Source: https://supreme.justia.com/cases/federal/us/151/639/
Timestamp: 2019-04-19 10:30:32+00:00

Document:
The citizens of Millersburg, Kentucky, raised a fund for the purpose of establishing a collegiate institute in that place or its vicinity, and invited the Kentucky Annual Conference of the Methodist Episcopal Church, South, to take charge of it when established. The invitation was accepted, and the legislature of the state incorporated the institute by an act, one provision in which was a reservation to the legislature of the right to amend or repeal it. Large additions were then made to the fund from other sources, and in 1860 another act was passed incorporating the Board of Education of that Conference of the Methodist Church. In this act, after reciting, the raising of the money and the establishment of the institution at Millersburg, the control of the college and the disposition of the sums raised were placed in the hands of the Conference. This act also was passed subject to the right of the legislature to amend or repeal. In 1861, the legislature passed another act, in which, as construed by the courts, power was conferred upon the Conference to remove the college from Millersburg to any other place within the bounds of the Kentucky Annual Conference. Held that the latter act did not impair any contract created by the former statutes and proceedings.
The Pennsylvania College Cases, 13 Wall. 190 require the affirmance of the decree in the court below in this case.
or from using the capital or fund of the institute for any purpose or at any place except in its conduct and management at Millersburg.
Upon final hearing, the bill was dismissed, and that decree was affirmed by the Court of Appeals of Kentucky, the highest court of the commonwealth. The present writ of error questions the correctness of the decree of affirmance, upon the ground, among others, that it gives effect to legislative enactments which, it is alleged, impair the obligation of a contract, in which the plaintiffs and those in whose behalf they sue have an interest for the permanent location and maintenance of the college at Millersburg.
"Whereas it is proposed to purchase ground and erect buildings for and institution of learning and boarding house, the whole to cost about fifteen thousand dollars, and whereas it is believed to be indispensable to the success of educational enterprises that they may be under the supervision of some denomination, therefore,"
when the buildings are put under contract, one-third when they are covered in and floors laid, and one-third six months thereafter."
"divers citizens in and near the Town of Millersburg, in the County of Bourbon, have subscribed a considerable sum of money for the purpose of erecting in or near said town a seminary of learning, to be under the control and supervision of the Kentucky Annual Conference of the Methodist Episcopal Church, South, to the extent hereinafter provided."
"All persons who shall subscribe twenty-five dollars or more in aid of said institute shall be deemed stockholders therein, said sum to constitute a share. And if the said Methodist Church shall ever relinquish or surrender, or cease to exercise a control over said institute, then and in that case, its control and management shall revert to and vest in said stockholders, who may at a meeting for that purpose called, proceed to elect a board of trustees, and if said corporation shall cease to exist, or be dissolved, or its charter surrendered or repealed, all its property of every kind or description shall vest in said stockholders."
This act, it was declared, should take effect from its passage, "but the legislature reserves the right to amend or repeal the same."
"1, That we accept the institute upon the terms set forth in the charter; 2, that we request the presiding bishop to appoint the preacher of Millersburg station agent to raise the sum of $10,000 for our educational fund; 3, that the sum of $10,000, when secured, be subscribed as the stock of this conference in the institute; 4, that we, the members of this conference, being deeply impressed with the sense of our educational necessities, do hereby pledge ourselves personally to the support of this institution, and we will afford every facility in our power to the agent in raising the above $10,000."
"1, That we, as stockholders in the institute, will unite in application to the legislature to so amend the charter as to make it a first-class male college; 2, that we will raise our subscription to $10,000, and that we will use our best efforts to advance and sustain the enterprise, upon the condition that the Kentucky Annual Conference of the Methodist Episcopal Church, South, will appoint a special agent to raise an additional sum of $10,000 and further that said conference in good faith pledges itself to aid in the erection of suitable buildings and to take the proper steps to endow the college as soon as practicable."
These proceedings were approved by the conference.
Annual Conference of the Methodist Episcopal Church, South, to be held by said conference as part of the educational fund; 8, that the treasurer of the educational fund be instructed to pay over moneys coming into his hands, as they may be needed, so soon as the $10,000 already pledged by the stockholders shall have been secured, provided that he shall, in so doing, be governed by the action of the conference and the other part of these proceedings; 9, that any individual who shall endow a professorship shall have the privilege of naming it."
"$500. Bourbon County, Kentucky, _____, 18__. ___ year after date, I promise to pay to the order of _____, treasurer of the educational fund of the Kentucky Annual Conference of the Methodist Episcopal Church, South, five hundred dollars, this being the _____ note in _____ payment for a scholarship in the college or university to be established by said conference."
will entitle him to two perpetual scholarships in the college or university established by said conference. _____ County, Kentucky, _____, 18__."
While certificates of scholarships were being issued, the buildings were in process of erection at Millersburg, and by November 23, 1859, nearly $60,000 had been donated in cash and notes, of which about $20,000 had been expended no the buildings, leaving only a small sum to be applied for their completion.
"the Kentucky Conference of the Methodist Episcopal Church, South, have resolved to form an educational fund and establish a college for the promotion of literature, science, morality, and religion within the limits of said conference, and having in fact secured the sum of fifty-seven thousand dollars in cash and in good and reliable notes, and located an institution at Millersburg, Bourbon County, which is now ready for occupancy: now, in order to give full and complete legal effect thereto,"
16, 1858, was repealed, and by the twelfth section the right to amend or repeal the act of 1860 was reserved.
"§ 1. That it shall and may be lawful for the trustees of Millersburg Male and Female Collegiate Institute, who were in office on the 12th day of January, 1860, when the act incorporating said institute was repealed, or their survivors, to convey by deed to the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, South, the property held by said trustees in and near the Town of Millersburg for the purpose of carrying into effect any contract made by said trustees or stockholders of said institute with said board, and their conveyance, recorded in the proper office, shall be effectual to pass the title of said property to said board and their successors."
"SEC. 2. Nothing contained in the act of the General Assembly incorporating said board, approved January 12th, 1860, shall be construed so as to prevent or hinder said board, or their successors, from removing the seat of the college from Millersburg to any other place in the bounds of the Kentucky annual conference."
"SEC. 3. That act to be in force from its passage."
"for the benefit of the educational fund of the Kentucky Conference of the Methodist Episcopal Church, South, forever, to be held and used and disposed of in such way as the charter of said Board of Education may direct. "
The plaintiffs contend that notwithstanding the act of 1858 reserves the right to amend or repeal the charter of the Millersburg Male and Female Collegiate Institute, the eleventh section of the act of 1860, repealing the act of 1858 incorporating the Millersburg Male and Female Collegiate Institute, was repugnant to that provision of the Constitution of Kentucky then in force declaring that "no law enacted by the General Assembly shall relate to more than one subject, and that shall be expressed in the title." Art. II, § 37. This contention was sustained by the Court of Appeals of Kentucky upon the ground that the subject of the repeal of the charter of 1858 was not expressed in the title of the act of 1860, and in our consideration of the principal question in the case, we will assume without discussion that the charter of the institute was not repealed by the act of 1860.
the naked legal title, and as section 1 of the Act of September 17, 1861, merely empowered those trustees to convey that property to the Board of Education, which they might have been coerced to do by a court of equity, no injury resulted from it."
But plaintiffs in error insist that the first section of the act of 1861 impaired the obligation of the contract in question.
transfer of the naked legal title from the trustees of the institute to the Board of Education did not take from the institute any substantial right, but was in execution of the purpose to put the college and its property wholly under the control and management of the Kentucky Annual Conference of the Methodist Church, South. The deed from the trustees stated that the college buildings had been erected for the benefit of the educational fund of the Kentucky Conference of the Methodist Episcopal Church, South, forever, to be held, used, and disposed of in such way as the charter of that board might direct. That charter, we have seen, was granted to give legal effect to the purpose of the conference, previously avowed, to form an educational fund, and establish a college for the promotion of literature, science, morality, and religion within its bounds, to which end a large sum in cash and notes had been secured, and an institution located at Millersburg, then ready for occupancy. If the first section of the Act of September 17, 1861, had contemplated any diversion of the property and funds of the institute from the purposes for which they were acquired, and for which, by its charter, they could be used, a different and more serious question would have arisen.
"shall be construed so as to prevent or hinder said board or their successors from removing the seat of the college from Millersburg to any other place within the bounds of the Kentucky Annual Conference."
The contention of the plaintiffs is that there was and is a contract the benefits of which they can rightfully claim, that the institute should remain permanently at Millersburg, and that, if the second section of the act of 1861 contains a grant of power to remove the institute from the town, it was void, as impairing the obligation of the contract.
in force confiding the powers of government to three distinct departments -- legislative, executive, and judicial -- and declaring that no person or collection of persons, being of one of those departments, should exercise any power properly belonging to either of the others except in the instances expressly directed or permitted. Art. 1, §§ 1, 2. But the Court of Appeals of Kentucky, regarding substance rather than form, held that the intention of the General Assembly by the second section of the act of 1861 was to confer upon the Board of Education a power not expressly granted by the act of 1860 -- namely, the power of removing the seat of the college from Millersburg to any other place in the bounds of the Kentucky Annual Conference. We assume that the act means what the court below said it meant in view of the constitution of the state. It must therefore be taken, in our examination of the question as to the repugnancy of the second section of the act of 1861 to the Constitution of the United States, that it was intended by the General Assembly of Kentucky to give the Board of Education authority to remove the college and its capital and funds from Millersburg to some other place within the bounds of the Kentucky Annual Conference. Did the act, thus interpreted, impair the obligation of any contract that the plaintiffs in error had in reference to that college? It certainly did if the alleged contract forbade the removal of the institute from Millersburg except with the assent of the plaintiffs and those in whose behalf they sue; so that it is necessary to inquire as to the existence and effect of the alleged contract, and that question must be determined by this Court upon its own judgment, independently of any adjudication by the state court. Jefferson Bank v. Skelly, 1 Black. 436, 66 U. S. 443; Wright v. Nagle, 101 U. S. 791, 101 U. S. 794; Louisville & Nashville Railroad Co. v. Palmes, 109 U. S. 254, 109 U. S. 257; Louisville Gas Co. v. Citizens' Gas Co., 115 U. S. 683, 115 U. S. 697; Vicksburg &c. Railroad Co. v. Dennis, 116 U. S. 665, 116 U. S. 667. If there was no such contract, as is alleged, then no right secured by the national Constitution has been denied by the decree below.
that the original purpose of those who were instrumental in establishing this institute was to have it located at Millersburg. Undoubtedly those persons were moved to act in some degree by the belief that the seat of the proposed college would be at Millersburg. That belief is disclosed in the resolutions adopted by the citizens of Millersburg at the meeting of January 4, 1858. It is also expressed in the charter of the institute granted in the same year, reciting that money had been subscribed for the purpose of erecting in or near said town a seminary of learning. It is again expressed in the certificates of perpetual scholarships issued under the authority of the conference. It is further expressed in the charter of the Board of Education of 1860, referring to the college as having been "located" at Millersburg, with buildings then ready for occupancy. And it is equally manifest that when that charter was granted, the conference believed that the ends proposed to be accomplished by the establishment of the institution -- namely, the promotion, within its bounds, of literature, science, morality, and religion -- could be accomplished by an institute located at Millersburg. It is equally true, upon the record before us, that the conference was not wanting in earnest persistent efforts to sustain the institute at Millersburg. But that body in its wisdom determined that the objects in view could be best a accomplished by removing the college to some other place, and we are of opinion that its removal to Winchester would not be in excess of its authority.
It is a significant fact that the permanent location of the institute at Millersburg was not made in terms, by the resolutions of the citizens' meeting or by the charter of the college, a condition upon which the control of the institute and its property should remain with the conference. The Methodist Episcopal Church, South, as represented by the Kentucky Annual Conference, has not relinquished, surrendered, or ceased to exercise control of the institute, and therefore its control and management has not reverted to stockholders through trustees of their own selection. The institute has not been discontinued, nor has the corporation ceased, in law, to exist, nor has its charter been surrendered or repealed, and therefore its property has not, in any view of the facts or of the legislation in question, vested in stockholders.
or expected, when making their subscriptions or giving their support to the institution, that it would always be maintained at that place. This Court, in determining the federal question involved, can only look at the question of the power of the General Assembly of Kentucky to authorize the removal of the institute to another place within the bounds of the conference. In the absence of a binding agreement, upon the part of the conference or those representing it, that the institute should remain permanently at Millersburg, even if the object of its original establishment could not be accomplished by keeping it there, our duty is to adjudge, without reference to considerations of abstract justice or equity, that the legislation in question is not repugnant to the Constitution of the United States.
In the brief of learned counsel for the plaintiffs are cited numerous authorities which, it is supposed, require a different conclusion from that announced by us.
opulent charity out of the hands of those to whose care and oversight the founders confided it, and place it in the hands of strangers who never breathed, perhaps, a single breath of vitality into this institution, either to impart to it life or growth? We think not."
"it would at least seem to be just that the donors should have a right to insist that as long as their donation is retained, it shall not, even under the authority of the state, be diverted from the uses stipulated in the charter, and the right should be transmissible as incident to the reversionary interests, and to the contract of donation. . . . We are of opinion, therefore, upon the ground of authority, as well as of reason, that the original charter of the University of Louisville creates a private corporation which is protected by that clause of the Constitution of the United States which prohibits the enactment of laws impairing the obligation of contracts, and that so much of the amended charter of the City of Louisville of 1861 as relates to the existing corporation and charter of the university and vests, or professes to vest, in a new corporation or in new trustees the property and privileges of the original corporation is in violation of that constitutional prohibition, and consequently void."
Our attention has also been called to the case of State v. Adams, 44 Mo. 571, 577, relating to the charter of St.
For these reasons, the amendment was held to be a violation of the contract embraced in the charter.
"Nothing is clearer in point of law than the right of a founder to have his visitorial power exclusively exercised by the very functionaries in whom he has vested it. It is the very substratum of his dotation. This is not all. The founder has a right to have the statutes of his foundation, as to the powers of the trustees, strictly adhered to except so far as he has consented to any alteration of them. But an authority to alter or modify those powers can never be fairly construed into an authority to take them away from his trustees and confer the same powers on other persons. My view of the resolve, therefore, is that it authorizes no alterations or modifications of the college charter which shall divert the funds of the founder from their original charter, and, a fortiori, that it does not justify the transfer of these powers from the trustees to any other persons not in privity with them. It does not authorize the Legislature of Maine to assume to itself the powers of the trustees or overseers, or either of them, or to appoint new trustees or overseers, for that would affect the rights and interests of the founder, who has a right to select his own administrators of his own bounty in perpetuity. "
Neither of those cases has any application to the one before us. There has been no diversion of the funds raised for this institute. From the beginning, the purpose was to establish an institution to be under the control and supervision of some religious denomination, and the denomination selected was the Methodist Episcopal Church, South, represented by the Kentucky Annual Conference. Nor has the legislature assumed to make any material change in its control and management. The trustees, as the charter of the institute required, are selected by that conference. The question here relates simply to the power of removing the institute from the place of its origin to another place within the bounds of that conference. There is no question of diversion of funds, or of change of control and management. It is clear that the above cases are wholly inapplicable to the present controversy.
The case more directly in point than any one to which our attention has been called is the Pennsylvania College Cases, 13 Wall.190. It resembles the present one in many important particulars. The principles which in that case sustained the validity of the legislation of Pennsylvania relating to the colleges at Canonsburg and Washington lead to an affirmance of the decree below.
"but be in disregard of the rights and interests of those residing elsewhere than at Millersburg, who have contributed, either by purchasing scholarships or donations, very much more than has been raised at that place. There is mention made in the act of 1860, and also in the certificates of scholarships, of the college being established at Millersburg, but the language used does not import an agreement that it shall permanently remain there. On the contrary, we think it should, as it can fairly, be interpreted as merely descriptive of the institution. In our opinion, therefore, there exists no contract or undertaking, express or implied, for the continuance of the institution at Millersburg any longer than its useful and successful operation requires."

References: § 37
 Art. 1
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