Trustees of Davidson College v. Executors & Next of Kin of Chambers

56 N.C. 253 | N.C. | 1857

Lead Opinion

The bill set forth the charter of incorporation of Davidson College, and plaintiffs' authority as trustees under the same, to receive sums of money due and owing, or in anywise arising, to them; that by the will of Maxwell Chambers, legacies to a large amount, were bequeathed to them, and that assets to an amount sufficient to pay and discharge the same, had come to the hands of the executors; and prayed that the defendants might be decreed to pay over the same.

The defendants admitted the bequests, and professed a willingness to pay the same, but adverted to the provision in the charter of incorporation, limiting the amount of the plaintiffs' property to two hundred thousand dollars. They stated that the amount of the said legacies, added to the amount already owned by the plaintiff, would largely overgo two hundred thousand dollars, and that they deemed it unsafe for them to pay more than that sum, unless so directed by the Court. They accordingly prayed the advice and protection of the Court in the premises.

The cause was set down for hearing upon the bill, answer, and exhibit, and sent to this Court by consent, and was heard at June Term, 1856. After giving to the able argument with which we were favored, full consideration, we are satisfied, that the heirs-at-law and next of kin of the testator, ought to be parties to this proceeding, and that the State and trustees of the University should also be represented, in order to have the matter presented in all its bearings, so that the action taken in regard to it may be conclusive.

Without intending to intimate any opinion, and, in fact, without having formed any, it may be well at this time to make some general remarks, for the purpose of directing attention to the questions that may be involved, as well as to show the ground upon which we think other parties ought to be made.

If a corporation has capacity to take, but not to hold, property, and a gift be made to it by an "executed conveyance," in an action or other proceeding to recover the property, the donor, or in case of his death, his heirs or next of kin are not necessary parties; for they have no interest, inasmuch as the capacity of the corporation to take, gives effect to the conveyance, so that the title has passed to the corporation. Nor is it necessary that the sovereign, who becomes entitled under the law offorfeiture, as distinguished from escheat, should be a party; for that title does not attach until after the corporation takes the property.

On the other hand, if the corporation has neither capacity to take norto hold, a conveyance made to it is simply void, and the title continues in the donor.

These propositions seem to be conceded; but it may be a question whether there is not a distinction between a conveyance executed intervivos, and a devise or will, where the corporation, which is the object of the testator's bounty, although capable of taking, is not capable ofholding beneficially; and whether the Court will not treat the devise or bequest as void, at the instance of the heir or next of kin, rather than permit the corporation to be used as a mere "conduit pipe," to pass the title into a third party, upon whom it was not the intention of the testator to confer a benefit; in other words, whether the principle of Atkins v. Kron, 2 Ire. Eq. 58, be not applicable.

It may also be a question, how far the Acts of Assembly, which confer upon the University escheats and derelict personal estate, extend to estates which devolve upon the State under the law of forfeiture, because the donee has capacity to take, but not to hold.

In our case, the capacity of the college is restricted by a clause of its charter, in these words: "The property belonging to the college shall not at any one time exceed the amount of $200,000, c." This presents a question of construction, in which the heirs-at-law and next of kin of the testator may have an interest, as well as the State or the trustees of the University, and we cannot proceed without having them all before us.

The cause will be remanded for the purpose of making parties, unless they can be made here by consent.

PER CURIAM, Decree accordingly.

THE cause was remanded to the Court of Equity of Rowan, and in that Court the bill was amended, according to the suggestion of this Court, by making the next of kin and the heirs-at-law of Maxwell Chambers, parties defendant. Process was also issued to the Attorney General as the representative of the State, and to the trustees of the University.

Process was also served on several persons as heirs-at-law, but it appearing that they were not such, their answers were withdrawn.

Most of the heirs-at-law live out of the State, and were not known to the counsel when the pleadings were sent up. It not being essential to a proper consideration of the case that they should be before the Court, the cause proceeded without them.

The answer of the next of kin was filed, not dissenting from any allegation of fact made by the plaintiffs, and submitting to such decree as the Court might think just and proper.

The cause was set for hearing and sent up by consent.

An Act of Assembly passed at the last session of the Legislature, extending the corporate capacity of the plaintiffs, so as to enable them to hold property to the amount of $500,000, and relinquishing to the plaintiffs any interest which the State or University might have in the fund, was agreed to be considered as regularly pleaded.

The cause was again argued at December Term, 1856.

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Addendum

The charter of the college (act of 1838) enacts among other things: sec. 1, "The trustees of Davidson College shall be able and capable to purchase, have, receive, take, hold, and enjoy in fee simple or lesser estates, any land, c., by gift, grant, devise, c.; and shall be able and capable, in law, to take, receive, and possess all moneys, goods and chattels, that have been, or shall hereafter be given, sold or bequeathed, for the use of said college, c." Sec. 10. "Be it further enacted, that the whole amountof real and personal estate belonging to said college, shall not any at onetime exceed in value, the sum of two hundred thousand dollars."

These words express, very clearly, the intention of the Legislature, that this college shall not own, at any one time, more than two hundred thousand dollars' worth of property. The motives for making this restriction, and the policy upon which it is based, are not open to enquiry by us. The restriction is made by the act which creates the corporation, and our consideration is confined to its legal effect.

The testator, besides a devise of a large amount of real estate, bequeaths, for the use of the college, a fund of personalty, which, when added to the property owned by the college at the time of his death, will greatly exceed $200,000. We have this question: Is there any principle upon which this Court can declare, that the college is entitled to the excess of the fund, after the $200,000 is fully made up, and decree that the executors shall pay over such excess for the use of the college? or are the next of kin of the testator entitled to the excess, on the ground, that it is not effectually disposed of by the will?

The general rule is well settled: When a legacy, from any cause, fails to take effect, the subject devolves upon the next of kin of the testator, as property undisposed of; for an ineffectual disposition, is no disposition at all. For instance, if a legacy fails by "lapse," i. e., the death of the legatee in the life-time of the testator; or by reason of its vagueness, as when the object of the bounty is not sufficiently described to enable the Court to say who is to take beneficially; Bridges v.Pleasants, 4 Ire. Eq. 26, where the object was "the poor saints;" or because the purpose of the testator is against the policy of the law, i. e., to establish an order of privileged slaves; Lea v. Brown, ante, 142; or, where those for whose benefit the bounty was intended, refuse to accept it; McAuley v. Wilson, 1 Dev. Eq. 276; or, where those for whose benefit the bounty is intended are positively forbidden by law from owning it, which is our case — made stronger, if possible, by the fact, that the prohibition is expressed in the very act by which the corporation is created.

The mere statement of the proposition seems sufficient for its solution; but as the amount involved is large, and the question a new one, we desired to hear all that could be said upon it, and to have the authorities examined; for that purpose, as there was not a full argument at the first term, we directed the next of kin and others to be made parties, and requested a second argument, suggesting in general terms, that there might be a distinction between conveyances executed inter vivos, and, possibly, devises; to which class of cases we had been referred, as establishing the distinction between a capacity "to take" and "to hold" real estate, and the devolution of property by act of law, and wills of personalty.

We are satisfied, after hearing a full argument in behalf of the college, that there is no principle upon which a decree can be made in its favor, in respect to the excess of the fund. In England, under the doctrine of cy pres, the Chancellor would direct the excess to be applied to some other charity, as near as might be, like that indicated by the testator, and if no other male Presbyterian college existed, it would be applied to a female college of that denomination.Attorney General v. Tonna, 2 Ves. Jun. 1; 4 Bro. C. C. 103; but our Court has never acted upon that refinement. McAuley v. Wilson, sup.

The cases of purchases of land by aliens and corporations, under the statutes of mortmain, are not in point. It is settled, that an alien or a corporation may, by purchase, take land, but cannot hold; and the doctrine is put on the ground, that if one by an executed conveyance, which is hisown act, passes land to an alien, or corporation, he shall not have it back; but it shall belong to the sovereign, upon office found. It is otherwise in regard to the act of law. If the heir, of one dying seized of land, be an alien, the law will not cast the descent on him, because he cannot hold beneficially, and the law will not give with one hand and take away with the other, but will cast the descent upon the next relation who is capable of holding. For the same reason, an alien husband does not take as tenant by the curtesy, nor an alien wife take dower.

In the case of a will of personalty, the property does not pass directly to the legatee; and the law will not require, or permit, the executor to assent to the legacy, unless it can take effect beneficially, according to the intention of the testator; but it devolves upon the next of kin, by the general rule, stated and illustrated above.

It was said, in the argument, that as the testator's object was a good one — the encouragement of learning, and his intention to give this fund to the college was clear, the Court should so decree, without looking at the consequences, and leave the question, as to whether the college violated its charter by taking it, to be settled upon proceedings instituted for that purpose, if the sovereign should see proper to do so. The reply to the first proposition is: The encouragement of learning is, in general, a good object, but it ceases to be so, when it becomes necessary to violate a positive law. To the second: This Court is a co-ordinate branch of the government; it may be, that had this property been vested in the college by a direct gift inter vivos, the power of the Court could not have been called into action, except upon proceedings instituted by another branch of the government; but as a case is now instituted, it must exercise its power, and there is a solemn obligation resting upon it, not to aid, or sanction, a violation of the law, upon the suggestion that another department of the government can more properly see to its redress.

But it is asked: Are the plaintiffs in a worse condition, because the executors declined to pay over the fund without being protected by the sanction of this Court, than if they had been willing to take the responsibility of paying it over without suit? Certainly not. Upon the death of the testator, without having effectually disposed of this fund, the rights of the next of kin "were vested." They could have filed a bill to prevent the executor from paying it over, or to follow the fund in the hands of the plaintiffs. This is also a full answer to the position, that the act of the Legislature, at its last session, by which the college is allowed to own property to the value of $500,000, and all right to the fund on the part of the State or of the University is relinquished, removes the objection to the plaintiffs' recovery. The rights of the next of kin being vested, the act of the Legislature does not in anywise affect them; so, the only effect of the act, besides enlarging the amount which the college is now capable of owning, is to waive any right of the State; but as we have seen, the State had none.

This being a bill against the executors only, the personalty was directly involved; but upon a suggestion, that the heirs-at-law might have an interest in the question, whether the full amount of the $200,000 should be made up out of the personalty alone, or out of the personalty and realty devised, by rateable contribution, it was directed that they should be made parties. We are satisfied that the personalty is the primary fund, and the requisite amount must be made up out of that exclusively; for which the necessary enquiry will be directed. The bill will be dismissed as to the heirs, without costs, as they claim the legal title to the land. The question between them and the college may be presented in an action of ejectment, if the parties are so advised.

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Addendum

The pleadings in this case present a question of much importance, which has not been hitherto directly decided in this State, nor, so far as I have been able to ascertain, in any other State of the Union. The charter, by which the plaintiffs exist as a corporation, after conferring upon it the usual powers for the acquisition of estates both real and personal, declares in the tenth section, "that the whole amount of real and personal estate belonging to the said corporation shall not, at any one time, exceed the sum of two hundred thousand dollars." (See Act of 1838, ch. 13). It is admitted that the amount of the personal estate claimed by the plaintiffs, under the will of the testator, Maxwell Chambers, will, when added to the value of the property which they already possess, greatly exceed the sum mentioned in their charter; but their counsel contend, that notwithstanding the restrictive clause in their charter, the plaintiffs are entitled to receive the excess, subject to the right of the State to take it from them. A claim is set up on behalf of the defendant Caldwell, upon the ground, that the restriction in the charter of the plaintiffs made the excess of the legacy to them unlawful, and therefore void, in consequence of which, it results to him as the representative of the next of kin. The executors admit that they have the fund in their hands, and express their readiness to pay it over to whomsoever the Court may declare that it ought to be paid. The question is thus fairly raised between the plaintiffs and the next of kin of the testator, and it becomes the duty of the Court to decide it according to the established principles of equity.

In the very able arguments made for the plaintiffs, the counsel have urged their claim upon two grounds: First, its analogy to the acquisition of land by an alien; and, secondly, its analogy to the principle upon which the statutes of mortmain in England were construed. I will proceed to consider them both, and will commence with that of the alien.

It is a well-settled rule of law in England, and in this State as well as in most, if not all, of the other States of the Union, that an alien may acquire lands by purchase, and may hold them against all persons except the King, or the State; but upon office found, the King in England, or the State in this country, may seize and have them. Co. Lit. 2; 1 Black. Com. 372. Different reasons have been given for the rule. Mr. Justice BLACKSTONE, on the page above cited, says that "if an alien could acquire a permanent property in lands, he must owe an allegiance, equally permanent with that property, to the King of England, which would probably be inconsistent with that which he owes to his own natural liege-lord; besides, that, thereby, the nation might in time be subject to foreign influence, and feel many other inconveniences. Wherefore, by the civil law, such contracts were also made void; but the prince had no such advantage of forfeiture thereby, as with us in England. Among other reasons which might be given for our constitution, it seems to be intended by way of punishment for the alien's presumption in attempting to acquire any landed property." One of the editors in his note (8) on this page remarks that "a political reason may be given for this, stronger than any here adduced. If aliens were admitted to purchase and hold lands in this country, it might at any time be in the power of a foreign State to raise a powerful party amongst us; for power is ever the concomitant of property." He illustrates his position by referring to the course pursued by the Czarina of Russia to raise up a party and acquire an influence in Poland whereby she was enabled to dismember that devoted and unhappy Kingdom.

In the case of Governeur v. Roberston, 11 Wheat. Rep. 332, Mr. Justice JOHNSTON, in delivering the opinion of the Court, speaks of the rule as having been so long and so firmly established in the common law, that an enquiry into the foundation of it was a mere matter of antiquarian curiosity, and he then seems to approve what he had seen in an elementary writer, as the reason why the sovereign could not seize the lands until an office was found, to wit, "that every person is supposed a natural born subject, that is resident in the Kingdom, and that owes allegiance to the King, till the contrary be found by office." There can be no doubt, then, of the rule of law, whatever may be the reason for it, that an alien may acquire by purchase, land or any other species of real estate, and may hold it against all persons except the King or State; and may hold even against the sovereign, until he may choose to have an office found, and process thereupon to have it seized into his hands. Among the modes of acquisition in England and in this State, is that by devise, or disposition contained in a man's last will. Hence, in England, and perhaps in this State, an alien might take real property by devise, which would give him a good title to it, as against all persons but the sovereign. In analogy to this, the counsel for the plaintiffs have contended that their clients have the right to take the whole legacy bequeathed to them by Mr. Chambers, though it may be that by force of the restrictive clause in their charter, the State might, if it saw fit, take from them the excess over the value of the property which they were authorized to own. The argument would have much force — perhaps be irresistable [irresistible] — if the legacy vested at once and immediately, under the will, in the plaintiffs. Such is the case undoubtedly in a devise of land. The devisee takes it at once by force of the will, and his title becomes complete immediately upon the death of the devisor. But the case of a legacy is well known to be different. Upon the testator's death, all his personal property becomes vested in the executor, who holds it in trust, first, for the payment of the funeral expenses, charges of administration and debts, and then for the payment of legacies; and if there be a residue undisposed of by the will, he is bound, since the act of 1789, (see 1 Rev. Stat. ch. 46, sec. 18; Rev. Code, ch. 46, sec. 24), to pay it over to the next of kin. The legatee has no legal title to the legacy until the executor shall give his assent to it. So strong is this rule, that if a legatee take into possession a specific chattel, given to him by the will, without the consent of the executor, the latter may by a suit at law recover it back; 2 Williams on Ex'rs., 845. It is true, that if, after the payment of all the debts and other legal charges upon the estate, the executor withholds his assent to a legacy, the legatee may, by a bill in equity, compel him to assent to it, and thereby give him a title to it; but it is by means of a suit in equity alone that he can get possession of a legacy, either general or specific, from an obstinate or dilatory executor. It needs the aid of a court, then, to enable the plaintiffs to recover the legacy which they claim; and the analogy to the case of an alien cannot be of much avail to them, unless we find that the law will per se and proprio vigore cast an estate upon him, or that a court either of law or equity, will lend him its assistance to obtain it. Let us see how that is. It is very certain that an alien cannot take lands by descent, or as a tenant by the curtesy, or tenant in dower, or other title derived merely from the law. Co. Litt. 8; 2 Black. Com. 249; 7 Rep. 25;Paul v. Ward, 4 Dev. 247; Copeland v. Sauls, 1 Jones' Rep. 70; Bell on the property of Husband and Wife, 151, (67 Law Lib. 114). It remains to be enquired whether the courts will aid him in his endeavor to obtain it. In making this investigation, we find it stated in the older authorities of the law, that an alien cannot maintain a real or mixed action. There was some difference as to the manner in which the defence was to be availed of by plea, when the alien was one of a country in league, and when he was an enemy. See Litt. sec. 198; Co. Litt. 129; Brooke, title Denizen, 3, 10; Roscoe on Real Actions, 197. Some learned Judges thought this doctrine to be at variance with the principle that an alien in possession of lands could hold them against all persons but the sovereign, and might maintain actions of trespass against wrongdoers. In the case of Rouche v.Williamson, 3 Ire. Rep. 141, this Court suggested the following explanation: "It has occurred to us, that perhaps the doctrine may be thus accounted for and explained. In real and in mixed actions strictly so called, the demandant seeks to obtain, by means of the law, the seizin of a parcel of land or a tenement, whereof he has never had seizin, or of the seizin whereof he has been unlawfully deprived. Now, as the law will not aid aliens to get land, because by such means the realm may be impoverished,(The King v. Holland, Allen, 14), it will withhold its aid to restore, or to give him seizin, though, while he remains seized, it will protect him against wrongdoers. It may be, also, that while the alien is seized, the law regards him as holding for the use of the sovereign, (1 Inst. 186, a), but the law deems him an improper person to take such seizin for the King, without the King's license." It is true that the Court held that the alien might maintain ejectment; but they put the decision expressly upon the ground, that as against the tenant in possession, the lessor had the right to the possession of the land, of which such tenant had unjustly deprived him. "Upon the trial of an ejectment under the common rule, and on the plea of not guilty, (say they), nothing is in dispute but the right of the plaintiff's lessor to demise the land, whereof the defendant is in possession. The plaintiff is entitled to a verdict upon showing that at the date of the confessed demise, his lessor had a legal title to the possession of the premises. And this legal title to the possession must belong to him who is recognized by the law as having the estate in the premises." It is manifest from what has been shown above, that the plaintiffs' lessor's right of possession must have been previously acquired by his own act, and had not been cast upon him by descent, curtesy, dower, or any other title derived merely from the law. It is equally clear that the spirit of the old law was to forbid its courts from lending their aid to an alien when seeking to acquire, or regain, a seizin of lands or other real property.

The case of Atkins v. Kron, reported in 2 Ire. Eq. 58, and 5 Ire. Eq. 207, will afford a more apposite and instructive analogy. It was a case of a bill filed by an executor against the legatees and devisees of his testator, and also against the Trustees of the University, for the purpose of obtaining the advice and direction of the Court as to the proper construction of the will of his testator, and his duties arising therefrom. So far as is necessary for my purpose, the provisions of the will are these: After giving a number of pecuniary legacies, the testator adds, "I give the balance or residue of my property to my executor, in trust, for the benefit of my sister Quenet's grand-children by the name of Forestier, to be paid to any one of them who shall apply for the same, subject, however, to the payment of the legacies made in this will," c. "But should no one of my sister Quenet's grand-children, nor any one duly authorised to receive the above property in their behalf, apply within two years from the time of my decease, then the above property to revert unto Mary C. Kron's children, and be distributed equally amongst them, subject, however, to the legacies herein mentioned." One of the questions, and the only one necessary to be here noticed, was, whether the trust in the real estate included in the residue, for the testator's sister Quenet's grand-children, who were aliens, was valid and could be enforced in Equity. It was held, according to the report in 2 Ire. Eq. 58, that the devise in trust for the aliens was void, and that the limitation over to Mrs. Kron's children was good, and a decretal order was made in their favor. A petition to rehear that part of the decree was filed on behalf of the aliens, and the question was thereupon very fully and elaborately argued by counsel on both sides. The Court, in a very able opinion, delivered by RUFFIN, Chief Justice, in which all the arguments and authorities upon the subject are reviewed, affirmed the former decree, concluding thus: "The Court, then, looks upon the disability of an alien to hold as cestui que trust of land, as placed, beyond all question, upon both principle and authority. When, therefore, the testator's trustee and executor asked, whether he ought to execute the trust, in respect of the real estate in favor of the aliens, the Court was obliged to declare, that he ought not, and that against them the sovereign was entitled. Whether the State should in this particular instance take, as between it and the children of Mrs. Kron, the devisees substituted for the aliens, was another question, with which the aliens had, and yet have, nothing to do, and which is not now open for discussion. But as to the exclusion of the aliens, no one of the Court doubted, when the decree was made; and upon a rehearing, no one of the Court now doubts." (See 5 Ire. Eq. at p. 216). Here, then, was a case in which the aliens might have taken under a direct devise of the legal estate to them, subject to the right of the sovereign to seize it upon office found, but in which, as a trust, the Court of Equity refused its aid to have it executed in favor of the aliens at all. If, therefore, it were unlawful for the plaintiffs, in the case before us, to hold the legacy as against the State, it seems to me that the analogy furnished by the case of an alien taking and holding land against every person but the sovereign, is against, instead of being in favor of, the claim of the plaintiffs to have it paid to them.

I will now consider the argument of the counsel for the plaintiffs, founded upon the analogy supposed to be afforded by the construction of the English statutes of Mortmain. In the outset I will remark, that a person, at first view, would hardly expect to find any thing in the English law of Mortmain, to throw much light upon the question of the right to a legacy in this State. The statutes of Mortmain never did embrace personal property even in England, (Shelf. on Mort. 9; Ang. and Ames on Corp. sec. 148,) and have never been adopted by any State of the Union, except Pennsylvania; Ang. and Ames on Corp. sec. 149; 2 Kent's Com. page 283. In England, the statutes were designed to prevent the accumulation of the landed property of the kingdom in the dead hands of the corporations, particularly the religious houses, whereby "it was observed that the feudal services, ordained for the defence of the kingdom, were every day visibly withdrawn; that the circulation of landed property from man to man began to stagnate; and that the lords were curtailed of the fruits of their seigniories, their escheats, wardships, reliefs and the like." 2 Black. Com. 270. They were enacted from time to time, commencing with the great charter of Henry the 3rd, in the 9th year of his reign, and coming down to the stat. of 9th Geo. 2nd. It is not my intention to give a history of them, either in detail or otherwise. An excellent summary of them, with their various provisions, and the construction put upon them, may be found in 2 Black. Com. from p. 270 to 275. In Shelford on Mortmain, (36 and 37 vols. of the Law Lib.) they will be found to be stated more at large, and treated of more fully. See also 2 Inst. 74, for a commentary upon such of them as were passed prior to the time of Lord COKE. Upon an examination of all of them, except that of 9th George 2nd, it will be seen that they did not make void the purchase of lands by the corporations, but declared that if it was made without licenses from the king, and the lords of whom the lands were holden, the lands should be forfeited, and the lord, or king, as the case might be, should have the right to enter for the forfeiture, and seize the lands for his own use. It will be seen further, that the king could not enter until office found; Shelf. on Mort. 10, citing Hayne v. Redfern, 12 East. Rep. 96; Evans v.Evans, 5 Barn. and Cres. 587, note (e); S.C. 8 Dowl. and Ryl. 399. The statute of 9 George 2, ch. 36, was intended to apply to conveyances and devises of lands, or any interest in them made to individual trustees, as well as to bodies politic, for charitable purposes, and it declared all such as were not executed as therein prescribed, to be void. Under this statute, then, all the forbidden conveyances and devises were construed to be void, and in the case of a devise, the heir-at-law was held to be entitled to the land. Shelf. on Mort. 204.

I have hereinbefore referred to the opinion of Chancellor KENT, that none of these statutes of Mortmain had been adopted in any State of the Union except Pennsylvania. I think I may safely assert that not one of them has ever been in force in North Carolina. I do not find in our reports any trace of their existence here. It is true, that the statute of 18th Edw. 1st, enacting that "no feoffment shall be made to assure land in main," is inserted by the revisors of 1820, in their list of British statutes then in force. (See 1 Rev. Code of 1820, p. 87). It may well be doubted whether it ever was so; but if it were, it was certainly repealed when the statutes were revised in 1836. (See 1 Rev. Stat. ch. 1, sec. 2). There has been no necessity for any such restraints upon corporations by statutory enactments in this country. In England it was otherwise; and the difference in the condition of the two countries with regard to their bodies politic, and the resulting difference in their legislation concerning them, is clearly stated by the Court in a case to which I shall refer more particularly hereafter. "A capacity to purchase and alien land, unless specially restrained by its charter, or by statute, has been held to be an incident, at common law, to every corporation. This general power, it has been found necessary in England to restrain by statute; and there, their powers in this respect are understood to be general and unlimited, except so far as controlled by such statutes. A large proportion of the corporations there hold their corporate rights by prescription. This supposes the grant no where to be found in written form. The uncertainty of the limits of the powers granted, and the great extent of powers claimed, at an early period created a necessity of limiting them by act of parliament. The statutes of Mortmain have this effect, in reference to purchasing and holding lands. In this country, few instances can be found of the existence of corporations, whose charters did not originate in express legislative enactment, and are not to be found printed in the statute books. In these cases, the grant of power is before us. The charter defines the grant, with its restrictions and limitations. Unless some other statute, enacted by the same authority, either general or special, can be found, enlarging or restricting those powers, we look no further for the rights of the body corporate."

This notice, however brief and imperfect it may be, of the English statutes of mortmain, and of the difference, or contrast rather, between them, and our charters of incorporation, is sufficient to show that the principles applicable to the construction of the former, can have very little bearing upon that of the latter. The former were intended for an age, and a condition of society, entirely unlike the political and social institutions of the American States. They were mainly aimed against the grasping power of the religious houses, in a semi-barbarous state of civilization, and were designed to rescue, from what has been quaintly called their death-clutch, the lands whose feudal services were the chief support and defence of the Kingdom. They fully accomplished their purpose by putting it into the power of the King and other feudal lords to enter upon, and seize, the lands when purchased without license from those whose rights were in danger of being invaded. The King, who, in the course of time, became almost the only person likely to be injured, it is true, could not take advantage of the forfeiture until an inquisition was made, as in the case of lands purchased by an alien. But that was found to be a sufficient protection to his rights; and the result of a commission issued on his behalf in December, 1833, in the case of the "University Life Assurance Society," shows that the power of entry upon office found, though it had its origin in a far different state of society, was still effective for good. See Shelf. on Mort., p. 10, note (e)

Corporations exist in this country, as has already been said, by virtue of express acts of legislation. They are created for a great variety of political and civil purposes, all having in view, or supposed to have in view, the weal of the State in which they have a "local habitation and a name." Their powers, rights and duties are defined, and limited in their several charters of incorporation, and when a question arises as to either rights, powers or duties, we must look to their charters mainly for the answer. The charter of any particular corporation is a law peculiar to itself, and by that law must it be judged. See Ang. and Ames on Corp., sec. 151. This brings us to the consideration of the restrictive clause in the charter of the plaintiffs, upon the proper construction of which our decision must turn.

There cannot be the slightest doubt that the Legislature intended to forbid the plaintiffs from owning, at any one time, real and personal estate, the value of which should exceed the sum of two hundred thousand dollars. Whether the policy of such a restriction was wise or not, I, as a Judge, have no right to enquire. An examination of the course of legislation from 1833 to the present time will show that it has been a settled policy with the General Assembly to restrain the amount of property held, or to be held, by institutions similar to the one whose case is before us. Thus, in 1833, the act incorporating "A literary and manual school in the county of Wake," declared that the value of its real and personal estate should not exceed fifty thousand dollars. In 1838, the carter granted to "The Trustees of the Greensborough Female College," limited the whole amount of its real and personal estate to the sum of two hundred thousand dollars; the same amount, which, in the same year, was prescribed for the plaintiffs, and for "The Trustees of Wake Forest College." Passing by the "Carolina Female College," and the "Trustees of the Clinton Female Institute," whose capital stock was, in 1848 and 1850, fixed respectively at twenty thousand dollars, and the "Glenn Anna Female Seminary," whose capital stock was, in 1854, limited to twenty-five thousand dollars, we come to the year 1856, when as many as four literary institutions were created, or had their charters amended, with similar restrictions: First, "The Trustees of the Female College of the Methodist Protestant Conference," was chartered, with a clause which restrains the amount of its property to three hundred thousand dollars. Secondly, "The Warrenton Female College," amount restricted to forty thousand dollars. Third, the charter of the plaintiffs amended so as enable them to hold property to the amount of five hundred thousand dollars; and lastly, the capital stock of "Carolina Female College," was increased to one hundred and fifty thousand dollars. It is true that during this period many academies and other literary institutions, were chartered without any such restrictive clauses. Why this was done, we need not enquire. The restrictions imposed upon those to which we have referred, indicate that the Legislature had a policy upon the subject, though it may not have acted uniformly upon it. The effect of that policy was to make it unlawful for the institutions which we have named, to own real and personal estate exceeding in value the amount specified for each respectively. What other construction can be put upon the words, "the whole amount of real and personal estate belonging to said corporation shall not, at any one time, exceed in value the sum of two hundred thousand dollars?" It seems to me, that, in admitting that the State, upon office found, or otherwise, may seize and take to its own use, the excess, the plaintiffs' counsel virtually admit that it is unlawfully held by the college. Why so forfeited to the State unless because the college has it in opposition to the express prohibition of its charter? If unlawful for the plaintiffs to have it, can a court of equity assist them to get it? I have, in vain, tried to discover a principle upon which the claim of the plaintiffs can be supported. The analogies of the common law are against it. It is well settled, and well known, that a contract, the consideration of which induces to the doing of an act, either malum in se, or malum prohibitum, is void, and no action at law can be sustained upon it. See Ingram v. Ingram, 4 Jones' Rep. 188, and the cases therein referred to. Will the court of equity be less sensitive to the duty of upholding the law, or less alive to the importance of preventing its violation? I have studied its principles to little purpose if it be so. I can find no case sustaining such a doctrine. On the contrary, I have found a very instructive one decided in the courts of one of our sister states, which fully sustains what I believe to be the true principle applicable to the present case. It is the case ofThe President, Directors and Company of the Bank of Michigan v. Niles, 1 Doug. (Mich.) Rep. 401. It was a bill filed by the plaintiffs, for the purpose of obtaining the specific performance of a contract entered into between them and the defendant, whereby the plaintiffs bound themselves, within a certain specified time, to convey to the defendant certain real estate described in the contract, and to obtain from one J. H. P. a good and sufficient deed for the property called the Rochester-mill property, and to convey to the defendant three undivided fourth parts of it; and, in case a mortgage or incumbrance should be created for the purchase of the mill property, they covenanted to pay the same, and have it released within five years from the date of the contract; and they further agreed to deliver to the defendant certain certificates signed by him. The defendant, on his part, agreed to execute a mortgage to the complainants for the purchase-money to be paid by him, amounting to $28,000, and, in addition, to include in the securities, certain notes, and the amount of the above mentioned certificates. The mortgage was to be executed on the property conveyed to him, and upon the remaining interest, which he already possessed in it as tenant in common. Within the specified time, the plaintiffs purchased the mill property; and then prepared and executed to the defendant a deed for three fourths of it, together with the other property which they were bound by the contract to convey to him, and were ready and willing to perform their part of the contract. The defendant demurred, and the demurrer having been sustained by the Chancellor, the plaintiffs appealed to the Supreme Court. The question turned upon the construction of the 3rd and 9th sections of the plaintiffs' charter of incorporation. The 3rd section provided that they "shall be in law capable of purchasing, holding and conveying estate, real and personal, for the use the said corporation." The 9th section enacted "That the lands, tenements and hereditaments, which it shall be lawful for the said corporation to hold, shall be only such as shall be required for its accommodation, in relation to the convenient transaction of its business, or such as shall have been bona fide mortgaged to it by way of security, or conveyed to it in satisfaction of debts previously contracted in the course of its dealings, or purchased at sales, upon judgments which shall have been obtained for such debts."

Upon the argument, the defendant, in support of his demurrer, contended that the plaintiffs were not authorized by their charter to make such a contract as that stated in their bill; that the buying and selling of real estate, except in the cases specified in their charter, was not within the scope of their corporate powers, and was, therefore, unlawful; and that the Court of Equity would not lend its aid to enforce a contract made in violation of law.

The counsel for the plaintiffs argued against the demurrer, that the general power to purchase and convey real estate, given by the 3rd section of their charter, was not affected or limited by the provisions of the 9th; that the latter used only the word "hold;" and they contended that the only design of the provision was to prevent real estate from being locked up in mortmain, in the hands of the corporation, and that the buying and selling of lands by it was not unlawful.

The Court, in an able opinion delivered by FELCH, Judge, decided that, by the terms of their charter, the plaintiffs were not authorized to make a business of buying and selling real estate; and that the contract made with the defendant was, therefore, unlawful. In concluding their opinion, the Court say, "there may be a difficulty, in cases where contracts are made in reference to matters but remotely tainted with immorality or illegality, and not the immediate subject of the undertaking of parties, to determine in what instances the principle should be applied; but when the very act contracted to be done is itself illegal, there can be no doubt of the application of the principle."

"The Bank of Michigan contracted to obtain and convey a title to real estate, under circumstances which made it a transaction prohibited by the spirit and terms of its charter. The defendant, with knowledge of the unlawfulness of the transaction, (for the charter is declared to be a public act), entered into the contract. Each party to the contract put himself in the power of the other; and as the Court of Equity would not interfere to compel the bank to perform its agreement, by buying and selling lands in violation of the law, so aid cannot be afforded to the bank to compel the defendant to perform on his part."

The principle deducible from the case to which I have just referred is the true principle by which the action of the Court of Equity should always be guided. Whether in matters of contract, or in any other matters in which human action is concerned, it should ever be ready to enforce that which the law commands, and to prevent that which the law forbids. It would be untrue to its high duty, if it, in any case or under any circumstances, lent its aid to any person, individual or corporation, who was seeking, with however innocent an intent, to circumvent the law. Governed by this spirit, it cannot assist the present plaintiffs. The lawgiver says, in the plainest terms, that they shall not own (for what belongs to them, they must own), more in value of real and personal estate than $200,000. It is against the law, then, for them to have it, and yet they ask this Court to give it to them. The Court cannot do so without assisting them to violate the law, and, therefore, it cannot do so at all.

The case of Humbert v. Trinity Church, 24 Wend. (N. Y.) Rep. 587, and that class of cases, wherein it has been held, that an increase of income, above the limit prescribed in the charter, from property already held by the corporation, is not against law, do not militate against this principle. In such cases the corporation has no necessity to ask the aid of any court to enable it to get the property. The original owner had, long before, parted with his title to it, when to purchase it was not forbidden to the corporation, and when the value of the property rises above the chartered limit, the only question with respect to it, which can arise, must be between the corporation and the State.

It only remains for me to say, that if I have been successful in showing that when the testator died it was unlawful for the plaintiffs to have the excess of the legacy above what was necessary to make the value of their real and personal estate amount to $200,000, it follows as a necessary consequence that, as to such excess, the legacy was void, and in the absence of a residuary legatee to take it, it resulted to the next of kin.

The cases referred to by my brother PEARSON, clearly show this, and it is unnecessary for me to add any thing to what he has said upon that subject. He has shown also that, in the view which we have taken of the case, the act of the last General Assembly, (see Acts of 1856, ch. 94), has no operation upon it. The 3rd section of that act provides as follows: "That all right, title and interest on the part of the State of North Carolina, and the University of North Carolina, or either of them, if any they have, in and to the estate and officers (?) given, or attempted to be given, in the last will and testament of Maxwell Chambers, late of Salisbury, to the Trustees of Davidson College be, and the same is hereby, released and conveyed to the Trustees of Davidson College, for the purpose specified in the said will." The section does not profess to give the legacy, or that part of it which may have previously become vested in interest, in the next of kin; and it is certain that the preceding section, which enlarges the amount of property the Trustees of the College should be authorized in future to hold, did not, and was not intended to, have that effect.

The novelty and importance of the question, and the large amount of property involved in the suit, must be my apology for stating the reasons for my opinion at such length.