University of North Carolina v. Fox1 Mur. 58 N.C. 1805
Locke, J., delivered the opinion of the Court. The Legislature of North Carolina in 1789 granted to the Trustees of the University "all the property that has heretofore or shall hereafter escheat to the State." Ch. 21, sec. 2. And by another act, passed in 1794, they also granted "the confiscated property then unsold." Ch. 3, sec. 1. By an act passed in 1800 they declared, "that from and after the passing of this act, all acts and clauses of acts which have heretofore granted power to the Trustees of the University to seize and possess any escheated or confiscated property, real or personal, shall be and the same it hereby repealed and made void.
"And be it further enacted, That all escheated or confiscated property which the said trustees, their agents or attorneys, have not legally sold by virtue of the said laws shall from hence revert to the State, and henceforth be considered as the property of the same, as though such laws had never been passed." Chapter 5.
The Trustees of the University in pursuance of the powers vested in them by the act of 1789, have brought this suit to recover the possession of a tract of land escheated to the State before the passing of the repealing act in the year 1800. The defendants have pleaded this repealing act in bar, by which they allege the power of the trustees to support this action is entirely destroyed. It is therefore now to be considered how far the trustees have title under the act of 1789, and, in the next place, how far they are divested of that title by the repealing act of 1800.
To determine the first question, it may be necessary to take into view the objections stated to the title of the trustees, independent of the operation of repealing act, and these are two: first, that no title to escheated lands vests in the State until an inquisition or office found; and, secondly, that if the State had title, yet the trustees have derived none by the act of 1789, because the State attempted to convey the right by act of Assembly and not by grant, as required by section 36 of the Constitution. With regard to the first objection, the Court think it a sufficient answer to say that on this subject the law has been supposed to be long settled, as this objection has been made in almost every suit heretofore brought by the Trustees of the University, and always overruled. The Court approve of the decisions upon this point, and will observe the ancient and wise maxim "stare decisis." 2 Black., 245; 2 Co. Rep., 52.
As to the second objection, the words of the Constitution are, "All commissions and grants shall run in the name of the State of North Carolina and bear test and be signed by the Governor," etc. It seems to be a fair and clear exposition of this part of the Constitution to say that when the State conveys land by grant, the grant shall have the requisites prescribed, to wit, run in the name of the State, bear teste and be signed by the Governor, etc., and that all grants otherwise authenticated shall be void. It became necessary that the officer whose duty it shall be to sign and authenticate grants should be pointed out, and that their form and substance should be ascertained, in order to give uniformity to such grants and to avoid that variety which would be produced by the judgment of different officers. But the Court sees nothing in this clause restricting the Legislature to this single mode of conveyance; they are left free from any control in the mode or manner of transferring their property, unless they should adopt the one pointed out in the Constitution, and then the form and ceremony are prescribed. This opinion is warranted not only by the expressions contained in the clause itself, but by the many and repeated acts of Assembly passed, since the making of the Constitution, for the purpose of transferring property. Many of these acts have been mentioned and referred to by the counsel for the lessors of the plaintiff. We are therefore of opinion that the land in question vested in the State without an inquisition or office found, and that the Legislature were competent to pass the interest in the same to the Trustees of the University by the act of 1780; and that the trustees have a good and valid title, unless the operation of the repealing act of 1800 has destroyed it.
The operation of this act is next to be considered; and it may be necessary to premise that the people of North Carolina, when assembled in convention, were desirous of having some rights secured to them beyond the control of the Legislature, and these they have expressed in the Bill of Rights and the Constitution. The preamble to the Constitution states, among other things, that "We, the representatives of the freemen of North Carolina, chosen and assembled in Congress for the express purpose of framing a constitution, under the authority of the people, most conducive to their happiness and welfare, do declare, etc." Section 13 directs the General Assembly to elect several officers of State. Section 15 directs the election of a Governor. Section 38 directs that there shall be a sheriff, coroner or coroners and constables in each county. It became necessary for the Legislature to appoint these officers or to pass such laws as would secure to the people such officers as would carry this form of government into effect. The framers of this instrument appear to have been well acquainted with the importance and necessity of education, and lest this object might escape the attention of the Legislature or be by them neglected, section 41 declares, "That a school or schools shall be established by the Legislature for the convenient instruction of youth, with such salaries to the masters paid by the public as may enable them to instruct at low prices; and all useful learning shall be encouraged and promoted in one or more universities." By this section as strong an injunction was imposed on the Legislature to establish an university as by the preceding clauses to appoint the several officers of government; these objects seem to be regarded by the framers of the Constitution with equal solicitude; they have, therefore, in the same imperative style declared that there shall be an university, and that there shall be a Governor, leaving to the Legislature to make such appropriations and create such funds for the endowment of the institution as would be sufficient to effect the purposes for which it should be established. In 1789 the Legislature obeyed this constitutional injunction and made an appropriation of escheated lands, and appointed trustees for the management of the concerns of the institution. By the act of 1800 the Legislature declared that this property should be taken from the trustees and revert to the State. Is, then, this last act authorized by the Constitution, or does it destroy a right which that instrument gave to the people, a right highly esteemed in all civilized nations, that of educating their youth at a moderate expense? a right of acquiring knowledge and good morals, which have always been deemed most conducive to the happiness and prosperity of the people?
Some light will be thrown upon this subject by examining the nature of corporations: how property can be taken from them, and how they can be dissolved. Corporations are formed for the advancement of religion, learning, commerce or other beneficial purposes. They are either aggregate or sole, and created by grant or by law. When they are once erected, they acquire many rights, powers, capacities, and some incapacities (1 Black. Com., 495), as, first, to have perpetual succession; and therefore, all aggregate corporations have necessarily the power of electing members in the room of those who die, to sue and be sued and to do all other acts as natural persons. Second, to purchase lands and to hold them for the benefit of themselves and successors. Fourth, to have a common seal. Fifth, to make by-laws for the better government of the corporation. These corporations cannot commit crimes, although their members may in their individual capacity. The duties of those bodies consist in acting up to the design for which they were instituted. Let us next inquire how their corporate property can be taken from them and how they may be dissolved. A member may be disfranchised or lose his place by his own improper conduct, or he may resign. A corporation may be dissolved by act of Parliament, which is boundless in its operation; by the natural death of all its members, in case of an aggregate corporation; by surrender of its franchises into the hands of the King, which is a kind of suicide; by forfeiture of its charter through negligence or abuse of its franchises, in which case the law judges the body politic to have broken the condition on which it was incorporated, and therefore the incorporation to be void; and the regular course is to bring an information in the nature of a quo warranto, to inquire by what authority the members now exercise their corporate power, having forfeited it by such and such proceedings. 1 Black. Com., 485; 3 Black. Com., 263. None of these prerequisites have been done in the present case. We are then led to inquire into the soundness of an argument greatly relied on by the defendant's counsel, that those who create can destroy. The Legislature have not pretended to dissolve the corporation, but to deprive them of a part of the funds that were deemed to be vested in them and to transfer those funds to the State. In England the King's consent to the creation of any corporation is absolutely necessary, either given expressly by charter or by act of Parliament, where his assent is a necessary ingredient or implied by prescription. 1 Black. Com., 472, 473. The King may grant to a subject the power of erecting a corporation; and yet it is the King that erects--the subject is but the instrument. 1 Black. Com., 474. Where there is an endowment of lands, the law distinguishes and makes two species of foundation: the first, fundatio incipiens, or the corporation; in which sense the King is the founder of all colleges and hospitals; the other, fundatio proficiens, or the dotation of it, in which sense the first gift of the revenues is the foundation, and who gives them is the founder. 1 Black. Com., 431. The Constitution directed the General Assembly to establish this institution and endow it; then it would seem from the principle upon which all this doctrine is predicated, that the Constitution and not the Legislature had erected this corporation; the Legislature being only the agent or instrument, whose acts are valid and binding when they do not contravene any of the provisions of the Constitution. We view this corporation as standing on higher grounds than any other aggregate corporation; it is not only protected by the common law, but sanctioned by the Constitution. It cannot be considered that the Legislature would have complied with this constitutional requisition, by establishing a school for a month or any determinate number of years, and then abolishing the institution; because the people evidently intended this university to be as permanent as the Government itself. It would not be competent for the Legislature to declare that there should be no public school in the State, because such an act would directly oppose that important clause in the Constitution before mentioned. But if the Legislature can deprive the university of the appropriated and vested funds, they can do that which will produce the same consequences; for, deprive the institution of funds already vested and refuse to make any additional appropriations, and there never can exist in the State a public school or schools; and thus the Legislature may indirectly effect that purpose which, if expressed in the words before mentioned, they could not do. Besides, when the Legislature have established an university, appointed trustees and vested them with property which they were to hold in trust for the benefit of the institution, have they not discharged their duty as the agents of the people and transferred property, which is afterwards beyond their control? From that moment the trustees became in some measure the agents of the people, clothed with the power of disposing of and applying the property thus vested to the uses intended by the people, but over which the power of the Legislature ceased with the discharge of the constitutional injunction; unless it might be necessary in the course of time to make other or further appropriations to continue and support the institution; and this we consider to be their duty at all times, when such necessity shall exist, that the expectation of the people, as expressed in the Constitution, may not be disappointed.
But one great and important reason which influences us in deciding this question is section 10 of the Bill of Rights, which declares "that no freeman ought to be taken, imprisoned or disseized of his freehold, liberties or privileges, or outlawed or exiled, or in any manner destroyed or deprived of his life, liberty or property, but by the law of the land." It has been yielded on the part of the defendant that if the Legislature had vested an individual with the property in question, this section of the Bill of Rights would restrain them from depriving him of such right; but it is denied that this section has any operation on corporations whose members are mere naked trustees, and have no interest in the donation, and especially on a corporation erected for a public purpose. It is also insisted that the term, "law of the land," does not impose any restrictions on the Legislature, who are capable of making the law of the land, and was only intended to prevent abuses in the other branches of Government. That this clause was intended to secure to corporations as well as to individuals the rights therein enumerated, seems clear from the word "liberties," which peculiarly signifies those privileges and rights which corporations have by virtue of the instruments which incorporate them, and is certainly used in this clause in contradistinction to the word "liberty," which refers to the personal liberty of the citizen. We therefore infer that by this clause the Legislature are as much restrained from affecting the property of corporations as they are that of a private individual, unless the "law of the land" should receive the construction contended for on the part of the defendant. It is evident the framers of the Constitution intended the provision as a restraint upon some branch of the Government, either the executive, legislative, or judicial. To suppose it applicable to the executive would be absurd on account of the limited powers conferred on that officer; and from the subjects enumerated in that clause, no danger could be apprehended from the Executive Department, that being entrusted with the exercise of no powers by which the principles thereby intended to be secured could be affected. To apply to the judiciary would, if possible, be still more idle, if the Legislature can make the "law of the land." For the judiciary are only to expound and enforce the law, and have no discretionary powers enabling them to judge of the propriety or impropriety of laws. They are bound, whether agreeable to their ideas of justice or not, to carry into effect the acts of the Legislature as far as they are binding or do not contravene the Constitution. If, then, this clause is applicable to the Legislature alone, and was intended as a restraint on their acts (and to presume otherwise is to render this article a dead letter), let us next inquire what will be the operation which this clause will or ought to have on the present question. It seems to us to warrant a belief that members of a corporation as well as individuals shall not be so deprived of their liberties or properties, unless by a trial by jury in a court of justice, according to the known and established rules of decision derived from the common law and such acts of the Legislature as are consistent with the Constitution. Although the trustees are a corporation established for public purposes, yet their property is as completely beyond the control of the Legislature as the property of individuals or that of any other corporation. Indeed, it seems difficult to conceive of a corporation established for merely private purposes. In every institution of that kind the ground of the establishment is some public good or purpose intended to be promoted; but in many the members thereof have a private interest, coupled with the public object. In this case the trustees have no private interest beyond the general good; yet we conceive that circumstances will not make the property of the trustees subject to the arbitrary will of the Legislature. The property vested in the trustees must remain for the uses intended for the university, until the judiciary of the country in the usual and common form pronounce them guilty of such acts as will, in law, amount to a forfeiture of their rights or a dissolution of their body. The demurrer must therefore be allowed, and the plea in bar overruled.
Hall, J., contra. A question of more importance than that arising in this case cannot come before a court. It is nothing less than one branch of the Government undertaking to decide whether another branch of the same Government has or has not transcended its constitutional powers; a question which in its discussion should at all times command the best energies of the head and heart. When this shall be the case, although a difference of opinion may sometimes exist, it will be an honest one, and cannot fail to find its remedy in mutual tolerance and concession. But well convinced, indeed, ought one person to be of another's error of judgment before he passes sentence of condemnation on it, when he reflects that each has given the same pledges to support the Constitution. Before a law enacted by the Legislature should be pronounced unconstitutional, it ought to appear to the Court to be palpably so. If an honest doubt can be entertained on the subject, we owe it to ourselves, as well as to the Legislature, to carry it into effect. Far be it from me, if it were in my power, to damp that laudable and honest zeal which characterized the argument of the defendant's counsel; it cannot be too much extolled or too widely circulated; but I speak it with deference to the opinions of my brethren, that I think occasions might occur when its influence would be more happily felt and lead to more useful and correct results. In the opinion which I have formed on this question I am probably mistaken, as I have the misfortune to differ from the rest of the Court; but from the best consideration I can give to it, I am bound to say that I believe the law in question is not unconstitutional.
I feel no disposition to controvert many things urged in argument by the defendant's counsel; he has had recourse, however, to one argument which I think militates against him. It is drawn from section 41 of our Constitution, which is in the following words: "A school or schools shall be established by the Legislature for the convenient instruction of youth, with such salaries to the masters, paid by the public, as may enable them to instruct at low prices; and all useful learning shall be duly encouraged and promoted in one or more universities." He endeavors to strengthen his general proposition, namely, "That any law taking away the property of an individual or a common corporation is unconstitutional," by stating, in addition, that there was a constitutional obligation on the Assembly to set apart funds for the support of the university; and if it were constitutional and right for them to do so, it is unconstitutional and wrong to take away those funds. If the framers of the Constitution intended by that section that the Legislature should establish one or more universities and schools, and vest in them certain funds, which might be deemed sufficient at the time for the support in a constitutional view; if it were intended that by doing this the Legislature had completely discharged their duty, and had nothing more to do with such schools and universities, whatever misfortunes might afterwards attend them, there might be something in the argument. I think, however, this section of the Constitution was intended for a very different purpose. It became the duty of the Legislature, created by and acting under that Constitution, to establish seminaries of learning, with salaries to the masters, etc., and afterwards to support and cherish them as long as the Constitution shall exist. If by accident the funds set apart for their support should be destroyed, it would be the duty of the Legislature to endow them with others. The Legislature is the constitutional guardian of these seminaries of learning, and should at all times keep them under their inspection and control. This is a duty which they cannot delegate or transfer to any one, and can only end with the Constitution itself. Suppose, then, that property should be given to the Trustees of the University (whom I consider in no other light than as agents of the Legislature), which property was not very productive, but sufficiently so for the support of the university; and afterwards it were to become so much so that one-third of the profits arising from it would be adequate to the wants of the institution: who would have a right to the surplus? Let us reverse the case and suppose the profits of property given to the trustees to decrease or fail altogether; would it not be the duty of the Legislature to provide other funds or give other property which would be sufficiently productive? I think it would. If so, can it be doubted but that the surplus profits would be at the disposition of the Legislature? It may be said that the trustees have no surplus funds; that the profits of their property are not equal to the wants of the institution. That may be the case; but who is to judge of it? I answer, not this Court; the Constitution gives it no such power. The Legislature must be the judge. It would be going too far to say that there was constitutional obligation on the Legislature to do a certain thing, and that this Court and not the Legislature should decide when it was properly done. If, then, the Legislature must judge how large the funds of the university ought to be, add to them when they are too small and take from them when too large, this Court are not the proper judges in such cases; and if not, how can we undertake to say that the law in question is unconstitutional? It cannot, I think, be denied that the General Assembly have a right to take from the trustees property of which the university stands in no need, and that for the best of reasons--because they are bound to furnish it with additional funds, as those which it already possesses may decrease or as its wants may increase. I have said that the General Assembly cannot delegate this constitutional power; that is, that they cannot, by giving to the trustees any quantity of property or any given sum of money, exonerate themselves from the trust and confidence which the Constitution reposed in them. It is true, they may appoint trustees as their agents to act for them, and their trustees or agents are amenable to them for their conduct: they have a naked authority without any interest. The law can have no bearing upon them as individuals; it can only affect them in their public character as trustees. And how is it to do this? They were entrusted with property for the purpose of supporting an university in conformity with the directions of the Constitution, and the General Assembly are about to take this property from them, which they contend they have no right to do. If the Assembly are bound in any event to furnish funds to support the university, they have a right to take away surplus funds. If it be said that the property in question is not of that description, I answer, who are to judge of this, but the General Assembly, on whom there is a constitutional obligation to establish and superintend an university? On the trustees no such obligation is imposed; they are the mere agents of the Legislature; and as well might it be said that any other citizens equal in number to the trustees should be placed paramount to the Legislature. I therefore can see no analogy between this case and that of a gift made to an individual or to an ordinary corporation. My opinion upon the whole case is founded upon the provisions of the Constitution, and regarding the trustees as mere agents for the management of the concerns of the university under the direction of the Legislature, I think the demurrer should be overruled and the plea in bar sustained.
The Founders' Constitution
Volume 5, Amendment V, Document 19
The University of Chicago Press
Easy to print version.