Lapas attēli
PDF
ePub

Opinion of the Court.

the income to be paid to the trustees of the university for the general purposes of the same."

By an act passed May 4, 1868, (Laws of New York, of 1868, c. 554,) the legislature authorized the Comptroller to invest the moneys which might be received in excess of sixty cents per acre, under the contract of August 4, 1866, and which thereunder went into "the Cornell Endowment Fund," not only in stocks of the United States or of the State of New York, or in some other safe stocks yielding not less than five per cent per annum on the par value thereof, (according to the restriction in section 4 of the act of Congress of July 2, 1862,) but also "on bonds secured by mortgage upon unincumbered real estate, situated within this State, worth at least double the amount secured by such mortgage." The statute also provided as follows: "The said fund and the interest and income thereof, subject to the expenses of the care and management of the same, shall be held for and devoted to the purposes of the said Cornell University, in pursuance of the contract before mentioned."

As to this statute, the Court of Appeals says (p. 127): "This must be taken as a legislative recognition of the fact that the agreement of sale to Mr. Cornell was for thirty (possibly sixty) cents an acre, and that all profits belonged to Mr. Cornell, but that by an agreement he had agreed to give them to the university for the general purposes thereof. We cannot assume that the State would have run counter to the express provisions of the act of Congress, by enacting that the purchase price of the scrip might be invested in a manner forbidden by that act."

In 1873, the legislature appointed a commission consisting of William A. Wheeler, John D. Van Buren, and Horatio Seymour, to ascertain the condition of the land grant and to report whether the acts of Congress and of the legislature had been complied with in the sale and disposition of the lands. The first two named of the commissioners reported, in April, 1874, that the profits realized by Mr. Cornell from the sale of the lands formed part of the purchase price of the scrip, while Governor Seymour reported that he was of a contrary opinion.

VOL. CXXXVI-13

Opinion of the Court.

The legislature ultimately, and by an act passed May 18, 1880, (Laws of New York, of 1880, c. 317,) directed the Comptroller, upon the request of Cornell University, to assign, transfer, pay and deliver to the latter "all moneys, securities, stocks, bonds and contracts, constituting a part of or relating to the fund known as the Cornell Endowment Fund, now held by the State for the use of said university." This was done because, under an agreement made between Ezra Cornell and his wife and the university, on the 13th of October, 1874, with the consent of the Comptroller and the Commissioners of the Land Office, Mr. Cornell and his wife had conveyed to the university all their rights under any agreement between him and the State relating to the land scrip or to any lands located or to be located under it, and the university had covenanted that it would assume and perform all the agreements made between him and the State in reference to the land scrip or the land, and would discharge his obligations held by the State. The university had paid to the State a part of the additional thirty cents per acre which the State was to receive, if realized, as the purchase price of the scrip.

On all these facts the Court of Appeals says, in its opinion (p. 128): "The State has made and makes no claim that any portion of these profits over the thirty cents an acre forms any portion of the purchase price of the sale of the scrip by it. The university, by its agreement with Mr. Cornell and by taking exactly his position, and by receiving the moneys and securities of the Cornell endowment fund by virtue of the act of 1880, clearly has taken the position that it was the owner of this fund, and was not indebted to the State therefor. Its reports show that they (the trustees of the university) claimed that it had no debts, and they acknowledged none to the State on account of this fund. If it existed, it would certainly be a somewhat onerous position for the State to be in. It must have all the proceeds of the sale of this scrip, including in such case all the profits of the past and what may hereafter arise; it must pay all expenses, etc., after location, in the way of taxes, and all incurred in the management and disbursement of the moneys, and must invest in stocks of the kind

Opinion of the Court.

described in the act of Congress, and must forever guarantee the whole amount, so that if any of the principal is lost it must be supplied by the State, and it must pay over the five per cent interest on the whole of this fund to the university. This, of course, does not weigh in case the decision were that the law is in that condition. For the reasons already given, I do not think it is."

On the question whether the legislation of New York, or the agreement of August 4, 1866, was in violation of the act of Congress, the Court of Appeals says (p. 129): “Interpreted as we have interpreted the agreement and the act of the legis lature of New York, the remaining inquiry is, does the New York statute, or the agreement under it, run counter to the act of Congress creating this land scrip trust? I think not. It provides that all moneys derived from the sale of the land scrip by the State shall be invested, etc., as therein prescribed. The scrip is to be sold by the State, which could not itself locate the land, and the avails of such sale are to be invested. The avails of the sale of the scrip by the State were the purchase price thereof; and if I am right, that the profits formed no part of such purchase price, but were the property of the vendee of the State, which he agreed to give to the university for general purposes, as his gift and to form the property of the university, then the act of Congress has no concern with it.

"Another consideration may be adverted to. It is exceedingly doubtful, in my mind, whether the university can be heard to claim the existence of this alleged debt under the facts of this case. The State has made, and makes, no claim upon the university for the property or any portion of it. It was placed in its possession by virtue of the consent of the State, evidenced by the passage of an act authorizing and directing it. The university has claimed to be the owner of it, and no one has drawn its rightful title in question. Can it now, while enjoying, without hostile claim from any source, the full control of the property, as its absolute owner, set up, as a reason why it should be allowed to take other property, that perhaps hereafter some one may make a claim that the prop

Opinion of the Court.

erty does not belong to the university, but that it is a trust fund originating in the act of Congress? If the State or the United States were to commence some proceeding, based on the counsel's argument, to reclaim possession of the property, there is nothing in the present attitude of the university which would necessarily estop or in any way conclude it from denying that any such trust exists, or that any case had been made for taking the possession of the property out of its hands. So far as appears, it seems that this assumed indebtedness is entirely gratuitous on its part, and that there is no creditor who makes the claim, no one who questions its title. It is going a good ways, under such circumstances, to lay much weight on a liability which, up to this proceeding, was never admitted by the university, and is not now asserted by any one else. It would seem as if property which was thus in the possession of the corporation, unclaimed by any one else, was held by it within the meaning of its charter, and that the question in regard to the character of its holding was merely an abstract one with which courts would not deal, at least so far as this proceeding is concerned.

"In all these matters it must be borne in mind the parties have all been acting in the most entire and perfect good faith. This was no scheme to avoid or evade the provisions of the act of Congress. The price of sixty cents an acre which the State got for the land was all it was worth at that time. Its future value depended upon many contingencies. The State had the right to sell the scrip for such price as it might agree on on with a purchaser. This it did. The university wanted money to pay its expenses. It could not very well wait for twenty or even five years for the purpose of seeing how the value of this scrip would appreciate, if at all. The legislature was equally in earnest in its desire for the prosperity of the institution; so were the state officers, and, above and beyond all, so was Mr. Cornell, its generous founder, and already the donor of such a large amount of money. Taking all the circumstances into consideration, the plan carried out was hit upon, and the amount of the Cornell endowment fund and the property arising therefrom must be regarded as a gift of the donor and

Opinion of the Court.

founder, and not as a violation of either the act of Congress, or of the act of our own legislature."

The Court of Appeals then states (p. 131) the position of the university with reference to the value of its property as follows: Funds from individuals, (including the value of the university buildings, farm, grounds, etc., at $69,683.33,) as fixed by the surrogate, $598,588.65; Western lands, $1,648,178.56; Western land contracts, $439,334.22; total, $2,686,101.43. It states. that the Supreme Court advanced the $69,683.33 to "$385,000," being an advance of "$315,316.67," and that, adding this $315,316.67 to the $2,686,101.43 makes a total of $3,001,418.10, without counting as property the College Land Scrip Fund in the hands of the State.

The statement that the Supreme Court advanced the $69,683.33 to $385,000 would appear by the record to be a clerical error, for, although Judge Merwin, in his opinion in the Supreme Court, states that the appellants there were entitled to a finding that the property represented by the item of $69,683.33 was, at the date of the death of Mrs. Fiske, of the value "at least" of $385,000, the judgment of the Supreme Court expressly adjudges that the item of $69,683.33 is fixed by it at $400,000, and that it finds that the value of the property of the university held and owned by it at the death of Mrs. Fiske was $3,015,414.71. But, in either case, the amount exceeded $3,000,000.

We concur with the Court of Appeals in the conclusion that the sixty cents per acre was the purchase price of the land scrip; that, under the agreement of August 4, 1866, the profits to be made by Mr. Cornell, although to be paid into the treasury of the State, were not any portion of the purchase price of the scrip, but were to be paid in, and were in fact paid in, as his profits, and were received by the State, as the sixth section of the agreement states, as, "a separate and distinct fund, which shall be the property of the Cornell University, to be known as the 'Cornell Endowment Fund,'" and that the income of the money was to be paid to the university for its general purposes, and the principal was to constitute the "Cornell Endowment Fund."

« iepriekšējāTurpināt »