Court Opinion

ID: 6466666
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:05:03.592698+00
Date Added: 2024-06-11T15:53:41.146601
License: Public Domain

Beeves, J., (dissenting.) The complainant, John Gerald Potter, a subject of Victoria, Queen of Great Britain and Ireland, etc., and a resident of the county of Middlesex, England, brings his bill of complaint against the Bio Arriba Land & Cattle Company, Limited, a corporation created and organized under the laws of the united kingdom of Great Britain and Ireland, having, as the bill alleges, a designated agent and place of business in the county of Bio Arriba and territory of ÍTew Mexico, and against Valentine Walbran Chapman, a resident of the county of Middlesex, England, defendants. The complainant avers ownership in certain lands in Bio Arriba county and territory of ÍTew Mexico, known as the “Bio Arriba Banches,” embracing about 270,000 acres of land, part of the San Joaquin del Bio de Chama grant; also a leasehold estate in or of said grant for grazing and pastural purposes for 10 years, and claiming under said Valentine Walbran Chapman as his lessor. The complainant alleges the formation of a corporation bearing the name of the Bio Arriba Land & Cattle Company, Limited, on March 3, 1887, for the purpose, among other things, to acquire by purchase or lease the land and premises known as the “Bio Arriba Banches,” and to carry on the business of cattle breeding, and generally to deal in cattle and live-stock, and for other purposes; that after the incorporation of the Bio Arriba Land & Cattle Company, and on the 3d day of March, 1887, the complainant, John Gerald Potter, and the defendant the Bio Arriba Land & Cattle Company entered into a contract in writing for the sale and purchase of the said Bio Arriba ranches and of said leasehold estate and the live-stock, horses, farming implements, etc., on said ranches, to be paid for by the company, in the shares of the company, or the equivalent in cash, on the execution and delivery of deeds of conveyance, of the premises, etc., by the complainant, Potter, to the company on the terms specified in the contract. The complainant alleges his offer to comply with the contract on his part upon payment to him of the purchase money according to the contract. The complainant further alleges that the defendant company is ready and willing to perform the contract on its part if the complainant can make it a good and marketable title to said land and premises, but that the defendant company alleges that complainant is not able to make such title because of the act of congress of the United States, approved March 3,1887, entitled “ An act to restrict the ownership of real estate in the territories to American citizens, and so forth, ” and that the defendant company, as it alleges, is rendered incompetent to acquire the legal title to the said lands and premises, and the same would be in its hands, if it should perform the contract subject to forfeiture at the suit of the United States; whereas the complainant charges that he can make a good title to said property. The complainant further alleges that the defendant Chapman has no longer any interest in said land and premises nor leasehold estate, but that by the terms of the contract it is his duty to make and deliver to the Bio Arriba Land & Cattle Company such further releases and assurances as may be requ ired in behalf of the companyprays that the defendant company and said Chapman may be compelled by the decree of the court specifically to perform the contract with complainant. The bill of complaint was filed with the clerk November 1,1887. On the same day the defendant Chapman and the defendant company, by their respective solicitors, entered their appearance, and made separate answers to the bill of complaint. Chapman disclaimed any interest in the property, and, admitting the complainant’s allegations to be true, he answered that he was willing to execute any further assurance of title to the leasehold premises to the defendant company as the court may direct. The defendant company, by its answer, fully admits the complainant’s allegations, and states its willingness to perform the contract on its part if the complainant can make a good and marketable title to said land and premises, but charges that the complainant is not able to make such title for the reasons stated in the bill of complaint, and declines, without the direction and command of the court, to perform on its part the contract. The parties, complainant and defendants, by their respective solicitors, stipulate in writing for the hearing of the cause upon the bill of complaint and the answers of the defendants. The •question in this ease is: Can the court grant the prayer of the complainant for a decree directing or compelling the defendants specifically to perform ’ their contract with the complainant on the allegations of the bill and the answers in the cause. The complainant contends that an equitable estate was vested in the defendant company by its contract with the complainant on March 3, 1887, and that the company is not precluded by the act of congress •of March 3, 1887, restricting the ownership of real estate in the territories to American citizens, from converting their equitable estate into a legal estate. A court of equity is as much bound by the common or statute law commanding or prohibiting a thing to be done as a court of law. The maxim that equity follows the law means that equity adopts the analogies furnished’by the rules of law. The maxim that equity regards that as done which ought to have been done finds its application in cases of the equitable conversion of property, and where the act is not illegal, as where money is directed to be invested in lands in which case the money is treated as real estate in equity; or where land is contracted to be sold, it is treated in some cases as money. But this has no application to the ease before the court. There is no authority to compel specific performance of the agreement while the act of congress is in force. Baylies v. Pettyplace, 7 Mass. 325, 337; Harrington v. Dennie, 13 Mass. 93, 94; Church v. Mayor, etc., 5 Cow. 538; 2 Pars. Cont. 184-186, 564, 576. The general rule authorizing a decree for the specific performance of a contract is that the matter in controversy has some special value not capable of being compensated in damages, or it is the breach of a contract for which the law affords no adequate relief. The complainant alleges that the contract between himself and the defendant company was executed, and that the company was incorporated on the same day, (March 3d,) that the president approved said act of congress, but before its approval. It is not clear, from the allegations •of the bill, whether the want of notice of the act of congress refers to the time when the contract was executed, and when the defendant was incorporated, or refers to the time while the negotiation between the parties was going on. The defendant company, in its answer, after admitting that the act of congress was not approved by the president until after the expiration of five hours subsequent to the making of the contract, alleges that arrangements for the incorporation of the defendant, in view of said contract, had been the subject ■of negotiation between the parties before any information had reached England or had come to the parties of the bill which resulted in said act of congress. If the want of notice was available for any purpose, it should have been averred that the contract was executed before the defendant, as well as the complainant, had notice of the act of congress. But it is not applicable to this case¡ according to the well-known maxim that ignorance of law is not-an excuse, and this applies as well in equity as in law. The covenants of the-contract are mutual. The complainant offers to perform the contract on- his part upon payment of the purchase money, and the defendant company is willing to perform the contract on its part if the complainant can make the company a good marketable title to the premises. Where there 'is equal equity, the court will not interpose on either side, but will leave the parties in statu quo. The act of congress so often referred to is entitled “An act to restrict the ownership of real estate in the territories to American citizens, and so-forth.” Approved March 3, 1887. By the first section of this act, and the one applicable to this case, it is provided that it shall be unlawful for any person or persons not citizens of the United States, or who have not lawfully declared their intention to become such citizens, or for any corporation not created by or under the laws of the United States, or of some state or territory of the United States, to hereafter acquire, hold, or own real estate so hereafter acquired, or any interest therein, in any of the territories of the United States or in the District of Columbia, except such as may be acquired by inheritance- or in good faith, in the ordinary course of justice in the collection of debts heretofore created: provided, that the prohibition of this section shall not apply to eases in which the right to hold or dispose of lands in the United States is secured by existing treaties to the citizens or subjects of foreign countries, which rights, so far as they may exist by force of any such treaty, shall continue to exist so long as such treaties are in force, and no longer.” St. 2d Sess. 49th Cong. 1886-87, p. 476. The parties to the suit, complainant and defendants and corporation, come within the class of persons and corporations prohibited by the act from acquiring real estate in the territories, unless they are within the exceptions of the act. The complainant, John Gerald Potter, and the defendant "Valentine Walbran Chapman are aliens and residents of the county of Middlesex, England, and the defendant the Bio Arriba Land .& Cattle Company is an alien corporation, created and organized under the laws of the united kingdom of Great Britain and Ireland. Evidently they do not come within the exceptions allowing aliens and alien corporations to acquire real estate by inheritance or in good faith, in the ordinary course of justice, in the collection of debts-created before the passage of the act, nor within the class of cases in which the right to hold or dispose of lands in the United States is secured by existing treaties to the citizens or subjects of foreign countries so long as the treaties are in force. By the second section of the act no corporation having more than 20 per centum of its stock owned by alien persons or alien corporations “shall hereafter acquire or hold or own any real estate hereafter acquired in any of tire territories of the United States or of the District of Columbia. ” By section third of this act “No corporation, except for the construction or operation of railroads, canals, or turnpikes, shall hereafter acquire, hold, or own more than five thousand acres of land in any of the territories of the United States.” To decree a conveyance of the real estate, thereby converting an equitable estate into a legal one, by virtue of the agreement between the parties for a title, would make an exception not made by the act of congress, and violate the provisions prohibiting alien corporations from acquiring real estate in the territories of the United States. The exceptions mentioned in the act of congress must be held to exclude all exceptions not expressed or necessarily implied. Corporations and natural persons acquire and hold property under different tenures. Corporations derive their powers to acquire and hold property from charters and acts of incorporation under legislative authority. For some purposes not necessary to be considered in this case, corporations are deemed persons. When the alien act became a law, the Bio Arriba ranches were not lawfully acquired or held by said company and corporation, and not excepted out of said act as real estate acquired before the passage of the act. A territorial legislature may create corporations* and prescribe the terms upon which they may do business or acquire property in the territory, subject to the control of congress. Williams v. Bank, 7 Wend. 539; Riddick v. Amelin, 1 Mo. 5; University v. State, 14 How. 268. The agreement between the complainant, Potter, and the defendant corporation was not made under the sanction of the laws of the territory of New Mexico, but in disregard of its laws. Section 218, Comp. Laws N. M., provides that “every company incorporated under the laws of any foreign state or kingdom, or of any state or territory of the United States beyond the limits of this territory, and now or hereafter doing business in this territory, shall file in the office of the secretary of this territory and in the office of the recorder of deeds of the county in which the principal place of business of such corporation shall be, a copy of its charter of incorporation; or in case such company is incorporated under any general incorporation law, a copy of its articles of incorporation, and of such general incorporation law, all duly certified by the proper authority of such foreign state, kingdom, or territory. Such company shall also, before it is authorized or permitted to do business in this territory, make and file with the secretary of the territory and in • the office of the recorder of deeds of the county in which its principal place of business shall be* a certificate, signed by the president and secretary of such company, duly acknowledged, designating the principal place where the business of such company shall be carried on in this territory, and an authorized agent or agents residing at such principal place of busi ness, upon whom process may be served, and such corporations shall have the same powers, and shall be subject to all the liabilities and duties as corporations of a like character organized undeF the general laws of this territory. But they shall have no other or greater powers, and no foreign or domestic corporation established or maintained in any way for pecuniary profit of its stockholders or members shall purchase or hold real estate in this territory except as provided for in this act and the laws of the territory now existing. * * *” It is not averred in the bill of complaint or otherwise shown that the copies and certificates mentioned in the above section of the statute have been filed with the secretary of the territory and clerk of the proper county as prerequisites before the company was authorized or permitted to do business in the territory. This statute, in express terms, provides that foreign corporations shall have the same powers and be subject to all the liabilities and duties of corporations of a like character organized under the general laws of the territory; but that they shall have no other or greater powers, and that no foreign or domestic corporation established or maintained in any way for the pecuniary profit of its stockholders or members shall purchase or hold real estate in this territory except as provided in this act and the laws of the territory now existing. But what are the purposes for which corporations may be organized under the laws of this territory, and what are their powers, liabilities, and duties? Section 192, Compiled Laws of the territory, specifies the different purposes for which corporations maybe organized in the territory, some of them for pecuniary profit of the stockholders and members of the company, others for benevolent, charitable, and scientific purposes, and still others of a different kind. By the following section (section 193) provision is made for the organization of domestic corporations, requiring the parties to make, sign, acknowledge, and record, in the proper office, a statement in writing setting forth the full names of the persons; the corporate name of the company; the objects for which the company shall be formed; the amount of its capital stock; the time of its existence, not to exceed 50 years; the number of shares of which the stock shall consist; the number of directors and their names; the name of the city or town and county in which the principal place of business of the company is to be located. Section 195 of the statute defines the powers conferred on domestic corporations, and among other powers to have succession for the period limited with power “to purchase, hold, sell, mortgage, and convey such real and personal estate as the purposes of the corporation shall require.” There is no mistaking the purposes of the Rio Arriba Land & Cattle Company as being a corporation for the pecuniary profit of its stockholders or members, as shown by the bill of complaint. The court can have no legal evidence of the corporate character of the defendant company nor of its powers, duties, and liabilities, without having the copies of the certificates, charters, and statutes certified by the secretary of the territory, or the originals as required by section 220, Comp. Laws N. M. The agreement between the parties recites that the complainant, Potter, shall sell, and the company shall purchase, the Rio Arriba ranches, estimated to contain about 270,000 acres of land, and the buildings thereon, and live-stock, horses, etc., and followed by an averment in the bill of complaint that the company had purchased a herd of cattle and placed the same on the land and premises known as the “Rio Arriba Ranches, ” for corporate enjoyment and purposes. Was not the purchase of the land and cattle a positive violation of the laws of the territory, inhibiting foreign corporations from doing business in the territory, and from acquiring or holding property in the territory without having first complied with the statutes? Will the court decree specific performance of the agreement, thereby compelling the defendant corporation to accept a deed of conveyance, when such decree and deed will violate the laws of the territory? The statute authorizing bodies politic to convey their real estate must be construed in connection with the statute authorizing corporations to acquire and hold real estate. Comp. Laws N. M. §§ 218, 2748. To say that the statute authorizing aliens to acquire, hold, and sell real estate in the territory includes alien corporations, without any restriction on their powers, would be to lose sight of all distinctions between natural persons and corporations. Comp. Laws N. M. §§ 218, 2746. Their charters and acts of incorporation must define their powers, and not the general provisions of statutes relating to real estate and conveyances. Under the general rules for the construction of statutes, all on the same subject are construed together, and no one statute is to be rejected for the purpose of supporting another. Comp. Laws N. M. §§ 218, 1851, 2614. Evidently the purpose of the parties was that the defendant corporation should acquire property and do business in the territory of New Mexico by virtue of its foreign charter or act of incorporation, without regarding the laws of the territory. They stipulate that the agreement shall be filed with the registrar of joint-stock companies, pursuant to the company’s act, 1867, alleging in the bill that the agreement had been so filed. The complainant, Potter, agrees to give such covenants and conveyances as shall be in compliance with the conveyancing and law of property act 1881. The purchase was to be completed, the money paid, and deeds executed in the city of London. The transcript contains an agreement between the parties that the cause and all matters in controversy therein should be heard" and finally determined upon the bill of complaint, and answers filed in the cause as hereinbefore stated, and a further agreement to omit from the printed record the exhibit referred to in the pleadings, the tenor and purport of the same being set forth in the pleadings according to the agreement. The duties and liabilities of the corporation, and the legal evidence of its existence, are not matters of privilege that litigants may dispense with and waive by agreement. It is not giving the statute a retrospective operation to refuse a decree for specific performance of an executory contract. Specific performance cannot be claimed as a vested right or right of any kind, but depends on the circumstances of each particular case. 2 Story, Eq. Jur. § 742. The statutes of this territory make no discrimination between foreign and domestic corporations as respects the right to acquire, hold, and dispose of their property. These statutes have been in force more than 20 years. No objection can be made as to the treatment of alien or foreign corporations that will not apply to domestic corporations. The legislation of the territory has always been liberal towards foreign corporations and foreign and alien persons in conferring the right to acquire, enjoy, and dispose of their property in the territory. In the case of the Singer Manuf'g Co. v. Hardin, 16 Pac. Rep. 605.1 decided at the present term of the court, section 218 of the Compiled Laws of the territory was upheld in most if not all of its provisions. In that case the court refers to and quotes from the case of Paul v. Virginia, 8 Wall. 168, as follows: “It affirms the right of a state or territory to name the conditions upon which a foreign corporation may enter the state and there exercise the corporate franchise and receive the recognition and protection of the local sovereignty,” where the conditions do not constitute a transaction of commerce within the meaning of the*constitution. This is further explained in the ease of Ferry Co. v. Pennsylvania, 114 U. S. 196, 5 Sup. Ct. Rep. 826. In that case the court said: “As to those subjects of commerce which are local or limited in their nature or sphere of operation, the state may prescribe regulations until congress assumes control of them.” Clearly the regulations prescribed by the territorial statutes relate to subjects which are local and limited to the territory, and not inconsistent with the commercial clause of the constitution. „ I find no authority to change by a decree of the court the state of the property as it existed at the time the alien act became a law by vesting a different title in the defendant company, an alien corporation, and thereby conferring a right to acquire and hold real estate in this territory by a different tenure contrary to the act of congress and the laws of the territory. On these grounds I think the complainant’s bill ought to be dismissed.  Same case, ante, 175.