Trustees of Davidson Coll. v. Chambers' Ex'rs

• Decision Date: 30 June 1857
• Court: North Carolina Supreme Court
• Parties: THE TRUSTEES OF DAVIDSON COLLEGE v. THE EXECUTORS AND NEXT OF KIN OF MAXWELL CHAMBERS.

3 Jones Eq. 253

56 N.C. 253

THE TRUSTEES OF DAVIDSON COLLEGE

v.THE EXECUTORS AND NEXT OF KIN OF MAXWELL CHAMBERS.

Supreme Court of North Carolina.

June Term, 1857.

Where an Act of Assembly, incorporating the trustees of a college, provided that their property should not, at any time, exceed a certain amount, in a suit brought for a legacy exceeding that amount, it was Held that only so much as was necessary to make their whole property amount to the limit specified in their charter, could be recovered, and that the overplus of the personalty vested, at the testator's death, in his next of kin.

THIS was a suit commenced in the Court of Equity of Rowan, and removed to this Court by consent.

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

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

The cause was set down for hearing upon the bill, answer, and exhibit, and sent to this Court by consent, and was heard at June Term, 1856.

Graham, Osborne, and Wilson, for the plaintiffs .

Winston, sr., for the defendants .

PEARSON, J.

After giving to the able argument with which we were favored, full consideration, we are satisfied, that the heirs-at-law and next of kin of the testator ought to be parties to this proceeding, and that the State and trustees of the University should also be represented, in order to have the matter presented in all its bearings, so that the action taken in regard to it may be conclusive.

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

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

On the other hand, if the corporation has neither capacity to take nor to hold, a conveyance made to it is simply void, and the title continues in the donor.

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

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

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

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

PER CURIAM, Decree accordingly.

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

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

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

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

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

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

The cause was again argued at December Term, 1856.

Graham, Osborne and Wilson, for the plaintiffs.Winston, sr., for the executors.Jones, for the next of kin.Bailey, Attorney General, filed a copy of the Act of Assembly above mentioned, and declined further appearing.

Advisari.--At this term the opinions were delivered.

PEARSON, J.

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

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

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

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

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