Court Opinion

ID: 6510166
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:21:39.874632+00
Date Added: 2024-06-11T15:54:51.169290
License: Public Domain

STONE, J.
On the 3d o.f February, 1866, the act was approved by which certain named persons and their associates and successors were “ created a body corporate of the name and style of the Tuskaloosa Scientificand Art Association, for the purpose of the encouragement of art and science in the distribution of works of art, and to aid the University of Alabama in replacing its library and establishing a scientific museum.” — Pamph. Acts, 269. This corporation, alike in its name, and in the expressed purpose of its creation, oifered strong claims to public approbation and support. A judicious distribution of works of art, is certainly giving encouragement to art and science. And after the destruction of the University with its library, the accumulation of years, every lover of learning, and of the State’s highest educational institution, must have rejoiced that steps were being taken to replace its lost library, and to supply it with a scientific museum. This, too, was another important átep in the encouragement of art and science. What is said above comprises the whole purpose of the act, as expressed in the caption and in the first section. There is nothing in the statute, which can be construed as enlarging this purpose; for all its other provisions relate to matters of organization and detail. Sections two, three four and five confer the power to purchase, hold, sell, transfer and convey such real and personal property as may be necessary for its purposes, to make contracts, to sue and be sued, and to have a common seal; declare the amount of capital stock, and its division into shares; provide for opening books of subscription, and for organization, and direct the holding of annual and called meetings of the stockholders. Section seven specifies the articles to be distributed and awarded, (“ for the purpose of the encouragement of art and science, . . and to aid the University of Alabama in replacing its library and establishing a scientific museum.”) They are as follows : “ books, paintings, statues, antiques, scientific instruments or apparatus, or any other property or thing that maybe ornamental, valuable, or useful.” The articles here enumerated, each and all, fall, within the domain of science and art, and refined aesthetics. They are all germane to the expressed purpose for which this body corporate was created. This enumeration strengthens the impression made by the caption and first section of the act, that the controlling purpose of the corporation was the encouragement of art and science, and the proffered aid to the State University. The general clause following this specific enumeration, of “ any other property *197or thing that maybe ornamental, valuable, or useful,” would be usually understood and construed as embracing, and intended to embrace things of like kind. Confirmatory of the view, that only specific articles of personal property were to be offered as awards, the statute, section six, declares, “ that before any distribution is made, they [the corporate authorities,] shall advertise in a newspaper, or by some other method, a list of all the articles to be awarded at the distribution, and the value of each, and all in money annexed.” Bear in mind, this requires a published list of all the articles awarded. And this valuation is required to show its true value, as is made manifest by the seventh section, which declares that “ to prevent fraud or unfair speculation, any holder of a certificate, if he has cause to believe that the article or premium awarded to him is not worth the value annexed to it in the published list,” may have the same appraised, and if found of less value, may demand the advertised value in money and refuse the article awarded, or may take the article and demand the difference between the advertised and the appraised value. This clause was inserted, not as a substantive grant of power to the corporation, but as a restriction, in the interest of the certificate-holder, on the power elsewhere granted, which the legislature thought might be abused. The wisdom of this restriction will be readily seen, Avhenit is remembered that feAv persons know the true, actual value of the enumerated articles to be offered as awards.
We have shown the purpose of the incorporation of the Tuskaloosa Scientific and Art Association. It is contended for appellant that the corporation Avas authorized by its charter to do the precise thing, for the doing of Avhich he, as its treasurer, was indicted and convicted. This authority is claimed under section six of the act, Avhich declares, “ that the said corporation shall have the power to receive subscriptions, and to sell and dispose of certificates of subscription, Avhich shall entitle the holders thereof to any articles that may be awarded to them.” It then provides that “ the distribution of aAvards shall be fairly made in public, after advertisement, by the casting of lots, or by lot, chance or otherAvise, in such manner as shall be directed by the by-laws of said corporation.” What is meant by receiving subscriptions, and disposing of certificates of subscription? And Avhat is meant by aAvarding articles to the holders of such certificates of subscription ? Corporations can only exercise such powers as this, when the legislature has granted them authority to do so. They can claim nothing that is not *198clearly given. — 1 Brick. Dig. 403, sections 22, 23. We repeat, what is meant by subscription, in the clause we are interpreting ? It is not a subscription to the capital stock of the association. That was provided for by section four of the act, and necessarily preceded organization. The subscription authorized must mean one of three things, and, perhaps, in its generality, is broad enough to include all three; that is, it means either a subscription to the purchase, or part purchase of some of the articles the association was authorized to distribute in awards, or a contribution of some article of the kind mentioned to be disposed of, or a subscription to a fund to be employed in procuring works of art for distribution, and in replacing the library of the University, and providing for it a scientific museum. Clauses of the act of incorporation make it partake somewhat of the nature of an eleemosynary foundation, while other provisions speak of private emolument of the stockholders, not more than fifteen per cent., and holds each stockholder “individually liable to the creditors and beneficiaries of said corporation to the extent of his or her stock.” Whether this dividend of fifteen per cent, is to be an annual dividend, or semi-annual, as is the rule with money corporations; whether it is to be declared on the stock subscribed and paid in; or whether it is designed to furnish a rule for the division of profits on each adventure, the charter does not inform us. This grave problem is left to interpretation. Nor does the charter, in terms, inform us how profits were to be realized for division. The articles were to be appraised at their true value. Whence the profits ? This vital question was also left to interpretation. If we hold that the subscription, and issue of certificates of subscription, provided for in the sixth section, mean a subscription towards the purchase of some article to be awarded, then, to realize a profit, it would be necessary to sell chances — subscriptions as they are strangely called — to an amount which, in the aggregate, will exceed the value of the article subscribed for. This, and this only, could furnish a margin of profit. If this be the plan resorted to, then, after the requisite chances for the various articles Avere purchased or subscribed for, it could be determined by lot or chance to which of the subscribers to this particular article, it should be ayvarded. This could be determined by many of the various methods employed in games of chance; such as dice, a single number lottery, &c. It could not be determined by a lottery conducted on the numerical, or combination plan. If a contribution of the second class, was made,, *199then the whole proceeds, less fifteen per cent., would remain for the charitable purposes of the corporation. On the other hand, if it mean a subscription to a fund, to be employed in procuring works of art for distribution, and in replacing the library of the University, and providing for it a scientific museum, as mentioned third above, then, to realize a profit, and thus accomplish the purpose of the act, it would be necessary that only a part of the sum subscribed should be invested in books, paintings, statues, antiques, scientific instruments or apparatus, or other property or thing, ornamental, valuable, or useful, to be distributed or awarded to the subscribers. Under this supposed and possible' plan, the corporation would be primarily eleemosynary, with a moderate profit to the stockholders, to compensate them for their labor. The award, or distribution of works of art, or things of taste or use, would be employed as incentives to the public spirited and generous, to increase subscription and contribution to the laudable enterprise expressed in the caption and first section of the act. Inadequate compensation, it is true; but, nevertheless, calculated to quicken and increase contributions. Under this method, as under the other, the distribution of the awards might be determined by lot or chance; or, awards of different values might be offered to subscribers, dependent on the amount subscribed. This would dispense with the lot or chance, provided for in the sixth section of the act, and furnish a field of operation for the word otherwise, which immediately follows them.
We have attempted above to give fair and full expression and operation to every power-granting clause in the charter of the Tuskaloosa Scientific and Art Association. We think we hazard nothing in saying a reader of the charter, unless so informed, would not perceive it contained a license for a lottery. To so hold, would be to dwarf into secondary and subordinate importance, the captivating and meritorious purpose of the act, so conspicuously shown in its caption and first section, and to make its chief operative effect to consist in a liberal, if not strained interpretation of such ambiguous phrases as, “ power to receive subscriptions, and to sell and dispose of certificates of subscription . . distribution of awards fairly made in public, after advertisement, by the casting of lots, by lot or chanceand constitutes the restraint imposed by the statute on fradulent or excessive valuation, one of the chief powers conferred on the corporation. Nay more : it stamps the legislature by which it was enacted as the dupes of language artfully framed to conceal, rather than *200to communicate ideas and purposes; or, what is worse, with a deliberate purpose to deceive the public, by conferring corporate powers in ambiguous phrase, which they were unwilling to announce in plain terms. We might extend these reflections much further. We might comment on the infelicitous, if not inapt employment of the words “ power to receive subscriptions and to sell and dispose of certificates of subscription,” to convey the idea of authority to sell tickets or chances in a lottery; and of the word “ award ”• to express the idea of the prize drawn therein. We might call attention to the fact that among the charitable acts asserted to have been performed by this corporation during the twelve years of its existence, we are not informed that it has made any offer of premiums or prizes for the best essays on science or art, or, for the most deserving works of art, by citizens of Alabama. And we might rely on this grant of power, as another argument in support of our interpretation of this statute. We will not, however, extend this line of argument.
For many years prior to 1866, it had been made a penal offense to set up, or be concerned in setting up a lottery in this State. It is now prohibited by the constitution. Cor porations can only exercise powers such as this, when they are clearly expressed in their charters. We find nothing in this charter which authorizes a lottery on the numerical or combination plan, or on any other plan, where money or its equivalent is offered or distributed as premiums. As we said in Tuskaloosa Scientific, and Art Association v. State ex. rel. 58 Ala. 54, 60, “ Looking into the body of the statute, we fail to find any warrant for setting up a lottery.” We think, as a mere incident to the purpose of this corporation as expressed in the caption and first section of the charter, it had the power to determine the awards it would make, by lot or chance, in one of the methods we have stated above. We hold its power extended no farther. This argument ignores the question of repeal of the charter, and leads us satisfactorily to the conclusion that the Tuskaloosa Scientific and Art Association never had the authority to set up a lottery. The rulings of the City Court of Mobile are in strict accordance with these views, and its judgment is affirmed.