Beaty v. Lessee of Knowler - 29 U.S. 152 (1830)
U.S. Supreme Court
Beaty v. Lessee of Knowler, 29 U.S. 4 Pet. 152 152 (1830)
Beaty v. Lessee of Knowler
29 U.S. (4 Pet.) 152
Ejectment. The defendant claimed the land in controversy under a tax sale which was made by a company incorporated by the Legislature of Connecticut in 1796 called "The proprietors of the half million of acres of land lying south of Lake Erie," and incorporated by an act of the Legislature of Ohio, passed on 15 April, 1803, by the name of "The proprietors of the half million of acres of land lying south of Lake Erie, called the sufferers' land." In 1806, the Legislature of Ohio imposed a land tax and authorized the sale of the lands in the state for unpaid taxes, giving the owners the right to redeem within one year after the determination of their minority. This act was in force in 1808. In 1808, the directors of the company, incorporated by the Legislatures of Connecticut and Ohio, assessed two cents per acre on the lands of the company, for the payment of the tax laid by the State of Ohio, and authorized the sale of those lands on which the assessments were not paid. The lands purchased by the defendant were the property of minors at the time of the sale, they having been sold to pay the said assessments under the authority of the directors of the company. Held that the sale of the land under which the defendant claimed was void.
The provisions in the act of incorporation of Ohio that it should be considered a public act must be regarded in courts, and its enactments noticed without being specially pleaded, as would be necessary if the act were private.
That a corporation is strictly limited to the exercise of those powers which are specially conferred on it will not be denied. The exercise of the corporate franchise, being restrictive of individual rights, cannot be extended beyond the letter and spirit of the act of incorporation.
From a careful inspection of the whole act, it clearly appears that the incorporation of the company was designed to enable the proprietors to accomplish specific objects, and that no more power was given than was considered necessary to attain those objects.
The words, "all necessary expenses of the company" cannot be so construed to enlarge the power to tax, which is given for specific purposes. A tax by the state is not a necessary expense of the company, within the meaning of the act. Such an expense can only result from the action of the company in the exercise of its corporate powers.
The provision in the tenth section
"that the directors shall have power to do what ever shall appear to them to be necessary and proper to be done for the well ordering of the interests of the proprietors not contrary to the laws of the state"
was not intended to give unlimited power, but the exercise of a discretion within the scope of the authority conferred.
This was an ejectment for lands in the State of Ohio, and on the trial in the circuit court the defendant excepted to the charge of the court and prosecuted this writ of error.
The facts are fully stated in the opinion of the court.