Runyan v. Lessee of Coster,
39 U.S. 122 (1840)

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U.S. Supreme Court

Runyan v. Lessee of Coster, 39 U.S. 14 Pet. 122 122 (1840)

Runyan v. Lessee of Coster

39 U.S. (14 Pet.) 122


The Legislature of the State of New York, on 18 April, 1823, incorporated "The New York & Schuylkill Coal Company." The act of incorporation was granted for the purpose of supplying the City of New York and its vicinity with coal, and the company having, at great expense, secured by purchase valuable and extensive coal lands in Pennsylvania, the Legislature of New York, to promote the supply of coal as fuel, granted the incorporation with the usual powers of a body corporate, giving to it the powers to purchase and hold lands to promote and attain the objects of the incorporation. The recitals in the act of incorporation show that this power was granted with special reference to the purchase of lands in the State of Pennsylvania. The right to hold the lands so purchased depends on the assent or permission, express or implied, of the State of Pennsylvania.

The policy of the State of Pennsylvania on the subject of holding lands in the state by corporations is clearly indicated by the Act of the Legislature of Pennsylvania of April 6, 1833. Lands held by corporations of the state or of any other state without license from the Commonwealth of Pennsylvania are subject to forfeiture to the commonwealth. But every such corporation, its foeffee or foeffees, hold and retain the same to be divested or dispossessed by the commonwealth by due course of law. The plain interpretation of this statute is that until the claim to a forfeiture is asserted by the state, the land is held subject to be divested by due course of law, instituted by the commonwealth alone, and for its own use.

The Supreme Court of Pennsylvania having decided that a corporation has, in that state, a right to purchase, hold, and convey land until some act is done by the government according to its own laws to vest the estate in itself; the estate may remain in a corporation so purchasing or holding lands, but such estate is defeasible by the commonwealth. This being the law of Pennsylvania, it must govern in a case where land in Pennsylvania had been purchased by a corporation created by the Legislature of New York for the purpose of supplying coal from Pennsylvania to the City of New York.

The case of Fairfax v. Hunter, 7 Cranch 621, cited with approbation.

In the case of Bank of Augusta v. Earle, 13 Pet. 584, and in various other cases decided in the Supreme Court, a corporation is considered an artificial being, existing only in contemplation of law, and being a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. Corporations created by statute must depend for their powers, and the mode of exercising them, upon the true construction of the statute.

A corporation can have no legal existence out of the sovereignty by which it is created, as it exists only in contemplation of law and by force of the law, and when that law ceases to operate and is no longer obligatory, the corporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty. But although it may live and have its being in that state only, yet it does not follow that its existence there will not be recognized in other places; and its residence in one state

creates no insuperable objection to its power of contracting in another. The corporation must show that the law of its creation gave it authority to make such contracts. Yet, as in the case of a natural person, it is not necessary that it should actually exist in the sovereignty in which the contract is made. It is sufficient that its existence as an artificial person in the state of its creation is acknowledged and recognized by the state or nation where the dealing takes place, and that it is permitted by the laws of that place to exercise the powers with which it is endowed.

Every power which a corporation exercises in another state depends for its validity upon the laws of the sovereignty in which it is exercised, and a corporation can make no valid contract without the sanction, express or implied, of such sovereignty, unless a case should be presented in which the right claimed by the corporation should appear to be secured by the Constitution of the United States.

Page 39 U. S. 123

This was an action of ejectment brought in the Circuit Court of the District of Pennsylvania by the defendant in error, the lessee of John S. Coster and Thomas K. Mercien, citizens of New York, for the recovery of a tract of land in Norwegian Township, Schuylkill County, Pennsylvania. The defendant in the circuit court was in possession of the land.

The title of the lessors of the plaintiff below was founded on a patent from the Commonwealth of Pennsylvania dated December 23, 1824, to Benjamin Pott, granting three hundred acres of land to him, in Schuylkill County; a survey of the land, and a deed executed on 17 March, 1830, by which the patentee conveyed the land to John G. Coster, John Hone, Moses Jaques, and Thomas K. Mercien, of the City of New York, trustees for the stockholders of the corporation known under the name of the New York & Schuylkill Coal Company, as well for such persons as were then stockholders as for such persons as might afterwards become stockholders

The New York & Schuylkill Coal Company was incorporated by the Legislature of New York on 18 April, 1823.

Moses Jaques, one of the trustees, by direction of the company, conveyed the right and interest in the land held by him under the deed from Benjamin Pott and wife to the other trustees on the same uses and trusts. The lessors of the plaintiff in the circuit court survived John Hone.

The defendant below, without offering any evidence, insisted and prayed the court to charge the jury that the plaintiff, upon the evidence, was not entitled to recover, but the court gave the contrary direction.

The jury having given a verdict for the plaintiff below in conformity with the directions of the court and a judgment having been entered on the same, the defendant prosecuted this writ of error.

Page 39 U. S. 128

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