Case Name: Lessee of Samuel Overmyer vs. Cyrus Williams
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1846-12
Citations: 15 Ohio 26
Docket Number: 
Parties: Lessee of Samuel Overmyer vs. Cyrus Williams.
Judges: 
Reporter: Cases decided in the supreme court of ohio : upon the circuit at the special sessions in Columbus
Volume: 15
Pages: 26–33

Head Matter:
In Bank.
Dec. Term, 1846.
Lessee of Samuel Overmyer vs. Cyrus Williams.
The Ohio Railroad Company is authorized, by its charter, to purchase and hold real estate, when necessary for the procurement of materials, or for the economical construction of the road.
This is a Writ of Error to the Court of Common Pleas of Sandusky County. .
The action below was ejectment, and, from the bill oT exceptions filed in the cause, it appears that the plaintiff claimed the land in controversy, by' virtue of a deed from John Overmyer, dated April 9th, 1845. The defendant claimed the land by virtue of a deed from said John Overmyer, to the Ohio Railroad Company, dated October 4th, 1839, and from the company to himself, dated June 19th, 1842. The defendant also proved on the trial, that it was difficult, if not impossible, to procure materials for the construction of the road without the purchase of land; that this tract of land was bought by the company for the purpose of procuring materials and the right of way; that the road passed over a corner of this land ; that the timber growing upon it was used in the construction of the road; and that it was as convenient, or more so, to obtain timber from this land as from any other land, though abundance of timber might be procured in the neighborhood. Upon this proof, the Court of Common Pleas — before which the case was tried, without the intervention of a jury — rendered a judgment for the defendant.
To this decision of the Court, the defendant filed exceptions, and assigned for error —
First: That the Court erred in deciding that the Ohio Railroad Company had power, by their charter, to receive and hold a conveyance of real estate.
Second: That the Court erred in deciding that the deed from John Overmyer, to the Ohio Railroad Company, passed the title of said land to the company.
Third: That the Court erred in giving judgment for the defendant.
To decide the questions presented upon this assignment of errors,. the case was reserved for decision here.
jL. T3. Otis, for Plaintiff in error.
Had the Ohio Railroad Company power, by their original charter, passed March 8, 1836, to receive and hold the legal title to the premises in controversy ?
The third section of their charter says, “ that they shall be ' capable in law of purchasing, holding, selling, leasing and £ conveying estates real, personal and mixed, so far as the same £ shall be necessary for the purposes hereinafter mentioned, £ and no further.”
The purposes here referred to, are defined in the 12th section of the charter to be, “the location, construction and repairs of a road not exceeding one hundred feet in width.”
A clause in the 3d section of this charter fully empowers the’ company, and its agents, “ to enter upon, and use, any adjoining land; take stone, timber, materials,” &c.
Thus it will be seen that this company, to carry out the purpose for which it was created, did not need a single foot of land, except a strip for its track, one hundred feet in width.
It is claimed by counsel for the defendant, that the power of acquiring title to lands, is an incident to every corporation.— We think this position incorrect. ' In the case of The State of Ohio v. The Granville Alexandrian Society, 11 Ohio Rep. 12, the Court say, the rule for construing acts of incorporation, is, “ to consider corporations as having such powers ás are spe- £ cifically granted by the act of incorporation, or as are neces- £ sary for carrying into effect the powers expressly granted, and £ as not having any other.”
' The 'power tó deal in.real éstate' generally,' by purchasing and selling the same,'is expressly prohibited to this corporation, use of.-the words “'and no further,” in the 3d Section of .their chárter. What else could the-Legislature have intended by the use-of’.'this' knguagé, 'than to prohibit this corporation from' dealing,, in lairds generally,-as in, the , cáse of the lands" in. controversy':1
•' Again,: IThis power was taken a^Vay. from-this, corporation, “impliedlyby.the purposes for which it was created.' .
: That this'corporation ha'd- not the power, by its original charter,-to acquire the title to the land’ in controversy, is-evident, from the fact, that an.- amendatory act- was .passed, March 23, 1-S4p; (Ohio Lawsfvol. xxxviii,'-page, 210,)'-expressly conferring upon this co'nipan.y the power to -purchase and sell lands. Why was this amendátóry. act passed, if .they had 'this power by their- original .charter?' ‘ ‘ ■ -■
The language made- use.of in this amendatory act is" such,that we may. infer that it-Was intended to ,givp it a retroactive effect, and in this way .legalize the procéedings of this -company under their original charter; so .far as 'their speculation in land was .concerned. But that it cannot -have' such a-'-,retroactive effect, is settled by 'the case of Good X. Zercher, .12 Ohio Rep. 364. ' '. ■ '■ ■ ■ '
Búcldand, Hays fy Lane, for Defendant.
Both'parties make title under John Overmyer..
In 1839 John Ove.rm.yer sold and conveyed to the Ohio-Railroad Company,'for, a-consideration fully paid. In 1842 the Ohio Railroad Company conveyed to Cyrus Williams, in payment óf a debt'. • ' • .
•In 1845 John Ov.ermyer sold and conveyed to Samuel Over-my.er, lor the nominal consideration of $-100'. This conveyance assumes that 'the former conveyance is void'.',- To maintain .this 'position, the plaintiff must show — ’ ■ . . '
.First: 'That the Ohio Railroad Company could not- • land for this purpose;- and ■/' • •' V v, • ■" hbld
'■Second’:'.. That á conveyance .of-'land to'.á. corporation, whi'cbithe.'charter does- not' authorize it to-.hold, passes 'nothing.;!-. '
The'3d .section'’of. the,-charter. (Ohio,- if. '-Laws, ROk-'i^xiy, 319) renders the'company, “'capable- jin daw. of • purchasing,
* holding,- selling,.-, leasing! ap'd'conveying .CstatesRreaV’'a-nd.:personal, Or mixed, so far Us .the' sanie shalRbé necessary' for.-the purpo'ses.Rereafter.men.tiohed-; and no!further,”'1.. -..' f' R -
" By' the 12th section, the corporation máy .enter-,' '-use. and' ex-' cavate any lands which' rpay .be'wanted for--thc.'site of'the-road, or fof any'otherpurpbse necessary and useful for; the', construe-: ti.on and repairs,-&o, &c.•' .- ’ 1
By-the I3’th section, .the company may agree with'the owners •of the land',- which máy be wante.d for' the -construction, and repairs of the road, for the purchase; „&c. . -. •' -
The road- is built up.on'piles., The land'.is, a quitter section, in the black swamp adjoining the road, but .far from town, and valuable for- timber only. ■ The deposition of Willsorq á part Of the bill'of- exceptions, sho.ws the timber was'necessary to construct, and was ■ constantly wanted to .repair;' that the - most convenient and economical mode to obtain -timber for these purposes,- was to purchase land; that this land was eminently subservient to this purpose, 'and that'it- was acquired by the, company with no other view, although afterwards, in the derangement of the company’s affairs, it Was sold to pay its debtsi I'f this purchase had been made upon!- speculation, or to furnish a-basis of credit, or with any other slippery design, we would, not try to Upheld' it. .But when the timber upon it was really needed, and when ¿his.mbde of obtaining it was not only the most convenient and economical, but precisely the mode which a prudent man- of business would take to get it, we-.hold .the purchase of the land','.and the. payment.'of a'fair price, to the owners’ satisfaction, is not only justified by the charter, but ' a far more -commendable and- honest course than the'harsh and forced'appropriation, from an unwilling donor,'under the right -of eminent domain.
2. Whatever may be held, as to the capacity of the corpora^on f° the land, this “ mousing ” plaintiff will be disapas well as the (honest ?) grantor, who sells it a second time, after receiving full payment; for the law does not enable a vender to a corporation to resume his estate, and thus take from the company the ability to pay its debts, and from the grantees the property they have honestly paid for. It is a principle well established, that lands liable to forfeiture, from the want of capacity in a corporation to hold, are not forfeited without office found, or some equivalent judicial action; and upon the interposition of the Court in such cases, by the operation of the Ohio statutes, (vol. xl, 67, sec. 14,) the property is applied to its debts, or to other legitimate objects. A few quotations will set this point at rest.
It was decided by the Supreme Court of Pennsylvania, that a bank might purchase, absolutely, and not for debts, lands in a distant county, which they did not occupy, although they, or the third person, to whom they might convey, would hold them by a title defeasible by the Commonwealth, and the Commonwealth alone, as in the cases with title by aliens. Leasure v. Hilly as, 7 Serg. and Itawle, 319; Angel and Ames, 92.
The Court of Appeals in Virginia decided that, though purchasing the land in question, the banks violated their ¿barters, and they might for that cause be dissolved, by a proceeding at the suit of the Commonwealth, yet that any conveyance made before dissolution, would pass an indissoluble title to the purchaser. 3 Rand. 136.
If the plaintiffs are a duly incorporated body, with authority to contract and take mortgages, and if they pass the exact line of their power, it would rather belong to the government of Pennsylvania to exact a forfeiture of their charter, than for this Court, in this collateral way, to decide a question of misuse, and set aside a just and bona fide contract. Per Kent, 4 Johns. Chan. Rep. 373.
This doctrine has been examined and adopted by the Supreme Court at Washington, in the case of Runyan v. Lessee of Carter et al., 14 Peters, 131. They say: “ The right of a ‘ corporation, in this respect, is like an alien, who has the £ power to take, but not to hold lands. And although the land £ thus held by an alien may be subject to forfeiture, after office £ found, yet, until some act is done by the government, accord- £ ing to its own laws,- to vest the estate in itself, it remains with £ the alien, who may convey it to a purchaser. But he can £ convey no estate, which is not defeasible by the Common- ‘ wealth. This principle has received the sanction of this Court, £ in Fairfax v. Hunter, whore it is said to be incontrovertibly £ settled, by the fullest authority, that the title acquired by an £ alien, by purchase, is not divested until office found.” They proceed to say, that doctrine clearly establishes the right of the lessees of plaintiff to hold the premises in question, until some act shall be done by the Commonwealth of Pennsylvania, according to its laws, to divest that right, and vest the estate in itself. The legal estate is, accordingly, in the lessee of the plaintiff, and the defendant cannot set up'any right of forfeiture, which the State of Pennsylvania can alone assert.

Opinion:
Birchard, J.
From the bill of exceptions, the determination of this question will dispose of the three assignments of error. Did the deed of John Overmyer, executed in 1839 to the Ohio Railroad Company, divest him of title to the land described in the deed ? The plaintiff in error assumes that it did not, for the alledged reason, that the corporation had no power to receive the title. At common law, corporations had the capacity to purchase and alien lands unless restrained by statute or their charters. 2 Kent's Com. 227, and cases there cited.
Owing to the lawish manner in which corporations are granted in modern times, a safer rule has obtained. The better and true doctrine which now is generally recognized, is, that corporations have such powers only as are specifically granted by the act of incorporation, or as are necessary to carry into effect the powers expressly, granted. 2 Cranch's Rep. 127; 15 Johns. Rep. 358; 5 Conn. Rep. 560; 12 Ohio Rep. 12.
The purchase in this case was made, as is shown by the proof, for the express purpose of securing the right of way, and the timber growing on the land, which was needed in constructing the track of the road, and was actually so used. The superintendent, states that, after several ineffectual attempts to procure timber for the making of the road by purchase, he found it necessary to resort to the purchase of lands in the vicinity of the road to supply the materials for making the superstructure; and, in accordance with that view, the company made the purchase of the land in question.
We look, then, to the charter of this company (O. L. vol. xxiv, 320) in order to determine whether the deed of 1839 is void. The 3d section confers the power of " purchasing, hold- £ ing, selling, leasing, and conveying estates, real, personal and £ mixed, so far as the same shall bo necessary for the purposes £ hereinafter mentioned, and no further;" ££ and they shall have, £ enjoy and exercise all the powers, rights and privileges, which £ corporate bodies may lawfully do, for the purposes mentioned £ in this act." The purposes referred to are declared, in the subsequent sections of the act, among other things, the building of a railroad not exceeding one hundred feet in width.
The ,12th section gives the right ££to enter, use and excavate £ any lands which may be wanted for the site of the road, or for £ any other purpose necessary and useful for the construction £ and repair of said road and its works."
Section 13 contains a paragraph which reads thus: ££ That £ the president and directors of said company, or a majority of ' them, or any person authorized by them, or a majority of them, £ may agree with the owner or owners of any land, earth, tim- £ her, stone or other materials, or any improvements which may ' be wanted for the construction or repairs of said road, or any £ of their works, for the purchase, use or occupation of the £ same."
In view of these grants of power, it would seem that the purchase in question was expressly authorized by the charter. Timber was needed for the construction of the road, and power was intended to be granted so ample, that it might be procured at all events. The first, and preferred mode of procuring it, was by purchase, upon mutual agreement with the owner; and it is evident from the whole scope of the charter, that the Legislature preferred that the company should make the necessary acquisitions of property, by purchase, to a resort to the other means conferred upon them, to wit, the exercise of the delegated right of eminent domain. The company did just what a prudent man would have done under like circumstances, and the charter justified them, because it was the intention of the Legislature (and which intent is to be gathered from the act of incorporation) to authorize purchases of all necessaries at fair prices, and in the mode most economical, least likely to give cause of offence, and least prejudicial to the rights of others.
Judgment Affirmed.