Court Opinion

ID: 5513508
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:26:21.013907+00
Date Added: 2024-06-11T08:34:13.539075
License: Public Domain

By the Court,

Savage, Ch. J.
The questions presented for decision in this casé are, 1. Whether the appointment by the defendants of a medical faculty in the city of New-York *217for the purpose of instruction in medicine is a franchise 1 2. Whether Geneva college has power to exercise this franchise I and if not, 3. Whether the remedy sought in this case is the appropriate remedy %
In the case of The People v. Utica Ins. Co., 15 Johns. R. 387, a franchise was defined by Spencer, justice, to be a privilege or immunity of a public nature, which cannot legally be exercised without legislative grant. To be a corporation is a franchise; the various powers conferred on corporations are franchises; the execution of a policy of insurance by an insurance company, and the issuing a bank note by an incorporated banking company are franchises. Without legislative authority, neither could lawfully be done by a corporation ; and were a bank to execute a policy of insurance, or an insurance company to issue bank notes, such acts would be usurpations of franchises.
Corporations are granted as well for the purpose of promoting education, as for the purposes of facilitating commercial and other transactions. Corporations can exercise no powers but such as are granted expressly or incidentally. The defendants are a corporation for the purpose of instructing pupils in the arts and sciences. They have power to confer degrees which are evidence of the proficiency made by their pupils; they have power of course to appoint tutors and professors to teach those branches of learning which will qualify pupils for receiving diplomas; these are franchises, and cannot be exercised by a corporation without legislative authority. It is not denied that an individual may instruct pupils, and may employ teachers under him, and may call them professors, and may also give a certificate or diploma. But a diploma or degree of doctor of medicine from an individual, will not give its possessor a right to practice in this state as a physician : a diploma or degree from a college does give that right. The individual who confers a degree does not profess to act by legislative authority: the corporation does. The degree of the individual confers no privilege or immunity upon the pupil: the degree of the corporation does confer a privilege. Hence the same act, when *218done by an individual, may be no franchise, yet is such when done by a corporation.
Before the passage of our restraining act, any individual or private association might issue negotiable notes for circulation like bank notes, but a corporation could not do so without legislative authority. Such act by the individual was no franchise, but by the corporation it was. The very existence of a corporation is a franchise, and every act of a corporation affecting the public is the exercise of a franchise. The appointment of professor is a franchise as well as the conferring of degrees. It is no answer to say that the college has a right to confer honorary degrees; it has a right to confer such degrees upon persons who are worthy of them, but I apprehend, were an incorporated college to confer such degrees upon persons not at all qualified, such acts by the corporation would be a misuser which would work a forfeiture. I cannot entertain a doubt that the appointment by a corporation of a medical faculty, in the city of New-York or in the village of Geneva, is the exercise of a franchise. ,
Have the defendants a right to exercise the franchise in the manner adopted by them ?
They state the manner in which they became possessed of their corporate rights, whatever they are. The trustees of Geneva academy applied to the regents of the university, and being disposed to found a college, made known to the regents the place where, the plan on which, and the funds with which they intended to found and provide for said college. It does not appear that the original plan was to establish a faculty of the college in any other place than Geneva. In due time the regents of the university granted a charter, on the 8th of February, 1825, and did thereby grant and declare that a college for the instruction and education of youth in the learned languages and liberal arts and sciences should be and thereby was founded and established in the village of Geneva. They were created a body politic and corporate, and authorized to confer such degrees as are known and usually granted by any university or college in Europe. By virtue of this charter, they claim to exercise certain franchises contained *219in their plea. It would have been a sufficient answer to the objection of the defendants that the appointment of professors in New-York is no franchise, to have said that they are concluded by their plea from denying that fact. They have themselves so denominated the rights and powers they claim. The question now is, whether their charter confers such authority.
In answering this question, we have only to recur to the fundamental principle relating to artificial beings—that they have such powers and capacities as are given to them, and none other. This corporation, by the very terms of its charter, is restricted as to place, as much so as is the Bank of Geneva. Suppose the Bank of Geneva were to establish an office of discount and deposit in the city of New-York, could they justify such a proceeding1? It may be answered that the charter of this bank contains an express prohibition against carrying on business elsewhere; but without such prohibition, there could be no question on the subject, and it would be no answer to say that the bills are signed in Geneva; and yet the cases would be precisely parallel. The signing of the degree gives no more locality to the business of instruction, than the signing a bank bill does to the operation of discounting a note. It is at Geneva, if any where, that the defendants have an existence and the capacity to appoint professors and give instruction, as well as to sign the diploma. Corporations take nothing by implication; certain powers are indeed incidental to the principal business to be carried on, but the instruction of youth at Geneva by no means requires or justifies the establishment of a branch in the city of New-York. If one branch of the business may be carried on out of the village of Geneva, the whole may, and Geneva college may locate herself any where in the state; nay, in every town in the state. Such a claim would be preposterous and absurd, yet equally well founded in legal right with the claim we are now examining.
It was stated, by one of the counsel for the people, that it may well be doubted whether Geneva college has any legal corporate existence, not having been incorporated according to the provisions of the new constitution. That is, in*220deed, a grave question, and must be well considered, if ever properly presented. The information in this case is not against certain persons assuming to exercise corporate powers without authority, but against a corporation claiming the . . . exercise of powers not conferred upon it by its charter. In at the college does not possess the power claimed, seems to me most manifest.
The only remaining inquiry is whether the proceeding by information in nature of a quo warranta is the proper remedy. The point seems to me to have been settled by the case of The People v. The Utica Ins. Co., 15 Johns. R. 383. If the appointment of professors by an incorporated college is a franchise, the assertion of such right, unless justified by authority from the legislature, is the usurpation of a franchise; and that is the case to which the present proceeding is the appropriate remedy. The right here claimed is of a public nature; it affects the public at large. In that respect it differs widely from the case of The People v. The Hillsdale and Chatham Turnpike Company, 2 Johns. R. 190. There the court refused leave to file an information, because the public was in no way interested; the controversy was between the defendants and an individual upon whom they were trespassing and to whom the courts were open, and no difficulty existed as to his remedy by suit. Here there is no remedy by suit; no individual in particular is aggrieved ; but the public at large are affected. The authority of the legislature is put in defiance by a creature of their own creation. In this respect the revised statutes, I apprehend, are but declaratory of what the law was. 2 R. S. 583, § 39. An information in the nature of a quo warranta may also be filed by the attorney general, upon his own relation, on leave granted against any corporate body, whenever it shall exercise any franchise or privilege not conferred upon it by law.
It was unnecessary to have filed this information upon the relation of any one; but it is not vitiated thereby: the statement of a relator is mere surplusage.
The plaintiffs are entitled to judgment upon the demurrer.