Lessee of Overmyer v. Williams.

IN BANK.

Dec. Term, 1846.

Lessee of SAMUEL OVER MYER US. CYRUS WILLIAMS.

The Ohio Railroad Company is authorized, by its charter, to purchase and hold real estate, when necessary for the procurement of materials, or for the economical construction of the road.

THIS is a WRIT of ERROR to the Court of Common Pleas of SANDUSKY County.

The action below was ejectment, and, from the bill of exceptions filed in the cause, it appears that the plaintiff claimed the land in controversy, by virtue of a deed from John Overmyer, dated April 9th, 1845. The defendant claimed the land by virtue of a deed from said John Overmyer, to the Ohio Railroad Company, dated October 4th, 1839, and from the company to himself, dated June 19th, 1842. The defendant also proved on the trial, that it was difficult, if not impossible, to procure materials for the construction of the road without the purchase of land; that this tract of land was bought by the company for the purpose of procuring materials and the right of way; that the road passed over a corner of this land; that the timber growing upon it was used in the construction of the road; and that it was as convenient, or more so, to obtain timber from this land as from any other land, though abundance of timber might be procured in the neighborhood. Upon this proof, the Court of Common Pleas - before which the case was tried, without the intervention of a jury rendered a judgment

for the defendant.

To this decision of the Court, the defendant filed exceptions, and assigned for error

First: That the Court erred in deciding that the Ohio Railroad Company had power, by their charter, to receive and hold a conveyance of real estate.

Lessee of Overmyer v. Williams.

Second: That the Court erred in deciding that the deed IN BANK. from John Overmyer, to the Ohio Railroad Company, passed Dec. Term, the title of said land to the company.

Third: That the Court erred in giving judgment for the defendant.

To decide the questions presented upon this assignment of errors, the case was reserved for decision here.

L. B. Otis, for Plaintiff in error.

Had the Ohio Railroad Company power, by their original charter, passed March 8, 1836, to receive and hold the legal title to the premises in controversy ?

The third section of their charter says, "that they shall be 'capable in law of purchasing, holding, selling, leasing and 'conveying estates real, personal and mixed, so far as the same 'shall be necessary for the purposes hereinafter mentioned, ' and no further."

The purposes here referred to, are defined in the 12th section of the charter to be, "the location, construction and repairs of a road not exceeding one hundred feet in width."

A clause in the 3d section of this charter fully empowers the company, and its agents, "to enter upon, and use, any adjoining land; take stone, timber, materials," &c.

Thus it will be seen that this company, to carry out the purpose for which it was created, did not need a single foot of land, except a strip for its track, one hundred feet in width.

It is claimed by counsel for the defendant, that the power of acquiring title to lands, is an incident to every corporation.-We think this position incorrect. In the case of The State of Ohio v. The Granville Alexandrian Society, 11 Ohio Rep. 12, the Court say, the rule for construing acts of incorporation, is, "to consider corporations as having such powers as are specifically granted by the act of incorporation, or as are neces'sary for carrying into effect the powers expressly granted, and as not having any other."

1846.

IN BANK,

1846.

Lessee of Overmyer v. Williams.

The power to deal in real estate generally, by purchasing Dec. Term, and selling the same, is expressly prohibited to this corporation, by the use of the words "and no further," in the 3d section of their charter. What else could the Legislature have intended by the use of this language, than to prohibit this corporation from dealing in lands generally, as in the case of the lands in controversy ?

Again: This power was taken away from this corporation, impliedly, by the purposes for which it was created.

That this corporation had not the power, by its original charter, to acquire the title to the land in controversy, is evident, from the fact that an amendatory act was passed, March 23, 1840, (Ohio Laws, vol. xxxviii, page 210,) expressly conferring upon this company the power to purchase and sell lands. Why was this amendatory act passed, if they had this power by their original charter?

The language made use of in this amendatory act is such, that we may infer that it was intended to give it a retroactive effect, and in this way legalize the proceedings of this company under their original charter, so far as their speculation in land was concerned. But that it cannot have such a retroactive effect, is settled by the case of Good v. Zercher, 12 Ohio Rep. 364.

f

Buckland, Hays & Lane, for Defendant.

Both parties make title under John Overmyer.

In 1839 John Overmyer sold and conveyed to the Ohio Railroad Company, for a consideration fully paid. In 1842 the Ohio Railroad Company conveyed to Cyrus Williams, in payment of a debt.

In 1845 John Overmyer sold and conveyed to Samuel Overmyer, for the nominal consideration of $100. This conveyance assumes that the former conveyance is void. To maintain this position, the plaintiff must show

Lessee of Overmyer v. Williams.

First: That the Ohio Railroad Company could not hold Is BANK. land for this purpose; and

Second: That a conveyance of land to a corporation, which the charter does not authorize it to hold, passes nothing.

The 3d section of the charter (Ohio L. Laws, vol. xxxiv, 319) renders the company "capable in law of purchasing, holding, selling, leasing and conveying estates, real and per'sonal, or mixed, so far as the same shall be necessary for the purposes hereafter mentioned, and no further."

By the 12th section, the corporation may enter, use and excavate any lands which may be wanted for the site of the road, or for any other purpose necessary and useful for the construction and repairs, &c. &c.

By the 13th section, the company may agree with the owners of the land, which may be wanted for the construction and repairs of the road, for the purchase, &c.

The road is built upon piles. The land is a quarter section, in the black swamp adjoining the road, but far from town, and valuable for timber only. The deposition of Willson, a part of the bill of exceptions, shows the timber was necessary to construct, and was constantly wanted to repair; that the most convenient and economical mode to obtain timber for these purposes, was to purchase land; that this land was eminently subservient to this purpose, and that it was acquired by the company with no other view, although afterwards, in the derangement of the company's affairs, it was sold to pay its debts.

If this purchase had been made upon speculation, or to furnish a basis of credit, or with any other slippery design, we would not try to uphold it. But when the timber upon it was really needed, and when this mode of obtaining it was not only the most convenient and economical, but precisely the mode which a prudent man of business would take to get it, we hold the purchase of the land, and the payment of a fair price, to the owners' satisfaction, is not only justified by the charter, but a far more commendable and honest course than the harsh and forced appropriation, from an unwilling donor, under the right of eminent domain.

Dec. Term, 1846.

1846.

Lessee of Overmyer v. Williams.

IN BANK. 2. Whatever may be held, as to the capacity of the corpoDec. Term, ration to hold the land, this "mousing" plaintiff will be disappointed, as well as the (honest?) grantor, who sells it a second time, after receiving full payment; for the law does not enable a vender to a corporation to resume his estate, and thus take from the company the ability to pay its debts, and from the grantees the property they have honestly paid for. It is a principle well established, that lands liable to forfeiture, from the want of capacity in a corporation to hold, are not forfeited without office found, or some equivalent judicial action; and upon the interposition of the Court in such cases, by the operation of the Ohio statutes, (vol. XL, 67, sec. 14,) the property is applied to its debts, or to other legitimate objects. A few quotations will set this point at rest.

It was decided by the Supreme Court of Pennsylvania, that a bank might purchase, absolutely, and not for debts, lands in a distant county, which they did not occupy, although they, or the third person, to whom they might convey, would hold them by a title defeasible by the Commonwealth, and the Commonwealth alone, as in the cases with title by aliens. Leasure v. Hillyas, 7 Serg. and Rawle, 319; Angel and Ames, 92.

The Court of Appeals in Virginia decided that, though purchasing the land in question, the banks violated their charters, and they might for that cause be dissolved, by a proceeding at the suit of the Commonwealth, yet that any conveyance made before dissolution, would pass an indissoluble title to the purchaser. 3 Rand. 136.

If the plaintiffs are a duly incorporated body, with authority to contract and take mortgages, and if they pass the exact line of their power, it would rather belong to the government of Pennsylvania to exact a forfeiture of their charter, than for this Court, in this collateral way, to decide a question of misuse, and set aside a just and bona fide contract. Per Kent, 4 Johns. Chan. Rep. 373.

This doctrine has been examined and adopted by the Supreme Court at Washington, in the case of Runyan v. Lessee