Abby v. Billups , 35 Miss. 618 ( 1858 )

Smith, C. J.,

delivered the opinion-of the court.

This suit was brought in the Circuit Court of Lowndes, by Harriet Abby against Thomas C. Billups et al., who are described as the Board of Trustees of the Collegiate High School of the Independent Order of Fellows, in the city of Columbus, and alleged to be a corporation by the law of this State.

The complaint alleged, that as such board of trustees, the defendants, on or about the 1st of October, 1855, in the county of Lown-des, rented from the plaintiff the house, lot, and premises of which the plaintiff was then and there the owner; which said lot and premises were situated in the town of Columbus; for the sole purpose of conducting and carrying on the said Collegiate High School, upon the express contract, that the defendants, as such trustees and corporation, in consideration that the plaintiff would lease and rent to them her said house, lot, and premises, for the period of two months, commencing from the 1st of October, 1855, for the purpose of conducting and carrying on the said Collegiate High School, the defendants agreed to pay plaintiff the sum of twenty-five dollars per month; and, at the expiration of the lease, return the said bouse, lot, and premises in as good condition and repair as they were when the defendants should receive possession of the same. That the defendants received and entered into the possession, use, and occupation of the house, &c., at the 'time stipulated. That said house, &c., were in good repair when defendants received possession of the same, and that defendants used and enjoyed them in that condition for the purpose of conducting said Collegiate High School, until within a short time of the expiration of the said lease, when the said house was consumed by. fire. And further, that defendants have not delivered the said house, lot, &c., in as good condition and repair as they were in when possession was delivered to them; but have refused to rebuild the said house, or otherwise to perform the stipulations of the said contract. A second count sets out, substantially, but with some variation in the statement, the same cause of action. And the damages are laid at four thousand dollars.

A demurrer to the complaint was interposed, which raises the question of the authority of the defendants, as trustees of the Collegiate High School, to contract in the mode and upon the terms alleged. The demurrer was sustained; and, the plaintiff declining to amend, judgment final was entered for the defendants. The cause, hence comes into this court.

In considering the propriety of the judgment, it is of course necessary to examine the act of incorporation under which, as it is alleged, the defendants proceeded in making the contract declared on.

It appears, from the preamble to the act of incorporation, that Covenant Lodge, No. 20, and McKindree Lodge, No. 82, of the Independent Order of Odd Fellows, in Columbus, had united, for the purpose of establishing a seminary of learning in that city, and being desirous of placing it under the control of a permanent board of visitors, applied to the legislature for an act to incorporate the persons named in the first section of the act, and their successors in office, who should, as the joint and permanent agent of the two lodges, take the government of the school, with corporate powers sufficient to carry into effect their objects. Accordingly, by the first section of the act, those persons and their successors in office, were incorporated as a hoard of trustees for the Collegiate High School, in the city of Columbus.

By the second section of the act of incorporation, the said board of trustees, and their successors in office, were “empowered to acquire property, either by gift, purchase, or otherwise, not exceeding in value at any one time the sum of fifty thousand dollars, to hold and convey the same in their corporate name, to sue and Be sued, &c., and to enjoy all legal privileges commonly appertaining to such incorporations, not contrary to the Constitution and laws of this State.”

In general, á corporation is restricted to the mode of contracting prescribed by the charter. But where no particular mode is prescribed by the act of incorporation, it is well settled in this country, “ that the acts of a corporation, evidenced by vote, — written or unwritten, — are as completely binding upon it, and are as complete authority to its agents, as the most solemn acts done under the corporate seal; that it may as well be bound by express promises through its authorized agents, as by deed; and that promises may as well be implied from its acts, and the acts of its agents, as if it had.been an individual.” (Cases cited at p. 174, An. & Ames on Corp.) Here the charter contains no direction in regard to the mode in which the board of trustees shall contract. Hence there is no doubt that the alleged contract, the execution of which is admitted by the demurrer, is obligatory upon the defendants in error, if the board of trustees had authority under the charter, to enter into it. We will, therefore, proceed to consider this question.

In this country, there "is no diversity of opinion as to rules to be applied in determining the powers and capacities of a corporation. A corporation is an artificial being, created by law for specified purposes. It stands, therefore, on a very different footing from a natural person. There is this distinction, it is said, between an individual and a corporation: “ An individual may perform all acts, and make all contracts, which are not in the eye of the law inconsistent with the welfare of society; a corporation possesses only the powers and capacities which are specifically granted by the act of incorporation, and such as are necessary to carry into effect the powers expressly granted. And hence, it can make only such contracts'as are connected with the purpose for which it was created, and which are necessary, either directly or incidentally, to answer that end.” 2 Kent. Com. 298; 7 How. Miss. R. 580.

The application of these principles in determining- the extent of the powers conferred by the act of incorporation, upon the board of trustees, leaves not the slightest doubt that they were vested with authority to acquire leasehold property in lands and houses, which was useful or necessary for the purposes of the school. A lease for years is a bargain and sale of the demised premises for the time. And here the rent agreed on, was in effect the price or purchase-money to be paid for the ownership of the premises during the continuance of the lease. An estate in lands for years or for life, is clearly as much property as an estate in fee-simple. The proposition is therefore too clear for debate, that the power vested in the board of trustees, “ to acquire property, by gift, purchase, or otherwise,” as fully authorized them to acquire an interest in lands and houses for a term or for life, as to become the owner of the same in fee.

Indeed, we do not understand counsel as seriously contesting the authority of the board of trustees to take a lease- of lands and houses; but to deny their power, under the charter, to enter into any covenant which would render the corporation responsible for injuries to the demised premises, resulting from fire, or other unforeseen and unavoidable accident. In other words, that the corporation was incapable of becoming an insurer against fire.

The question, whether a lessee, who contracts to keep the demised premises in repair, and, at the determination of the lease, to surrender them in as good condition as they were in at the date of the lease, in the event of the destruction of the buildings by fire during the term, without his default, would be bound to rebuild them, has never been decided in this court. Under these circumstances, that the tenant would be bound to rebuild, is the ancient and well-settled doctrine of the English courts. The case of Walton v. Waterhouse, 2 Saun. Rep. 422, and the cases cited in note (2) to that ease, contain all the English law on the subject; the principle extracted from which is, “ that, although a man may be excused from a duty, imposed upon him by the law, if he is disabled from performing it without any fault of his own, yet, when by his own contract, he creates a duty or charge upon himself, he is bound to make it good, notwithstanding any accident by inevitable necessity.”

The same doctrine is generally recognized in this country. Story on Con. 383; 4 Harris & John. 564; 1 Parsons on Con. 425; 7 Porter, 42; Phillip v. Stevens, 16 Mass. R. 238. And we are satisfied that the doctrine is a correct one.

Such being the proper construction and legal effect of a covenant by the lessee, to keep the demised premises in repair, and, at the determination of the lease, to surrender them in as good condition as they were in when the lease was made, we will proceed to ascertain whether the act of incorporation vested in the board of trustees, the power and capacity to enter into a covenant of that character.

If the question were, simply, whether the board of trustees, in virtue of the powers conferred by the charter, have or have not the authority to enter into policies of insurance against loss by fire, or by other casualties, where the consideration of the contract, and the object of the insurer, is a stipulated premium, no possible doubt could exist on the subject. The business of insurance is entirely foreign to the objects of the incorporation. Manifestly, the authority to make such contracts, is not expressly granted; and it cannot be conceived how its exercise is necessary to carry into effect the express powers.

But there is an essential and manifest distinction between a policy of insurance, in the legal sense of the term, and the contract declared on. In the latter, the sole object of the trustees was the acquisition of property, needful in effectuating the purposes for w'hich the charter was granted. There was no stipulated premium, and a profit in that shape, manifestly, was not in the contemplation of the parties. It must be supposed that the trustees understood the legal operation of the contract; and hence, their liability to repair injuries to the leased premises, occasioned by inevitable accident, as well as those which would result from the decay of the buildings, or other natural causes, constituted part of the consideration for their ownership of the property, during the continuance of the lease. It is not to be controverted, that the trustees were capable of binding the corporation, to make good any deterioration in the premises, which would result from natural or known caus.es; and, therefore, it is not easy to perceive why they were not, also, capable of obliging the corporation to make good injuries occasioned by accidental causes. Indeed, it seems impossible, in contracts of this character, to draw a distinction between the power requisite to mate a valid contract to repair anticipated or inevitable injuries, and a contract to make good injuries resulting from accident. In the very nature of things, there can be no distinction between the power requisite to make a valid contract, in the one or the other. It is only by looking at the subject-matter of the contract, and not at the capacity to contract, that any misapprehension could arise.

It follows, from this view of the subject, that the board of trustees of the Collegiate High School, in making the alleged contract, acted within the limits of their chartered powers; hence, that the demurrer to the complaint was improperly sustained. We, therefore, reverse the judgment, and remand the cause, with leave to the defendants in error to answer the complaint in the court below.

Harris, J., presided on the trial below, and gave no opinion here.