text:
    Philadelphia versus Fox et al.

    1. A municipal corporation is a public corporation created by the government for political purposes, having subordinate and local powers of legislation.
    2. A municipal corporation is merely an agency instituted by the sovereign, to carry out in detail the objects of government; revocable and having no vested right to any of its powers or franchises.
    3. The charter of a municipal corporation is not a contract with the state and is subject to the control of the legislature, who may enlarge or diminish its territorial extent or functions.
    4. The legislature may modify the internal arrangement of a municipal corporation or destroy it.
    5. While a municipal corporation thus exists, it enjoys the rights and is subject to the liabilities of any other corporation, public or private.
    6. The legislature cannot authorize a municipal corporation to violate a contract.
    7. The sovereign may continue the existence of a municipal corporation, and assume the appointment of all its officers.
    8. The legislature cannot by contract, invest any municipal corporation with an irrevocable franchise of government over any part of its territory.

      9. A municipal corporation may be a trustee under grant or will, for public purposes germane to its objects.
    10. The trusts under Girard’s will and the other trusts confided to Philadelphia, are germane to its objects as a municipal corporation.
    11. The trusts are charities; charities axe public trusts.

      12. A trust for a particular person is not a charity.
    13. Indefiniteness is of the essence of a charity.
    14. A municipal corporation by accepting such trusts cannot thereby invest itself with any immunity from legislative action.
    15. A municipal organization, trustee of a charity, cannot set up a vested right to maintain such organization in the form in which it was when the trust was created, and prevent the state from changing it as the public interests may require.
    16. That a judge is a trustee of a charity is no disqualification in him to sit.
    17. The Act of June 30th 1869, authorizing the judges of the Supreme Court, and other judges to appoint trustees for the trusts to the city of Philadelphia, under Girard’s will and others is constitutional.
    January 31st 1870.
    Before Thompson, C. J., Read, Agnew, Sharswood and Williams, JJ.
    Appeal from the decree of the Supreme Court at Nisi Prius.
    This was a bill in equity, No. 6, to January Term, filed in the Supreme Court for the Eastern District, by the City of Philadelphia against Daniel M. Fox, Mayor of the city of Philadelphia, William S. Stoldey, President of the Select Council, Louis Wagner, President of the Common Council of the said city, Edward King, Henry M. Phillips, William B. Mann, Alexander Biddle, William Welsh, Charles H. T. Collis, James Campbell, James L. Claghorn, J. Gillingham Fell, Gustavus S. Benson, J. H. Michener, George H. Stuart.
    (The proceedings were instituted to test the validity of the appointment of a board, called “Directors of City Trusts,” made under authority of an Act of Assembly of the 18th of June 1869.
    The act provided :—
    Sect. 1. That after 1st of July then next, all the duties, rights and powers of the city of Philadelphia, concerning all property and estate whatsoever, dedicated to charitable uses or trusts, the charge or administration of which are now or shall hereafter become vested in or confided to the city of Philadelphia, shall be discharged by the said city through the instrumentality of a board composed of fifteen persons, including the mayor of said city, the presidents of the select and common councils for the time being, and twelve other citizens, appointed as hereinafter provided, to be called directors of city trusts, who shall exercise and discharge all the duties and powers of said city, however acquired, concerning any such property appropriated to charitable uses, as well as the control and management of the persons of any orphans or others, the objects of such charity, to the extent that the same have been or hereafter may be, by statute law or otherwise, vested in or delegated to the said city or the officers thereof.

      Sect. 2. The judges of the Supreme Court, together with the judges of the District Court and the Court of Common Pleas of the city and county of Philadelphia, shall form a board of appointment, of which the Chief Justice of the Supreme Court shall ex officio be president, which shall convene in the city of Philadelphia, at such time and place as the said Chief Justice shall appoint, within eight weeks from the passage of this act, and select and appoint, from the citizens of said city, twelve persons to serve, during good behavior, as members of the before-mentioned board of directors of city trusts, s_ubject, however, to removal as hereinafter provided, &c. * * * 1
    Sect. 4. The said directors of trusts shall have power to make rules and by-laws for the proper regulation of their business, to appoint as many agents as in their judgment shall be required for the proper discharge of all the duties delegated to said directors, &c.; * * * also in the name of the said city, and in accordance with the conditions of said charitable trusts, to make all leases, contracts and agreements whatsoever, which, in the course of the, administration and management of said property, it may from time to time become necessary and proper to make and execute; and it shall he the duty of the said directors' of trusts, for and in the name of the said city, to do, perform and discharge all and singular whatever acts and duties are or from time to time may become proper or necessary to be done by the said city in discharge of said trust, and to make an annual report thereof to the councils of the city, to the board of appointment and to the legislature of the state of Pennsylvania. * *
    Sect. 6. The said directors, in the discharge of their duties, and within the scope of their powers aforesaid, shall he considered agents or officers of said city; but no compensation or emolument whatever shall be received for such services, nor shall any of them have or acquire any personal interest in any lease or contract whatever, made by said city, through said directors or through any agent appointed by them.
    i ¿The following trusts were held by the city of Philadelphia:— ,
    I. By the will of Stephen Girard, 1. The sum of $10,000 in trust, with the income thereof, to purchase fuel and distribute the same annually “ amongst poor white housekeepers and room-keepers, of good character, residing in the city of Philadelphia.”
    < 2. The residue of his estate in trust:—

      1 As to $2,000,000 thereof to erect a college building, and to endow the same as a place for the habitation and education of orphan children.
    As to $500,000 to apply the income annually to lay out, pave, and light a street, to front the river Delaware, to be called Delaware Avenue; to pull down and remove all wo'oden buildings and others formed of combustible materials within the said city, and to prohibit the future building of such therein ; to regulate, widen, pave and curb Water street within the said city : and to the further improvement of the eastern part of the said city.
    And the remainder of the said residue to apply the annual income to the further improvement of the said college, to the establishment of a proper police for the said city, to enable “the said corporation to improve the city property and the general appearance of the city” and, “in effect, to diminish the burden of taxation.”
    3. The testator devised and bequeathed to the said corporation the whole of the residue of his estate in trust for the purpose mentioned, except $300,000, which he gave to the Commonwealth of Pennsylvania, to be paid when laws should be enacted to enable the said city to lay out Delaware Avenue, to remove wooden buildings, and to widen Water street.
    "^yi'The testator prescribed in his said will many regulations for the government of his said trustees in the management of the said trust estate, and said: “ I leave, necessarily, many details to the mayor, aldermen, and citizens of PhiladelphiaDand their successors; and I do so with the more confidence, as from the nature of my bequests, and the benefit to result from them, I trust that my fellow-citizens of Philadelphia will observe and evince especial care and anxiety in selecting members for their, city councils and other agents.” Tyfc A' ■
    The testator further provided, that if the city should knowingly and wilfully violate any one of the conditions mentioned in his said will, then the said remainder and accumulation should go to the Commonwealth of Pennsylvania, except the rents and profits of his real estate in the city and county of Philadelphia, which he declared should for ever be applied to the maintenance of the said college, &c.
    II. By the will of Dr. Benjamin Franklin, 1000Z. sterling in trust, to “let out the same upon interest at five per cent, per annum to such young married artificers under the age of twenty-five years as have served an apprenticeship in the said ” city, to assist them in setting up their business; such loans not to exceed 60Z., or be less than 15Z. to any one person. The testator directed that at the expiration of one hundred years from his death, part of the accumulated capital of his bequest should be applied to introducing water from the Wissahickon creek into the said city.
    III. The Trustees of First Lodge of Free Masons, in the year 1793, paid “ the corporation of the city of Philadelphia ” the sum of $1533.57, to be by them applied “ towards establishing a fund for supplying, out of the interest thereof, the necessitous inhabitants with fuel in the winter season.” And in the same year Mr. Ricketts presented $631 to the same corporation for the like purpose. Subsequently the fees and fines of the Mayor’s Court for the years 1796 to 1800, amounting to $307, was devoted to the same purpose.
    IV. By the will of John Bleakley; 1. “ To the corporation of the city of Philadelphia, as a fund to procure fuel during the winter season for poor housekeepers, widows, 1000Z.”
    2. “ To the corporation of the city of Philadelphia, as a fund to relieve those who may be reduced to the necessity of being placed in the hospital during the existence of the yellow fever, 1000Z.” An act of April 16th 1836, authorized the city corporation to appropriate and pay the annual income of this bequest to the managers of the Wills Hospital for the indigent blind and lame : but provided, that if at any time the fund or income should be required for the purposes specified in the said will, then it should be so appropriated.
    V. By the will of Elizabeth Kirkpatrick; the balance after sale of her real estate to be “ paid and delivered by my executors unto the corporation of the city of Philadelphia for the use of the poor of the said city, without any distinction of person or color.” The amount paid to the city by .the executors of Mrs. Kirkpatrick, was $2278.59, which was added to the fund appropriated to purchase fuel for the poor.
    VI. By the will of John Scott, $3000, “ to be applied to the same purpose as the legacy” of Dr. Franklin, before mentioned: and $4000 “ with the proviso that the interest and dividends to become receivable upon” it “be laid out in premiums to be distributed among ingenious men and women who make useful inventions.”
    VII. By will of Elias Boudinot; certain timber lands in Centre county, in trust, to apply the rents and income “to and for the beginning of a fund, or in aid of one already begun, for the supplying the poor inhabitants of the city and liberties of Philadelphia with the householders (not able to provide it for themselves) at a price during the winter season not in any case exceeding the moderate average price of wood during the preceding summer, with fuel of such kind and sort as to the said mayor and corporation may seem more likely to answer the purpose aforesaid.”
    VIII. By the will of James Wills; “All the residue of my estate, * * * in trust for the purchase of a sufficient plot of ground in the city of Philadelphia or in the neighborhood thereof, and thereon to erect or cause to be erected suitable buildings and accommodations for an hospital or asylum to be denominated ‘ The Wills Hospital for the relief of the Indigent Blind and Lame.’ The funds thus appropriated are to be put out on good mortgage security, or city stock, and after expending the necessary sum for the lot and improvements heretofore mentioned, the income of the remainder is to be exclusively applied to the comfort and accommodation of as many of the indigent blind and lame as the income will admit of, after defraying the necessary expenses incident to such an establishment. And to the aforesaid mayor and corporation of thesaid city and their successors in office is intrusted the duty of appointing trustees or managers, and all other matters and things in any wise appertaining to the due fulfilment of the aforesaid bequest, the right regulating the establishment, and insuring the right application of the funds to the purposes heretofore stated, and for the sole use and benefit of the indigent blind and lame, giving preference to those persons resident in Philadelphia and its neighborhood.”
    IX. By the will of John Scottin; a ground-rent of $12, in trust, to deliver annually, on the “ 23d day of the second month,” to the poor of the city, and of Southwark, $12 worth of bread.
    X. By the will of Elliot Cresson ; “ $5000, in trust, as a perpetual fund, the income of which I desire shall be annually, for ever, expended in planting and renewing shade trees, especially in situations now exposing my fellow-citizens to the heat of the sun.”
    XI. By the will of Archibald Thompson; the residue of his estate to Cadwalader Evans and John Keble, in trust, to pay out of the income thereof, annually, 751. for the support of the poor in the city of Philadelphia. For the better carrying into effect the intentions of the testator, the surviving trustee conveyed to the guardians of the poor the said devise “ on the trust, and for the uses and purchases named in the said will,” and on the further trust, “ that they, the said guardians and their successors, do, and shall at all times, for ever, cause a separate a.ccount to be kept by their treasurer in the books of the corporation, respecting the yearly ground-rents hereby assigned, as provisions made by the will of the said Archibald Thompson for the poor of the city of Philadelphia, so that the same may never be blended with the moneys of the said corporation, and to and for no other use, intent, or purpose whatever,”
    XII. By the will of James Dutton; the residue of his estate “unto the ‘ Guardians of the Poor of Philadelphia,. Southwark, and the Northern Liberties,’ and their successors,” in trust, to improve the same and keep it as a fund, and to apply the net income “ to the aid, comfort, and support of the poor of the Northern Liberties.”
    XIII. By will of Esther Waters; to the “ Guardians of the Poor of Philadelphia, Southwark, and the Northern Liberties,” $5000, in trust, to invest the same, and expend the income annually in the purchase of “firewood, or other fuel, for the use of the poor of Philadelphia.”
    XIV. By the will of George Emlen : two ground-rents, one of 90i. and one of 40?., to “ The Managers of the Hospital and Bettering House of Philadelphia, jointly,” in trust, to apply the income to purchase fuel, and to distribute the same to “poor widows, such as are not assisted by any public charity,” in the winter months; annually.
    Subsequently, the managers of the hospital relinquished to the guardians of the poor all their interest in this bequest.
    XV. By will of William Carter; ground-rents, amounting to 177, to “ The Mayor and Commonalty of the City of Philadelphia,” in trust, for the use and services of the almshouses belonging to the city, and the relief of the poor people in the same: and a ground-rent of 67, for the use of the poor people of the said city, “ as well those whose names are to be found in the poor-boob as others.”
    XVI. By the will of Ann Armit; certain messuages to her executors, in trust, to convey one thereof to “ the Overseers of the Poor, or the Managers of the Bettering House in” this city.
    XVII. By an Act of Assembly, approved the 18th day of March 1847, “ The Spring Garden Association” was empowered to sell a certain lot of ground, and, after paying, &c., was directed to invest the balance of the purchase-money in the corporate loan of the district of Spring Garden: and the “ Commissioners of the District of Spring Garden” were directed to apply the interest on said investment in the purchase of fuel, and distribute the same during the winter months of every year among such of the poor of said district as reside in said district east of Broad street.
    XVIII. By the will of Paul Beck; a ground-rent of $500, in trust, to collect the same, and pay it over to the soup societies established in Philadelphia.
    XIX. By the will of Thomas D. Grover; to the commissioners and inhabitants of Southwark all of his estate, except, &c., in trust, 1, From the income to appropriate the sum of $300 for the purchase of soup and bread, and to distribute the same during the winter season among “ poor persons residing in Southwark.” 2. To appropriate the income of the balance in the purchase of fuel, and “ distribute the said fuel among white widows of respectable character, who are housekeepers or roomkeepers, born within the limits of the United States of America, whose husbands shall have died within the present defined boundaries of the district of Southwark, and to no other description of widows.”
    The legislature of Pennsylvania, by appropriate legislation, authorized the carrying out of the provisions of the will of Stephen Girard, and the condition having thus been complied with, his bequest of $300,000 to the Commonwealth was paid.
    The city took possession of the property devised by Stephen Girard, and set apart the sums directed to supply fuel, and for the opening of Delaware Avenue; they erected the college build-dings, furnished and opened them for the admission of orphans; they also erected the building required by the will of James Wills, and applied the income of his estate as directed by him.

      The Consolidation Act of 1854 merged the old city of Philadelphia, the various incorporated districts, and all the county of Philadelphia into one municipal corporation, by the title of “ The City of Philadelphia.” The act provided that “all the estates and incomes now held in trust by the county, present city and each of the townships, districts and other municipal corporations united by this act, shall be held by the city of Philadelphia upon and for the same uses, trusts, limitations, charities and conditions as.jthe same are now held by the said corporations respectively.”
    ) In pursuance of the provisions of the Act of 1869 the twelve defendants last named were appointed members of the Board of Trusts by the judges of the courts, and with the mayor and presidents of the councils, who were created members by the Act of Assembly, demanded of the plaintiffs the trust property and the evidences of title. The demand was refused.
    The bill set forth as is above stated, and averred—
    31. That the effect of the Act of 1869 is to hinder and obstruct them in the discharge of their office of trustee in the cases herein mentioned, and to vest their powers and authority in agents for whose conduct they may be responsible, but in whose appointment they have no voice.
    32. * * * That the said board is not entitled to such possession, or to exercise any control over the said trusts or trust estates by virtue of any power conferred or attempted to be conferred upon them by the said Act of Assembly: inasmuch as they believe and charge that the said act is unconstitutional, because it is an attempt to deprive the plaintiffs and their cestui que trust of their property in another mode^han by the judgment of their peers, or by the law of the land.5 'And that especially as to the said trusts for the laying out of Delaware Avenue and widening Water street, as well as the other trusts in the will of Mr. Girard, the Commonwealth having for a consideration conferred upon the plaintiffs power to execute the same, cannot deprive them of that power without infringing so much of the Constitution of the United States as declares that no state shall pass any law impairing the obligation of contracts.
    33. That by the will of Mr. Girard the remainder of the residue of his estate is devised for the further improvement and maintenance of his college, and to enable the city to provide for the security of persons and property by a competent police, and to improve the city property and the general appearance of the city, and in effect to diminish the burden of taxation. This devise is therefore for the benefit of the people of the city and the owners of property therein. The said testator further directs that if the city shall knowingly and wilfully violate any of the conditions contained in his will, that the said residue and accumulations be given and bequeathed to the Commonwealth of Pennsylvania, except his real estate in the city of Philadelphia. The plaintiffs say that the parties interested in this gift for municipal purposes, namely, the people of the city, have now by their right to choose the legislative bodies of the corporation, control and supervision over their interest in this gift. But if this estate shall pass into the hands of the said board of trusts, it will pass into the care of a body beyond their control, in whose appointment they have no voice, whose proceedings are without publicity, and who, by reason of the mode of their constitution, are not subject to the supervision of, or liable to removal by a court of law. And they submit they may lose the benefit proposed to be conferred on them by the testator, not only without fault of their own, but without power to help themselves. And if it is intended that the Commonwealth by the creation of the board of trusts relinquishes her right of forfeiture, the plaintiffs submit that one having such a right cannot release it to the unloosing of the terms or conditions of a ti’ust.
    The prayers were:—
    1. That the said Act of Juñe 80th 1869 be declared unconstitutional and void.
    2. That the defendants be enjoined from interfering with the trusts or trust estates mentioned and set forth in the bill.
    3. General relief.
    The defendants demurred.
    Mr. Justice Williams at Nisi Prius sustained the demurrer and dismissed the bill. The defendants appealed to the court in banc, and assigned the decree of dismissal for error.

      JE. Olmstead and Meredith (with whom were T. J. Barger, City Solicitor, J. Gfoforth and JF. B. Growen), for appellants.—
    The plaintiffs are competent to take and hold these trusts: Vidal v. Girard, 2 How. 127 ; Cresson’s Appeal, 6 Casey 450; Mayor v. Wills’ Ex’rs., 3 Rawle 170. The act professes to be what it is not. It declares that the directors shall be considered as agents or officers of the city, while in fact the principal has no power to dismiss much less appoint them. The legislature cannot make this change: Brown v. Hummel, 6 Barr 86. The act is judicial, and beyond the power of the legislature: Bagg’s Appeal, 7 Wright 512; Grim v. Weissenberg, 7 P. F. Smith 433; Norman v. Heist, 5 W. & S. 171; De Chastellux v. Fairchild, 3 Harris 18; Spragg v. Shriver, 1 Casey 286; Menges v. Dentler, 9 Id. 495. A municipal corporation may for some purposes be regarded as a private corporation: Saving Fund v. Philadelphia, 7 Casey 175; Bailey v. New York, 3 Hill 521. The trust under Girard’s will for laying out Delaware Avenue, &e., having been executed, a money consideration having been paid to the legislature for the authority, the legislature cannot deprive the plaintiffs of their rights under the will. The legislature cannot take away the property of a municipal corporation without providing for the payment of its debts. Every citizen of Philadelphia, and every owner of property in the territorial limits of the old city of Philadelphia, has a pecuniary interest in the devise of Mr. Girard. When the wants of the college are supplied, and the police purposes satisfied, the surplus under Girard’s will is to he applied in such a manner as will diminish the burden of taxation. The property of the citizen or landowner or tax-payer in this prospective benefit of the fund, applicable to diminish his taxes, is as much guarantied and secured to him by the Constitution as more visible and tangible property.
    Section 11 of the Constitution declares that all courts shall he open, and every man shall have remedy by the due course of law and right and justice administered without sale, denial or delay. The powers of the plaintiffs are to appoint agents to administer these trusts, and to define the duties of such agents. This power the act proposes to transfer to a board composed of all the judges of this court and the judges of the Philadelphia courts, and takes away from the plaintiffs all control over the acts of the appointees of this board. Therefore the real contest in this case is between the plaintiffs and the board of appointment; the members of that board of appointment could have been made proper parties as defendants in a bill asking for an injunction to restrain them from appointing the agents as trustees: McManus v. Phila. and R. Railroad, 9 P. F. Smith 330; Patterson v. Barlow, 10 Id. 54. If the judges, who claim the power of appointment of the officers to manage these trusts, are proper parties to a suit by the city of Philadelphia to determine their right to appoint, the effect of the Act of Assembly has been to deprive the plaintiffs of any tribunal before which their rights might be determined, other than such as are composed of those who claim in opposition to them the very powers, the rightful possession of which is the subject of controversy. The courts are not open, and a remedy by due course of law given to a suitor, when every court is held by those who claim in opposition to him the very property, the title to which is the subject of litigation: Dr. Bonham’s Case, 8 Rep. 118; Day v. Savadge, Hobart 87; Dyer 220, B. pl. 14; Littleton, § 212; London v. Wood, 12 Modern 669. A judge may perform ministerial duties or not at his option: Kuhn v. U. S. Bank, 2 Ashm. 174.
    The directors are not agents of the city. It has no power to control or dismiss them, and could not be held liable for their malfeasance : Martin v. The Mayor of Brooklyn, 1 Hill 545; Prather v. City, 13 B. Monroe 559; Mayor v. Bailey, 2 Denio 433; Alcorn v. Philadelphia, 8 Wright 348; Story on Agency, § 456 a.
    The city, in the administration of the trusts, is to he treated as a private corporation: Lloyd v. Mayor of New York, 1 Selden 374; Milhaw v. Sharp, 15 Barb. 193; Holland v. San Francisco, 7 California 377; Angell & Ames on Corporations, § 767 ; 2 Kent’s Com. 305, 306, n.; Aberdeen Academy v. Mayor, 13 Smedes & Marshall 646; Louisville v. University, 15 B. Monroe 642; St. Louis v. Russell, 9 Missouri 507.
    As to Acts of Assembly making changes in private corporations, election and appointment of trustees, &c.: Com. v. Bonsall, 3 Whart. 559; Ervine’s Appeal, 4 Harris 264 ; 2 Story on the Constitution, § 1, 392; Plymouth v. Jackson, 3 Harris 44; Norris v. Abingdon Academy, 7 Gill & Johns. 7; State v. Hayward, 3 Richardson 389 ; Louisville v. Trustees, 15 B. Mon. 642; Yarmouth v. N. Yarmouth, 34 Maine 411; Sheriff v. Lowdnes, 16 Maryland 357; Edwards v. Jagers, 19 Indiana 407; Vincennes University v. Indiana, 14 How. 269.
    As to judges being parties: Anon., 1 Salkeld 396; 1 Kent’s Com. 448.
    P. McQall and Strong (with whom was J. Fallon), for appellees.
    — If an Act of Assembly be within legislative power it is valid: Sharpless v. Mayor, 9 Harris 147; Speer v. Blairsville, 14 Wright 150; Com. v. Maxwell, 3 Casey 456.
    The Act does not remove the city from the trusts, and appoint other trustees in its place. The city remains the trustee as before. The trust property and estates still remain vested in the city. The board of directors are officers of the city. If the charter of the city were repealed, the board of directors would fall with it. The source of their authority or the manner of their appointment has no bearing on their status as officers. A person may be a city officer, though not elected by the corporation.
    The city is not to be regarded as a private corporation. In these trusts the city acts only as a municipal corporation — an instrument or agency of government to which a portion of the sovereign power is delegated for local purposes. It may take real and personal property upon trust: Vidal v. Girard, 2 How. 127 ; Girard v. Philadelphia, 7 Wall. 1. The objects of the trusts are of a public character, such as education, the care of the poor, &c., which fall within the scope of the duties of the city as a governmental agency : Wills Hospital, 3 Rawle 170. If the trustee corporation holds property clothed with public duties, the court has a right to interfere: Attorney-General v. Mayor of Liverpool, 1 M. & C. 171.
    In the case of corporations created by the mere will of the legislature, there being no other party interested or concerned, whose franchises are not the result of contract, the legislature may at all times modify, change or annul their franchises as the public! good may in their judgment require: The People v. Morris, 13 Wend. 337; The State v. Branin, 3 Zabr. 497 ; Reynolds v. Baldwin, 1 La. An. 162; Police Jury v. Shreveport, 5 Id. 661. The People v. Power, 25 Ill. 187; Robertson v. Rockford, 21 Id. 451; E. Hartford v. Hartford Bridge, 10 How. 534; Borough of Dunmore’s Appeal, 2 P. F. Smith 374. Nor does it make any difference that the public corporation is organized for purposes of education and not of police: Trustees of Schools v. Tatman, 13 Ill. 27.
    January 10th 1870,
    The mode in which public functionaries shall be chosen or appointed depends purely on the legislative will, and is a question of expediency addressed entirely to the wisdom of the legislature : People v. Draper, 1 Smith N. Y. 532; People v. Pinkney, 5 Tiffany 377; Baltimore v. The State, 15 Md. 376.
    They referred to a number of Acts of Assembly of Pennsylvania authorizing municipal appointments outside of the corporation.
    The limit to the power of the legislature over property owned by a municipal corporation is only that the legislature cannot divest the property of the corporation or divert it to cti-her uses: Montpelier v. E. Montpelier, 29 Vt. 21.
    The courts are open to all these parties on the rights here involved. A judge might sit, though a party: 2 Roll. Abr. 93; Dimes v. Gr. Junction Railroad, 3 H. of Lords Cases 787.
   5 The opinion of the court was delivered,

by Sharswood, J.

— The City of Philadelphia is beyond all ques-

tion a municipal corporation, that is, a public corporation created by the government for political purposes, and having subordinate and local powers of legislation: 2 Kent’s Com. 275; an incorporation of persons, inhabitants of a particular place, or connected with a particular district, enabling them to conduct its local civil government: Glover Mun. Corp. 1. It is merely an agency instituted by the sovereign for the purpose of carrying out in detail the objects of government — essentially a revocable agency— having no vested right to any of its powers or franchises — the charter or act of erection being in no sense a contract with the state — and therefore fully subject to the control of the legislature, who may enlarge or diminish its territorial extent or its functions, may change or modify its internal arrangement, or .destroy^itsl very existence, with the mere breath of arbitrary discretion/Sic volo, sic jubeo, that is all the sovereign authority need say. This much is undeniable, and has not been denied. That while it thus exists in subjection to the will of the sovereign, it enjoys the rights and is subject to the liabilities of any other corporation, •public or private, is equally undoubted. This was the very object of making it a body politic, giving it a legal entity and name, a seal by which to act in solemn form, a capacity to contract and be contracted with, to sue and be sued, a persona standi in judicio, to hold and dispose of property, and thereby to acquire rights and incur responsibilities. These franchises were conferred upon it for the purpose of enabling it the better to effect the main design of its institution, the exercise of certain of the powers of government, subordinate to the legislature, over a certain part of the territory of the state. ■ Put all this affects its relations to other persons, natural or artificial: it does not touch its relation to the state, its creator. It is nothing to the purpose, then, to show that a city may act in certain particulars as a private corporation, may make contracts as such, and that it cannot impair the obligation of a contract entered into by it in that capacity, because it may deem it for the benefit of its citizens to do so, nor is it in the power of the legislature, under the provision of the Constitution, to authorize the violation of such a contract: Western Saving Fund Society v. City of Philadelphia, 7 Casey 175, 185. It is equally aside from any question respecting its essential nature and subjection to the sovereign will to discuss its liabilities for the acts or neglects of its officers or agents, or whether it can rightly be made or has been made responsible for such as are not appointed or selected by itself, but by the state, or in some special mode provided by the state : Mayor v. Bailey, 2 Denio 433; Prather v. City, 13 B. Monroe 559 ; Alcorn v. The City, 8 Wright 348. The sovereign may continue its corporate existence, and yet assume or resume the appointments of all its officers and agents into its own hands; for the power which can create and destroy can modify and change. Indeed, the legislature of this Commonwealth, under the Constitution, could not by contract invest any municipal corporation with an irrevocable franchise of government over any part of its territory. It cannot alienate any part of the legislative power which, by the Constitution, is vested in a General Assembly annually convened : Parker v. Commonwealth, 6 Barr 507. If the legislature were to attempt to erect a municipality with a special provision that its charter should be unchangeable or irrevocable, such provision would be a nullity; for Acts of Parliament derogatory from the power of subsequent parliaments bind not: 1 Blacks. Com. 90.

That such political institutions have not and cannot have any vested rights as against the state, is strikingly illustrated and exemplified in The Borough of Dunmore’s Appeal, 2 P. F. Smith 374, where it was held by this court that municipal corporations, being creatures of legislation, have no constitutional guaranty of trial by jury, and such trial may be denied them.

' [ Such a municipal corporation may be a trustee, under the grant or will of an individual or private corporation, byt .only as it seems for public purposes, germane to its objects» The Mayor v. Elliott, 3 Rawle 170; Cresson’s Appeal, 6 Casey 437 ; Vidal v. The Mayor, 2 How. 127. I am aware that it has been said by high authority in England that it may take and hold in trust for purposes altogether private: The Mayor v. Gloucester, 1 House of Lords 285. But the administration of such trusts, and the consequent liabilities incurred, are altogether inconsistent with the public duties imposed upon the municipality. It could hardly be pretended, I think, in this country that it could be a trustee for the separate use of a married woman, to educate the children of a donor or testator, or to accumulate for the benefit of particular persons. It certainly is not compellable to execute such trusts, nor does it seem competent to accept and administer them. | The trusts 'held by the city of Philadelphia, which are enumerated in the bill before us, are germane to its objects. They are charities, and all charities are in some sense public. If a trust is for any particular persons, it is not a charity. Indefiniteness is of its essence. The objects to be benefited are strangers to the donor or testator. The widening and improvement of streets and avenues, planting them with ornamental and shade trees, the education of orphans, the building of school-houses, the assistance and encouragement of young mechanics, rewarding ingenuity in the useful arts, the establishment and support of hospitals, the distribution of soup, bread or fuel to the necessitous, are .objects within the general scope and purposes of the municipality. Í The king himself may be a trustee, though he cannot be reached by the process of any court without his consent: Hill on Trustees 49 ; and so may the state, though as I take'it under the Constitution, only for objects germane to the purposes of government. :The government of the United States has accepted and administered such a trust under the will of James Smithson “ for the promotion of knowledge among men.” When, therefore, the donors or testators of these charitable funds granted or devised them in trust to the municipality, they must be held to have done so with the full knowledge that their trustee so selected was a mere creature of the state, an agent acting under a revocable power. Substantially they trusted the good faith of the sovereign. It is plain — too plain, indeed, for argument, that the corporation by accepting such trusts, could not thereby invest itself with any immunity from legislative action. Such an act could not change its essential nature. It is surely not competent for a mere municipal organization, which is made a trustee of a charity, to set up a vested right in that character to maintain such organization in the form in which it existed when the trust was created, and thereby prevent the ^state from changing it as the public interests may require i. Montpelier v. East Montpelier, 29 Term. 21. This whole question is put at rest, and that as to one of the most important of these trusts and as to this trustee, by the opinion of the Supreme Court of the United States in Girard v. Philadelphia, 7 Wallace 14: “It cannot admit of a doubt,” says Mr. Justice Grier, that where there is a valid devise to a corporation, in trust for charitable purposes, unaffected by any question as to its validity because of superstition, the sovereign may interfere to enforce the execution of the trusts, either by changing the administrator if the corporation be dissolved, or if not, by modifying or enlarging its franchises, provided the trust be not perverted, and no wrong done to the beneficiaries. Where the trustee is a corporation, no modification of its franchises or change in its name, while its identity remains, can affect its rights to hold property devised to it for any purpose.” ..With equal plausibility hnight it be pretended that the acceptance by the government of the United States of the bequest of James Smithson limited the power of amendment contained in the Federal Constitution. If it could have such effect, the only logical consequence would be that the acceptance of a trust would be ultra vires and void: and so if the acceptance of a trust by a municipal corporation can operate to impair the power of the sovereign over it as such, the acceptance .is a nullity. ,. i.

In consistency with these views, for which I have forborne to cite cases which might, however, be heaped up ad nauseam,) on what principle can the Act of June 30th 1869 (Pamph. L. 1276) be declared unconstitutional ? It provides merely that one class of the functions of the municipality shall be administered in a manner different from that which has been used heretofore. The head and front of its offending hath this extent — no more. It is a change in internal organization. It provides a separate body of citizens for the administration of the trusts vested in the city. It makes that body a permanent one, holding their offices during good behavior — it imposes upon it all the duties devolved on the corporation itself as trustee — it perverts no one of the trusts— it does wrong to none of the beneficiaries. We have nothing to do with the wisdom of the measure — with the policy of having such a board dissociated from the general government of the city, or with the mode of its selection. Those are questions exclusively for the legislature. No one I think can doubt that it was entirely competent for that authority to vest the entire management and control of all municipal affairs in just such a body as that constituted by this act. If they could do the greater, they can do the less. They could make a similar provision for any other department of the municipality. They might establish a board of police, of highways, of sewerage, of cleansing. They have often done so. The departments of the prison, of health, of the poor and of the public schools have been placed in the hands of bodies of men constituted and appointed just as is “ The Board of Directors of City Trusts,” and no one has ever thought of questioning the constitutionality of these several acts of the legislature. For if the legislature, acting for the state, can resume all the franchises of the municipality into its own hands, which is a conceded premise, it can certainly resume any part. Omne majus continet in se minus. * d ■ ;' ■

It is said, however, that as to some of the trusts under the will of Stephen Girard, there was a contract which the legislature cannot constitutionally impair. If this were even so, it would be no valid ground for declaring the act void as to all the other trusts. But there is no such contract impaired by this act. Mr. Girard left $300,000 to the Commonwealth, to be applied to the purposes of internal navigation, on the condition that certain laws should be passed as to Delaware avenue, Water street and wooden or brick-paned buildings. The money was accepted and the laws were passed. They stand unchanged and unrepealed on the statute book. No alteration or modification of them by any of the provisions of this act has been or can be pointed out. It is a contract, if a contract at all, completely executed and fulfilled on both sides.

It remains to consider one more ground of objection to this act. It is seriously and earnestly contended that it is in contravention of the 11th section of the 9th article of the Constitution, which declares “ that all courts shall be open and every man for an injury done him in his lands, goods, person or reputation, shall have remedy by the due course of law, and right and justice administered without sale, denial or delay.” It is supposed, if I understand the argument aright, that because the judges of this court, and of the District Court and the Court of Common Pleas of Philadelphia, are vested with the function of appointing the directors of the city trusts, of displacing them if unfaithful, and of filling vacancies, they are thereby rendered incompetent to decide any controversies which may arise out of the management of the trusts by them. It is said they are thereby made judges in their own cause. Conceding it to be unconstitutional for the legislature to make a man a judge in a case in which he is a party litigant, it is not easy to comprehend how it reaches this act. As was well said in the argument, this very proceeding is a practical refutation of the idea that this court or any other court is not open to these plaintiffs or anybody else who may have just cause of action at law or in equity against this Board of City Trusts. Nay, can any one doubt that this proceeding might have been anticipated in limine, and a bill filed against the board of appointment itself to enjoin it from proceeding to obey the behests of the legislature? A judge who is actually a trustee of a charity may from delicacy decline to sit in a case in which he is a party as such, but surely, as he has no pecuniary interest in the result, there is no moral or legal reason why he should not. If it is necessary it is his duty to do so. I have no doubt it has been often done, but I will mention one instance within my own experience. The city of Philadelphia in 1859 filed a claim for taxes against the building occupied by the American Philosophical Society on Independence Square under a grant from the Commonwealth, and issued a scire facias thereon in the District Court for the city and county of Philadelphia, and it was necessary that the court should decide upon the liability of the society to pay those taxes. My Brother Hare and myself were both members of the society, and would gladly have excused ourselves from taking any part in the decision. But it was impossible. Without one of us at least there could have been no court. We heard and decided the case in favor of the society, and that judgment was affirmed by this court: City of Philadelphia v. The American Philosophical Society, 6 Wright 9. The true rule unquestionably is that wherever it becomes necessary for a judge to sit even where he has an interest —where no provision is made for calling another in, or where no one else can take his place — it is his duty to hear and decide, however disagreeable it may be. I The rights of the other party require it: 2 Roll. Ab. 93; Dimes v. Grand Junction Railroad, 3 House of Lords Cases 759. The Act of Assembly of April 14th 1834, § 37, Pamph. L. 349, makes provision for special courts in four cases specified — where the president judge is personally interested in the event of any cause depending, when the title of either party is derived from or through him or where he holds under the same title, when any near relation of the president shall be a party or interested, or whenever he has been attorney or counsel for either of the parties in the cause or any other cause touching the same subject-matter; and by the 8th section of the Act of April 4th 1843, Pamph. L. 133, the provisions of the Act of 1834 above referred to, are extended to the judges of the Orphans’ Court, Register’s Court, Quarter Sessions or Oyer and Terminer. It will be observed that the case of a judge being a nominal party is not specified as a disqualification unless he is personally interested. This court has held that an objection to competency, under the act for the establishment of special courts, must be addressed to the discretion of the judge himself, and his decision is not reviewable on a writ of error: Barrington v. Bank of Washington, 14 S. & R. 405; Ellmaker v. Buckley, 16 Id. 72 ; Philadelphia Library Co. v. Ingham, 1 Whart. 72. “ This,” said Gibson, C. J., “ is conformably to the principle of the common law, which exempts a judge from challenge.” That a judge is one of the trustees of a charity is no disqualification, much less where he merely appoints such trustee. No one ever heard before that he was disqualified to sit in the cause of a trustee of his own appointment. In the case directly before us there is nothing in the position of the judges as members of the board of appointment which could possibly influence their opinion or prevent a fair and impartial consideration and decision of any cause which might grow out of their proceedings.

Decree affirmed, and appeal dismissed at the costs of the appellants.


source: Caselaw Access Project

author: by Agnew, J.

license: Public Domain

text:
    West’s Appeal.
    1. The Philadelphia Savings Pund Society is not a charity, but a business corporation.
    2. The Acts of 26th April 1855 and 17th April 1869 (Escheat) do not apply to this society.
    3. The words “ gift, devise, bequest, legacy,” in the charter, denote only means to effectuate its purposes and do not indicate its purpose or design.
    4. The power given to ‘‘improve and augment” the property of the society, is to furnish adequate security for repayment of depositors.
    5. The fund thus created is not property without an owner.
    6. The society is not an object of escheat.
    7. The proceeding to escheat property held by a corporation contrary to the Act of 1855 is by quo warranto.
    8. The auditor-general’s commission to a deputy escheator under the Act of 1855, is without authority and confers no power to proceed, viewing the case as a charity.
    9. The Act of 1869 does not provide a mode for enforcing an escheat of property without a rightful owner.
    10. A proceeding in such cases by the auditor-general and the escheator is not that of a sovereign, but for want of authority, is illegal and void of sovereign sanction.
    11. Process of the court acts on them as individuals and not on the state.
    February 7th and 8th 1870.
    Before Thompson, C. J., Read, Agnew, Sharswood and Williams, JJ.
    Appeal from the decree of the Supreme Court at Nisi Prius: In Equity: Of January Term 1870.
    The appeal was by George S. West, deputy escheator, in a decree on a bill filed against him December 4th 1869, by the Philadelphia Saving Fund Society. On the same day on which the bill was filed the plaintiff moved for a special injunction and filed affidavits (those hereafter referred to as taken before the deputy escheator). The plaintiffs in the bill were incorporated February 5th 1819. The act of incorporation recited that “ a voluntary association of a number of the citizens of Philadelphia and the neighborhood, under the title of the Philadelphia Saving Fund Society, has for some time existed, and has been established for the sole purpose of receiving and investing in public stock or substantial security on real estate, such small sums as may be saved from the earnings of tradesmen, mechanics, laborers, servants and others; and of affording to industrious persons the advantages of security and interest:” * * * and enacted
    Sect. 1. That Andrew Bayard and others be a * * * body corporate * * * to have, purchase, receive, take, hold, possess, enjoy and retain lands, rents, &c., stock, goods, chattels and effects of what kind, nature or quality soever, &c., by gift, grant, demise, bargain and sale, devise, bequest, testament, legacy, loan, deposit or advance, or by any other mode of conveyance, &c., and the same to give, grant, ffic., and also to improve and augment the same in such manner and form as the said society, by their bylaws and regulations, shall order and direct, and shall and may apply the same, with the rents, issues, profits, &c., and the moneys arising from the same by alienation, disposal or employment thereof, to the uses, ends and purposes of their institution, according to the rules, regulations and orders of their society now in force, or which, according to the provisions hereinafter made, shall from time to time be declared, touching the same, as effectually and fully as any natural person or body politic or corporate within this state, &c., can do and perform; and the said society may * * * do and execute all and singular such acts, matters and things which to the said corporation shall or may appertain, and he necessary for the purposes thereof, subject, nevertheless, to the rules, regulations, restrictions, limitations and provisions herein prescribed and declared.
    Sect. 2. “ The following rules, &c., shall form and be fundamental articles of the constitution of the corporation: * * *
    Art. 3. “ No emolument whatever shall be received by the president or managers for their services.
    Art. 4. “ The money deposited shall bear interest at the rate of four and eight-tenths per cent, per annum, and shall be repaid when required, upon two weeks’ notice, with the interest thereon to the time of such notice. * * *
    Art. 13. “ A report shall he annually prepared by three auditors, who shall not be managers or officers of the corporation, chosen by the hoard; and such report shall be published in one or more of the gazettes of the city of Philadelphia, and the managers shall annually transmit one copy of the said report to the Speaker of the Senate, and one copy to the Speaker of the House of Representatives. * * *
    Sect. 4. “ If, at any time, the said corporation shall misuse or abuse any of the privileges granted by this act, or if it shall appear that the said privileges are injurious to the citizens of this Commonwealth, the legislature shall have power to revoke and annul them at any time they may deem the same expedient.”
    The auditors provided for by the 3d article in the 2d section of the act of incorporation made a report showing the state of the society, January 1st 1869, viz. that the investments and cash of the society amounted to $6,436,815.63; that there was due by them on their real estate a dower mortgage of $7666.67; that there was due to depositors $5,765,280.63, leaving “contingent fund to cover losses $663,868.33.”
    The Act of April 26th 1855, Pamph. L. 331, Purd. 145, provides :—
    Sect. 8. “Any literary, religious, charitable or beneficial society, congregation, association or corporation having capacity to take and hold real and personal estate within this Commonwealth, may acquire and hold the same to the extent, in the aggregate, of the clear annual value of $5000, and to no greater extent without an express legislative sanction: * * * * Provided, That any property now held, as aforesaid, in excess of such value, shall not be hereby invalidated or prejudiced in title or otherwise.”
    Sect. 12. “ To avoid the evil of an indefinite increase of the property in mortmain and perpetuity, it shall not be lawful for any religious, charitable, literary or scientific society, association or corporation, present or future, to accumulate income into capital or invested estate so'as that the clear annual value thereof, as regards future acquisitions with those now held, shall exceed the limitation hereinbefore contained; and as regards acquisitions now held by or for any such body shall not exceed said annual amount, except as the property now held does, or, being made more productive, may exceed such amount, but all such clear income, after such amount of capital or invested estate shall be attained, shall be expended, annually, in and for the purposes, uses and trusts upon and fpr which the property producing it is held, and if there be not objects within the intent of such purposes, uses and trusts, sufficient to exhaust such income, it shall be the duty of such body or association holding such property to apply to the legislature for authority to expend the income thereof upon such practicable objects as shall most nearly conform to the intent of the uses and trusts upon which such property is held, and in default thereof such incomeas shall not be so expended in execution of its trusts shall be paid into the treasury of the Commonwealth.”
    Sect. 9. “ All property hereafter acquired and held by persons, corporations- or associations forbidden by this act to hold the same, or held contrary to the intent of this act, and all such hereafter acquired and held beyond the limit prescribed as aforesaid by this act, shall escheat to this Commonwealth.”
    Sect. 15. “All dispositions of property, hereafter made to religious, charitable, literary or scientific uses, and all incorporations or associations formed for such objects, shall be taken to have been made and formed under and in subordination to all the duties and requisitions of this act as rules of property and laws for their government.”
    The Act of April 17th 1869, entitled “A further supplement to an act entitled ‘An Act to declare and regulate escheats,’ passed September 29th 1787,” provides—
    Sect. 1. Whenever any cestui que trust has heretofore, or shall hereafter, die intestate, without heirs or any known kindred, a widow or surviving husband, the beneficial interest of such cestui que trust in any property or effects, real, personal or mixed, shall escheat to the Commonwealth, subject to all legal demands on the same.
    Sect. 2. Whenever any trustee is, or shall be, seised or possessed of any property or effects, real, personal or mixed, the cestui que trust or cestui que trusts whereof have been, or shall be, unknown for the space of seven years, the beneficial interest of the cestui que trust or cestui que trusts therein shall escheat to the Commonwealth, subject to all legal demands on the same.
    Sect. 8. Whenever any trustee,' bailee or other depositary, is or shall be seised or possessed of property, real, personal or mixed, as a fiduciary agent, which property is or shall be without a rightful owner, the same shall escheat to the Commonwealth, subject to all legal demands on the same.
    On the 19th of April 1869, R. W. Jones made information to the auditor-general, that the plaintiff was seised and possessed of certain lands, &c., goods, &c., which “ have no rightful owner, and that the same have escheated to the Commonwealth of Pennsylvania ; and further, that the said Commonwealth is of right entitled to be seised and possessed of and to have and enjoy the same.”
    The auditor-gen eral thereupon, on the 1st of May, appointed George S. West, the defendant, deputy escheator, under the Act of September 29th 1787, relating to escheats, and its supplements. On the 24th of July 1869, the deputy escheator issued a precept for an inquest to inquire as to the escheat, &c., to meet on the 6th of August. On the hearing before the escheator, Caleb Cope, the president of the society, testified that the surplus as reported by the auditors was correct nominally, but the actual surplus could not be ascertained until the assets should be realized and the institution wound up : the surplus is not distinguishable from the general funds of the society. If the assets were converted gradually and under favorable circumstances, the cash surplus might be equal to the sum reported; but compelled to be converted suddenly or at an unfavorable time, considerable loss would result. From the character of the depositors, most of whom are ignorant and timorous, a saving fund is liable to sudden runs to a large amount, which requires it to realize as rapidly as possible to save insolvency ; it is therefore peculiarly necessary for such societies not to divide the whole annual income, but to retain a small percentage to guaranty the capital against loss. Care has been taken that the surplus of this society should not increase beyond what would constitute a due regard for safety. The society never lends at rates above 6 per cent, and never discounts.
    Several other witnesses testified in the same manner. It also appeared that there were depositors who had been unknown for seven years.
    The case before the escheator’s inquest was closed on the part of the Commonwealth November 29th 1869, and the claim was stated to be
    “ 1. The amounts standing to the credit of all depositors who have been unknown for seven years past.
    “ 2. Under the 12th section of the Act of 26th April 1855, the difference between the amount of the surplus fund as it then existed and at the present time, which difference is without a rightful owner.”
    The bill set out the foregoing facts. The plaintiff also averred that there were but about 50 depositors out of 29,589 who had not been traced; they denied that they were a religious, charitable, literary or scientific society; they averred that if the Act of 1855 applied to their case, the amount of accumulated income could not be ascertained but by a long account and inquiry by a competent accountant, and the informer has presented no facts by which a guess at the amount could be made; that as the very end and purpose of the institution is security to depositors, the surplus could not be paid away or into the state treasury without endangering the security; that the inquest to accomplish its objects must continue for a long time and acquire great publicity and result in great and irreparable injury to the society and the depositors.
    They prayed:
    1. That the court shall declare the true intent and meaning of the said Act of Assembly of the 17th of April 1869, and the rights of these complainants and of the informer under the same, directly or indirectly, as also of the said Act of the 26th of April 1855.
    2. If the court shall declare that, under the circumstances, and the Acts of Assembly hereinbefore referred to, any parts of the property held by the complainants as their assets and property have no rightful owner and are liable to escheat, the court shall then declare what parts are so liable, or on what basis this liability shall be ascertained, and shall thereupon direct inquiry to be made and an account taken with respect to such assets and property, to the end that the proportion or share thereof, if any, which the defendants are liable to pay to the Commonwealth by way of escheat, and the value thereof, may be ascertained ; the complainants hereby tendering themselves ready and willing to account, with respect to all matters as to which the informer defendant is entitled to have an account, and to pay the amount so ascertained to be due; and that, in the meantime, the defendant be restrained, by injunction, from further prosecution of the pending proceeding, or instituting any other proceeding with respect to all claims mentioned in the information and writ, other than the amount due by the. complainants to persons who, having been depositors, are dead, without issue or known kindred, husband or wife.
    3. General relief.
    After hearing, the court (Read, J.), on the 4th of December 1869, granted a special injunction, which is as follows:—
    “Whereas, it has been represented, &c., in a certain case therein depending in which the Philadelphia Saving Fund is complainant, and you the said Whittendale Jones and George S. West, are defendants, that upon an information filed, and a certain writ or precept therein issued, you the said defendants are proceeding before a jury of inquest, in the matter of the alleged escheat of certain property real and personal, of which it is alleged that the Philadelphia Saving Fund Society aforesaid, are seised and possessed, and which have no rightful owner.
    “Now, therefore, we do strictly enjoin and command you, the said R. Whittendale Jones and George S. West, your servants and agents, and all and every of you, that you do from henceforth altogether absolutely desist from the further prosecution of the said proceeding, in respect of all claims mentioned in the said information and writs, other than the amount due by the Philadelphia Saving Fund Society aforesaid, to persons who having been depositors in the said society, are dead without issue, or known kindred, husband or wife, until our said court shall otherwise make order to the contrary.”
    West, deputy escheator, appealed to the court in banc.
    He assigned for error:
    1. The court erred in granting the injunction.
    2. The court erred in entertaining the bill.

      J. W. M. Newlin and F. 0. Brewster, Attorney-General (with whom was W. J. McElroy), for appellant.
    — A. court of equity has no power to enjoin an inquest by the Commonwealth. An injunction will not lie against the state: Hill v. United States, 9 How. 386; Mississippi v. Johnson, 4 Wall 475; United States v. McLemore, 4 How. 286; Marbury v. Madison, 1 Cranch 137; Griffith v. Cochran, 5 Binn. 87; Commonwealth v. Cochran, 6 Id. 456 ; Commonwealth v. Cochran, 1 S. & R. 473; Mott v. Penna. Railroad, 6 Casey 33. A court of equity cannot interfere in proceedings purely statutory: Brightly’s Eq. § 283; Holl v. Holl, 4 Amer. Law J. 424; Eden on Injunction, c. 2, p. 3; Crawford v. Commonwealth, 1 Watts 485; Attorney-General v. Utica Ins. Co., 2 Johns. Ch. R. 376. Nor where there is an adequate remedy at law: Scheetz’s Appeal, 11 Casey 95; Patterson v. Lane, Id. 275; Commonwealth v. Plankroad Co., Id. 152; Gallagher v. Railroad Co., 2 Wright 102; Pusey v. Wright, 7 Casey 396; Glenn v. Fowler, 3 Gill & J. 340; Hood v. New York, 23 Conn. 609; Richardson v. Richardson, 8 Gill 448 ; Hunter’s Appeal, 4 Wright 194; Rogers v. Cincinnati, 5 McL. 337; Boyd v. Miller, 2 P. F. Smith 431; Lord Montague v. Dudman, 2 Ves. Sr. 306 ; Crafts v. Dexter, 8 Ala. 767. The Philadelphia Saving Fund Society is a charitable corporation under the Act of 1865, and the relation between the society and its depositors is that of trustee and. cestui que trust, and not that of debtor and creditor: Magill v. Brown, Brightly’s R. 356; Witman v. Lex, 17 S. & R. 88; Going v. Emery, 16 Pick. 107; Zimmerman v. Anders, 6 W. & S. 218; Price v. Maxwell, 4 Casey 23; Pepper’s Estate, 1 Pars. R. 436; Girard Will Case 54; Jones v. Williams, Ambler 651; Morice v. Durham, 9 Ves. 405; Porter’s Case, 1 Rep. 24; Babb v. Reed, 5 Rawle 151; Attorney-General v. Heelis, 2 Sim. & St. 67; Thomas v. Ellmaker, 1 Pars. R. 98; Miller v. Porter, 3 P. F. Smith 292. The society is not entitled to sustain a bill for an account, as this is not a case of mutual demands, or a series of mutual transactions, and the society requires no discovery, all the facts being within their own knowledge: Skinner v. Dayton, 3 Johns. Ch. 526; McGowin v. Remington, 2 Jones 63; Shollenberger’s Appeal, 9 Harris 340; Bank U. S. v. Biddle, 2 Pars. 53; Gloninger v. Hazard, 6 Wright 389; Brightly’s Eq. §§ 124, 125; Story’s Eq. §§ 458, 459, 462; Porter v. Spencer, 2 Johns. Ch. Rep. 171; Dinwiddie v. Bailey, 6 Verm. 136; Eden on Injunction 23.

      R. C. McMurtrie and H. Wharton (with whom was W. S. Rawle), for the appellees.
    — The society by rendering gratuitous services in administering the affairs of others, did not become a charitable society within the meaning of the Act of 1855: Bank of Savings v. The Collector, 3 Wall. 495; State v. Louisiana Savings Inst., 12 La.; Amer. R. 570; Babb v. Reed, supra; Blenon’s Estate, Brightly’s R. 338. An escheator’s inquisition could not take the necessary account; equity has the jurisdiction : Kerr on Injunctions 58; Drewry on Injunctions 74; Taff Vale Railway v. Nixon, 1 H. Lds. Cas. 122; North Eastern Railroad v. Martin, 2 Phil. 762; Foley v. Hill, 2 H. & C. 37; Bliss v. Smith, 34 Beav. 508; Kerr on Injunctions 60; Story’s Eq. Jur. § 459; O’Connor v. Spaight, 1 Sch. & Lefroy 309; Scott v. Corporation, 3 De G. & Jones 35: McIntosh v. Great Western Railway, 3 Sm. & Giff. 146; Padwick v. Hurst, 18 Beav. 580; Kennington v. Houghton, 2 Y. & Coll. Ch. 627; Flukes v. Taylor, 3 Drewry 191. Public officers may be restrained: Kerr on Injunctions 348; Felton v. Herbert, 30 L. I. Ch. 604; Hilliard on Injunction 374; Green v. Mumford, 5 Rhode I. 475; Miller v. Gorman, 2 Wright 312; Ewing v. Thompson, 7 Id. 372; Mott v.
      Penna. Railroad, 6 Casey 41; Osborn v. U. S. Bank, 9 Wheat. 739; Darby v. Wright, 3 Blatchf. C. C. 170.
    February 28th 1870,
   The opinion of the court was delivered,

by Agnew, J.

— The claim of the Commonwealth to the surplus fund of Philadelphia Saving Fund Society is clearly unfounded. Neither the Act of 26th April 1855, relating to literary, charitable, and religious societies, nor the Act of 17th April 1869, for the escheat of equitable interests without a rightful owner, applies to this society. It has not the semblance of a charity. It is specifically a business corporation for pecuniary purposes; to receive deposits of money, invest them for the security of the depositors, and repay them with interest. The preamble sets forth, in precise terms, its sole purpose to be that of receiving and investing in public stocks, or substantial security on real estate, the small sums saved from the earnings of tradesmen, mechanics, laborers, servants and others, and of affording to industrious persons the advantages of security and interest.

The charter authorizes the society to receive, take and hold real and personal estate by gift, devise and bequest, as well as by purchase, loan, deposit and advance. But all these modes of acquisition, whether by gift ■ or purchase, are expressly declared to be for the “ uses, ends and purposes” of the institution, which are pecuniary, and not charitable in any sense of the term, legal or popular. The words gift, devise, bequest and legacy, denote only additional means given to effectuate the purpose of the charter, and are not indicative of its purpose or design. These terms are used in many old charters to describe modes of acquisition, not ends to be subserved. In this charter they are evidently subsidiary to the power to invest to enable the society to strengthen its securities, by the use of all the various forms of assurance. If a father desire to reinforce the failing or doubtful security of his son, his aid might come in any of these modes.

Power is also given to the society to “improve and augment ” its property, evidently for the purpose of creating a fund for increased security against losses and fluctuations in the value of investments. The rents, income and profits of the property are to be applied to the “uses, ends and purposes ” of the institution, according to the rules and regulations of the society itself, made or to be made by it as fully and effectually as it could be done by a natural person. This is a broad grant of power, vesting the fund to be created under this authority in the corporation itself, not for any particular cestui que trust, but for the general uses and purposes of the corporation. It cannot be said, therefore, to be property without an owner. It has not only a lawful owner, but a continuing, valuable and special purpose to subserve. The property thus improved and augmented as a safety fund for the protection of depositors, the society is expressly authorized to hold, enjoy and retain to the use, end and purposes of the institution, without any limitation whatever. Nor is danger to be apprehended from this large grant of powers, the legislature having reserved the power to revoke and annul the corporation. The want of stockholders and prohibition on the corporators or managers to derive emolument from the fund does not rob the society of the express powers thus given. If there were no beneficial purposes to which the fund was devoted, the argument that it is without an owner might have some force. But the obvious purpose of producing a fund by improving and augmenting the property of the society is to furnish an adequate security for the repayment of depositors. The success attending the administration of the investment, in producing the large surplus now existing after nearly half a century of good management, detracts nothing from the charter right to enjoy the accumulation for the true purposes of the society. Besides the internal evidence afforded by the charter itself, of the business character of the corporation for pecuniary purposes, the general legislation of the state has heretofore classed such institutions with other business associations, such as bank, loan, insurance companies, &c., for various purposes, such as taxation, unclaimed dividends, and deposits.

This being the true character of this society, it is obvious it is not the subject of escheat, and the proceeding to condemn its surplus fund (especially in a mode not prescribed by law) is illegal and injurious. Let us, then, examine the proceedings. The ninth section of the Act of 1855 directs the proceeding to escheat property held by a corporation contrary to the true intent of that act, to be by “ quo warranto, in all respects as is provided by law in the case of the usurpation of any corporate franchises.” Viewing this as a case of charity, the commission of the auditor-general to the deputy escheator is without authority and confers no power to proceed under the Act of 1855.

If the proceedings be considered as under the Act of 1869 to escheat property without a rightful owner, another obstacle presents itself. The Act of 1869 wholly omits to provide for its enforcement. If we might supply by intendment the mode of proceeding according to the Act of 1787, because of the title of the Act of 1869, as “ a further supplement ” to that law, yet the proceeding would be inapt and defective as applied to cases of trust property. Under the Act of 1787, the inquiry is simply whether an intestate has died, seised or possessed, without lawful heir or known kindred. It is true, it permits a claimant or party in possession to traverse the finding of the inquest, and thus to raise a question of property in a court of law; but the difficulty would be to apply this to the varied cases of trust. Can the property be seized and sold or rented by the sheriff, under process directed to him in the mode prescribed by the Act of 1787 ? This would displace the trustee who holds the legal title, is bound to use. it to maintain the purpose of the trust, and whose title and control may have to remain in order to preserve the estate, and to protect ulterior, contingent or alternative interests.

The proceedings under the Act of 1787 would do to determine an ordinary question of property, hut judicial intendment would be insufficient — it would require legislative power to adapt it to the peculiarities of a trust. Perhaps nothing short of equity powers would be available to mould the proceedings to suit the exigencies of each particular trust.

The proceeding to escheat the surplus fund being illegal both in its object and its mode, the judge at Nisi Prius was right in enjoining it. The act is contrary to law, and is also prejudicial to the interest of the society and its depositors. No one can doubt that an attempt to wrest from it its surplus fund with the apparent approbation of this court must impair its credit and curtail its business and might subject it to a recall of its deposits, forcing it either to suspend payment or impair its assets by the sacrifices necessary to maintain its solvency. We cannot view the proceedings of the auditor-general and his deputy as that of a sovereign, neither to be resisted nor to be arrested; but by reason of its entire want of authority, we must declare it to he illegal and void of sovereign sanction. Persons thus proceeding illegally do not represent the state, which is presumed to do no wrong, and are, therefore, to be restrained, not because they are acting as agents or officers under its commission, but because they are proceeding in violation of right and contrary to law, and have no legal commission to do the act they are seeking to perform. The process of this court acts upon them as individuals, and not upon the state. The decree of the Court of Nisi Prius is therefore affirmed.


text:
    West versus Pennsylvania Company for Insurance on Lives, &c.
    1. A corporation held property in trust for persons “unhnown for seven years.” In order to escheat the property, the Commonwealth must provide means to come in under the trust deed in room of the cestui que trust.
    2. The Act of September 29th 1787 (Escheat) has not furnished a remedy.
    3. Under the Act of 1787, the questions are, whether the intestate died possessed of property without known heirs or kindred, and who has possession of it ?

      4. These facts being found and certified, the Commonwealth can seize the property, unless the person in possession give bond to traverse.
    5. The Commonwealth has then a prima facie title and the person in possession must become the contestant.
    6. A trustee is lawfully possessed, and no process can displace him, until he has had a day in court and the beneficial interest established against him.
    7. The trustee must account to the true owner, who is no party to the proceeding under the Act of 1787 and not bound by the finding.
    8. The questions of title under the trust can be determined only by the Court of Common Pleas, which has jurisdiction of the trustee’s accounts.^
    9. The Act of April 17th 1869 (Escheats) is incapable of being carried into execution.
    10. Commonwealth v. The North American Land-Co., 7 P. E. Smith 102, distinguished. West’s Appeal, antea, p. 186, approved.
    January 3d 1871.
    Before Thompson, C. J., Read, Agnew and Williams, JJ. Sharswood, J., at Nisi Prius.
    Appeal from the decree of the Supreme Court at Nisi Prius: In Equity: No. 64, to January Term 1870.
    The bill in this case was filed March 30th 1870, by The Pennsylvania Company for Insurance on Lives, &e., against George S. West and R. W. Jones. On the same day a special injunction was granted.
    The hill alleged that upon an information by R. W. Jones the auditor-general issued a commission to George S. West, as deputy escheator, in the matter of an alleged escheat of property known as the “ 381 Trust” and the “Aggregate Fund Trust;” that the property said to be escheated had known owners. The hill further alleged that by deed of September 30th 1796, James Green-leaf conveyed to George Simpson certain property in trust for holders of notes and acceptances specified in the deed; this trust is known as the “ 381 Trust;” the plaintiffs are now the trustees thereof; the moneys of this trust came into their hands in December 1862, an account thereof was filed, an auditor awarded the fund to certain cestuis que trust and his report is still pending in the Court of Common Pleas of Philadelphia on exceptions. The hill further alleged that by a series of deeds, dated in 1797, said Greenleaf conveyed property to Henry Pratt and others in trust for the holders of certain notes and acceptances therein specified. This is known as the “Aggregate Fund Trust;” the plaintiffs were now the trustees thereof but had received no funds ; their predecessor in the trust had filed an> account of the fund which had been distributed by auditors whose reports had been confirmed; that the two funds were intimately connected, and proceedings had been begun by West, as deputy escheator, for the escheat of the property in the possession of the plaintiffs as trustees of these funds, under the Act of April 17th 1869, as the property of owners who had been unknown for seven years.
    The prayers were:—
    1. That it may he declared that no such proceeding can be had tinder the said Act of April 17th 1869; that it omits wholly to provide for its due enforcement, and cannot he carried into effect.
    2. That the defendants may he enjoined from continuing any further said alleged proceedings under said Act.
    3. For general relief.
    The injunction was as follows :— * * *
    “We do strictly enjoin and command you, the said R. Whittendale Jones and George S. West, your servants and agents and all and every of you, that you do from henceforth altogether absolutely desist from further prosecution of the said proceedings until our said court shall otherwise make order to the contrary.”
    The defendants filed separate answers, April 22d 1870. West answered that under his commission as deputy escheator, two inquests were constituted, who held numerous meetings, at which the plaintiffs were represented by counsel; that the cases had been closed and nothing remained to be done but for the escheator to charge the juries and for them to find their verdicts. Jones answered that the two funds were entirely separate and distinct; he set out the mode of their creation; that in November 1862 the Supreme Court awarded to the trustees of “ 381 Trust” 6119 shares in the North American Land Company subject to the trusts; on these shares $100,000 of dividends have been received and are in the possession of the plaintiffs ; that the cestuis que trust are the holders of certain notes and acceptances; that $44,000 of the fund has known owners as holders of notes and acceptances secured by the “ 381” deed and are part of the “Aggregate Fund” held by complainants ; that the account mentioned in the bill was only the first of the dividends, and the $44,000 was awarded to the holders of the notes and acceptances and that part of this sum belongs to unpaid certificate holders of the “Aggregate Fund” who have been unknown for seven years; that the remainder of the fund belongs to holders of notes and acceptances ' (specified in the answer) ; that it is wholly unpaid and the owners have been unknown for seven years, and both funds are therefore escheated; that the possession of these funds by the plaintiff's was proved before the inquest and none of the cestuis que trust appeared to claim them.
    On the 30th of April 1870, the court (Read J.) made the injunction perpetual.
    West appealed to the court in banc, and assigned for error:—
    I. Granting the injunction.
    3. Entertaining the bill.
    4. In making the injunction perpetual.
    The Acts of Assembly under which the proceedings to escheat were had, are stated in the case immediately preceding (West’s Appeal, antea, p. 186).

      J. W. M. Newlin and F. O. Brewster, Attorney-General, for appellants, and W. M. Tilghman and E. S. Miller, for appellees, submitted the case on their respective paper-books.
    January 14th 1871,
   The opinion of the court was delivered,

by Agnew, J.

— In West’s Appeal, antea, p. 186, we held that the Act of April 17th 1869, relating to escheats, though a supplement to the Act of September 29th 1787, was without adequate means of enforcement in relation to trusts, the proceeding under the Act of 1787 being inapt, and not capable of being applied to trusts.

That is said in the printed argument of this case to be an obiter dictum. We do not think so. Two questions arose there, one, whether the surplus fund of the Philadelphia Saving Eund Society was the subject of escheat; the other, whether the mode of proceeding was authorized. As to the former, we held that the surplus was the property of the corporation for the ends and uses of the charter. And as to the latter, that if the proceeding was under the 9th section of the Act of 1865, it must be by quo warranto ; and if under the Act of 1869, to escheat a trust, that act had provided no mode for its enforcement; and therefore, that there was no authority in the deputy escheator to proceed at all. Hence we concluded, that by reason of the entire want of authority, the proceeding was illegal and void of sovereign sanction. And on this ground he was to be enjoined as an individual acting wholly without authority; and not as an officer executing a lawful function. That case is therefore an authority, and was based, we think, on sufficient reason; nor did we overlook, as it is thought, the character of ■ the interest to be escheated, as the beneficial interest only of the cestui que trust; but the question in our minds was, how this beneficial interest could be proceeded against under and according to the mode provided in the Act of 1787, and its supplements, allowing the most liberal interpretation of its provisions. The case of The Commonwealth v. The North American Land Co., 7 P. F. Smith 102, is not parallel. That was a case of partnership property held by persons, all of whom were dead; and there is no difficulty in applying to such a case the proceeding under the Act of 1787. It was nothing more than a substitution of the property of partners for that of a single owner, and required no new mode. The case was new, but the proceeding similar. Here we have, however, not only a new case, in that of a cestui que trust unknown for seven years, but a necessity for a proceeding adapted to the case of a living trustee, with a title and a right to administer the trust unembarrassed by a dissimilar and discordant proceeding. To escheat the property in his hands, the Commonwealth must provide a means to come in under the trust deed, in room of the cestui que trust. It is just here the Act of 1787 fails to furnish an appropriate remedy. Under that act the only question is, whether the intestate died seised or possessed of the property without heirs or known kindred, and the further inquiry into whose possession the same came.

These facts being found, the property can be identified and described, and the inquisition certified into the proper office, and the Commonwealth can seize, attach or secure the property, unless the person in possession give bond to traverse the inquisition. These facts being found the Commonwealth has a primá, facie title, and the person in possession presumptively has no title, and is turned around to be the contestant. But a trustee is lawfully seised or possessed and no process can displace him, until he has had a day in court, and the beneficial interest is established against him. Clearly he is not in the case of one having a mere possession of property, which, by the seisin or possession and death of the owner, is east as a waif upon the ocean waste without an owner to claim it. The trustee is therefore not to be subjected to a claim of the Commonwealth without some evidence of title, and a time and place to defend against it, for he must account to the true owner, who is no party to the proceeding under the Act of 1787, and not bound by the finding of the inquest. The trustee and not he is the party in possession, and the trustee is a steward for others and must protect their rights — rights which at the time may not be defined, or even capable of definition until his account is settled. How can the ex parte finding of an inquest in such a case seat the Commonwealth upon the trust ? Dying seised or possessed is evidence of title, but not so in a case like this. How is the claim of an unknown person as the beneficial owner to be ascertained by the inquest; or in other words, how is the fact of a trust for some person not known to be ascertained, by them, except through the deed of trust and the transactions of the trustee ? But clearly this implies a power over the trustee, and a settlement of his trust; and how is this to be managed by the deputy eseheator and the inquest ? It is impossible for them to make a finding of property to be certified to the Commonwealth, except by calling in, not only the instrument of trust, but the trustee also, and investigating his affairs in order to find a fund belonging to somebody, and that somebody an unknown person. In such a proceeding it is evident that the trustee occupies the position of a party entitled to the fund, and to preserve it for the true owner, known or unknown; and therefore the right of the unknown person must be established against him by judgment. Now, for all this, the Act of 1787 and its supplements, are totally inadequate. In an attempt to administer the mode provided in them for a seisin or possession, and death without heirs or kindred, we should find ourselves at a loss in every step, and would have, in fact, to legislate, rather than administer the law. This case itself illustrates some of the difficulties to be met. It is alleged that the Pennsylvania Company for Insurance on Lives, &e., holds funds under two trust deeds made three-quarters of a century ago, belonging to unknown owners. Now, under these deeds, whose claims are valid, and whose are not? who have been paid, and who not ? who survive, and who do not ? who succeed to the fund, and who do not? who are known, and who not? what are the rights of the known, and what the unknown ? Does the failure of some to claim enure to the benefit of those who do claim ? All these inquiries, and probably others, may have to be determined before an escheat can be ascertained, and who the unknown for seven years are; and what their interest to be found by the inquest. It is evident all these things can be determined only by the Court of Common Pleas having jurisdiction of the accounts of the trustee in a settlement of his trust estate in due course of law. And in the present case the jurisdiction of the court had vested, and the proceedings are still pending. Until the account be settled, how is it possible to tell who are the owners of the fund, and consequently, whether they are known or unknown; and how could the inquest therefore specify, under the Act of 1787, the estate of which the unknown owner is seised or possessed, and certify the same into the proper office, or how can the sheriff seize, attach or secure the same ? How can an inventory or appraisement of the property be made ? and on what principle, if a bond could be given, should the trustee, an admitted owner, be driven to traverse an ex parte finding ? There may be no difficulty in ascertaining the beneficial interest in the case of a dry trust, or of property in a specific form, or an unclaimed deposit, or declared dividend, but such is not the case where the trust is active, with a power to convert, collect, &c., and when the beneficial interest can only he ascertained by a settlement and a decree of distribution. In this very case what do we know about the rights of the parties ? Not a single exhibit referred to in the bill and answer is placed before us, as the appellant was hound to do under the 3d Rule, adopted September 6th 1852, 6 Harris 577. This, in itself, is sufficient to dismiss the appeal. In order to get rid of the insuperable difficulties which must arise in endeavoring to administer the Act of 1869 under the form provided in the Act of 1787, we are compelled to say, that the Act of 1869 is incapable of being carried into execution, and the legislature will have to provide some suitable mode of reaching cases of trusts, and others of like character. The decree of the judge of Nisi Prius is presumptively right, and until the appellant shows it to be erroneous, it must stand. He has not done this, and the decree is therefore affirmed, with costs to be paid by the appellant.