Claremont College v. Riddle, 165 N.C. 211 (1914)

March 25, 1914 · Supreme Court of North Carolina

165 N.C. 211

CLAREMONT COLLEGE v. J. L. RIDDLE.

(Filed 25 March, 1914.)

1. Corporations — Defective Organization — Legislative' Amendments.

Semble, the place for recording articles of incorporation taken out before the clerk were properly filed and recorded in the office pf register of deeds of the county under Laws of 1871-’72, ch. 199, sec. 8; but were it otherwise, a corporation thus formed having all the attributes of a corporation <Ze facto, towit, a bona fide attempted organization under a statute, and the' consequent actual user of the incidental powers, can make a valid deed to lands it has thus acquired; and its powers to thus act can only be drawn in question by the State, on suit regularly entered.

2. Same — Curative Acts.

A defective organization of a corporation under a general law authorizing it is cured by a legislative amendment to its original charter, and especially when the amendment distinctly recognizes its corporate existence, is the State thereafter concluded from setting up the original defects.

3.-Corporations — Deeds and Conveyances — Restrictive Powers — Conditions Subsequent.

The original charter of a corporation provided, among other things, that the purpose of the .corporation was to establish a female college, with authority to take, receive, and hold property, real and personal, which may be conveyed to the corporation, or its trustees'ánd their successors for its use and benefit, etc.:' Held, a habendum in a deed to land made to the corporation, its successors in office, for the only proper use and benefit of the corporation, does not so restrict the use of the lands to school purposes, under condition subsequent, as to invalidate a conveyance of the lands to a third person. Church v. Ange, 161 N. 0., 314, cited and distinguished.

4. Same — Statutes—Intent.

A deed to lands to be held for school purposes reserves .in the grantor a possibility of reverter, which may be removed by a subsequent and unconditional deed from him; and the deed in question bearing date in 18S0, it was made subject to the statute of 1879, now Revisal, sec. 946, and is to be construed in fee, it not appearing by construction that it was the intent of the grantor to pass an estate of less dignity.

5. Corporation — Deeds and Conveyances — Restrictive Powers — Parties — Tender of Deed — Judgment—Estoppel.

A conveyance of lands was made to Claremont Female College, which by legislative amendment was changed to Claremont College and a conveyance of the land made from the trustees of the college under its former name to that under the amendment. The amendment placed the control and management of the college under the “Classis of North Carolina Reformed Church of the United States,” providing for a governing body of trustees to take and hold the property, of the college. The objection that the Reformed Church of the United States should be made a party to an action involving the validity of a conveyance of the lands by the corporation to another, to be used for other than school purposes, is untenable, the local part of that organization, especially charged with looking after its interest there, through its accredited representatives, having been made parties plaintiff and joined in the tender of the deed.

6. Corporations — Charter Provisions — Management—Deeds and Conveyances — Purchaser.

Where an educational corporation has agreed to convey certain of its lands, the purchaser may not refuse the deed upon the ground that it would render the corporation unable to conduct a school in accordance with its charter, as such matter affects the internal management of the corporation and does not concern the purchaser.

Appeal by defendant from Cline, J., at October Term, 1913, of Catawba.

Civil action, beard and determined by consent before bis Honor.

On tbe hearing it appeared tbat, plaintiff having bargained a piece of real estate to defendant at tbe price of $1,400 and tendered a deed for same, defendant resisted recovery on tbe ground that tbe title offered is not a good one. On tbe issue presented, tbe pertinent facts and conclusions of law tbereon were declared and stated by tbe court as follows:

“First. That in or about July, 1880, Jobn F. Murrill, J. G. Hall, A. M. Peeler, et als. filed articles of incorporation in tbe office of tbe clerk of tbe Superior Court and received a charter from tbe said clerk of tbe Superior Court, incorporating Clare-mont Female College; said,articles of incorporation were filed 28 July, 1880, in tbe office of tbe register of deeds for Catawba County in Book” 14, at page 58 et seq.; tbe said articles are hereby made a part hereof, and will appear in tbe record of this cause; that tbe said parties organized under their said charter, .received and held property, both real and personal, established a female school or college," and they or their successors have maintained and conducted tbe school under said charter without any amendments thereto from that time continuously t'o tbe present.

“Second. That on 1 February, 1881, Henry W. Robinson, of Catawba County, now deceased, who was seized in fee óf tbe tract of land in said county hereinafter mentioned, executed and delivered to John F. Murrill, J. G. Hall, A. M. Peeler, et als. a deed for that tract of land fully described therein, now known as tbe Claremont College property, in Hickory, which deed was filed in tbe office of tbe register of deeds, 31 December, 1885, and was registered in Book 2V, page 522, reference to which is hereby made for tbe full terms of said deed and description of property, and copy of which will be found in tbe record.

“Third. That on 12 February, 1909, tbe General Assembly of 1909 passed an act to amend tbe charter, which is chapter 58 of the Private Laws of 1909, reference'to which i@ hereby made.

“Fourth. That on or about 19 September, 1913, J. L. Murphy, K. C. Menzies, et als., being present trustees of Claremont College, executed as trustees under their hands and seals deed to Claremont College as a corporation, which deed is duly registered in the office of the register of deeds for Catawba County in Book ..., page ..., reference to which is hereby made, and a copy of which will be found in the record.

“Fifth. That the plaintiff, Claremont College, prior to the institution of this action, was duly and properly authorized by its board of trustees to sell off certain lots from the tract of land described in the Robinson deed and use the proceeds thereof for advancing the purposes and interests of the' corporation, and that said authority was given in the exercise of the best judgment of the trustees, and the court finds that the same was duly and timely made and given.

“Sixth. That prior to the institution of this action the said plaintiff, with proper authority from its trustees, contracted and agreed with the defendant to sell and convey to the defendant that lot fully described in the fourth paragraph of the complaint, and known as Lot No. 1 of the Claremont College plat, prepared by J. E. Barb, surveyor, at the price of $1,400, and the defendant contracted and agreed upon his part to pay to the plaintiff therefor the said sum of $1,400.

“Seventh. That prior to the institution of this action the plaintiff tendered to the defendant a deed purporting to convey to the defendant in fee the said Lot No. 1, and demanded the purchase money therefor, but the defendant declined and refused to accept said deed and pay the purchase money therefor, upon the ground that the plaintiff could not make title in fee for said lot.

“Eighth. That this action was thereupon begun for the purpose of requiring and compelling said defendant to accept said deed and pay the purchase money to the plaintiff.

“Upon the foregoing findings of fact, the court concludes and holds as a matter of law:

“First. That Claremont College, the name' being so- changed from Claremont Female College by the General Assembly of 1909, was and still is a corporation, as alleged by the plaintiff, for all the purposes of this action.

“Second. That Henry W. Robinson was, prior to and on the first day of February, 1881, seized in fee of the tract of land described in his deed to John F. Murrill, J. G. Hall, A. M. Peeler, et dls., trustees of Claremont Female College, and on, said day conveyed to them as such trustees, their successors and assigns, in fee, the land in said deed described.

“Third. That the deed from J. L. Murphy, K. 0. Menzies, and others, present trustees of Claremont College, dated 19 September, 1913, conveys to Claremont College, Incorporated, in fee the eight (8) lots therein fully described.

“Fourth. That the' contract and agreement entered into between the plaintiff and defendant was good and valid and en-forcible in law against the defendant, for that Lot No. 1, covered by said agreement, was one of the lots mentioned in the last paragraph above, and the said plaintiff had and. still has a fee-simple estate in said lot, and is able to convey same to the defendant, his heirs and assigns, in fee. ■

“Fifth. That the deed tendered by the plaintiff to the defendant is sufficient in form and substance to convey to the defendant in fee the said Lot No. 1.

“Sixth. That the plaintiff is entitled to judgment against the defendant for the sum of $1,400, recoverable upon the delivery to him of said deed, and for the costs of this action.” .

Judgment thereon for plaintiff, and defendant excepted and appealed.

Charles IT. Bagby and B. B. Blaclcwelder for plaintiff.

■ A. A. Whitener for defendant.

Hoke, J.

We concur in his Honor’s view’that the title offered in this case is a good one, and that defendant must pay the contract price. As-we understand his position, it was objected for defendant: (1) That the original incorporation of Claremont Female College was defective in that the proposed charter was registered in the office of the register of deeds, and not before-the clerk, as required! by~T"he Code of 1883, sec. 618, and now iii~theoffice ofEecretary of State, Revisal 1905, sec. 1139.' So far as we can ascertain, at the time this incorporation was had or attempted,-in 1880, the law applicable was that of 1871-’72, and, under that act, the registry in the office of the register of deeds seems to have been the proper place (Laws 1871-’72, ch. 199, sec. 8) ; but if we are in error about this, and some amendment has 'escaped attention, and if it be conceded that the registry had was not the proper method, it would not avail defendant in this instance, for the reason that, upon all the testimony and the facts as found by his Honor, the Claremont Female College had and possessed all the attributes óf a corporation de facto, towit: “A statute under which it might have been organized. (2) A bona fide attempt to organize pursuant to the statute. (3) An actual user of the corporate powers incident to such an organization.” 10 Cyc., 252-253. And as such, and in reference to third persons, it could take and hold property and exercise, under its charter, all the powers of a corporation de jure. Finnegan v. Noerenburg, 52 Minn., 239; Investment Co. v. Davis, 7 Ind. Ter., 152; Marshall v. Keach, 227 Ill., 35; 1 Clark and Marshall, sec. 81, pp. 230-233. Its powers to act could only be drawn in question by the State, on suit regularly entered, and this source of interference is removed by the action of the Legislature amending the original charter. Private Laws 1909, ch. 58. Not only does an amendment, in distinct recognition of the corporate existence, conclude the State in this respect (R. R. v. City of St. Louis, 66 Mo., 228; Bashor & Stebbins v. Dressel, 34 Md., 503; People v. Perrin, 56 Cal., 345), but this statute expressly provides (section 3), “That the original charter of said college is in all respects wherein the same is not inconsistent herewith, recognized, ratified, and confirmed.”

It was further insisted that, under the first deed from. H. "W. Robinson, the original owner, the specific property was restricted, to school purposes, and not otherwise, and this by reason of the language of the habendum, as follows, the deed being to J. E. Murrill et PI., incorporators and trustees of the college: “To have and to hold the aforesaid lands and premises to the party of the second part and their successors in office forever, for the only proper use and behalf of said Claremont Female College as aforesaid.” The original charter makes provision that it is to establish a female college, and for that purpose, among other things, may take, receive, and hold property, real and personal, which may be conveyed to said corporation or to said trustees and their successors for the use and benefit of the same, etc., and it is held with us and by the weight of authority elsewhere that the words of this habendum do not have the effect contended for by the defendant, appropriating the specific property to school purposes, under condition subsequent, but, unless there is imperative and express provision to the contrary, as in Church v. Ange, 161 N. C., 314, these and words of similar import shall be held to express only the purpose of the grantor in making the deed, and that as to third persons the power of the trustees.or other corporate authority to convey the property is not impaired. Fellowes v. Durfey, 163 N. C., 305; St. James v. Bagley, 138 N. C., 384; Dowden v. Rayburn, 214 Ill., 342; Rawson v. School District, 89 Mass., 125; Hunter v. Murphy, 126 Ala., 123; Carroll Co. Academy v. Gallatin Academy, 104 Ky., 621. And, in any event, there would only be a possibility of reverter in H. ~W. Robinson and his heirs, and, as we interpret the record, this has been entirely removed in the present case by a subsequent deed of Robinson, conveying the property to the college, without any qualifying words whatever.

In this connection, it may be well to note that this property was acquired and the deeds bear date in 1880, and, after that time, making same subject to the statute of 1879, now Revisal, sec. 946, and by which it is provided that all deeds shall be construed to be in fee, with or without the word “heirs,” unless it is shown by “plain and express” words or it shall plainly appear by the conveyance or some part thereof that the grantor intended an estate of lesser dignity. Thé decision of Allen v. Basherville, 123 N. C., 126, is not controlling, therefore, on the construction of the present title; and it will be noted further that to cure or remove any defect, or the appearance of it, by reason of the original deed having been made to the trustees by name, these trustees have all executed a deed conveying the property to the college under its present and proper title of “Claremont College.”

Again, it is contended that under the statute amending the charter the property has been placed under the control and management of the “Classis of North Carolina Reformed Church of the United States,” and that they should be made party to the suit; but this position cannot be sustained. True, the Reformed' Church had been placed in the control of the school and the property, but a perusal of tbe statute will disclose tbat a governing body of trustees is provided for, who are to take and bold tbe property and are sufficiently representative to bind tbe cburcb by decree entered in tbe cause to wbicb.tbey are parties. And tbe suggestion finally made tbat tbe property is required for school purposes is not one presented in tbe record; Doubtless if it were properly made to appear tbat a proposed sale or conveyance of tbis property or any part of it would render tbe trustees unable to continue or conduct a school, as provided and contemplated by tbe charter, a court would interfere to stay tbe sale; but tbis is a matter which affected tbe internal management of tbe corporate affairs and does not concern tbe purchaser. Wilkinson v. Brinn, 124 N. C., 723.

It would seem from a perusal of tbe present charter as amended tbat tbe Corinth Reformed Cburcb of Hickory, N. 0., is tbe body more especially charged with tbe duty of looking after tbis interest, and tbat cburcb, by its accredited representatives, has been made a party plaintiff, and thereby joins in tbis tender of title, and certainly is 'concluded by tbe decree. There is no error, and tbe judgment is

Affirmed.