Case Name: Ohio ex rel. v. Neff et al.
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1895-03-12
Citations: 52 Ohio St. 375
Docket Number: 
Parties: Ohio ex rel. v. Neff et al.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 52
Pages: 375–408

Head Matter:
Ohio ex rel. v. Neff et al.
Private eleemosynary corporation — Charged with maintaining a college — Property of, inviolate — Unconstitutionality of act of April 15,1892. (89 Ohio Laws, 647.)
1. The property of a private eleemosynary corporation, although charged with the maintenance of a college or other “public charity,” is private property, within the meaning and protection of that clause of section 19, of article I, of the constitution of this state, which declares that “ private property shall ever he held inviolate.”
2. The result of the statute passed April 15, 1892, 89 Ohio Laws, 647, relating to the Cincinnati College, which, in terms, gives absolute control and management of the affairs and property of the Cincinnati College to the directors of the University of Cincinnati, is to take the property of the former and donate it to the latter institution. The statute, therefore, conflicts with section 19 of article I of the constitution of this state, and is void.
(Decided March 12, 1895.)
Error to the Circuit Court of Hamilton county.
The plaintiffs in error, the directors of the Cincinnati University, instituted in the circuit court of Hamilton county proceedings in quo wa/iranto to oust the defendants in error from the positions heretofore held by them, of trustees of the Cincinnati College. The circuit court denied the relief sought and dismissed the petition of the relators, whereupon they brought the record to this court to be reviewed on error.
J. B. Foraker, Wilby & Wald and Matthews & Cleveland, for plaintiffs in error.
The first two objections to the validity of the amendatory act of 1892 are based upon a single proposition, to wit: That the effect of the act is to deprive a person or persons of property without due process of law. Inasmuch as the act leaves the title to the property just where it was before —in the corporation — and leaves the property devoted to precisely the same object to which it had been previously devoted, and to which alone it can lawfully be devoted' — the maintenance of a college —our adversaries find themselves obliged to maintain that the privilege and duty of the shareholders to elect trustees to manage the affairs of the corporation are property; the property of the shareholders, of which the act attempts to deprive them. The notion that this privilege and duty are property of the stockholders rests upon a misconception of the corporate character of the Cincinnati College, and of the law of public dharities. The Cincinnati College, though a private corporation, is a public charity. ' Morman Church v. United States, 136 U. S., 47; article XII, section 2, Constitution; Gerke v. Purcell, 25 Ohio St., 229; Humphries v. The Little Sisters of the Poor, 29 Ohio St., 201; Cleveland Library Association v. Pelham, 36 Ohio St., 253; Mannix v. Purcell, 46 Ohio St., 102.
We maintain that a corporation of the character of the Cincinnati College is a private corporation, but that its purpose is a public charity. Stephen Girard, by his will, created a public charity similar to that provided for by the charter of the Cincinnati College. Girard v. Philadelphia, 7 Wall., 1.
The Cincinnati College was specially created for the sole purpose of the erection and maintenance of a college — the administration of a public charity — and in the charter, in the very act which is the law of its being, the legislature provided that “This act shall be subject to such alterations as the general assembly may from time to time see proper to make.” The custom of reserving in the charters of corporations the power to alter, amend, and repeal became almost universal after the decision of the Dartmouth College case, so as to enable legislatures to do inter alia, the precise thing (i. e., change the number and mode of appointment of trustees), which, in that case, the Supreme Court decided a legislature could not do, unless the power to alter had been reserved in the charter creating the corporation. 4 Wheat., 675.
Since then many states, including Ohio, have embodied in their constitutions a provision reserving to the legislature this power of alteration, amendment, and repeal of the charters of all corporations which it might create. The question as to the effect of such reservation has been frequently before the courts. State v. Cincinnati Gas Light and Coke Co., 18 Ohio St., 262; Tomlinson v. Jessup, 15 Wall., 454; Railroad Co. v. Maine, 96 U. S., 499; Sinking Fund cases, 99 U. S., 700.
It is true that the reserved power to alter a-charter is not without a limit, and all the decisions cited by us concede this. Our learned adversaries say that the test to be applied in determining what is the limitation to the power reserved to alter a charter is stated by Chief Justice Shaw in Commonwealth v. Essex Company, 13 Gray, 253.
After the amendatory act of 1892, the property remains just as it was before; the legal title in the corporation, and the beneficial interest in the public for the Cincinnati College is a purely public charity. The only change made by the act is to take from the stockholders the privilege and duty of selecting the trustees who are to administer the charity. This privilege and this duty are, as we think we have already shown, not property at all, Assuredly they are not property or rights which have become vested under a legitimate exercise of the powers granted. The right to vote for trustees was created by the act of incorporation itself, it did not become vested by the exercise of any power granted by the act. Property, purchased under the power granted in the act to acquire property, would become vested under a legitimate exercise of the powers granted. The right to vote for trustees never became vested under the exercise of any power granted by the act, but was conferred and existed solely as a power granted directly by force of the act itself; and by virtue of the reservation in the charter, could be taken away by the legislature. Tomlinson v. Jessup, 15 Wall., 459; Sinking Fund cases, 99 U. S., 721.
We have heretofore referred to authorities which lay down the general rules defining the ambit within which the reserved power to alter charters may be exercised. These rules have been frequently applied in cases of corporations of the character of the Cincinnati College, and of corporations affected with a public interest, in respect of legislation similar to that involved in the ease at bar. Commonwealth v. Bonsall, 3 Whart., 559; Pennsylvania College cases, 13 Wall., 190. Bryan v. Board of Education, 151 U. S., 639; State v. Miller, 15 Wall., 478; Spring Valley Waterworks v. Schottler, 110 U. S., 347; Close of Glenwood Cemetery, 107 U. S., 466; Jackson v. Walsh, 23 Atl. Rep., 778; Sage v. Dillard, 15 B. Monroe, 357; State v. Adams, 44 Mo., 570; Morawetz on Corporations, section 12.
We have never contended that the power to alter a thing was a power to destroy it, and substitute something else.
The power to alter the charter of a college founded and incorporated as a nonsectarian institution, does not include the power to convert into a Catholic, Methodist or Presbyterian institution. This would not be alteration, but the destruction of one thing and the substitution of another. Nothing of the kind is attempted' in the case at bar. The meaning of the power to alter is clearly defined in Attorney-General v. The Railroad Companies, 35 Wis., 425.
Mr. Justice Story cannot be supposed to have intended to overrule what he said in the Dartmouth College case as to the effect of reserving the power to alter the charter itself. Our adversaries denounce the legislature for passing the act of 1892, charging that body with having acted hastily, or ignorantly, or worse, they “indignantly protest.” Strictly speaking this is irrelevant. United States v. Desmoines, etc., Co., 142 U. D., 544; Greenwood v. Freight Co., 105 U. S., 17; Gas Co. v. Hamilton, 146 U. S., 258.
The terms of the reservation in the act incorporating the Cincinnati College are equally broad.; they are that this act shall be subject to such alterations as the g-eneral assembly may from time to time see proper to make.
The present alleged stockholders hold certificates for 134 shares of-stock issued in 1873 to 114 persons, many of whom were then dead, some who were living, no longer residents of Cincinnati, and still others utterly unknown except by name. These are the only certificates of stock in the Cincinnati College extant. The holders claim in their aggregation to he that corporation, and that the act of April 15, 1892, deprives them.of their prop erty without due process of law.
The edifice, for the repair of which this money was subscribed, was totally destroyed by fire in 1845. The property in question belonged in 1819 as a leasehold estate to the Lancaster Seminary, a corporation. By the act of 1819 creating the Cin: cinnati College the control of the property was transferred to the latter. It is the supposed successors to those persons only who in 1835-6 subscribed $4,300 for the repair of a building entirely destroyed in 1845, who issued certificates to themselves in 1873, who claim to be the body of stockholders. It is only the subscribers to a small fund for the repair of a building nonexistent now for nearly fiftjT-years, who claim the right to control the real estate of the corporation to the acquisition of which they'never contributed a cent, and to prevent it from the purpose for which it was given by the donors, Cincinnati College v. State, 19 Ohio, 110.
The record shows that the First Presbyterian church granted the lands by perpetual lease at a nominal rent to the Lancaster Seminary in return for the right to nominate for -gratuitous annual instructions twenty-five children in the lower and three in the higher department of said seminary. It never entertained the idea of giving away its lands to support a law school.
II. Does the act of April 15, 1892. confer corporate power ?
1st. It is claimed that it confers corporate power on the Cincinnati College.
2d. That it confers corporate power upon the directors of the Cincinnati University.
3d. That if it does not confer corporate power, it is the exercise by the legislature of the power of appointment to office contrary to article XXVII, section 2, of the constitution.
The corporate power mentioned in article XIII of the constitution, must be some power conferred on a corporation already created or some power conferred upon individuals which makes them into a corporation. State v. Cincinnati, 23 Ohio St., 466; M. & C. R. R. Co. case, 15 Ohio St., 35; State v. Pugh, 43 Ohio St., 110.
In this ease a solution of the question, therefore, requires us to ascertain what corporation was created by the original act; secondly, what, if any, new powers were conferred upon such corporation; and thirdly, what individuals, if any, have been created into a corporation, by the act in question.
1. The original charter of th'e Cincinnati College created certain individuals and their associates a body corporate, with perpetual succession, under, the name of the “President, Trustees and Faculty of the Cincinnati College.” It seems to be necessary at this late day to seek to maintain, by argument, that a corporation is a real thing. It is said to be a mere fiction — -a nothing. Corporate powers conferred; the rights and powers and franchises and property of a corporation; the stock of a corporation and the rights of stockholders in a corporation, are all meaningless expressions. It is quite true that you cannot hide behind a corporate charter and exercise the corporate powers in defiance of the laws of the state, as in the Standard Oil Co. case, 27 W. L. B., 197. But within the reason and the policy of the. law, and when not used as a shield to hide infractions of the law and morals, a corporation is as much a juristic person as any natural individual. State v. Sibley, 25 Minn., 387; Revised Statutes, p. 3239.
Surely the object of the statutes must be to create a body or person separate and distinct from the persons who constitute it. It cannot be that the corporate body is a reality, only when its stockholders desire to evade its debts and responsibilities, and yet a mere fiction when otherwise advantageous to them. Bank v. Morton, 4 Gray, 156.
The directors or trustees are mere agents of the corporation. Morawitz on Corps., section 516. It is quite essential to distinguish between the corporation itself, its agents or the agents of the stockholders, and the stockholders. It is also necessary to distinguish between the office of director or trustee, and the incumbent or person who administers the office. It is first arg-ued that the act confers corporate power upon the corporation known as the “President, Trustees and Faculty of the Cincinnati College, ” which are called for convenience merely the “Cincinnati College,” by conferring upon it the power to have a new board. It is herein assumed that the corporation is a real person capable of having powers conferred upon it. The second claim is that the university directors are created into a corporation; that under the charter the stockholders have the corporate power and are in fact the corporation, and that such corporate power is taken from them and conferred upon the university directors. First, the Cincinnati College is a corporation; next, the stockholders are the corporation, and now the trustees are the corporation. It would be difficult to imagine three more contradictory propositions. By the original charter, thealleged stockholdershad the right to choose trustees. To those trustees was committed the sole charge and management of the property of the Cincinnati College.
The act of April 15, 1892, called the amendatory act, does not in any way interfere with the Cincinnati College or its property. (It merely changes the method of choosing its trustees.) It is in vain that we search for any burden laid upon the corporation or privilegie granted to it, that it did not before possess. This is admitted to the extent that no change is attempted save in the method of choosing the governing body. It is claimed, however, that such change confers upon the corporation, “The Cincinnati College,” corporate powers in this that the right to have such a board so chosen, instead of the board as chosen as before, is corporate power. As decisive of this proposition, The State v. Smith, 48 Ohio St., 211; Kirker v. Cincinnati, 48 Ohio St., 507, are cited. 29 Ohio St., 102; State v. Pugh, 43 Ohio St., 119; State v. Constantine, 42 Ohio St., 437.
2. Nor does the act of April 15, 1892, confer corporate power or perpetual succession upon the university directors any more than the original char ter conferred perpetual succession on the trustees of the college. The office, presumably, was perpetual, but the change of persons then and now is analogous. Even if the university directors were a corporation, the new act would not have conferred corporate power, because they could do no act in connection with the Cincinnati College as a board of the university, but would act as individuals comprising the college board; which may be the case, as is assumed in the Hospital case, 23 Ohio St., 466, and was decided in People v. Freeman, 22 Pac. Rep., 173, and ex parte Frazier, 54 Cal., 94.
The persons composing the board of directors of the university chang’e; so do the persons comprising the board of trustees of the college exactly as they did before. The only change is in the appointing power, so far as the college is concerned. It is confusing to confound the office with the officer in discussing the theory of perpetual succession. The board is concerned with the mere internal management of the business of the corporation. Jackson v. Walsh, 23 Alt. Rep., 778; Marietta Railroad case, 15 Ohio St., 37.
Plainly, the new board in this case is merely wielding the powers of the old corporation. Plainly, the new board is either appointed or desig’nated directly by the legislature. Clark v. Stanley, 66 N. C., 9; State v. Pugh, supra. In neither aspect is power conferred upon a corporation or a new corporation erected, but a change is made in the manner of designating’ the agents who shall wield the powers of the old corporation. State v. David, 23 Ohio St., 424; State v. City of Cincinnati, 23 Ohio St., 445; 29 Ohio St., 201.
3. The designation of directors or trustees of a private corporation is not obnoxious to article XXVII, section 2, of the constitution. State v. Kennon, 7 Ohio St., 566.
E. W. Kittredge, John F. Follett and J. W. Warrington, for defendants in error.
It is claimed by the relators that the act of April, -1892, leaves the legal title to the property of the Cincinnati College in the corporation, and leaves the property devoted the maintenance of a college. But it is said that the idea that the corporation or its stockholders are protected in the right to control and manage the property and apply it to the maintenance of a college, arises upon a misconception of the corporate character of the Cincinnati College, and of the law of public charities. There are two kinds of public charities as that term is used in the law: First, where the ownership of the property is private, but the object is public charity. Second, where both the ownership and the object, which is charity, are public. The Cincinnati College belongs to the former of these classes. Where the law creates a private corporation to be controlled and administered by the shareholders who contribute the funds or stock, although the object may be charitable, it is a private corporation. In such case, the charity is not different in kind from that which is created when a man by his deed conveys property to a trustee to be administered for a charitable purpose, and where no corporation is contemplated or created.
The provision of the constitution of this state, that private property shall be held inviolate, includes the property of private corporations and individuals, whether it is held for private purposes or for purposes of purely public charity. The' provision is general in its terms, and contains no exception of private property held for charitable uses. No case has been cited by our adversaries tending to support the proposition that private property may be taken from its owners, corporate or otherwise, because it has been devoted by them to the support of a public charity. It being admitted that the Cincinnati College is a private corporation, there is nothing in its charter that precludes the corporation, if it should make profits in the prosecution of its business, from declaring dividends.
Still more certainly, under section 3762, of the Revised Statutes of Ohio, it is the right of the stockholders of the Cincinnati College, by the concurrent action of the trustees selected by them, and by their own vote, to dispose of and divide its property among themselves. Our adversaries deny this, without attempting any argument or reasoning in support of their denial. A private eleemosynai’y corporation, though, organized for the purpose of administering a public charity, holds its title to property acquired as much exempt from legislative control as any other private corporation. Trustees for Vincennes University v. The State, 14 Howard, 268; Regents v. Williams, 9 Gill and Johnson, 365; Trustees v. Bradbury, 11 Me., 113; Montpelier Academy v. George, 14 La., 395; Yarmouth v. North Yarmouth, 34 Me., 411; Trustees of the University v. Foy, 1 Murphy (N. C.), 58; State v. Adams, 44 Mo., 570; Board v. Greenebaum, 39 Ills., 610; Bakewell v. Board of Education, 33 N. E. Rep., 186; Board v. Bakewell, 122 Ill., 339; Downing v. Indiana State Board of Agriculture, 129 Ind., 443; Terrett et al. v. Taylor et al., 9 Cranch, 43.
The Cincinnati College being a private corporation having the possession and ownership of private property, and the avowed purpose of our adversaries by this legislation and proceeding being to accomplish the cession of the property so held by the Cincinnati College to the Cincinnati University, the second question in the case is whether the act of April, 1892, provides for taking of the property of this private corporation, or whether the subterfuge can avail that the legal title is left in the corporation, and that the control and administration of its property is taken away from it and its stockholders, and conferred upon the directors of the Cincinnati University. Take any of the trusts of a charitable nature that exist in our midst — the music hall, the art museum, the art school in Cincinnati, or the churches of various denominations throughout the state — is it possible because their object is public charity, when the ownership is of private property, that the legislature can by legislative enactment displace the possession and control of the corporations, and appoint agents of its own to possess, manage and control them? The civil law in defining property, expresses ownership by the word dominium. . This idea is at the foundation of every legal definition of property. The word owner, which is of Anglo-Saxon origin, as applied to property, signifies the right to control, to administer and dispose of the property, The control and management of the property ia taken away from it; and being taken away from it, it is taken away from its stockholders who compose it. Does this take us any further than the lega] entity, with which we have long been familiar, oi which we know, from the decision of the Supreme Court in the case of State v. Standard, Oil Co., 49 Ohio St., 137, that, apart from the natural persons who compose it, it is a mere fiction, introduced for convenience in the transaction of business ?
We have already discussed the proposition that every definition of property or of the ownership of property includes as its fundamental idea the right to control, manage and dispose of it. And we conceive that in recognizing the correctness of the rule as laid down by Chief Justice Shaw, our adversaries have conceded that the legislature, under its reserved power to alter this charter, cannot take away from this corporation, nor yet from its stockholders, the right to control, manage and dispose of the property which it has acquired. But the definition of the limitation upon the power to alter a charter does not rest solely upon the authority of 13 Gray, 253; People v. O'Brien; 111 N. Y., 48; Railroad v. Elliott, 58 N. H., 457; Allen v. McKean, 1 Sumner, 276; Sage v. Dillard, 15 B. Monroe, 359; Orr v. Bracken Co., 81 Ky., 593; Shild v. Ohio, 95 U. S., 324; Detroit v. Plank Road Co., 43 Mich., 140; Reagan v. Farmers' Loan and Trust Co., 154 U. S., 362; Lewis on Eminent Domain, section 54.
Under the act of 1892, the Cincinnati College and its board of trustees are excluded from the right to use, manage and control its property, and thereby are, and were intending to be, absolutely deprived of the property itself, which the legislature is prohibited from doing by both the constitution of the United States and of this state, unless it is done in the exercise of the power of eminent domain, and then it can be done only upon paying-full compensation therefor.
The trustees of the Cincinnati college unanimously remonstrated against the passage of the act of 1892, and the trustees and stockholders each unanimously refused to accept the provisions of the act after it was passed. Miller v. State, 15 Wall., 98; Jackson v. Walsh, 23 Atl. Rp. Glenwood cemetery case, 107 U. S.
The act violates the inhibitions against special legislation and appointing officers. The exact question raised by the legislation in dispute may be stated to be: Whether it is competent to enact by statute that corporation A shall, without a hearing and without compensation, surrender to B, forever, the entire control and dominion of its property both real and personal.
' The solution of the question of whether power has or has not been conferred upon a corporation, cannot involve the question of whether a corporation is a legal entity, apart from the natural persons who compose it or not. As it is admitted that there is a corporation, no one with clear ideas and a clear case would ever claim the definition of a corporation could aid in determining whether or not power has been conferred on the corporation. The act is special in form and substance, and is in no sense a general law. This is so according to the express terms of the act, and is so admitted by opposing counsel. It is only necessary, then, to show either that the act confers corporate power or creates a corporation. We maintain that it does confer corporate power upon the Cincinnati College corporation, by giving it power to have the board, created by the amendatory act in dispute, instead of the old board mentioned in section 3 of its charter. If this can be done at all, it must be by general law "and not by. special act. State v. Cincinnati, 20 Ohio St., 35; State v. Smith, 48 Ohio St., 211; Atkinson v. Railroad Co., 15 Ohio St., 35; Kirker v. Cincinnati, 48 Ohio St., 507.
If the mandatory act is valid, it has furnished the college with a new board, constituted in a new way, composed of members whom the stockholders of the college had no- right to select, and clothed with power to manage its property and funds in connection with the Cincinnati University property and funds. It is immaterial whether this would be a benefit or an injury. It is something new and something added ; not something old ■ or something taken away merely. State v. Constantine, 42 Ohio St., 442; State v. Anderson, 44 Ohio St., 248; State v. Pugh, 43 Ohio St., 98; State v. Mitchell, 31 Ohio St., 592; State v. Cincinnati, 23 Ohio St., 445; State v: Cincinnati, 20 Ohio St., 18; School District v. Ins. Co., 103 U. S., 707; Enorr on behalf of Cincinnati v. Miller, 27 W. L. Bull., 64.
The only other way suggested to escape the inhibition against conferring power on the corporation by special act, is the claim that as to corporations holding charters antedating the present constitution, the general assembly is free to legislate as it pleases. The particular claim urged is that the legislature can, as regards such corporations, confer power by special act. A plain statement of such a claim ought to furnish its complete refutation. . 43 O. L., 280; 45 O. L., 127; 49 O. L., 467; 1 Ohio Ry. Rep., mid. p. 444.
To sustain the claim of opposing counsel would be to allow legislative power existing under the old constitution, to survive the adoption of the new one, in spite of that portion of section 17 of the schedule which. provides in respect of the - new constitution, that upon its. receiving a majority of the votes of the people, said constitution shall he the constitution of the state of Ohio.
If the amendatory act is to be given effect, it constitutes and erects the members composing the board of directors of the University of Cincinnati, at the- date of its enactment, and their successors, into a corporation. If the amendatory act be valid, then only a shell of a corporation was left standing, as a seeming obedience to the law, but with its internal structure destroyed or removed. Sugar Trust Case, 121 N. Y., 623; Ohio ex rel. v. Standard Oil Co., 49 Ohio St., 137; McKinley v. Wheeler, 130 U. S., 630; Paul v. Virginia, 8 Wall., 181; Taylor on Corporations, sec. 50; People v. N. R. S. Co., 121 N. Y., 621; Lee, Treas., v. Sturges, 46 Ohio St., 153; State v. Sibley, 25 Minn., 387; Bank v. Morten, 4 Gray, 156.
While it would not be essential to the creation of a corporation that it should have perpetual succes-. sion, for it is common practice in the United States to create corporations for a limited number of years, yet if perpetual succession were a necessary attribute it is to be found in. the self-perpetuating official machinery - whereby the board of directors or trustees of the university are created and continued. Revised Statutes, section 4098; 89 O. L., 31; State v. Kennon, 7 Ohio St., 2.
The feature of perpetual succession is made plainer by the fact that the functions of the -board —considered in its relations to The Cincinnati College — and its rights and powers all relate to a corporation, and must all be treated as perpetual for that reason alone. Revised Statutes, sections 3235, 3240, 3250, 3261.
The voting power is universally treated by courts as being one of the most important and val uable privileges belonging to corporate stock. It cannot be bartered away, nor even given away irrevocably. Griffith v. Jewett, 15 W. L. Bull., 422; Hafer v. Railway Co., 14 W. L. Bull., 68; State v. Railway Co., 6 Ohio C. C. Rep., 427. The same questions were urged before this court, but not decided in Railway Co. v. State, 49 Ohio St., 668.
It would be no answer to say the legislature can change this policy; because the very question is whether destruction of control in stockholders is not destruction of the corporation and the transfer of such control the creation of a new corporation.

Opinion:
Bradbury, J.
In 1814, The Cincinnati Lancas- • ter Seminary was incorporated, chiefly, for the purpose of instructing youth on a plan devised in England, late in the preceding century, by Joseph Lancaster; the most characteristic feature of which consisted in employing the more advanced pupils to impart instruction to those of a lower grade. The scheme was not successful, and in the year 1818, the institution being in a languishing condition, application was made to the legislature for a new incorporating act, which was passed on the 22d day of January, 1819, and reads as follows:
"Section 1. Be it enacted by the General Assembly of the State of Ohio, That Jacob Burnett, Francis Dunlavy, Samuel Johnson, William Lytle, Zaccheus Biggs, Joshua L. Wilson, O. M. Spencer, John Thompson, W. H. Harrison, Joseph H. Crane, Joshua Collett, Samuel W. Davis, Daniel Drake, William Corry, Jesse Hunt, Samuel Burr, John Reynolds, James Galloway, Martin Baum and Levi Jame's, and their associates, be, and they are hereby created and made a body corporate and pol itic, with perpetual succession, who shall be known and distinguished by the name and style of ' The President, Trustees, and Faculty of the Cincinnati College;' and by that name and style, they and their successors shall be a body in law, capable of contracting and being contracted with, suing and being sued, pleading and being impleaded, answering and being answered unto, defending and being defended, as natural persons are or may be, in all courts and places, and in all manner of suits, complaints, bills, causes and matters whatsoever. They shall have and use a common seal; they shall be capable of purchasing, receiving, holding and enjoying, and of granting, selling and conveying any estate or property, real or personal, necessary for promoting the object of this act of incorporation; which object is hereby declared to be the erection and maintenance of a college; provided, that the annual income, rents or receipts arising therefrom, shall not exceed eleven thousand dollars.
"Sec. 2. Be it further enacted, that the funds or stock of said college shall consist of five thousand shares, of twenty-five dollars each; which funds or stock shall be subscribed for in such manner and paid in at such times, in such proportions and under such regulations as may be prescribed by the by-laws and rules of said company.
"Sec. 3. Be it further enacted, that the affairs of said Cincinnati College shall be under the management of a board of trustees, which board shall consist of not less than thirteen, nor more than twenty members, to be elected by the shareholders on the last Friday of March, annually, between two and six o'clock in the afternoon, at the college edifice; and it shall be. lawful for the trustees to continue in office, and to discharge the duties appertaining thereto, until their successors are elected and qualified.
'£ Sec. 4. Be it further enacted, that all elections • shall be bjr ballot; at every election, each shareholder shall be entitled to one vote for every share of twenty-five dollars, until the number of shares, shall amount to five, and one vote for every five shares above five he or she may hold at the time of the election; but no trustee of the Miami University shall discharge the duties of trustee of The Cincinnati College.
"Sec. 5. Be it further enacted, that the board of trustees shall, at their first meeting after their election, elect a president and secretary of the board from their own body; they shall have the power of filling vacancies that may happen in the board during the period of their own appointment; they shall appoint a treasurer, who shall give bond and security for the faithful performance of his duty; they may elect a president and vice-president of the college, and may appoint such professors and tutors as they shall think necessary; which president, vice-president, professors and tutors may be removed at the pleasure of the board; they, may, from time to time, make and enforce such rules', regulations and by-laws for the government and well being of the college, as may seem to them proper; provided, they be consistent with the laws of the United States, and of this state; they may appoint a faculty to consist of the president, vice-president. professors, and such other persons as they may judge necessary, and may vest in the faculty so appointed, such powers as they may think expedient for the preservation of good order, and for enforcing obedience to the rules, regula tions and by-laws of the institution; they may cause the principles of morality and of the Christian religion to be included, but the religious tenets that may be peculiar to any particular sect or denomination, shall never be taught or enforced in the college; they may hold their meeting's at such times and places as they may designate and appoint,the president of the board may call a meeting' at any time, when, in his opinion, it may be expedient; at any stated or special meeting of the board, seven members shall constitute a quorum for transacting business; the property and funds of the college shall be under the management and at the disposal of the board of trustees, by whom or by whose authority all contracts, purchases and sales shall be made; and, generally, the said board of trustees shall have power to do and perform all such matters and things as they may judge necessary for the benefit of said college; provided, that the funds of the institution shall not be applied to any use or for any purpose not herein expressed or intended.
"Sec. 6. Be it further enacted, that the board of trustees of the said eolleg'e, may grant and confer on any candidate in such form as they may direct, all or any of the degrees that are usually conferred in any colleg'e or university within the United States.
"Sec. 7. Be it further enacted, that so much of the act entitled, 'An act to-incorporate The Cincinnati Lancaster Seminary, ' as requires the appointment of a board of directors, be, and the same is hereby repealed; and that the board of trustees of the Cincinnati college, shall be, and they are hereby authorized to exercise all the powers granted by that act to the directors of The Cincinnati Lancas ter Seminary; and it shall be lawful for the trustees of the Cincinnati colleg'e to apply the surplus funds of The Cincinnati Lancaster Seminary, to the use of the Cincinnati .eolleg'e; and in all respects to manage the affairs of the said seminary in the same manner as the board of directors are by law authorized to do.-
"Sec. 8. And be it further enacted, that Jacob Burnett, Joshua L. Wilson, Oliver M. Spencer, Daniel Drake, Levi James, Samuel W. Davis, William Corry, Francis Dunlavy, Samuel Johnson, William Lytle, Zaccheus Biggs, John Thompson, William H. Harrison, Joseph H. Crane, Joshua Collett, Jesse Hunt, Samuel Burr, John Reynolds, James Galloway and Martin Baum, shall be, and they are hereby appointed trustees of the Cincinnati college, who shall continue in office until the last Friday in March, next, and from thence until their successors are chosen.
"This act shall be subject to such alterations as the general assembly may from time to time see proper to make. ' '
One effect of this act was to vest in the corporation created by it, the property rights of The Cincinnati Lancaster Seminary, which rights ever since have been-and now in fact are, enjoyed by the body thus created. The object of this body, The Cincinnati College, as expressly declared by the first section of the incorporating act, is "the erection .and maintenance of .a college," the act nowhere designating the nature of the instruction to be given, or the .method by which it was to be imparted.. The early transactions of the institution, from the plate of the incorporation, of The Cincinnati Lancaster Seminary in 1814, until its merger in The Cincinnati College in 1819, are buried in obscurity, and but little more has been satisfactorily ascertained respecting its affairs after the incorporating act of 1819 was passed, until about the year 1845. However, it may be gathered from the record, that soon after The Cincinnati Lancaster Seminary was incorporated, it established, and for a time maintained, a school wherein both primary and academic instruction was given; that the school was not successful and soon began to languish. That in 1819, The Cincinnati Lancaster Seminary was superseded by The Cincinnati College, and the property of the former, of the value of about ten thousand dollars, transferred to the latter corporation, -and by the same act, the stock of the last named corporation was fixed at five thousand shares, of twenty-five' dollars each, a sufficient number of which were subscribed to add about forty thousand dollars to the funds received from The Cincinnati Lancaster Seminary.
Schools were maintained by the new institution until about the year 1825. After this date, for eight or ten years, whatever educational processes, if any, that may have been continued, were desultory and unsystematic. In 1835 additional shares of stock were subscribed, amounting- in the aggregate to about four thousand dollars, primary and academical education established, and a medical-school established. About the same time instruction in law was also begun. After a year or two, the medical school was discontinued and as early as 1845 or 1846 all attempts to impart- primary or academical instruction were abandoned, since which time a law school only has been maintained, except a course of philosophical lectures continued during a few years at a later period, and since abandoned. The date when the law school was established is left uncertain, but probably it was in 1832; if not quite so early as that, yet it had had an uninterrupted existence of more than fifty years, when in the year 1892, the following statute was passed by the general assembly :
"An act to amend sections 3, 4 and 5, of an act entitled ' An act to incorporate The Cincinnati College,' passed January 22, A. D., 1819, (17 Ohio L., Ch. 20, p. 46.
Whereas, in the act entitled 'An act to incorporate The Cincinnati College, ' enacted by the general assembly of the state of Ohio, January 22, A. D. 1819, by the eighth section thereof it was provided as follows, to-wit:
"This act shall be subject to such alterations as the general assembly may, from time to time, see proper to make; and,
" Whereas, the endowment of The Cincinnati College as at present invested and managed, is not sufficient to enable it to carry'out the purposes of its charter; and,
" Whereas, in the opinion of the general assembly, it would be advantageous to The Cincinnati College and to the University of Cincinnati, and to the public generally, that the government of the two institutions should be joined and consolidated; therefore,
' 'Section 1. Be it enacted by the General Assemoh the State of Ohio, That sections 3, 4 and 5, of the act entitled 'An act to incorporate The Cincinnati College, ' passed the 22d day of January, A. D., 1819, be amended so as to read as follows:
"Sec. 3. The affairs of the said Cincinnati College shall hereafter be under the management of the directors, for the time being, of the Uni ver sity of Cincinnati, which directors shall be, and they are hereby constituted the board of trustees of The Cincinnati College, and they are hereby authorized to exercise all the powers granted by law to the board of trustees of The Cincinnati College.
"Sec. 4. Be it further enacted, that the management of the funds, and of other matters belonging to or connected with the said Cincinnati College, shall be solely in the hands of the board of trustees aforesaid, and the said funds shall be administered for the purpose of carrying1 out the objects of the charter of The Cincinnati College, in connection with the funds and administration of the University of Cincinnati.
"Sec. 5. The board of trustees shall appoint a treasurer, who shall give bond and security for the faithful performance of his duty; they máy elect a president and vice president of the college, and may appoint such professors and tutors as they shall think necessary; which president and vice president, professors and tutors, may be removed at the pleasure of the board; they may, from time to time, make and enforce such rules, regulations and by laws for the government and well being of the college, as may seem to them proper; provided they be consistent with the laws of the United States, and this state; they may appoint a faculty to consist of the president, vice president, professors and such other persons as they may judge necessary and may vest in the faculty so appointed, such powers as they may think expedient for the preservation of good order, and for enforceing1 obedience to the rules, regulations and by laws of the institution; they may cause the principles of morality and of the Christian religion to be included, but the religious tenets that may be peculiar to any particular sect or denomination, shall never be taught or be enforced in the college; they may hold their meetings at such times and places as they may designate and appoint; the president of the board may call a meeting at any time, when in his opinion it may be expedient; at any stated or special meeting of the board, a majority of the members shall constitute a quorum for the transaction of business; the property and funds of the college shall be under the management and at the disposal of the board of trustees, by whom, or by whose authority all contracts, purchases, and sales shall be made; and generally, • the said board of trustees shall have power to do and perform all. such matters and things as they may judge necessary for the benefit of the said college; 1provided, that the funds of the institution shall not be applied to any use, or for any purpose not herein expressed or intended.
"Sec. 2. Be it further enacted, that sections 3, 4, and 5 of the said act of January 22, 1819, entitled 'An act to incorporate The Cincinnati College, ' be, and the same are hereby repealed.
"Sec. 3. This act shall take effect and be in force from and after its passage."
The constitutionality of this statute is assailed on a number of grounds, one of which is that it violates that provision of the nineteenth section of article I of the constitution of Ohio, which asserts that "Private property shall ever be held inviolate."
Whether the statute is obnoxious to that constitutional provision depends, 1, whether it violates the property rights of The Cincinnati College, and 2, if it does so, whether that corporation is entitled to the protection secured by the clause of the constitution of this state, above quoted.
No refined process of reasoning or unusual keeness of perception is required to ascertain the effect of this statute upon the property rights of The Cincinnati College. It simply and in unambiguous terms, abrogates these rights by transferring them to a body of strangers. No language that the court might use can make this • result more clear than does the concise language employed by the general assembly. The expressly declared reason for this legislative action is the assumed insufficiency of the property of The Cincinnati College, as managed by the present directory, to "carry out the purposes of its charter, " and assuming further, that " it would be advantageous to The Cincinnati College and to the University of Cincinnati, and the public generally, that the government of the two institutions should be joined and consolidated," it seizes the entire property of the one and hands it over to the other of the two bodies. It is no answer to this to assert that the new directory represents the old corporation, or that the legal title to the property still remains in The Cincinnati College. The mere naked legal title to property has no value, when that title is absolutely severed from its control and beneficial enjoyment. It is the province and the duty of courts to look at the substance of a transaction, and to ignore refined and unsubstantial distinctions. And we can see no substantial difference between a statute which expressly creates a new corporation and endows it with the property of another body corporate, and a statute, like the one under consideration, which, finding a corporation already existing, vests in the directory of the latter all the powers and rights of property which had belonged to another corporate body. And whether we regard the corporation as the actual and potential proprietor of the property in contention, or whether we consider those who contributed to or created this fund or property as such proprietors, and the corporation a mere agency, created to represent them and carry their will into .execution, is immaterial in this connection. For, if the corporation is the real owner, it has been deprived of its use and enjoyment of its property, while if those who originally created the fund are the real owners, then without their consent and against their will, it has been taken from their chosen ag'ents, and placed in the custody and management of others, whom they did not appoint and over whom they have no control. - Property in the hands of an agent is just as inviolate as that in the custody of the owner himself. As long' as the principal may choose and control his agent, his dominion of the property confided to the agent continues, but this dominion, or proprietorship, is at once destroyed the moment that his property is forcibly, and against his will, seized, and absolutely and irrevocably transferred to another agent, selected not by the owner, but by some other person or authority.
We have seen that the statute under consideration has taken from the control and management of The Cincinnati College all of its property and placed it under the control and management of the University of Cincinnati. One ground, as we understand the argument of counsel, upon which this result is maintained to be lawful, is that the purpose to which this property was devoted by its original donors is a public purpose, and therefore, that circumstance alone is sufficient to impress upon the property a public character; but if that is not so, yet as the purpose of the donors was not private gain, but public charity, and as - the property under the new corporation would be applied to the same purpose to which The Cincinnati College would have applied it, had the latter continued its administration, that therefore no substantial right, either of the original donors or of the corporation, was violated by the law. That in fact the- only rights the original donors had, as the - result of their contribution to the funds of The Cincinnati College was that of voting' for directors of the concern, which was "no more property than the privilege and duty of a citizen to vote for a governor of state, or presidential electors, are property."
The results of establishing this doctrine would be to place every eleemosynary corporation' within the state, whether religious, educational, or created to administer to the wants of the suffering or needy, beyond the limits of constitutional protection. Whenever, in the opinion of a majority of the general assembly, the public interest, or the interest of two or more colleges, or churches, or other private or eleemosynary corporations, required them to be united, the property of one or more of them could be seized and transferred to another.- The doctrine finds no support in any treatise or -adjudication within our knowledge, nor by reason or justice. There are two classes of public charities, one where the institutions are public in the broadest sense of that term, that is, they are owned by the state, or some subdivision thereof created for governmental purposes, and maintained at the public expense. These institu tions are absolutely-under the control and management of the public through its proper representatives. As - respects them no vested or private rights pertain. It does not follow, -however, that because this class of public charitable institutions are the subjects of absolute public control, that another class, whose property consists of private donations and to which the organized public has contributed nothing* shall-also be subjected to such absolute governmental control because the charity they administer has been christened a "public charity" in legal nomenclature. In common-.acceptation; colleges are not "charitable institutions," although in law they administer a public charity. This, means no more than that the public are incidentally benefited by the education of some of its members, the immediate advantage accruing to the individual members who have received instruction.
The unbroken current of authority declares that the property of such institutions is private property, and the corporations themselves private corporations. Dartmouth College v. Woodward, 4 Wheaton, 518; Vincennes University v. Indiana, 14 Howard (U. S.), 269; Inhabitants of Yarmouth v. Inhabitants of N. Yarmouth et al., 34 Me., 411; Trustee v. Salmon, 11 Me., 114; Trustees v. Foy, 1 Murph. (N. C.), 58; State ex rel. Pittman et al. v. Adams et al., 44 Mo., 570; Downing et al. v. The Indiana State Board of Agriculture, 129 Ind., 443; Board of Education v. Greenebaum, 39 Ill., 609; Board of Education v. Bakewell, 122 Ill., 339; Montpelier Academy Trustees v. George et al., 14 Louisiana, 395.
When the donors of property devote it to a charitable purpose and choose an existing, or create a new corporation as an instrument by which this purpose is to be effected, they make this instrument their perpetual representative, for that purpose. "These gifts were made, not indeed to make a profit for the donors or their posterity, but for something in their opinion of inestimable value; for something which they deem a full equivalent for the money with which it was purchased. The consideration for which they stipulated, is the perpetual application of the fund to its object, in the mode prescribed by themselves. Their descendants may take no interest in the preservation of this consideration. But in this respect their descendants are not their representatives. They are represented by the- corporation. The corporation is the assignee of their rights, stands in their place, and distributes their bounty, as they would themselves have distributed it, had they been immortal. ' ' Dartmouth College v. Woodward, 4 Wheaton, 642.
Whether The Cincinnati College is regarded as the owner in its own right of the property donated to it, or as the representative of the donors, charged with the execution of their purpose, is not material; in either view the property is private as contradistinguished from public, and as such is within the protection of that provision of the constitution which declares private property to be inviolate.
We now come to the consideration of the provision in the charter of The Cincinnati College, which reserves to the general assembly the right of amendment. This reservation would be wholly unnecessary if The Cincinnati College had no rights of property which the general assembly was bound to respect. If the legislature, at its will could divest this corporation of its property, the legislative-control of the institution would be absolute, for by taking away its entire property rights, all effectual corporate action would be at once paralysed. Thenceforward it would be powerless to advance the purposes of its creation.
The authorities agree in holding that the legislative power of amendment and alteration thus reserved in charters, is not absolute, although its .boundaries are not yet established. In Kentucky this- power of amendment seems to be limited to those matters which concern the relations established by the charter between the corporation and the .state.
"The power,to alter or amend the contract, in our conception, is to change it as betiveen the original pa/rties, and such others only, as have been permitted, by their mutual consent,. to come into the enjoyment of its benefits and privileges; not to compel one of the parties to operate in conjunction with others, and share with them the privileges and benefits of the contract." Sage v. Dillard, 15 B. Monroe, 359.
• Whatever difficulties have been encountered by the courts in ascertaining' -the limits of this -reserved legislative power,, they concur in denying that under it, the legislature can strip a corporation of its rights of property.
"The power of alteration and amendment is not without limit. The alterations must be reasonable; they must be in. good faith, and be consistent with the scope and object of the act of incorporation. -Sheer oppression and wrong cannot be inflicted under the guise of amendment or alteration. - Beyond the sphere of the reserved powers, the vested rights of property of corporations in such cases are surrounded by the same sanctions and are as inviola• ble as in other cases." Shield v. Ohio, 95 U. S., 324; Detroit v. Plank Road Co., 43 Mich., 140; Orr v. Bracken Co., 81 Ky. Rep. 593.
The Cincinnati College was the lawful owner of the property in its possession; it is immaterial whether it was acquired from The Cincinnati Lancaster Seminary that it succeeded, or by subscriptions and donations subsequently made. This property had been intrusted to it for the purposes of establishing and maintaining a "college," no specific branches of learning were prescribed, or method of instruction commanded. Primary, academical, medical, legal and philosophical courses were from time to time attempted; all of them except the law school, proved unsuccessful and were abandoned; the latter has been continuously and successfuly maintained for nearly sixty years, and substantially the entire income of the institution during that period has been devoted to its maintenance and improvement, without material objection appearing to have been made by any one of the donors. The facts that such donors of the property to this institution, gave it with knowledge that- no specific branches of learning or method of instruction were prescribed by its charter, together with the brief history of its various educational attempts and failures just adverted to, and the acquiescence of such donors therein, tend to show that these donors entrusted to this chosen instrument of their will a wide discretion respecting the course and method of instruction to which their donations were to be, devoted, and if good faith is to be kept with these donors, we must deny to the legislature the powers to seize the fund thus raised, and transfer it from these chosen agents to others, in whose discretion they did not confide. This power, we think is prohibited by section 19,' of article I, of the constitution of 1852, which declares the inviolability of private property. This conclusion makes the consideration of the other questions raised in argument unnecessary.
Judgment affirmed.