Kiefer v. German American Seminary

46 Mich. 638
CourtMichigan Supreme Court
DecidedOctober 12, 1881
StatusPublished
Cited by1 cases

This text of 46 Mich. 638 (Kiefer v. German American Seminary) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kiefer v. German American Seminary, 46 Mich. 638 (Mich. 1881).

Opinion

Cooley, J.

TMs is an equity case heard on pleadings and facts stipulated. The facts are as follows :

By an act approved March 15,1861, the Legislature of the State granted to the defendant 25,000 acres of State swamp lands to aid the defendant in erecting buildings for its use. The lands were to be selected by defendant and conveyed to-it, but the act contained a proviso “ That if said seminary shall fail to erect bmldin-gs, in pursuance of the terms of the lease- or grant made by the city of Detroit of land to said seminary, and witMn the time therein mentioned, said seminary shall in such event forfeit the swamp land, by this act granted, to-the State of Michigan, and the same shall absolutely and forever revert to the State, against all and every person claiming to hold the same or any part thereof, and the patent or deed issued by the State of said lands shall state in substance this proviso of forfeiture.” Laws 1861 p. 283. By an amendatory act passed in 1863 this proviso was changed so-as to read as follows: “ That before the issuing of the patents- or conveyance, the trustees of said seminary shall deposit with the State treasurer a .bond to the people of this State, with sufficient security, to be approved by the State treasurer, in the sum of twenty-five thousand dollars conditioned that the net proceeds of the sales of said lands shall be faithfully and forever applied to the purposes contemplated in this-grant.” Laws 1863 p. 59.

The bond provided for by this act was given by defendant, and complainants became the sureties therein. The lands granted were duly selected, patented to and the most of them sold by defendant, and thé sum of $16,205.34 real[640]*640ized therefrom. In April, 1861, while defendant was without buildings for its use, it was consolidated with the German-English school of Detroit, and received therefrom a •school building and lot of the value of ten thousand dollars, to which defendant three years later made additions at a cost •of ten thousand dollars, and since that time has expended in repairs and improvements the sum of five thousand five hundred dollars. Of the sums realized from the sale of -swamp lands defendant has expended $2123.96 for buildings and repairs, $3726,53 for taxes, insurance and legal ■ expenses, and $6954.85 for stationery, books, school utensils •and teachers’ salaries, and claims a right to expend any sum .so received for the current expenses of its school.

The bill, to protect complainants against liability as sureties on the bond so given to the State, prays for an accounting by defendant of the moneys received from sales of said ■ swamp lands, and that defendant may be enjoined from making use of any of such moneys for any purpose whatsoever except for the purpose of aiding the defendant to erect-buildings for its use and occupancy.

It is admitted by the stipulation that the school buildings ■of defendant are now in a good state of repair, and as large .as the wants of the school require.

On these facts the court of chancery granted decree in favor of complainants as prayed.

It is objected to this decree that, on the theory of the bill, the swamp lands were conveyed to the defendant in trust, .and the bill seeks to compel the execution of the trust. But the conveyance of the land to defendant was for its own benefit, so that if the conveyance was charged with a trust ■defendant was both cestui que trust and trustee, which is impossible. Bolles v. State Trust Co. 27 N. J. Eq. 308. In ■such a case, it is said, if the fund donated is not applied according to the directions of the donor, there can be no redress, for the donor, by making absolute conveyance to the beneficiary, has trusted wholly to his good faith and ¡sense of duty. See Emigrant Co. v. Adams County 100 U. S. 61, 69.

[641]*641Tbe bill, however, does not proceed on the theory of a trust. Its theory is that the donor in making a gift for a specific purpose has required the donee to give security against misappropriation, and the complainants, as the donee’s sureties, are entitled to the protection of equity. There is an implied agreement between them and the defendant that the moneys shall be faithfully applied according to the intent of the gift, and a misappropriation would be a species of fraud. Nor is it any answer to say that the State, having ■conveyed absolutely, cannot possibly be damnified and therefore cannot in any event recover on its bond. The State, as ■donor, in releasing the condition of forfeiture contained in the act of 1861, had an interest amply sufficient to support the bond, and the bond was intended to accomplish the same purpose which the provision of forfeiture had in view. This was, to restore the property, or an equivalent, to the State in case of attempted misappropriation.

The vital question in the case, however, is whether any misappropriation, actual or threatened, is shown. The question must be solved on a consideration of the purpose of the grant, and the use which has been or is proposed to be made ■of the proceeds. The general purpose of the grant is made very plain by the statute. It was to aid a private educational institution to accomplish the object for which it was ■established. That object was to give instruction to those who should apply for it. To do this it must have buildings, means of illustration and teachers, and to obtain these it must have money. The State deemed it wise to provide that the moneys to be realized from its donations should be applied, not in the payment of teachers’ wages, or for current expenses, but to the procuring of necessary buildings. If under any and every conceivable circumstances the ap]3li•cation must be made according to the very terms of the grant, the agreed facts show that the corporation is already in default for some of them have been used otherwise.

The general rule undoubtedly is, that public grants are to be construed strictly as against the grantees. United States v. Arredondo 6 Pet. 691; Charles River Bridge v. Warren [642]*642Bridge 11 Pet. 544; Martin v. Waddell 16 Pet. 367; Dubuque etc. R. R. Co. v. Litchfield 23 How. 66; Baltimore v. Railroad Co. 21 Md. 50; Bradley v. Railroad Co. 21 Conn. 294; Richmond v. Railroad Co. 21 Grat. 614; DeLancey v. Ins. Co. 52 N. H. 581; La Plaisance Bay Harbor Co. v. Monroe Walk. Ch. 155 ; Pennsylvania R. R. Co. v. Canal Com'rs 21 Penn. St. 22. The grantee shall take nothing which is not plainly granted, and as is said in the case last cited, “ every resolution which springs from doubt is against ” him. But there is no question in this case in respect to the grant; its terms are clear and precise and its extent undisputed; the controversy arises upon the terms of a restraint imposed by the grant, and which is in the nature of a condition subsequent, and tends to a defeat of the grant by way of forfeiture. If the grant is to be construed strictly as against the grantees, the condition is to be construed strictly against the State; and the State is entitled to enforce it only when a forfeiture would be fairly within the intent of the act whereby the grant was made. The purpose of construction is to give effect to an instrument; not to defeat it: Rice v. Railroad Co. 1 Black 358; People v. Burns 5 Mich. 114; Tabor v. Cook 15 Mich.

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Bluebook (online)
46 Mich. 638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kiefer-v-german-american-seminary-mich-1881.