In re the estate of McGraw (111 N.Y. 66, 1888)

Peckham, J.

The question to be decided in this case is whether Cornell University or some other parties, being the residuary legatees, or else the heirs-at-law or next of kin of John McGraw, deceased, or of Jennie McGraw Fiske, deceased, or her husband, shall have the property, or any portion of it, bequeathed to the university by the will of Mrs. Fiske. In case the university should be held not to be a competent legatee, the question as to where the property shall go is, as we understand, a matter in which the various parties to the litigation have agreed, and hence the only question we need consider is, first, in regard to the capa'city of the corporation to take the legacy. If that should be decided in the affirmative, it would be necessary to discuss no other question. If, however, it should be held that the corporation had no power to take andhold more than $3,000,000, the second question would be as to whether it was the owner and holder of such an amount at the time of the decease of Mrs. Fiske. Both of these questions are important and worthy of the most careful and deliberate consideration. The case involves a very large amount of property, and involves, also, the decision of a question as to the effect of the general statutes relating to the acquisition and holding of property by corporations of the class of this university, as the same have been affected by the terms of the special charter granted to it.

The case has been most elaborately and ably argued by counsel on both sides, and the written briefs submitted to the court by them bear conclusive evidence of the thoroughness and extent of then- researches into the English law on the subject of mortmain and its results, as well as that of our own and of the other states of the union.

To examine and comment upon each argument advanced, and to go through the long list of cases cited in this and other states and in England, would render this opinion of immoderate length and would not probably be of any great service.

We must be content to give the conclusion at which we have-arrived, together with the reasons which seem to us controlling, in as short a space as it reasonably may be done.

First. Doming to a discussion of the first question, it may be assumed that a corporation, by the common law, had power to take property by devise. (Sherwood v. American Bible Society, 4 Abb. Ct. of App. Dec. 227, 231; 1 Kyd on Corp. 74-78; Grant on Corp. 98.)

Our Revised Statutes provided that every corporation, as such has power, among other things (§ 1, subd. 4), to hold, purchase and convey such real and personal estate as the purposes of the corporation shall require, not exceeding the amount limited in its charter. By section 2 of the same title of the statutes the powers enumerated in section 1 “ shall vest “ in every corporation that shall hereafter be created, although “ they may not be specified in its charter or in the act ■ under “ which it shall be incorporated.”

Section 3 provides that, in addition to the powers enumerated in the first section, and to those expressly given in its. charter or in the act under which it is or shall be incorporated, no corporation shall possess or exercise any corporate powers, except such as shall be necessary to the exercise of the powers so enumerated and given. (1 R. S. 599-600, §§ 1, 2. 3.)

Under this power to hold, purchase and convey such real and personal estate as the purposes of the corporation may require, not exceeding the amount limited in its charter, the corporation could take property by devise, for the word purchase includes all means of acquiring property not coming to one by descent or the mere act or operation of the law. The same Revised Statutes, however, in providing for the transmission of real property by will, stated that “every estate “ and interest in real property descendible to heirs,” might be devised. “ Such devise may be made to every person capable “ by law of holding real estate; but no devise to a corporation shall be valid unless such corporation be expressly “ authorized by its charter or by statute to take by devise.” (2 E. S. 57, §§ 1, 2, 3.)

There are other provisions in the Eevised Statutes relating to corporations incorporated for purposes of education. It is enacted therein that, “ the trustees of every college to which a “ charter shall be granted by the state shall be a corporation.” (Sec. 31.)

“ Sec. 36. The trastees of every such college, besides “ the general powers and privileges of a corporation, shall have power

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“ 4. To take and hold, by gift, grant or devise, any real or “ personal property, the yearly income or revenue of which “ shall not exceed the value of twenty-five thousand dollars.” (1 E. S. 460, §§ 31-37.)

At the adoption of the Eevised Statutes, therefore, the law in this state was that a corporation could hold, purchase and convey such real and personal estate as the purposes of the corporation should require, not exceeding the amount limited in its charter, but it could not take any real property by devise unless it was expressly authorized by its charter or by statute to take by devise. And there was power in the trustees of a college to which a charter was granted by the state, to take and hold real or personal property by gift or devise, provided the income did not exceed $25,000 annually. Some time subsequent to the adoption of these statutes, and in the years 1840 and 1841 (chap. 318 of 1840 and chap. 261 of 1841), the legislature passed acts (the latter being an amendment of the earlier one) by which trusts were authorized to be created by grants, devises, and bequests of property to incorporated colleges or other literary incorporated institutions in the state, to be held in trust for specific purposes comprehended in the general objects authorized by their charters. The acts contained no limitation as to the amount or value of property which could, be thus taken in trust by the corporation.

It was held, however, by this court in Chamberlain v. Chamberlain (43 N. Y. 424) that these acts did not repeal or affect the general law of the state limiting and restricting the amount and value of property which could be taken and held by literary and educational corporations, and it was therein said that the general laws of the state are in harmony with its policy, which has been uniform and consistent, so far as such policy is indicated by legislation in relation do gifts in mortmain, and the powers of corporations to take and hold property.

It was further said that these statutes (those of 1840 -1841) authorized the creation of special trusts, in furtherance of the objects of the corporations named, but that such trusts could be created and full effect given to the acts within the limits imposed by the general laws upon the power of the corporations to acquire and hold property. There being no express repeal of the general provisions of law or repudiation of the uniform policy of the state, the intent of the legislature to do either, it was said, could not be implied.

Thus the several provisions of law relating to the property of corporations stood at the time of the granting of its charter to Cornell University by the state in 1865. By chapter 585 of the Laws of that year, the legislature incorporated and established the Cornell University. In the first section of the act the following language is to be found : The corporation hereby created shall have the rights and privileges necessary to the object of its creation as declared in this act, and in the performance of its duties shall be subject to the provisions and may excercise the powers enumerated and set forth in the second article of the fifteenth chapter, title 1 of the Revised Statutes of the State of Hew York.

The second article above alluded to is entitled “ of the “ powers and duties of the trustees of colleges,” and is to be found already referred to {supra) as 1 Revised Statutes, 460, sections 31 to 3Y. It is subdivision 4 of section 36 which authorizes the trustees to take and hold real or personal property by gift or devise not exceeding the value therein ■ stated.

Section five of the charter reads as follows :

“ Sec. 5. The corporation hereby created may hold real and “ personal property not exceeding three millions of dollars in “ the aggregate.”

These provisions in the charter, together with the statutes above alluded to, must be examined for the purpose of discovering, if possible, what was the legislative intent towards this,, corporation regarding property.

The learned counsel for the appellant claims at the threshold, that the provisions of the Bevised Statutes as to the incorporation of colleges {supra), with a single exception, were merely intended to apply to institutions of learning incorporated by the regents of the university of the state under the general - laws of the state. He argues that the regents had power to incorporate a college by virtue of the provisions of the act (Chap. 82) of 1787, the provisions of which were re-enacted in 1813 and incorporated subsequently into the Bevised Statutes, and at that time, and for many years thereafter, there was no other way of incorporating a college unless by a special act of the legislature. Hence, he says these provisions of law, general in their nature applied to corporations which were incorporated by the regents, and were never supposed to apply to corporations incorporated by special act, unless expressly made applicable in the special act.

The counsel is right in his statement as to the fact when the act was passed. At that time there was no general law for the incorporation of colleges or other institutions of learning, other than by the regents, and when they granted a charter there can be no doubt that its provisions were affected by the act as contained in the Bevised Statutes. But the language therein used (sec. 31), that the trustees of every college to which a charter shall be granted by the state shall be a corporation, is general in its nature, and it would seem to include all cases embraced within its language. That it is superfluous to apply it to the case of a corporation which becomes such by virtue of the very act which incorporates it, is not a conclusive answer. It is an argument from the point of view that it was unnecessary, but because it was unnecessary is not always, perhaps even generally, an argument against the applicability of a statute to a certain condition of things. It is alike unnecessary with regard to colleges or academies which were incorporated by the regents under the power granted them in the acts of 1181 and 1813, both of which acts expressly .granted them power to incorporate colleges and academies by giving them a charter. When they did so the college or academy became a corporation by virtue of those acts which empowered the regents to incorporate it. The section (31) was, therefore, unnecessary in both cases, and yet it was adopted, and in its language it embraces all colleges to which a charter is granted by the state.

The thirty-sixth section provides that the trustees of every such college shall have power, among other things (subd. 4), “ To take and hold * * * any real and personal * * * property, the yearly income,” etc.

I think it plain, therefore, that the provisions contained in that title would be applicable to the Cornell University, although specially chartered by the state, unless inconsistent provisions were to be found therein. The charter, however, in so many words, makes this title applicable to the university. (See section 1 of the charter, part of the language of which is quoted supra.)

It is true that it states the corporation, m the performance of its duties, shall be subject to the pro visions and may exercise the powers enumerated in the title mentioned, among which is the right to take and hold real and personal property. But the title itself is headed, “Of the powers and duties of the trustees of colleges,” and among those powers and duties is the right above mentioned. I do not think that the use of the words “ in the performance of its duties,” would in any wise exclude the application of this fourth subdivision of section 36, and we must look elsewhere for such exclusion if it is to be excluded. That it is to be excluded all admit, but the exclusion is founded upon a special provision in the charter itself which is wholly inconsistent with its continued applicability. The subdivision confines the taking and holding, by gift, etc., of real or personal property to a yearly income not exceeding in value $25,000, while the charter permits it to hold real and personal property to an amount not exceeding $3,000,000 in the aggregate.

Both sides admit that this subdivision in question is not applicable — the respondents, because an inconsistent provision in the charter expunges it, while the appellant claims that even if there were no inconsistent provision in the charter, it would still be inapplicable because the statute only applies to corporations incorporated by the regents. The provisions of the charter are'inconsistent, and still we must look at all the other statutes above cited for the purpose of discovering what the legislative intent is. Looking at the general statutes we find corporations have power to purchase and hold property necessary for the purposes of their incorporation, not exceeding the amount limited in their charter, but they cannot take by devise unless expressly authorized by their charter or by statute so to take. Then the ¡Revised Statutes prohibit corporations from possessing or exercising any corporate powers, except such as are enumerated or are expressly given to them by their charters, or such as shall be necessary to the exercise of the powers so enumerated and given. The statutes also allow the trustees of a college to take property by gift or devise not exceeding a certain annual income, and then come the acts of 1840-1841, and then the charter of this university. The argument of the learned counsel for the appellant is, as I have said, based upon the theory of the utter inapplicability of the act of the Revised Statutes as to colleges; and then he claims that the acts of 1840 and 1841 bestow a capacitv to take property by will not exceeding the amount limited in the charter of the corporation; and he claims also that in this case there is no limitation of the power in the charter of the university to take real or personal property to any amount, and the only limitation there is consists of a limitation upon the power of holding more than $3,000,000, in the aggregate. He thus obtains the power to take an unlimited amount of property by virtue of one act, and a limitation is only placed upon its power to hold by another act, and that is the organic act of incorporation itself.

I do not think such an interpretation of the statutes can be sustained. . I think the fifth section of the charter gives the measure of the power of the university to take as well as to hold property. The language is an authority as well as a limitation. It is an authority to hold more than the Bevised Statutes permitted, but it shall not be permitted to hold more than a certain specified amount. And if there were nothing said on the subject of property in the charter, I think the Bevised Statutes as to the limitation for colleges would apply. Beading the language in the charter, it is difficult to imagine a holding without a previous taking of property, and the counsel for the appellant admits that if there were no other statute providing for a taking of property, the language of the fifth section of the charter would necessarily imply a right to take in order to hold. I do not think that his claim to derive an unlimited capacity to take by virtue of the Laws of 1840 and 1841, when construed with the other statutes, and with the provisions in the charter, can be upheld as a fair exposition of the legislative intent upon the subject. The statutes of 1840 and 1841 were passed for the purpose of authorizing the creation of certain special trusts in connection with these educational institutions, which could not have been legally created prior to their passage, and their object did not in the least infringe upon the general laws of the state or its policy. As has been said, their passage did not repeal those general laws limiting the amount or value of property which corporations might take and hold. Because a special statute contained provisions upon the subject of the property of the corporation thereby incorporated, which were inconsistent with the general provisions contained in the Bevised Statutes-relating to the same subject, I do not think the effect was not only to render the general law inapplicable, but also to twist the provisions of the law of 1841 in relation to the special trusts spoken of into a permission outside of and beyond the language of the charter to take property without any limitation as to amount or value. That might have been the effect if the charter had repealed those general provisions as to this corporation, and had made no other provision regarding it.

Under such circumstances, the act of 1841 could have been referred to as permitting the corporation to take property by devise and in trust to an extent unlimited, but when the same language which renders the general law inapplicable also gives a power to hold property to a certain limited extent, it seems to me that such a power includes the power to take up to that sum, and limits it accordingly.

It is said that if the power to take an unlimited amount of property and to hold but a certain sum were contained in the same law, there could he no doubt upon the question of the power to take. That may he so, for in that case the legislative will would have been announced in terms which could not be misunderstood. But there is a great difference between the two cases. The question is always one of legislative intent, and the inquiry is whether the statute of 1841, providing for the creation of trusts, really applies in this instance to this university so far as an unlimited capacity to take property is concerned. For the reasons already stated, I think it does not.

Looting' for a moment outside of and beyond the statute laws of the state, and in order to strengthen his position regarding the true construction to be given that law as to the material distinction in the case at least of a corporation, between the power to take and the power to hold property, the counsel for the appellant has made a most able and learned argument. Its outlines are, in substance, as follows r A corporation at common law could take and hold property by devise. At an early stage in the history of the law of England, relating to the power of corporations to hold real property, and while the feudal system still prevailed, it was-enacted that no man should alien his feud to a corporation under penalty of a forfeiture thereof to his next superior, of whom he held the land, and in default of such superior insisting upon the forfeiture, then his superior might do so, and thus on until the king, as the general superior and lord of all, was reached. But in case the forfeiture was not insisted upon, the corporation, which had taken a defeasible title to the land, could hold it as against all the world.

He therefore insists that this distinction between taking and holding strengthens his claim that the use of the word hold in the charter was intentional and for the specific purpose of permitting the corporation to take an unlimited amount of property and to hold only the amount specified. No sound reason for giving such unlimited power to take, while limiting the power to hold, can, as it seems to me, be stated. And if such were the intent, I think it would have been plainly .stated in the charter instead of trusting to such a conjectural application to be given to another statute.

The counsel cites about all the writers upon the subject of corporations, and they have' all adverted to this distinction, as existing in relation to the English corporations subject to the mortmain statutes, and they state that licenses to hold in mortmain were granted to such bodies, but without such licenses they took the title to the real property aliened, subject only to the right of the superior lord to enter and take the land under the power of forfeiture. The only penalty, therefore, which a corporation risked when it took lands without a license in mortmain was that of a forfeiture of the land to the next superior of the grantor, and so on up to the king; and the counsel claims that in this state, in the case of a corporation with unlimited power to take, but not to hold more than a certain amount, the penalty for holding more is that the state, representing the whole people and standing in this respect in lieu of the king -(there being no mesne lords), can forfeit the charter of the corporation and thus prevent the further holding. And assuming this to be the fact, he uses it as strengthening his argument as to the existence of this clear and material distinction betAreen taking and holding property.

The further claim is then made that, as title to the property subject to the forfeiture of its charter, the heirs or next qí kin of the testator have no more right to raise the question than any other third parties who have no interest therein. It is said that it is a matter for the state alone to take cognizance of, and until it does the corporation holds the property, however much it may transcend the limitation prescribed in its charter. has vested in the corporation, -which, in holding it, has become

The counsel states accurately the law of mortmain in England and its consequences of possible forfeiture of the estate granted, and, until forfeiture, the vesting of the title in the corporation indefeasible, except by the re-entry of the person entitled to take it by reason of the forfeiture. But the circumstances under which lands are held by citizens of Hew York, where their tenure is so wholly different from that which prevailed in England when the early mortmain acts were enacted, render any argument in regard to those acts and their effect totally inapplicable to the case of a eorpo-« ration of this state. Taking the law as it exists in our statutes]]" including the special provision upon the subject m the chartei" of the university, it seems to me that the provision therein, limiting the holding of property, is, as I have said, a restriction also upon the power to take in excess of the specified property in the same way as an individual, the consequence was that, in England, large landed possessions were held by religious corporations, and, by reason of alienations of real estate to them, the services due by the vassal to the lord were partially, if not totally, paralyzed, and the chief -lords lost their escheats. This Avas a constantly growing and alarming evil. To remedy the difficulty, the first mortmain act was placed in Magna Charta, which declared all such alienations to corporations entirely void, and that the lands should revert to the lord of the fee. It was held, however, that the reversion must. amount. As, at common law, a corporation could take real be accomplished, by cm entry, and then and from that time there, was a forfeiture, the corporation having taken the title ■and held the property until such forfeiture by re-entry. (Shelford on Mortmain, 8, 34; 1 Kyd on Corp. 81; Grant on Corp. 106.)

Other statutes upon the subject were subsequently enacted, • all for the purpose of preventing the great accumulation of real property in the hands of corporations, and they all provided substantially for a re-entry on the part of the next superior lord whenever lands had been ahened in mortmain, and, until such entry enforcing the forfeiture, the corporation held the lands. There was one law, directed against superstitious uses (23 Henry VIII, Chap. 10)j which provided that the grant to such uses for more than twenty years was absolutely void, and the estates thus ahened would have gone to the grantor or his heirs, excepting for a provision, subsequently , made, giving such estates to the king. (Wilmot’s Opinions, '9, 10, in Attorney-General v. Downing, variously reported : Ambler, 550-511; 1 Dick. 414; 3 Ves. Jr. 714; 5 id. 300 ; 8 id. 256.) The mortmain statute (9 George II, Chap. 36) renders ah devises to charitable uses void. (Shelford on Mortmain, 118-120.)

The nature of the tenure of real property at the time of the passage of the early mortmain acts in England bears no resemblance, to the tenure by which a citizen of this State holds lands. Here there is no vassal and superior, 'but the title is absolute in the owner, and subject only to the liability to escheat. (Const, of N. Y., art. 1, § 13.) The escheat takes place when the title' to lands fails through defect of heirs, (Const, of N. Y., art. 1, § 11.)

A devise to a corporation which is forbidden to take (or forbidden to hold, if the word, under the circumstances of the case, is construed to include a taldng also) does not, therefore, give a title subject to the right of some superior to claim a forfeiture of the land; but if it be in violation of a statute, j I think- the devise is void and the land descends to the heir j or residuary, devisee. "

We have not in this state re-enacted the statutes of mortmain or generally assumed them to be in force, and the only legal check to the acquisition of lands by corporations consists in those special restrictions contained in the acts by which they are incorporated, and which usually confine the capacity to purchase real estate to specified and necessary objects. (2 Kent’s Com. 282.) Of course, the restrictions contained in any general law, if applicable, must also be referred to.

There is, by reference to our laws, no such necessary and universal distinction between taking and holding property by corporations, as is seen in the laws of England relating to alienations in mortmain. Whether the legislature, when using language providing for a limitation upon holding property, meant to permit an unlimited taking, is a question of legislative intent; and I think the general inference would be, in the absence of some plain and controlling circumstance to the contrary, that the legislative body meant to limit a taking asj well as a holding beyond the specified amount. As is said in the Ohomiberlain Case, this is in accordance with the policy of the state, a policy which has been recognized as existing for many years, and which the courts have concurred in approving and carrying out. I do not think the statute (Laws of 1779, chap. 25, § 13) touches this case. It provided that the absolute property of all lands, etc., and all rents, franchises, debts, dues, duties and services, escheats and forfeitures, which before the 9th of July, 1776, vested in or belonged or were due to the crown of Great Britain, were and forever after the 9th day of July, 1776, shall be vested in the People of the state, in whom the sovereignty and seigniory thereof are and were united and vested.

The counsel for the appellant does not claim that this property was itself forfeited to the state, if the state should choose to enforce the forfeiture. His claim is, as I understand it, that if the university exceeded its limitation by holding more property than it was allowed by law to hold, a cause of forfeiture of the charter was thereby created, and that in enforcing such forfeiture, after the payment of the debts of the corporation the rest of the property would (as he insists) probably go to the state because there would be no living claimant to it who would have any right to acquire it. A forfeiture the state may claim and may enforce at pleasure when the occasion arises, but it is a forfeiture of the charter and not a forfeiture of the property held by the corporation. It is further claimed that this distinction between the right to take and the power to hold property is one which has been admitted and enforced in the courts of England, of this state and of the other states of the union for a long number of years; and that there is no reason why effect to such a distinction should not be given in this case, the result being, as is stated, that the corporation has an unlimited right to take property and also an unlimited right to hold it as against any one but the state in its capacity of sovereign. There is undoubtedly a distinction between the right to take and the power to hold property under some circumstances, the only question being whether the legislature had such distinction in mind and meant to provide for it in the case in hand. It is said that an alien has the right to take property by purchase, but he cannot hold it as against the state. That is so. He takes, however, a defeasible title, good as to all but the sovereign power, which must take it upon office found or by escheat. ( Wright v. Saddler, 20 N. Y. 320.)

In such case it is not exactly an accurate description of the alien’s title to simply say that he can take but cannot hold. That is a contradiction in terms. If he take, he must hold, if for but a fractional part of a second of .time. The expression is but a short one for the statement that he cannot hold, as against the claim of the state, where properly made and enforced. The same expression is used in the case of a corporation under the mortmain laws, that it can take but not hold, the meaning being that it cannot hold as against the claim for forfeiture when made by the next superior lord of the grantor of the lands. That the words lose all their meaning when wrenched from the circumstances under which they were used, and applied to corporations existing by virtue of the laws of this state, seems to me a plain proposition.

The counsel has, however, with great industry and research, cited a number of cases from our own courts and those in other states, where this distinction, he claims, has been admitted, and in cases, too, where the principles involved were similar to the case at bar (one or two being, he says, precisely like it), and where it has been held that in such cases, although the corporation has violated the law of its being, yet no one but the state could take advantage thereof.

I think that, with the exception of one case, they were all entirely different from this one, and the decisions were based upon a totally different and probably a perfectly unassailable ground.

The principal case, or at least one of the early ones, is that of Leazure v. Hillegas (7 S. & R. 313), which arose in Pennsylvania and was decided in 1821. The restriction in the charter of the Bank of ISTorth America was that the bank should not purchase and hold property excepting under circumstances therein stated. The directors of the bank accepted from their grantor, William Henry, a conveyance of his land (not within their specified powers) at a fair price, in payment of a debt, bona fide, due. The question was whether the corporation could hold and convey a title ? Tilghmae, Oh, J., said : “ The restriction is that the bank shall not purchase and “ hold. Purchasing and holding are very different things, “ and the consequences of each are very different. To pur- “ chase and hold might have been thought dangerous, but to “ purchase, subject to the statutes of mortmain, which author- “ ized the state to appropriate the land to its own use, could “ be attended with no danger.”

The court there held that some portions of the mortmain, laws of England were in force in Pennsylvania, to the extent of permitting the state, as the sovereign lord, there being no mesne lords, to enter and claim the forfeiture, and that until the state did so, the title of the corporation was good, and it could convey such a title to its grantee. No such laws have been in force in this state.

Under the modern acceptation of the law regarding corporations, this case could probably be supported on an entirely different ground, viz, that it was an executed contract or conveyance, upon a good consideration, and that the grantor could not be heard to dispute his own grant under the circumstances; and that no one could take advantage of this violation of its charter by the corporation excepting the state, which could proceed to forfeit the charter because thereof. " The case, is no authority in this state for the proposition that none but the state can interfere, nor is it of any importance upon the question as to how material it is to note the absence of an express limitation in words upon the power to take property under the charter of the university. Baird v. Bank of Washington (11 S. & R. 411) is a somewhat similar case, and decided also upon the authority of Leazure v. Hillegas (supra). Goundie v. Northampton Water Company (7 Penn. St. 233), decided in 1847, refers to the Leazure. Case. It was also a case where the contract was on a good consideration, and the company had the right to contract for the land and pay for it, and a deed for value would vest in it a good title, subject to the right of the state to interfere, etc. The case of Runyan v. Coster (14 Pet. [U. S.] 122), decided in 1840, upon appeal from the Circuit Court in Pennsylvania, was decided with express reference to the statute of that state, passed April 6,1833, relative to escheats, which permitted the corporation to retain the title, subject to be divested at any time by the commonwealth. The decision was put upon the ground of the act of 1833 and the doctrine of the Supreme Court of Pennsylvania in the Leazwre Case. These are the cases cited from the Pensylvania courts, and it is plain they furnish no support for the contention in this case, in the absence of those laws of mortmain upon which they were founded.

There is one case, however, which has been decided by the Supreme Court of the United States upon the question of who may take advantage of a violation of the charter in relation to the power to hold property, which comes very near the case at bar. The decision of that court goes quite a distance towards sustaining the contention of the appellant’s counsel, although there was another ground upon which the decision could rest. The very great respect which we all feel for any decision of the Federal Court of last resort, and for any opinion given by its learned and able judges, even in cases where it is not binding upon us, renders it necessary to examine the case with some care. The case is Jones v. Habersham, (107 U. S. 174). ' The head-note is: “Restrictions “ imposed by the charter of a corporation upon the amount of “ property it may hold cannot be taken advantage of collater- “ ally by private persons, but only in a direct proceeding by “ the state.”

The testatrix, a resident of the state of Georgia at the time of her death, devised and bequeathed to the Georgia Historical Society certain land for the purposes of maintaining a historical society, etc. The corporation was incorporated in 1839, and had power to purchase, take, hold, etc., lands and tenements, provided the clear annual income of such real and personal estate should not exceed the sum of $5,000. It was admitted that the net income of the corporation from property held by it at the time of the death of the testatrix was between $3,000 and $4,000, and that the income of the property bequeathed to it by her will would add $7,000 to that income. The appellants, who were the heirs-at-law and next of kin of the testatrix, claimed that the gift was void in toto, as it gave more than the corporation was allowed to take or hold. The court, per Geay, J., stated the answer to such proposition in the language of the head-note above quoted, and, without argument, referred in support of such doctrine to five cases, viz.: Runyan v. Coster (14 Pet. 122, 131); Smith v. Shelley (12 Wall. 358, 361); Bogardus v. Trinity Church (4 Sand. Ch. 633, 758); De Camp v. Dobbins (29 N. J. Eq. 36); Davis v. Old Colony Railroad Company (131 Mass. 258, 273).

Upon looking at those cases I have been unable to find that they decide the principle they are cited to sustain. It seems to me that the question was not really and fully presented, discussed or decided in any of them. The first case, Runyan v. Coster (14 Peters, supra), has already been cited and sufficiently discussed. It was decided upon the express statute of Pennsylvania, and can be no authority for the general doctrine stated by Mr. Justice Guay in his opinion. The next case is Smith v. Shelley (12 Wall. 358-361). The bank in that case had been incorporated by an act of a territorial legislature, where a law of Congress was in force providing ’that no act of such a legislature incorporating a bank should have any force until approved by congress. The bank had power under the territorial act “ to buy and possess property of every kind.” Land was sold to it for a money consideration paid by it.

Mr. Justice Davis, in his opinion, said: “It is insisted, “ however, as an additional ground of objection to this deed, “ that the bank was not a competent grantee to receive title. “* * * It could not legally exercise its powers until the “ approval of congress was obtained, but this defect in its “ constitution cannot be taken advantage of collaterally. “ * * * Conceding the bank to be guilty of usurpation, “ it was still a body corporate de facto exercising at least one “ of the functions which the legislature attempted to confer “ upon it, and im, such a case the party who mahes a sale of “ real estate to it is not in a position to question its capacity “ to talce the title after it has paid the consideration for the “purchase ” This, as it seems to me, is also very far .from authority for the proposition for which it is cited. The grantor dealt with it as a corporation, received its money, and should not be heard to deny or question its existence.

The next case cited by the learned judge is Bogardus v. Trinity Church (4 Sand. Ch. 633 ; Vice-Chancellor's opinion, 720-758, as to point in question.) It was provided that the church could not hold more than an income of £500. The fact was that when the grant in question was made it did not hold,' with the grant, nearly as much as it was allowed. Then the vice-chancellor said, if it did, it was a question between the corporation and the sovereign power, in which individuals have no concern, and of which they cannot avail themselves in any mode against the corporation. This was mere obiter. The question was not involved nor decided. It was not a case of a devise to a corporation holding at the time of the devise more property than the law permitted, and where the question was whether such devise was good, and, if bad, whether the property (not devised by a valid devise) passed to the heirs.

The defense of the defendant was, among others, adverse possession, and that defense prevailed. The case referred to by the vice-chancellor (Humbert v. Trinity Church, 24 Wend. 587, 604, 629) did not decide the question either. The ground of the decision was that the plaintiff’s claim was barred by the statute of limitations. Co wen, J., says (p. 605): “Admit “ that the law will cast no title on the corporation, the answer, “ in the words of the statute, is equally fatal. You have been “ out of possession for-more than twenty years, and are thus “ disqualified to maintain an action to recover your land against “us or any other.” It was a decision upon a question of adverse possession.

Senator Furman (page 629), in his opinion, assumes from the evidence that the real estate, when received, counting all defendant ever had, did not amount to the limitation of £500. He adds, in giving another view of the case, that the “'restriction is a mere question of governmental policy, and “ individuals, as such, have nothing to do with it, and no con- “ trol over it. That it is only voidable at the instance of the “ supreme power.” He cited no authorities and the question was not before him.

The case is only authority for the proposition that a corporation can insist upon a title to property by adverse possession, which when proved, is as potent to close the mouth of a claimant to the property in the case of a corporation as in that of an individual. To same effect, Harpending v. Dutch Church (16 Pet. 455); Bogardus v. Trinity Church (4 Paige, 178).

Then comes” the case of De Camp v. Dobbins (29 N. J. Eq. 36), which was a devise to a charitable corporation claimed to have been restricted to a holding of property to the amount of $2,000 annual value. The chancellor found that by a later statute the restriction did not exist. lie then gave a dictum that if a corporation takes land by grant or devise, in trust or otherwise, which by its charter it cannot hold, its title is good as against third persons and strangers ; the state alone can interfere.

This dictum is opposed by another distinguished judge of Hew Jersey (Chief Justice Beaslet), who, on appeal to the Court of Errors and Appeals in the same case, took occasion, in delivering the unanimous opinion of the court, while affirming the judgment below, to dissent from any such view of the law. I shall have occasion to refer to the case again. (De Camp v. Dobbins, on appeal, 31 N. J. Eq. 611, 690.) The‘Hew Jersey case cannot, therefore, be regarded as the least authority for the main proposition under discussion.

The last case cited by the learned justice is that of Davis v. Old Colony Railroad Company (131 Mass. 258-273). The case decides that a railroad company had no power to guarantee the payment of the expenses of a musical festival, although it was expected that profits would result to the railroad company therefrom.

Incidentally, and as part of the general argument, the court, in the opinion at page 213, mentions the doctrine contained in the Leazure Case (supra), and in Old Colony Railroad Corp. v. Evans (6 Gray, 25). Heither case decides the question, and it was not involved in either. This completes the examination of the cases cited in the opinion in Jones v. Habersham, and I think that it cannot be said that they really furnish any very secure foundation for the doctrine contained in that case, and I think the doctrine is opposed to the principle of the Chamberlain Case (supra), decided by this court. The other cases cited in the printed argument of the counsel for the appellant, are mostly cases where a corporation has contracted with parties on a valid consideration, and where a conveyance has been made and then it is sought to raise the question, as to the power of the corporation to take or convey a title, and it has been held that in such cases of an executed contract, if the corporation has violated the statute, the parties seeking to set up such violation would not be heard, and in such case none but the state would be. That one who con-;! tracts with a corporation shall not, under such circumstances, be heard to raise the question, is, in substance, the principle ¡J decided.

Such are the cases, in substance and principle, of Cowell v. Springs Co. (100 U. S. 55); Hough v. Cook Co. Land Co. (73 Ill. 23); Alexander v. Tolleston Club of Chicago (110 id. 65); Barnes v. Suddard (117 id. 237); Cal. Tel. Co. v. Alta Tel. Co. (22 Cal. 398); Natoma Water Co. v. Clarkin (14 id. 544); Haywood v. Davidson (41 Ind. 212); Baker v. Neff (73 id. 68); C. B. & Q. Co. v. Lewis (53 Iowa, 101) ; Land v. Coffman (50 Mo. 243) ; Chambers v. City of St. Louis (29 id. 576); Barrow v. Nashville, etc., Tel. Co. (9 Humph. 304); Baker v. Northwestern Guaranty Co. (36 Minn. 185); Missouri, etc., Co. v. Buchwell (2 Neb. 192). I have examined all of these cases, and while the facts are, of course, not precisely similar, yet in not one of them does the fact exist of a devise of property to a corporation which it cannot hold, because the limitation has been reached provided for by statute, and, of course, no doctrine that in such a case the heirs cannot claim the property, is advanced.

In most of them the court looks upon the question as one of a forfeiture of the charter on account of a violation of some limitation therein contained, and in such case, it is said, none but the sovereign can raise such question.

The case of Hayward v. Davidson (41 Ind. 212), was that of a devise of real estate to county commissioners for the use of the county. The court held that the county was authorized to acquire and hold title to real property for some purposes, and it could not be made a question by any one, except the state, whether or not real estate acquired by such county has been thus acquired for authorized purposes or not. That the title passed under the power of the county to take real estate for some purposes, but the court also said if the charter or the law has forbidden a corporation to take, then a deed or devise passes no title.

In the case at bar, where the statute authorizes the corporation to hold not exceeding a limited amount, is it not the same thing, in substance, asa prohibition against holding and, therefore, a prohibition against taking any more ? And when the limit is reached, is it not the same as an original prohibition against taking any ? In Chambers v. City of St. Louis (supra), the court held, also, that there was a right in the city to take and hold lands, and if there were a capacity in the vendor to convey, so soon as there was a conveyance there was a complete sale, and if the corporation, in purchasing, violates or abuses the power to do so, that is no eoneern of the vendor or his heirs.. It is a matter between the state and the city. This case rests upon the same principle above alluded to.

In the case of Vidal v. Girard's Executors (2 How. [U. S.] 127), the trusts created by the will of Stephen Girard were held valid, and the court said that in such a case, if the corporation were incompetent to execute them, the heirs could not take advantage of such fact, as that could only be done by the state by quo warrcmto or other judicial proceeding. This is upon the ground that the trust was a valid trust, and if so, and the corporation, as such, had no power to execute it, the trust did not, for that reason, fail, but upon the failure of the corporation for lack of power, to execute it, a court of equity would appoint a new trustee. Of course, the heirs had no interest in the question when once the trust was declared Valid, whether the corporation was exceeding its power in taking upon itself the execution of the trust or not. They had no title to or any further interest in the property. They stood, therefore, in respect to the corporation, as any other strangers. The case does not aid the appellant upon the matter under review.

I have not yet referred to all the cases cited by the indefatigable counsel for the appellant, but I have read them all, and in not one is the question fairly up and decided in the way he asks the court to decide this case.

The cases decided by the Supreme Court of the United States, known as the National Bank Mortgaging Cases, are cited to sustain the view of counsel. (National Bank v Whitney, 103 U. S. 99; Fortier v. New Orleans Nat. Bank, 112 id. 439.)

They were cases where the bank took a mortgage from a party to secure future advances (against the act of congress), wliich advances it subsequently made, and for the non-payment of which it attempted to foreclose the mortgage, when the mortgagor set up the violation of the act. The court held that the act did not make the security void, and that the government meant that the only penalty should he the right of the government to proceed against the bank for a judgment of ouster and dissolution. Certainly the party who had contracted with the bank, and had obtained its money on the faith of the security, had no equity in his claim. It is not, however, in the least analogous to the subject under discussion. Yet, even in that case, this court held that the mortgage was void because taken in violation of the national banking act (Crocker v. Whitney, 71 N. Y. 161), and it was stated, as the undoubted law of this state, that a contract made in violation of a'statute is void, and it is immaterial that it is not so declared in the statute itself, and that a security taken in violation of a statute is void.

As the case involved the construction of an act of congress an appeal was taken to the Federal Supreme Court, where the judgment was reversed and the penalty for a violation of the act was held to consist in the right of the government to proceed against the bank for a forfeiture of its charter, and the security was held valid.

The counsel refers to the general doctrine of ultra vires in respect to corporations, and shows that, as matter of fact, corporations have power to violate the law of their existence, or, in other words, to do wrong; and he cites Bissell v. Railroad, Company (22 N. Y. 259); Whitney Arms Company v. Barlow (63 id. 63); Atlantic State Bank v. Savery (82 id. 292); Rider, etc., v. Roach(97 id. 378).

. The theory upon which the plea of ultra vwes is examined is that it will not, as a general rule, prevail whether interposed for or against a corporation, when it will not advance justice but will accomplish a legal wrong. (S.ee above cases.) I do not perceive that any assistance accrues to the appellant from a presentation of this doctrine. There is no question between these parties of a contract nature, nor any fact which ought to preclude the respondents from setting up any legal bar to the right of the corporation to take title to property which they claim either as heirs-at-law or as legatees or devisees.

The cases of the Elevated Railroad (70 N. Y., 327, 338) and Moore v. Brooklyn, etc., Railroad (108 id. 98, 104) are cited to show that none but the sovereign can talee advantage of a forfeiture of the charter, and that must be in a direct proceeding against the corporation. The principle is undenied. But in a case like this it is no forfeiture that is being insisted upon. It is simply a question of title to the property, and, provided it has not been legally devised or bequeathed, it necessarily vests in the heir or next of kin.

But it is said that where property is given to a corporation which has power to take or hold under some circumstances, the title vests in the corporation, for otherwise the state would never obtain the right to forfeit even the charter for a violation thereof. The argument is, the corporation would answer a claim to forfeit the charter by the fact that the charter precluded it from taking such property, and, therefore, as it could not, it had not done so. I do not see the force of the argument. The charter may preclude the rightful taking of the property by the corporation, and may prevent the. legal title from vesting in it, but that has nothing to do with the fact that, nevertheless, the corporation has, as a physical act, taken the property and may be insisting upon its right to keep it as matter of law. In such case can there be any doubt that the corporation has taken and is holding the property as its own and in defiance of the charter, and that it may be f punished by having its charter forfeited, although the rightful owner of the property may thereafter obtain his own?

The fact that he does obtain it is no answer to the other fact that the corporation had taken it, nor is it any legal answer to the claim of forfeiture of the charter, on the part of the state, that it was unsuccessful in continuing to hold the property against the charter provisions.

Although we never adopted or enacted the English statutes of mortmain, yet in this, as in other states, we have a decided mortmain policy. It is found in our statute in relation to wills, prohibiting a devise to a corporation unless specially permitted by its charter or by some statute to take property by devise.

“ It is a statute of mortmain, resting on a mortmain policy “ as distinctly as any act of the British parliament. * * * “ The necessity is recognized of forbidding the acquisition by “ will, unless the legislature, in granting the charter, and in “ full view of the reasons for so doing, think proper to confer “ the power in express terms. * * * Hor is this neces- “ sity by any means a fanciful one. It is eminently praise- “ worthy to give in the interest of charity and religiqn. But “ in the last hours of life exaggerated impressions of chari- “ table or religious duty often obscure the judgment of men “ and sub j ect them to undue influence and persuasion. Against “ these the statute is intended to guard, because it is in behalf “ of associations incorporated for pious and benevolent purposes that the sentiments of men in such situations are “ most generally appealed to. The enactment is, therefore, “ prohibitory and it ought to be expounded and applied in “ that sense.” (Per Comstock, Ch. J., in Downing v. Marshall, 23 N. Y. 366, 387.)

“ Judges have given the widest possible scope to statutes in “ restraint of the disposal of property in mortmain, and have “ been astute in their arguments for the application of such “ statutestocasesastheyarose. (PerGibson,Ch. J., Hillyard v. “ Miller, 10 Penn. 326.) The courts ought not to impute an “intent to the legislature not clearly expressed, in direct “ hostility to the traditions and policy of the past. * * * “ Claiming property and seeking the aid of the courts to “ reach it, the corporation can rely only on the warrant and “ authority conferred by law, and cannot claim in transgression “or excess of that authority. * . * * Doubtless, the “restriction upon corporations is a governmental regulation, and one of policy, and to be enforced by the govern- “ ment; but an individual whose interests will be affected by “ a transgression of the rule, may assert and insist upon “the limitation as a restriction upon the power of the cor-, “ poration .to take.” (Per Allek, J., in Chamberlain v. Chamberlain, 43 N. Y. 424-439.)

Under our general statutes upon the subject of the right to take or hold property by colorations, and reading them in connection with the provisions of the charter of the university, we should be astute in our arguments against the application of the mortmain statutes instead of in favor of them, if we should decide that the language of the charter did not apply as well to a taking as of a holding of property beyond the expressed limit.

, There can be no doubt that it is the law, in this state at least, ! that if there be a prohibition against the taking of property ¡: beyond a certain amount or value, a devise or bequest to a eor- { poration of property which will exceed the amount or value which the corporation is permitted to take, will be void for the excess. This is expressly decided in the Chamberlain Case, and we think it was rightly decided. Nor is there any doubt that in ' such a case the heirs or next of kin can raise the question. This was also decided in the same case. (See, also, White v. Howard (46 N. Y. 144). When we come to the conclusion, therefore, that this university is by law precluded (or was precluded at the time of the death of Mrs. Fiske) from taking more than the -amount of property limited in its charter, we bring the case precisely within the rules laid down in the cases just cited.

The language of Chief Justice Beasley, in the case of De Camp v. Dobbins (31 N. J. Eq. 690), is very appropriate here. He says: “Nor can I assent to the other “proposition that if, as the contention assumes, this bequest “ is violative of the law if carried into effect, that none but “ the state can intervene. I find no warrant for such a doctrine, “ either in the legal principles belonging to the subject or in “ the adjudications. There can be no doubt that there are “ cases in which, where a corporation has acquired rights of j “ property to an extent or in a manner unwarranted by its ’ “ charter, no one but the public can have the right to complain. , “ A grantor making title to a corporation might be estopped “ from questioning the effect of his own conveyance. So a “ mere stranger could not question such a corporate title. “ But I have not observed any decision that asserts, where a ' “ title is created by devise which vests in a corporation for its “ own use a larger quantity of property than the laws authorize, “ that the heir-at-law has no right to make objection. The “ authorities referred to do not lend countenance to such a “ doctrine.” The learned judge refers to the cases of Bogardus v. Trinity Church and Leazure v. Hillegas (both cited supra), and continues: “ These cases rest on the obvious “ principle that the capacity of the corporate body to become' “ the grantee in the given case cannot be challenged by a party “ who does not stand in a position to raise the question. In “ such a position it would be true that the state alone could “ object to such corporate act. But such instances are to be j “ discriminated from that other class, where the corporation j “ claims to take and hold by devise, in contravention of law, “ and the heir of the devisor is the party complaining. In j “ this latter situation the doctrine enforced in the cases does 1 “ not apply. * * * I have no doubt that the heir-at-law “ has a standing in court to raise such a contention, and that J “ in a court of equity he would be entitled to prevail if he! “ could succeed in establishing the proposition on which such! “ defense rests.” The court affirmed the judgment below on the ground that the corporation was not prohibited from taking the property. The counsel claims, however, that a devise to a corporation vests the title in it, so far as the question of capacity is concerned, whenever it would in the case of a sale for a valuable consideration. Hence he says that the cases of sales above cited are decisive of this, if they be admitted as well decided. In the case of an executed sale, however, the question of ultra vires, as set forth in the modern cases, comes in play, and the question of a want of title in the corporation in such case would not be permitted to be raised by the grantor or his heirs, because it would be against justice and would accomplish a legal wrong. (Whitney Arms Co. v. Barlow, 63 N. Y. 62.)

The question of an executed gift without consideration by a donor, by an absolute delivery to a corporation without power to take, is also instanced, and the question is asked Whether the title vests in such a case in the corporation so that the donor or Ms heirs could not recover it back, and if it do, the counsel asks where is the difference in the two cases. It is time enough to decide such a case when it arises. But it seems to me there is a decided difference. In the one cáse the gift is made inter vivos by the absolute owner, and it is made effectual as to him by a delivery. In such case it would seem that he stands in no position to ask the aid of the court to get him out of a situation into which he voluntarily entered with his eyes open, and the court might well say to him that he stood in no position to attack the right of Ms donee to property which he freely and absolutely gave it. As to his heirs it could be said that their ancestor had made a disposition of property which was absolutely his own in his lifetime, and in such a way that he could not question its validity, and that as he could not, they succeeding only to his rights, were alike disabled.

In the case of a devise, however, the case is essentially , different. The will does not take effect until the testator’s if death, and then, if his property is not legally devised or bequeathed, no title vests for a single moment in the devisee. • or legatee, but it vests instantly in the heir or next of kin; and the corporation claiming under the will asks the aid of the law to give the property to it, and in so doing it must show the authority it has to take. And if th