land. Since the adoption of our registry system there is more, rather than less, reason for strictness,
I do not care to discuss the policy which I may think, and which others may not think, should govern our legislation. It is fortunate the question has been raised, for it must now be determined whether foreign corporations shall have plenary, or limited power, or no power at all, given to them to take and hold lands in this state; and as the attention of the authorities is now called to it, some action will doubtless be taken.
But, until there is legislation, I am unable to satisfy myself that any such corporation can be recognized as a source or holder of title. The cases which have been before our courts have never presented any such question. Some of them have been decided by us while this very case has been pending here, awaiting re-argument before us at our invitation. They have no weight at all for any of the purposes of this controversy.
I regret that I cannot concur in the conclusions of my brethren. I have indicated in a very general way the views I entertain on the single question of corporate capacity.