Franklin County Grammar School v. Bailey , 62 Vt. 467 ( 1890 )

The opinion of the court was delivered by

Ross, J.

The right of the plaintiff to recover depends upon-whether the act of the Legislature, approved Nov. 25,1884, purporting to give the use of the lands sequestered or granted to-the use of county grammar schools in the town of Riehford, among which is the land sued for, is an act which the Legislature, under the circumstances, could lawfully pass. On Nov. 4, 1799, the Legislature passed an act incorporating the plaintiff,, with the usual powers and rights of a corporation, for the purpose of maintaining a grammar school in St. Albans, in the county of Franklin, upon condition that the inhabitants- of St. Albans should, within two years, erect a house for the grammar ..school of the value of $800, and forever after keep the same in repair. It is conceded that the condition was complied with in ■erecting and keeping the house in repair to 1860. Then the ■plaintiff entered into an arrangement with School District No. •4 by which that district was to keep and maintain such a building on the lot of the plaintiff sufficient to accommodate one hun•dred pupils on certain considerations. This has been done. It is apparent that the defendants cannot, against their lease of the land from the plaintiff, in this suit, collaterally try the question -whether this arrangement with the school district was such an •act that the State by proper proceedings might have the charter •which it had granted without reserving the right to alter, modify or repeal, set aside and declared forfeited. It is not one of the issues raised and cannot be so adjudged collaterally in this suit. After the charter of the plaintiff and after it had complied with the condition imposed, and while it was maintaining such a -school building as required by the condition, the Legislature, Nov. 7, 1815, passed an act entitled an act appropriating the ■county grammar school lands in the county of Franklin. By ¡section one of this act, the several shares of land in the county •of Franklin granted to the use of the county grammar schools in this State are appropriated to the use of the plaintiff. By ¡section two, it is enacted that the plaintiff shall hold the said rights or shares of land to themselves and successors in trust for dhe use of said Franklin County Grammar School forever. And it is hereby made the duty of said corporation to lease the said Tights or shares of land for such time and for such rents as they -shall deem just, and shall appropriate the rents and profits-of ¡said lands to the use and for the benefit of said Franklin County Grammar School in such a manner as shall be most conducive to the interest and advantage of said school. In this act the Legislature reserved no right to alter, modify or repeal the act, ,=and there existed then, nor now, no constitutional limitation •¡saving such right to future Legislatures. It is apparent that the ■plaintiff might accept or reject the provisions of this act.

It does not appear whether this act was passed by the procurement of the plaintiff. Presumably it was. The plaintiff at once-accepted the provisions of the act, took upon itself the duties-imposed, and, in 1835, made a perpetual lease of the land sued for,, reserving the right of re-entry if the rent should not be paid as stipulated. While the defendants may not dispute the title of the plaintiff, their landlord, they may show that the plaintiff’s-right to the land sued for and into the possession of which they entered as the tenants of the plaintiff, has terminated without, their fault, so that when this suit was commenced no rent which the plaintiff could lawfully claim remained unpaid ; and that the plaintiff liad no right to re-enter for the non-payment of rent as-stipulated, or for any other cause, as its right to the use of the-land had been taken away by the act of the Legislature,. Orleans County Grammar School v. Parker, 25 Vt. 696. Hence, the real question is whether the act of 1884 was one-which, under the existing circumstances, the Legislature could legally pass. The decision of this question depends upon whether the act of 1815 and what had been done by the plaintiff under it, under the Constitution of the United States, was subject to-modification or repeal by the Legislature, or to any action on the part ^of the Legislature except to properly enforce the application of the use of the lands thereby appropriated to the purposes for which they were set apart in the charters of the several towns. In the charter of the town of JElichford one-seventieth part or share was set apart “ to the use of the county grammar schools throughout this State.” No question is made but this is a legislative appropriation of this land to the irse named. Town of Pawlet v. Clark, 9 Cranch, 292. The only contention is whether the appropriation of these lands in the county of Eranklin, by the act of 1815, falls within the principle of the Dartmouth College .case, and that class of cases which placed it beyond the power of future Legislatures to-take it from the plaintiff. If the appropriation had been made a part of the original charter of the plaintiff, it is conceded, on the-authority of Caledonia County Grammar School v. Burt, 11 Vt. 632, that subsequent Legislatures would have no power to fake the lands from the plaintiff. It is attempted to distinguish this from that ease, mainly because the appropriation was made by an act subsequent to the granting of the charter. In that -case the charter was granted upon condition that the inhabitants •of Peacham contributed to the establishment of the school, and the appropriation of the lands sequestered in the charters of the towns to the use of county grammar schools was contained in the original charter. No right to alter, modify or repeal the charter was reserved. The condition was complied with by the inhabitants of the town. It was hold, following the Dartmouth case, that the lands thus appropriated could not be taken from that school by subsequent legislation. In regard to these lands, in Grammar School v. Burt, it is held that they did not vest in the original proprietors of the town, individually or collectively, but remained with the Legislature and were at its entire disposal, “ except that the charter contained a declaratory covenant or plighted public faith that they should only be appropriated for the uses and purposes mentioned, and to which by the charter they were sequestered and dedicated,” citing Pawlet v. Clark, 9 Cranch, 293. “ Over these rights the Legislature had an absolute and entire control and disposal for the uses and purposes for which they were reserved. Of the one for the use of grammar schools, it had the power to grant it to any one or more, and upon such limitations and conditions as the Legislature chose to express, or without any conditions whatever, in which case it would have only the implied condition that the use must ever •be applied to the purposes of the grant.” In the case at bar the .appropriation by the act of 1815 was without reservation, condition or limitation, except that their use should be applied to the purposes for which they had been sequestered and dedicated by the charter. By its terms this was a full and entire grant of the lands. It was not, as contended, the grant of the rents to be derived from them for a limited term of years, or from year -to year. The language is that the plaintiff “ shall have the said rights or shares of land to themselves and successors in trust for 'the use of said Franklin County Grammar School forever.” This is as absolute a grant of the lands as is that of the Legislature to the proprietors.

Such grants have always been held, when made without money •consideration and without conditions, limitations or reservations for the action of future Legislatures, irrepealable. The foundation of all property rights in real estate depends upon the irrepealability of such grants. This was an executed grant. Nothing further remained to be done by the Legislature to pass these lands, sequestered and dedicated to the use named in the •charter of the several towns, to the plaintiff. Nothing remained to be done by the plaintiff except to accept the lands, which it at •once did. In this respect this case is distinguishable from Trustees of Bishop's Fund v. Rider, 13 Conn. 87. In that case the fund sought to be reached remained in the possession and control of the State, and when the act relied upon by the plaintiff was passed, it had not been received by the State, and many things were to be done by the officers of the State to bring it Into the possession of the State. It was nqt, so far as related to the fund claimed, an executed gift or grant, but was wholly executory and rested in the promise of- the State contained in the original act to make the gift or grant when the money should be received from the United States. While thus resting in the .promise of the State, being wholly without consideration, the promise was unenforceable, and a subsequent Legislature could legally withdraw it. In the case at bar, if without consideration, by the act of 1815, the State did all it could do and all that was necessary to pass these lands to the plaintiff. The plaintiff, by accepting the provisions of the act, made the donation of ■these lands, if a gift, an executed gift or grant. If an executed gift or grant, the defendant contends it was without consideration, and for that reason subject to recall by future Legislatures. We do not understand that the State stands differently from individuals in regard to executed gifts or grants. As already said, nil the grants of lands in townships to the original proprietors are of this kind. We understand that an executed gift is a grant and a contract, the obligations of which are secured by the provision of the Constitution of the United States, which prohibí tsfhe States from passing any law which impairs an obligation of contracts. By' a grant arising from an executed gift the donor relinquishes all right to the thing donated, and expressly or impliedly contracts with the donee that he does so and that he will not endeavor to reclaim the thing to himself; and the donee receives the thing donated as his own, freed from all rights of the donor therein.

In The Trustees of Dartmouth College v. Woodward, 4 Wheat. 656, Washington, Justice, uses this language: “ What is a contract ? It may be defined to be a transaction between two or more persons in which each party comes under an obligal ion to the other, and each reciprocally' acquires a right to whatever is promised by the other. Powell on Conts. 6. Under this definition, says Powell, it is obvious that any feoffment, gift, grant, agreement, promise, etc., may be included, because in all (here is a mutual consent of the minds of the parties concerned in them, upon an agreement between them, respecting some-property or right, that is the object of the stipulation.” He adds-that the ingredients requisite to form a contract are parties, consent and an obligation to be created or dissolved. These must all concur, because the regular effect of all contracts is, on one side to acquire and on the other to part with some property or rights ; or to abridge or restrain natural liberty by limiting the parties to do or restraining them from doing something which before they' might have done or omitted. If a doubt could exist that a grant is a contract, the point was decided in the case of Fletcher v. Peck, 6 Cranch, 87, in which it was laid down that a contract is either executory or executed. By the former a party binds himself to do or not to do a .particular thing; the latter is one in which the object of the contract is performed, and this differs in nothing from a grant; but whether executed or executory-, they both contain obligations binding on the parties, and both are equally within the provisions of the Constitution of the United States, which forbids the State government to pass laws impairing tlie obligations of contracts.” In Fletcher v. Peck, cited supra, it was held that the grant of lands by the Legislature of Georgia — as we understand without consideration — though procured by conniption and fraud, could not be set aside by' the act of a subsequent Legislature when the lands had passed into the hands of a bona fide purchaser for value, before the passage of the repealing statute. That case is cited as authority in Grammar School v. Burt, supra. In the Dartmouth College case, p. 683, Story, Judge, uses this language: “ But it must, on the other hand, be admitted that the Constitution did intend to preserve all the obligatory force of contracts which they have by the general principles of law. Now, when a contract has once passed bona fide into grant, neither the King nor any private person, who may be the grantor, can recall the grant of the property, although the conveyance may have been purely voluntary. A gift completely executed is irrevocable. The property conveyed by it becomes, as against the donor, the absolute property of the donee, and no subsequent change of intention of the donor can change the rights of the donee. 2 Black. Com. 441; Jenk. Cent. 104. And a gift by the crown of incorporeal hereditaments, such as corporate franchises, when executed, comes completely within the principle and is, in the strictest sense of the terms, a grant. 2 Black. Com. 317, 346 ; Shep. Touch, c. 12. Was it ever imagined that land voluntarily granted to any person by the State was liable to be resumed at its own good pleasure ? Such a pretension would, under any circumstances, be truly alarming; but in a country like ours, where thousands of land titles had their origin in gratuitou grants of the States, it would go far to shake the foundations o the best settled estates.”

On p. 698 he further says : “ The truth is, the government has no power to revoke a grant, even of its own funds, when given to a private person or a corporation for special uses. It cannot recall its own endowments, granted to any hospital, or college, or city, or town, for the use of such corporations. The only authority remaining to the government is judicial, to ascertain the validity of the grant, to enforce its proper uses, to suppress frauds, and if the uses are charitable, to secure their regular administration through the means of equitable tribunals in cases where there would otherwise be a failure of justice.”

Speaking for the court in Terrett v. Taylor, 9 Cranch, 50, the same learned judge says: “ If the Legislature possessed the authority to make such a grant and confirmation, it is very clear to our minds that it vested an indefeasible and irrevocable title. We have no knowledge of any authority or principle which could support the doctrine that a legislative grant is revocable in' its own nature, and held only durante bene plácito. Such a doctrine would uproot the foundation of almost all land titles.” This court has said in Grammar School v. Burt, supra, that the State Legislature possessed the authority togrant these lands. The principles, so clearly presented by the highest judicial tribunal, governing the obligations growing out of voluntary grants have never been questioned in the many cases on this subject, subsequently arising in the United States Supreme Court. They were given as unquestioned in that case, when the question was whether the franchises of a charter expressed to have been conferred ex mero motu were within the protection of this clause of the United States Constitution. It is true the learned judges found a consideration for granting the franchises conferred in that case. On the principles so clearly enunciated, we think if the grant of the lands made by the act of 1815 was without consideration, it was an executed gift, a grant whieh could not be recalled by subsequent legislation. It is conceded by the defendants that if the grant of these lands to the plaintiff, by the act of 1815, was on consideration, whether executed or unexecuted, they could not.be taken away by subsequent legislation. We think the grant was on consideration. Before the grant the Legislature was charged with the duty of caring for them and appropriating the income arising therefrom to the purposes to which they had been sequestered and dedicated in the charters of the towns. By the grant, if accepted, the Legislature was relieved of this duty. By accepting the grant, by its terms the plaintiff took upon itself the duty, which it did not have before, of leasing and caring for these lands, collecting and applying the rents to the purpose to which they had been dedicated. This was a sufficient valuable consideration, a relief from a duty on the part of the State, the discharge of which would, of necessity, be more or less expensive to it pecuniarily, and an assumption of this duty and expense by the plaintiff. Besides this consideration, there might well be found the additional consideration which was . found by the learned judges in the Dartmouth College case and by our own court in Grammar School v. Burt. Says Marshall, Chief Justice, in the Dartmouth College case, p. 637: “The objects for which a corporation is created are universally such as the government wishes to promote. They are deemed beneficial to the country; and this constitutes the consideration of the grant.” On the same subject, p. 688, says Story, Judge: “And where the grantees (in the charter) are mere trustees to perform ■services without reward, exclusively for the benefit of others, for public charity, can it be reasonably argued that the services are less valuable to the government than if performed for private •emolument of the trustees themselves ? In respect, then, to the trustees also, there was a valuable consideration for the charter, the consideration of the services agreed to be rendered by them in the execution of a charity, from which they could receive no private remuneration.” He further says, p. 690 : “ If this had been a new charter, granted to an existing corporation, there could not have been a doubt that the grant would have been an ■executed contract with the corporation, as much so as if it had been to any private person.” The difficulty there to be met was that the corporation, to which the grant was made, was not in esse .at the time the grant was made. That was overcome by the learned judges. Here the corporation was in esse at the time , this grant was made, carrying on the work of charity for which it was chartered, the work of a grammar school in which the ¡State was deeply interested. The trustees were then charged with the gratuitous administration, to that public purpose, of the .funds they had in hand. By accepting.the grant made by the act of 1815, they increased their cares and responsibilities and undertook, without compensation from the State or otherwise, so* far as is shown, the duty of renting and caring for these lands and of applying the avails to the public use to which they had been sequestered and dedicated, a purpose in which the State was deeply interested.

This was ample consideration for the grant, if a consideration-be required. The acceptance of the grant was a benefit to the State in that it relieved it of the care of these lands and of the expense of leasing, collecting and appropriating the rents to the purpose to which they had been dedicated, a detriment to the plaintiff, in that these burdens and duties, from which the State was relieved, were to be done by it. Either the burden assumed by the plaintiff or the relief secured to the State was a consideration for the grant. From whatever point we consider it, the act of 1884 falls within the inhibition of the Constitution of the United States, and must be declared inoperative and void. None of the authorities cited by the defendant’s counsel are to the contrary.

The judgment of the County Court is reversed and the cause is referred to the clerk to ascertain the rent due the plaintiff, with interest, agreeably to sec. 1259, R. L., and judgment rendered that unless the defendant pays to the clerk for the plaintiff the rent so found due and costs of suit within thirty days from being notified, the plaintiff shall recover the possession of the premises with intervening profits and costs; and if the defendant shall make such payment, then the case to be discontinued under the statute.

Royce, Ch. J., and Rowers, J., dissenting.

Note. — This case was argued at the January Term, 1889, Franklin County, and was assigned to Boss, J., who then wrote the above opinion which was not concurred in by all the sitting judges. Ic was re-argued at the General Term, 1889, when the opinion was adopted by a majority of the court.