Society for Propagation of the Gospel v. Town of New Haven, 21 U.S. 464 (1823)

U.S. Supreme Court

Society for Propagation of the Gospel v. Town of New Haven, 21 U.S. 8 Wheat. 464 464 (1823) Society for Propagation of the Gospel v. Town of New Haven

21 U.S. (8 Wheat.) 464

ON DIVISION IN OPINION AMONG THE JUDGES OF

THE CIRCUIT COURT FOR THE DISTRICT OF VERMONT

Syllabus

A corporation for religious and charitable purposes which is endowed solely by private benefactions is a private eleemosynary corporation, although it is created by a charter from the government.

The capacity of private individuals (British subjects) or of corporations created by the Crown in this country or in Great Britain to hold lands or other property in this country was not affected by the Revolution.

The proper courts in this country will interfere to prevent an abuse of the trusts confided to British corporations holding lands here to charitable uses, and will aid in enforcing the due execution of the trusts, but neither those courts nor the local legislature where the lands lie can adjudge a forfeiture of the franchises of the foreign corporation or of its property.

The property of British corporations in this country is protected by the sixth article of the Treaty of Peace of 1783 in the same manner as those of natural persons, and their title, thus protected, is confirmed by the ninth article of the treaty of 1794, so that it could not be forfeited by any intermediate legislative act or other proceeding for the defect of alienage.

The termination of a treaty by war does not divest rights of property already vested under it.

Nor do treaties in general become extinguished ipso facto by war between the two governments. Those stipulating for a permanent arrangement of territorial and other national rights are, at most, suspended during the war, and revive at the peace unless they are waived by the parties or new and repugnant stipulations are made.

The Act of the Legislature of Vermont of 30 October, 1794, granting the lands in the state belonging to "The Society for Propagating the Gospel in Foreign Parts" to the respective towns in which the lands lie is void, and conveys no title under it.

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This was an action of ejectment brought by the plaintiffs against the defendants. The material facts, upon which the question of law arose, were stated in a special verdict, and are as follow:

By a charter granted by William III in the thirteenth year of his reign, a number of persons, subjects of England and there residing, were incorporated by the name of "The Society for the Propagation of the Gospel in Foreign Parts" in order that a better provision might be made for the preaching of the gospel and the maintenance of an orthodox clergy in the colonies of Great Britain. The usual corporate powers were bestowed upon this society, and, amongst others, it was authorized to purchase estates of inheritance to the value of 2,000 pounds per annum, and estates for lives or years and goods and chattels of any value. This charter of incorporation was duly accepted by the persons therein named, and the corporation has ever since existed, and now exists, as an organized body politic and corporate in England, all the members thereof being subjects of the King of Great Britain.

On 2 November, 1761, a grant was made by the Governor of the Province of New Hampshire in the name of the King, by which a certain tract of land in that province was granted to the inhabitants of the said province and of the King's other governments and to their heirs and

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assigns, whose names were entered on the grant. The tract so granted was to be incorporated into a town by the name of New Haven, and to be divided into sixty-eight shares, one of which was granted to "The Society for the Propagation of the Gospel in Foreign Parts." The tract of land, thus granted, was divided among the grantees by sundry votes and proceedings of a majority of them, which, by the law and usage of Vermont, render such partition legal. The premises demanded by the plaintiffs in this ejectment were set off to them in the above partition, but they had no agency in the division, nor was it necessary, by the law and usage of Vermont, in order to render the same valid.

On 30 October, 1794, the Legislature of Vermont passed an act declaring that the rights to land in that state granted under the authority of the British government previous to the Revolution to "The Society for the Propagation of the Gospel in Foreign Parts," were thereby granted severally to the respective towns in which such lands lay, and to their use forever. The act then proceeds to authorize the selectmen of each town to sue for and recover such lands, if necessary, and to lease them out, reserving an annual rent, to be appropriated to the support of schools. Under this law, the selectmen of the Town of New Haven executed a perpetual lease of a part of the demanded premises to the defendant, William Wheeler, on 10 February, 1800, reserving an annual rent of $5.50, immediately after which the said Wheeler entered

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upon the land so leased, and has ever since held the possession thereof. Similar donations were made, about the same time with the above grant, to the plaintiffs of lands lying within the limits of Vermont by the Governor of New Hampshire in the name of the King, but the plaintiffs never entered upon such lands nor upon the demanded premises nor in any manner asserted a claim or title thereto until the commencement of this suit.

The verdict found a number of acts of the State of Vermont respecting improvements or settlements, and also the limitation of actions, but as the discussions at the bar did not involve any questions connected with those acts, those parts of the special verdict need not be more particularly noticed.

Upon this special verdict, the judges of the court below were divided in opinion upon the question whether judgment should be rendered for the plaintiffs or defendants, and the question was thereupon certified to this Court.

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MR. JUSTICE WASHINGTON delivered the opinion of the Court, and, after stating the case, proceeded as follows:

It has been contended by the counsel for the defendants

1st. That the capacity of the plaintiffs as a corporation to hold lands in Vermont ceased by and as a consequence of the Revolution.

2d. That the society being, in its politic capacity, a foreign corporation, it is incapable of holding land in Vermont on the ground of alienage, and that its rights are not protected by the treaty of peace.

3d. That if they were so protected, still the effect of the last war between the United States and Great Britain was to put an end to that treaty, and consequently to rights derived under it unless they had been revived by the treaty of peace, which was not done.

1. Before entering upon an examination of the first objection, it may be proper to premise that this society is to be considered as a private eleemosynary

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corporation, although it was created by a charter from the Crown for the administration of a public charity. The endowment of the corporation was to be derived solely from the benefactions of those who might think proper to bestow them, and to this end the society was made capable to purchase and receive real estates in fee to a certain annual value, and also estates for life and for years and all manner of goods and chattels to any amount.

When the defendants' counsel contends that the incapacity of this corporation to hold lands in Vermont is a consequence of the Revolution, he is not understood to mean that the destruction of civil rights existing at the close of the Revolution was generally speaking a consequence of the dismemberment of the empire. If that could ever have been made a serious question, it has long since been settled in this and other courts of the United States. In the case of Dawson's Lessee v. Godfrey, 4 Cranch 323, it was laid down by the judge who delivered the opinion of the Court that the effect of the Revolution was not to deprive an individual of his civil rights, and in the case of Terret v. Taylor, 9 Cranch 43, and of Dartmouth College v. Woodward, 4 Wheat. 518, the Court applied the same principle to private corporations existing within the United States at the period of the Revolution. It is very obvious from the course of reasoning adopted in the two last cases that the Court was not impressed by any circumstance peculiar to such corporations which distinguished them in

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this respect from natural persons; on the contrary, they were placed upon precisely the same ground. In Terret v. Taylor, it was stated that the dissolution of the regal government no more destroyed the rights of the church to possess and enjoy the property which belonged to it than it did the right of any other corporation or individual to his or its own property. In the latter case, THE CHIEF JUSTICE, in reference to the corporation of the college, observes that it is too clear to require the support of argument that all contracts and rights respecting property remained unchanged by the Revolution, and the same sentiment was enforced more at length by the other judge who noticed this point in the cause.

The counsel then intended, no doubt, to confine this objection to a corporation consisting of British subjects and existing in its corporate capacity in England, which is the very case under consideration. But if it be true that there is no difference between a corporation and a natural person in respect to their capacity to hold real property, if the civil rights of both are the same and are equally unaffected by the dismemberment of the empire, it is difficult to perceive upon what ground the civil rights of a British corporation should be lost as a consequence of the Revolution when it is admitted that those of an individual would remain unaffected by the same circumstance.

But it is contended by the counsel that the principle so firmly established in relation to corporations

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existing in the United States at the period of the Revolution is inapplicable to this corporation, inasmuch as the courts of Vermont can exercise no jurisdiction over it to take away its franchises in case of a forfeiture of them by misuser or nonuser or in any manner to change the trustees, however necessary such interference might be, for the due administration and management of the charity. If this be a sound reason for the alleged distinction, it would equally apply to other trusts where the trustees happened to be British subjects residing in England and entitled to lands in Vermont not as a corporate body, but as natural persons claiming under a common grant. The question of amenability to the tribunals of Vermont would be the same in both cases as would be the consequent incapacity of both to hold the property to which they had an unquestionable legal title at the period of the Revolution.

It is very true, as the counsel has insisted, that the courts of Vermont might not have jurisdiction in the specified cases, and it is quite clear that were they to exercise it and decree a forfeiture of the franchises of the corporation or the removal of the trustees, the plaintiffs would not be less a corporation clothed with all its corporate rights and franchises.

But it is not perceived by the Court how this exemption of the corporation from the jurisdiction of a foreign court to forfeit its franchises or to interfere in its management of the charity can destroy or in any manner affect its civil rights or its capacity to hold and enjoy the property legally

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vested in it. It would surely be an extraordinary principle of law which should visit such a corporation with the same consequences on account of a want of jurisdiction in the courts of the country where the property lies to inquire into its conduct, as would happen if, after such an inquiry, judicially made, the corporation should be found to have forfeited its franchises -- in other words, that the possibility that the corporation might commit a forfeiture, which the law will not presume, or might require the interference of a court of chancery to enforce the due administration of the charter, which might never happen, should produce a forfeiture, or something equivalent to it, of the very funds which were, in whole or in part, to feed and sustain the charity. This nevertheless seems to be the amount of the argument, and it is deemed by the Court too unreasonable to be maintained unless it appeared to be warranted by judicial decisions. It would seem that the state in which the property lies ought to be satisfied that the courts of the country in which the corporation exists will not permit it to abuse the trusts confided to it or to want their assistance when it may be required to enable it to perform them in a proper way.

Were it even to be admitted that the Legislature of Vermont was competent to pronounce a sentence of forfeiture of the property belonging to this corporation upon the ground of its having abused or not used its franchises, still the act of 1794 does not profess to have proceeded upon that ground. The only reasons assigned in the

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preamble of the act for depriving the plaintiffs of this property are 1. that by the custom and usages of nations, aliens cannot and ought not to hold real estate in a country to whose jurisdiction they cannot be made amenable, and 2. that this corporation, being created by and existing within a foreign jurisdiction, all lands in the state granted to the said society became vested by the Revolution in that state. For aught that appears to the contrary, the society was, at the moment when the act passed, fulfilling the trusts confided to it in the best manner for promoting the benevolent and laudable objects of its incorporation. It may further be remarked that the effect of this act is not merely to deprive the corporation of its legal control over the charity, so far as respects the property in question, but to destroy the trusts altogether by transferring the property to other persons and for other uses than those to which they were originally destined by the grant made to the society.

The case chiefly relied upon by the defendants' counsel in support of his first point was that of Attorney General v. City of London, 1 Ves.Jr. 247, and 3 Bro.Ch.Cas. 171, under the will of Mr. Boyle, which directed the residue of his estate to be laid out by his executors for charitable and other pious uses, at their discretion. They purchased, under a decree of the Court of Chancery and Manor of Brafferton, which they conveyed to the City of London upon trust to lay out the rents and profits in the advancement of the Christian religion among infidels as the Bishop

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of London and one of the executors should appoint, such appointment to be confirmed by a decree of the court of chancery. The trustees appointed a certain part of the rents and profits to be paid to an agent in London for the College of William and Mary in Virginia for the purpose of maintaining and educating in the Christian religion as many Indian children as the fund would support, the president, &c., of the college to transmit accounts of their receipts and expenditures yearly to the court of chancery and to be subject to certain rules then prescribed and to such others as should thereafter be adopted with the approbation of the court. This appointment was ratified by a decree of the court of chancery. The object of the information was to have the disposition of this charity taken from the college, and that the master should lay before the court a new scheme for the future disposition of the charity. The new scheme was ordered by the chancellor upon the ground, that the college, belonging to an independent government, was no longer under the control of the court.

The difference between that case and the present is that in that, the president, &c., of the college were not the trustees appointed by the will of Mr. Boyle or by his executors to manage the charity, but were the mere agents of the trustees for that purpose, or rather the servants of the court of chancery, as they are styled by the counsel for the college, in the administration of the charity, subject to such orders and rules as might be prescribed by the trustees and sanctioned by the

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chancellor. The college had a mere authority to dispose of the charity, but without any interest whatever in the fund. The trustees resided in England, and there too was the fund. The president, &c., of the college derived all their authority from the trustees and from the court of chancery. To that court they were accountable, and were necessarily removable by the court whenever it should appear to the chancellor to be necessary for the due administration of the charity.

In the present case, the plaintiffs were, at the period of the Revolution, entitled to the legal estate in the land in question under a valid and subsisting grant, and the only question is whether the estate so vested in them was divested by the Revolution and became the property of the state. We have endeavored to show that it was not.

The case of Barclay v. Russel, 3 Ves. 424, was also mentioned by the defendants' counsel, and ought therefore to be noticed by the Court. That was a claim on the part of the State of Maryland of certain funds which had been vested in trustees in London before the American Revolution by the old government of Maryland in trust for certain specific purposes. The case is long and rather obscurely reported, but in the case of Dolben v. Bank of England,, 10 Ves. 352, the Lord Chancellor states the ground upon which the claim was rejected. His lordship observes that

"That was a case in which the old government existed under the King's charter, and a revolution took place, though the new government

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was acknowledged by this county. Yet it was held that the property, which belonged to a corporation existing under the King's charter, was not transferred to a body which did not exist under his authority, and therefore the fund in this country was considered to be bona vacantia belonging to the Crown."

Another and perhaps a more intelligible reason is assigned in the case itself -- namely that the funds were vested by the old government in the hands of the trustees by the act of 1733 for certain specific trusts, the execution of which was then rendered impossible. "There is no specific purpose," says the chancellor,

"that the will of the present government can point out, for which purpose, according to the original creation of the trust, I can direct the trustee to transfer. It is therefore the common case of a trust, without any specific purpose to which it can be applied, the consequence of which is that the right to dispose of this money is vested in the Crown."

Now it is quite clear that if the premises upon which this case was decided were correct, the conclusion is so. The old government was treated as a corporation which ceased to exist as such by the new form of government, deriving its name, its existence, and its constitution, from a totally different source from that under which the old corporation existed. The old corporation no longer existed, the consequence of which was precisely that which would take place in case of the dissolution of any private corporation: their

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legal right would cease, and would not descend or pass to the new corporation. So too, if the specific purpose for which the trust was created had ceased, the disposition of the fund clearly devolved upon the Crown.

But in this case the plaintiffs exist at this day as a corporation, precisely as it did before the Revolution, and the specific purposes to which the trust was to be applied by the terms of the charter still remain the same. The cases, therefore, are totally unlike each other.

2. The next question is was this property protected against forfeiture for the cause of alienage or otherwise by the treaty of peace? This question, as to real estates belonging to British subjects, was finally settled in this Court in the case of Orr v. Hodgson, 4 Wheat. 453, in which it was decided that the 6th article of the treaty protected the titles of such persons to lands in the United States which would have been liable to forfeiture by escheat for the cause of alienage or to confiscation jure belli.

The counsel for the defendants did not controvert this doctrine so far as it applies to natural persons, but he contends that the treaty does not in its terms embrace corporations existing in England, and that it ought not to be so construed. The words of the 6th article are

"There shall be no future confiscations made, nor any prosecutions commenced, against any person or persons, for or by reason of the part which he or they may have taken in the present war, and that no person shall on that account suffer any future

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loss or damage, either in his person, liberty, or property,"

&c.

The terms in which this article is expressed are general and unqualified, and we are aware of no rule of interpretation applicable to treaties or to private contracts which would authorize the court to make exceptions by construction where the parties to the contract have not thought proper to make them. Where the language of the parties is clear of all ambiguity, there is no room for construction. Now the parties to this treaty have agreed that there shall be no future confiscations in any case for the cause stated. How can this Court say that this is a case where, for the cause stated or for some other, confiscation may lawfully be decreed? We can discover no sound reason why a corporation existing in England may not as well hold real property in the United States as ordinary trustees for charitable or other purposes or as natural persons for their own use. We have seen that the exemption of either or all of those persons from the jurisdiction of the courts of the state where the property lies affords no such reason.

It is said that a corporation cannot hold lands except by permission of the sovereign authority. But this corporation did hold the land in question by permission of the sovereign authority before, during, and subsequent to the Revolution up to the year 1794, when the Legislature of Vermont granted it to the Town of New Haven, and the only question is whether this grant was not void

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by force of the 6th article of the above treaty? We think it was.

Was it meant to be contended that the plaintiffs are not within the protection of this article because they are not persons who could take part in the war or who can be considered by the court as British subjects? If this were to be admitted, it would seem to follow that a corporation cannot lose its title to real estate upon the ground of alienage, since, in its civil capacity, it cannot be said to be born under the allegiance of any sovereign. But this would be to take a very incorrect view of the subject. In the case of Bank of the United States v. Deveaux, 5 Cranch 86, it was stated by the court that a corporation, considered as a mere legal entity, is not a citizen, and therefore could not as such sue in the courts of the United States unless the rights of the members of it in this respect could be exercised in their corporate name. It was added that the name of the corporation could not be an alien or a citizen, but the corporation may be the one or the other, and the controversy is in fact between those persons and the opposing party.

But even if it were admitted that the plaintiffs are not within the protection of the treaty, it would not follow that their right to hold the land in question was divested by the act of 1794 and became vested in the Town of New Haven. At the time when this law was enacted, the plaintiffs, though aliens, had a complete, though defeasible, title to the land of which they could not be deprived

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for the cause of alienage, but by an inquest of office, and no grant of the state could, upon the principles of the common law, be valid until the title of the state was so established. Fairfax's devisee v. Hunter's lessee, 7 Cranch 503. Nor is it pretended by the counsel for the defendants that this doctrine of the common law was changed by any statute law of the State of Vermont at the time when this land was granted to the Town of New Haven. This case is altogether unlike that of Smith v. Maryland, 6 Cranch 286, which turned upon an act of that state, passed in the year 1780 during the Revolutionary War, which declared that all property within the state belonging to British subjects should be seized and was thereby confiscated to the use of the state, and that the commissioners of confiscated estates should be taken as being in the actual seizin and possession of the estates so confiscated, without any office found, entry, or other act to be done. The law in question passed long after the treaty of 1783, and without confiscating or forfeiting this land (even if that could be legally done), grants the same to the Town of New Haven.

3. The last question respects the effect of the late war between Great Britain and the United States upon rights existing under the treaty of peace. Under this head it is contended by the defendants' counsel that although the plaintiffs were protected by the treaty of peace, still the effect of the last war was to put an end to that treaty and consequently to civil rights derived

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under it unless they had been revived and preserved by the Treaty of Ghent.

If this argument were to be admitted in all its parts, it nevertheless would not follow that the plaintiffs are not entitled to a judgment on this special verdict. The defendants claim title to the land in controversy solely under the act of 1794, stated in the verdict, and contend that by force of that law the title of the plaintiffs was divested. But if the Court has been correct in its opinion upon the two first points, it will follow that the above act was utterly void, being passed in contravention of the treaty of peace, which in this respect is to be considered as the supreme law. Remove that law, then, out of the case, and the title of the plaintiffs, confirmed by the treaty of 1794, remains unaffected by the last war, it not appearing from the verdict that the land was confiscated or the plaintiffs' title in any way divested during the war or since by office found or even by any legislative act.

But there is a still more decisive answer to this objection, which is that the termination of a treaty cannot divest rights of property already vested under it.

If real estate be purchased or secured under a treaty, it would be most mischievous to admit that the extinguishment of the treaty extinguished the right to such estate. In truth, it no more affects such rights than the repeal of a municipal law affects rights acquired under it. If, for example, a statute of descents be repealed, it has never been supposed that rights of property

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already vested during its existence were gone by such repeal. Such a construction would overturn the best established doctrines of law and sap the very foundation on which property rests.

But we are not inclined to admit the doctrine urged at the bar that treaties become extinguished ipso facto by war between the two governments unless they should be revived by an express or implied renewal on the return of peace. Whatever may be the latitude of doctrine laid down by elementary writers on the law of nations dealing in general terms in relation to this subject, we are satisfied that the doctrine contended for is not universally true. There may be treaties of such a nature as to their object and import as that war will put an end to them, but where treaties contemplate a permanent arrangement of territorial and other national rights, or which in their terms are meant to provide for the event of an intervening war, it would be against every principle of just interpretation to hold them extinguished by the event of war. If such were the law, even the treaty of 1783, so far as it fixed our limits and acknowledged our independence, would be gone, and we should have had again to struggle for both upon original revolutionary principles. Such a construction was never asserted and would be so monstrous as to supersede all reasoning.

We think therefore that treaties stipulating for permanent rights and general arrangements and professing to aim at perpetuity and to deal with the case of war as well as of peace do not cease on the occurrence of war, but are, at most, only suspended

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while it lasts, and unless they are waived by the parties or new and repugnant stipulations are made, they revive in their operation at the return of peace.

A majority of the Court is of opinion that judgment upon this special verdict ought to be given for the plaintiffs, which opinion is to be certified to the circuit court.

Certificate for the plaintiffs.