Argument for Plaintiff's in Error.

excluding other scientific and classical studies, and including military tactics, to teach such branches of learning as are related to agriculture and the mechanic arts, in such a manner as the legislatures of the States may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life."

This foundation both in terms and intent was made upon the idea that the State accepting the donation should make the most and best it possibly could out of the lands and land scrip thus donated.

It was a trust that expressed and implied the highest degree of duty and diligence on the part of the State in obtaining the greatest possible fund that could be got out of the lands and scrip, for the purposes named.

Had it been a private trust between citizens, established in precisely the same phrases, no one would doubt that the donee who accepted the gift would be bound in every and the highest sense to realize the largest possible sum to the ends named.

The State, acting upon the duty and trust in the sense in which I have described it, on 27th April, 1865, passed the act establishing Cornell University. It was a public educational institution, whose governing authority was the chief officers of the State, but it was provided as a due and grateful memorial of the beneficence of Mr. Cornell in the foundation gifts as well as in what it was expected he would be able to do in realizing the largest possible sum out of the land scrip for the benefit of the institution, that the eldest male lineal descendant of Mr. Cornell should be ex officio a member. It was also provided, as had been stated in the title of the act, that the objects and educational proceedings of the corporation should be the very ones named in the donating act of Congress.

The foundation and activity, therefore, were the foundation and activity measured precisely by the provisions of the act of Congress.

The fifth section of the incorporation act authorized it to hold real and personal property to an amount not exceeding three million dollars; but it is agreed on all hands in this controversy that that limitation has no application to such prop

Argument for Plaintiffs in Error.

erty as falls within the purview, and is subject to the operation of the donating act of Congress. This would be apparent on acknowledged principles if the state act itself had made no further provision, but, having thus limited the general and disposable property of the corporation, it proceeded without limit to provide for all the funds that could be obtained from the land scrip, amounting to 990,000 acres.

The sixth section declared that "the income, revenue and avails, which shall be received from the investment of the proceeds of the sale of the lands, or of the scrip thereof, or any part thereof," should be paid over to the university for the purpose before named.

The seventh section provided that the trustees should fulfil the requirements of the act of Congress in respect of the buildings, etc., as part of their duty in connection with taking the fund.

The next step was the act of New York, 10th April, 1866, which provided that the comptroller should fix the price of the scrip at not less than thirty cents per acre; that he might contract for the sale thereof with the trustees of the university. It provided, further, that the trustees might make contracts to the effect that "the whole net avails and profits from the sale of land located under said scrip shall, from time to time, as such net avails and profits are received, be paid over and devoted to the purposes of such institution, in accordance with the provisions of the act of Congress herein before mentioned." The act then required that the persons to whom the scrip "shall be sold shall report to the comptroller annually, under such oath and in such form as the comptroller shall direct, the amount of land or scrip sold, prices at which the same have been sold and the amount of the money received therefor," etc.

The next section provided that the comptroller should have the power of examination into the doings of the person to whom the scrip had been thus sold, in order to ascertain the net avails, etc., to the end of carrying out the purposes of the

act.

The next step in the history of the transaction is the act

Argument for Plaintiffs in Error.

of New York of 24th of April, 1867, amending the charter of the university, the 7th section of which required that the trustees of the university taking the benefit of the act should comply with the act of Congress in respect of the buildings, etc., and that "they shall make all reports, and perform such other acts as may be necessary to conform to the act of Congress aforesaid."

On the 22d July, 1867, the comptroller reported to the constitutional convention of New York the history of the matter down to that time, from which it appeared that Mr. Cornell had proposed to take the land scrip and to deal with it for the benefit of the university, beginning at thirty cents an acre and all profits, and thirty cents more per acre to be added to the college fund, etc., and the balance of said profits to be placed in a separate fund, to be known as the Cornell Endowment Fund, and to be preserved and invested for the benefit of said institution, and the income derived therefrom to be paid over annually to the trustees of the said university for the general purposes of said institution.

"The general purposes" of the institution were precisely those, and none other, that the donating act of Congress had required that the avails of the land scrip should be devoted to.

The arrangement, then, instead of being a compensation or commission to Mr. Cornell for undertaking the enterprise of disposing of the scrip, was an arrangement precisely to the ends declared by the act of Congress; and the separation of the avails, and the giving a name to a part of them was simply the tribute that was justly due Mr. Cornell in respect of his contributions and exertions to the beneficent end contemplated. Things and obligations remain the same names and ornaments were laid on to these things for the honor of the name of Mr. Cornell. That was all. The substance was the same.

It is obvious, then, if clear language can express clear intentions, that the State intended and Cornell agreed that in putting the disposition of the scrip into his hands, all the money that could be derived from the disposition of the scrip should be devoted to the purposes of the institution. That

Argument for Plaintiffs in Error.

part of it mentioned as attributable to the "Cornell Endowment Fund" was only a phrase of honor to the name and efforts of Cornell in realizing the largest possible sum for the beneficent ends designed by the act of Congress. There is no word, hint or symptom that the sum attributable to the Cornell Endowment Fund was to be considered as a compensation to Cornell, as the agent or contractor of or with the State, for his service in disposing of the scrip. Had there been any such statement or implication, it would have been, on the face of it, an apparent fraud on the donor, for the sum expected to be realized and that was in fact realized, would be out of all proportion to any honest arrangement in respect of payment for services or responsibilities in the affair.

Under this arrangement between the State and Mr. Cornell, and pursuant to the law and authority of the State then in force and no other, Mr. Cornell disposed of the scrip and realized therefrom the large sums of money that have become, in the practical sense, the pivot on which this case turns. This realization of funds and income took place before the subsequent steps in respect of legislation or contract were taken.

Under the law and agreement before mentioned Mr. Cornell then went on, took the scrip, located and sold it from time to time, and then on 4th May, 1868, the legislature of New York enacted that the moneys in question in excess of the sixty cents per acre before referred to, "which excess, in pursuance of a contract made with Ezra Cornell by the commissioners of the land office bearing date 4th August, 1866, is set apart and constituted a separate and distinct fund, to be known as the Cornell Endowment Fund,' shall from time to time," etc., be invested. This investment, it is true, was not such an investment as the act of Congress appeared to require, but the income was to be devoted to the uses of the university, which uses, as before stated, were precisely and only those named in the act of Congress.

Whether the State, in providing for a different investment from that which the act of Congress required, was guilty of a breach of trust or duty, is a question quite apart from the nature of the fund. The fact that a trustee misinvests the

Argument for Plaintiffs in Error.

funds confided to him does not alter the character of the trust or fund.

Following all this, in 1869 the Comptroller of the State reported the receipts from both the classes of moneys- "College Land Scrip Fund," "Cornell Endowment Fund" — as the fruits of the sale of scrip under the act of Congress, and stated the account accordingly.

The Comptroller of the State from time to time reported to the legislature the state of the accumulations under these two heads and called attention to the possibility that the State was not, in form, at least, conforming to the act of Congress in dealing with the avails of the sales of scrip in the very respect of the Cornell endowment fund matter-chiefly as it respected expenses, etc. But continually, as it appears from the official records, all the money that Mr. Cornell got in from the sale of scrip was turned over to the State in accordance with this contract, and for the purposes before named. And this was in pursuance of the acts of the legislature of New York from time to time passed on the subject. That of May 4, 1868, provided for the disposition of the "excess" arising under the contract with Cornell, and set that money apart as under state authority, and, referring to the donating act of Congress as its foundation, provided that it should be invested to the end contemplated by the act of Congress, although the mode of the investment authorized differed from the limitations of the act of Congress, but it required that the fund should still be held and devoted to the purposes of the institution, which purposes, as before stated, were precisely and no other than those mentioned in the donating act of Congress.

The sale of the scrip accordingly went on, and the money came in and was duly accounted for accordingly. There was yet left some unlocated or unrealized scrip, and Mr. Cornell, apparently becoming tired of the drudgery and detail concerning the affair, desired that his authority and mission should be turned over to the university itself. Accordingly the State, by an act of 18th May, 1880, directed the comptroller to turn over to the university all the funds, securities, etc., known as belonging to the "Cornell Endowment Fund."