In re McGraw's Estate

• Decision Date: 27 November 1888
• Citation: 111 N.Y. 66,19 N.E. 233
• Parties: In re McGRAW'S ESTATE. In re FISKE'S ESTATE.
• Court: New York Court of Appeals Court of Appeals

111 N.Y. 66

19 N.E. 233

In re McGRAW'S ESTATE.¹

In re FISKE'S ESTATE.

Court of Appeals of New York.

November 27, 1888.

Appeal from supreme court, general term, Fourth department.

On the 4th day of May, 1877, John McGraw, of Ithaca, died, the owner of property of between two and three millions of dollars, having executed a last will and testament, of which he made his only child and heir, Jennie McGraw, and Hon. Douglass Boardman, and the survivor of them, sole executors. His daughter, Jennie, survived him not quite four years. On the 14th day of July, 1880, she married Willard Fiske, and on the same day she executed her last will, by which, after making various bequests of about a million of dollars in amount, she gave and bequeathed all the rest and residue of her estates and property to Cornell University, and made Judge Boardman sole executor thereof. On the 30th day of September, 1881, she died, at Ithaca, without issue, and leaving her husband, Prof. Fiske, surviving her.

The will of J. McGraw contained the following provision: ‘I desire that she [his daughter] shall dispose, by will, of such property as may remain to her by will, in her own discretion, and according to the circumstances then existing; but, if she shall die without leaving a child or children of her born, or descendants of such child or children, and without having made any last will, then it is my will and desire that whatever of property hereby given her, then remaining, may be divided between Thomas Henry, John, Lettie, Georgie, William, and Frank, the six children of my brother Joseph, as follows: Two-sevenths thereof to Thomas Henry McGraw, and one-seventh to each of the others named.’

On the 8th day of January, 1883, both estates of John McGraw and Jennie McGraw Fiske were formally settled before the surrogate of Tompkins county, after due citation of all the parties interested, none of whom appeared; and a decree was entered, directing Judge Boardman, as executor, to pay the balance of said estates to the Cornell University, as the residuary legatee of Jennie McGraw Fiske. On the 6th day of September following, this decree and settlement were opened, upon the petition of Willard Fiske, and he was permitted to be heard as if he had appeared on the 8th day of January, 1883. On the 24th of the following month the said decree, settling the said estates, was in like manner opened upon the petition of Joseph McGraw, the brother of John McGraw, and the Southworth heirs, as the heirs and next of kin of Mrs. Jennie McGraw Fiske, and also on the petition of Thomas H. McGraw and others, the sons and daughters of Joseph McGraw, as the devisees and legatees of John McGraw. The surrogate, after a hearing, made and filed his findings, decision, and decree, affirming in all things his original decree and settlement of January 8, 1883; and the several petitioners, Willard Fiske, the husband of Mrs. Fiske, Joseph McGraw and others, as her heirs and next of kin, and Thomas McGraw and others, as the devisees of John McGraw, on the 23d day of June, 1886, renewed their requests to find, which had been made on the trial, and added others, made and filed their exceptions, and duly served their notices of appeal, both upon the facts and the law, to the general term of the supreme court. This appeal is taken from their decision, reversing the decree of the surrogate of Tompkins county, and making a new decree.

George F. Comstock and George S. Camp, for appellees.

S. D. Halliday and Edwin Countryman, for appellants.

It was the received doctrine, from the time of BRACTON to the present day, that mortmain restrictions were merely on holding, and not against taking the title; and they were always confined to real property. Shelf. Mortm. 2, 122; 1 Co. Litt. 99 a; Kyd, Corp. 79, 103, 104; Grant, Corp. 98. As the restraints were originally made for the protection of the king as lord paramount, and his subordinate lords of manors, they alone could object to an alienation by the tenant. 1 Co. Litt. 99 a. The title would therefore vest in the corporation, subject to the right of the crown or lord of the manor to claim the forfeiture as an alienation in mortmain. Shelf. Mortm. 8, 34, 35; Grant, Corp. 100. If they did not object, the corporation might continue to hold and enjoy the property; and it they consented, or subsequently ratified it, the alienation was good, and the title incontestable. 1 Co. Litt. 98 b, 99 a; Shelf. Mortm. 8, 27, 35; 2 Bl. Comm. 272, 273. In short, as the rule is stated by Grant and approved by Shelford, who may be regarded as the highest authorities in England on this subject, ‘a corporation, aggregate or sole, when once created, may, without a license to hold in mortmain, take lands and tenements granted to them or him in mortmain; for they have, at common law, a capacity so to do, and without a license they may hold such lands, and sue, etc., in respect of them, provided neither the lord or lords of whom they were holden, nor the crown, assert their rights and enter upon such lands; in other words, a grant or gift in mortmain is not void, but only voidable, by the lord or the crown entering for the escheat.’ Grant, Corp. 100; Shelf. Mortm. 8, 34, 35.

Perhaps the most carefully considered case on the subject to be found in the books is that of Attorney General v. Downing, which was pending in the court of chancery for more than half a century. 2 Amb. 550, 571, 1 Dick. 414;Attorney General v. Bowyer, 3 Ves. 714, 5 Ves. 300, 8 Ves. 256. The will devised all the lands, tenements, and hereditaments of the testator, after the failure of issue in tail male, to trustees for the establishment and maintenance of Downing College, at Cambridge. The issue having failed, it was claimed, on behalf of the heirs, that the devise was void as a gift in mortmain. The case came on to be heard before Lord NORTHINGTON, Ch., who called to his assistance Sir THOMAS SEWELL and Lord Chief Justice CAMDEN. Ambler states in his report that, ‘after having taken up a great length of time in argument, and before judgment was given, my Lord NORTHINGTON was removed from the great seal, and Lord CAMDEN succeeded, when it was argued again before him, assisted by Sir THOMAS SEWELL and Mr. Justice WILMOT, who all gave their opinion in favor of the charity.’

It is laid down by Grant, as the established rule in England, that, ‘in the cases of trading or other private corporations, the acts of parliament, or charters constituting them, usually express in each case the extent to which the corporations may hold lands; and, if no amount is mentioned in the license or charter or statute, they may hold to any extent.’ Grant, Corp. 102, 103. And the practical result of this rule is stated to be ‘that many corporations have greatly exceeded the limits of their license, and hold such surplus lands without any right derived from the crown for their doing so. It is clear, however, [he adds,] that, if a corporation have exhausted its license to hold in mortmain, the fact does not make a devise or conveyance to it void. The only result is that it may take, though, unless it can obtain an extension of its license, it cannot hold, the lands, unless the mesne lords and the crown choose to sleep upon their respective titles.’ Id. 104, 105.

The same rule as to the capacity of corporations to take and hold the title to property has generally been recognized and maintained in this country. 2 Kent, Comm. 281; Ang. & A. Corp (11th Ed.) §§ 110, 145; Sherwood's Case, 4 Abb. Dec. 227; Page v. Heineberg, 40 Vt. 81;People v. La Rue, 67 Cal. 526, 531,8 Pac. Rep. 84;Leazure v. Hillegas, 7 Serg. & R. 313;Baird v. Bank, 11 Serg. & R. 411;Goundie v. Water Co., 7 Pa. St. 233, 239; Barrow v. Turnpike Co., 9 Humph. 303;Jones v. Habersham, 107 U. S. 175, 187, 188,2 Sup. Ct. Rep. 336; De Camp v. Dobbins, 29 N. J. Eq. 36, 41; Christian Union v. Yount, 101 U. S. 352; Alexander v. Tolleston Club, 110 Ill. 65;Hough v. Land Co., 73 Ill, 23;Hayward v. Davidson, 41 Ind. 213;Baker v. Neff, 73 Ind. 68;Cowell v. Springs Co., 100 U. S. 56, 60;McConihay v. Wright, 121 U. S. 201, 215,7 Sup. Ct. Rep. 940; Mallett v. Simpson, 94 N. C. 37, 41;Banks v. Poitiaux, 3 Rand. (Va.) 136;Mining Co. v. Clarkin, 14 Cal. 545;Telegraph Co.'s Case, 22 Cal.398, 430;Baker's Case, 36 Minn. 185,30 N. W. Rep. 464;Girard College Cases, 2 How 127, 191, and 7 Wall. 1, 14; Land Co., v. Bushnell, 11 Neb. 192, 195,8 N. W. Rep. 389; Chambers v. St. Louis, 29 Mo. 543, 576, 577;Land v. Coffman, 50 Mo. 243, 254;Bybee's Case, 26 Fed. Rep. 586;Oil Co. v. Railroad Co., 32 Fed. Rep. 22,Bank v. Matthews, 98 U. S. 621, 629;Bank v. Whitney, 103 U. S. 99, 102;Fortier v. Bank, 112 U. S. 440,5 Sup. Ct. Rep. 234;Barnes v. Suddard, 117 Ill. 238, 7 N. E. Rep. 477

The same authorities reaffirm the English rule that ‘restrictions imposed by the charter of a corporation upon the amount of property which it may hold cannot be taken advantage of collaterally by private persons, but only in a direct proceeding by the state which created it.’ The government is the only proper party to determine whether the corporation ought to be pursued for a violation of the particular franchise concerning the acquisition of property as well as of all other corporate franchises. Banks v. Poitiaux, 3 Rand. (Va.) 136, 142, 146;Hayward v. Davidson, 41 Ind. 213, 215;Clarkin's Case, 14 Cal. 545, 553; Leazure v. Hillegas, 7 Serg. & R. 313, 320;Baird's Case, 11 Serg. & R. 411, 416, 417; Alexander v. Tolleston Club, 110 Ill. 65, 72;Cowell v. Springs Co., 100 U. S. 56, 60. It has accordingly been held in this court that a cause of forfeiture cannot be taken advantage of collaterally, or in any other mode than by a direct proceeding against the corporation; and the government, as the sole party in interest, may waive the forfeiture. In re Railroad Co., 70 N. Y. 327, 338; Moore v. Railroad Co., 108 N. Y. 98, 104, 15 N. E. Rep. 191. This rule is universally admitted. Girard v....