President of Medical College v. Zeigler

17 Ohio St. (N.S.) 52
Ohio Supreme Court·Decided December 15, 1866·Published

Opinion

Scott, J.

The mortgages drawn in question in this case, purport to convey the entire title, interest, and estate of the corporation executing them, without any express restriction, reservation, or limitation whatever.

And it is claimed by counsel for the mortgagees, that independently of the act of March 21, 1851, the corporation had power to borrow money and execute such general mortgages, by the terms of its original charter and other subsequent acts, passed prior to 1851. Be this as it may, however, those prior enactments were, by their own terms, made subject to alteration and amendment.

The act of 1851 was a substantial reorganization of the medical college. By it eleven persons therein named, and their successors, were constituted a board of trustees of the Medical College of Ohio • and by that name were invested with corporate powers.

The first and main section of the act, provides that this board, by its corporate name, “ shall have power to contract and be contracted with, sue and be sued, to answer and be answered unto, in all courts of law and equity, for the period of ten years from the 1st day of January, 1851, or until their successors are appointed, and to mortgage the property now known as the Medical College of Ohio : provided, that in the event of the mortgage of said property, the proceeds thereof shall bo appropriated to the erection of a building, on the lot on which the present building is erected, in which shall be taught regular scientific medicine, as contemplated in the various acts creating the medical college; and, provided further, that no sale of said property, by reason of said mortgage, or otherwise, shall imjDair the right of the state to the medical attendance now by law provided and required for the Commercial Hospital and Lunatic Asylum at Cincinnati; provided, the State of Ohio shall, in no event, be held liable for or required to pay any money in consequence of the provisions of this act; and provided, [58]*58moreover, that the premises so authorized to be mortgaged, shall ever be occupied and used *for the purposes of a medical college, as contemplated by the acts relating to the Medical College of Ohio; and the professors and faculty of medicine, hereafter so using and occupying said premises, shall always furnish medical and surgical attendance at the Commercial Hospital and Lunatic Asylum; provided, also, that the trustees of said college may, for fifteen years, and thereafter, unless otherwise provided by law, lease out such parts of said premises and the buildings thereon as may not be necessary for the purposes of said college; provided, also, that all moneys arising from leases so authorized, shall be appropriated, after paying the sum for which said premises may be mortgaged, as hereinbefore authorized, in manner hereinbefore specified, in promoting the objects of said college in such manner as said trustees may deem proper; or as may be provided by law.”

Section 2 provides for filling vacancies in the board of trustees; section 3, that all rents and graduation fees thall be applied to the payment of the debt created in erecting the buildings; and section 4 repeals all acts and parts of acts conflicting with this act. 49 Ohio L. 295.

It is clear that the board of trustees, by whose authority these bonds and mortgages were executed, derived their power to act in the premises, solely from this act of 1851. The mortgagees themselves refer expressly to this act, and represent the issuing of the bonds and the making of the mortgages to be in execution of the powers therein conferred. The mortgages must therefore be construed with reference to the limitations, if there be any, which qualify the power of mortgaging, granted by the act of 1851.

The first section of that act, just quoted, contains six provisos, so called; and it is claimed in behalf of the plaintiff in error, that, by virtue of the fourth of these provisos, the board of trustees had no power to mortgage the premises so as, in any event, to justify a sale, without reserving to the corporation the right forever to occupy and use the building erected thereon, or so much thereof as may be necessary, for the purposes of a medical college. To this claim, interposed by way of defense in the court below, the bondholders, who were there plaintiffs, demurred. The question was thus raised as *to the proper construction and effect of this proviso or clause; and this is the question upon which the judgment to be rendered here must depend.

[59]*59It is certain that the whole section is inartistically and unskillfnlly drawn. To make the literal sense of the terms of its numerous provisos harmonize with each other, and with what seems to be the purview and main purpose of the enactment, is simply impossible. We may well be contented if, in such a case, we can arrive at a satisfactory conclusion as to what was not intended, without assuming to determine with confidence what was the actual intention. In giving a construction to the fourth proviso, on which the claim of the plaintiff in error is based, it is proper to consider it in connection with the other provisions of the same section; for “ it is an established rule in the exposition of statutes, that the intention of the lawgiver is to be deduced from a view of the whole, and of every part of the statute, taken and compared together. The real intention, when accurately ascertained, will always prevail over the literal sense of terms.” 1 Kent, 462. In looking to the body of the section, then, we find a grant of power to the board of trustees, “ to mortgage the property now known as the Medical College of Ohio.” The property thus described is the same as that embraced in the present mortgages, and the power is not limited to a part, but extends to the whole of it. This ijower was clearly intended to be exercised for the purpose and as a means of raising money for the erection of a suitable building to be used as a medical college. The first proviso imposes on the corporation, as a condition subsequent, the obligation to appropriate the moneys obtained by means of the power thus given, to that object. We may reasonably assume that the word “mortgage” was used by the legislature in its ordinary, well-understood, and common-law sense; and tliat the ordinary legal liabilities incident to a mortgage were intended to follow the execution of the power conferred. Prominent among these liabilities is the sale of the mortgaged premises, in default of the payment of the debt for which they are a security. Indeed, it was evidently contemplated that a sale of the property might result from its being mortgaged; for the second proviso ^declares “that no sale of said property, by reason of said mortgage, or otherwise, shall impair the right of the state to the medical attendance now by law provided and required for the Commercial Hospital and Lunatic Asylum at Cincinnati.”

Now, a bona fide sale has always been supposed to confer some rights upon a purchaser. Ordinarily, upon the payment of the [60]*60purchase money, he becomes at least the equitable owner of the property purchased, and must, either presently or in the future, become entitled to its possession and use. If these are to remain forever in the vendor, it would be absurd to call the transaction a sale.

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President of Medical College v. Zeigler, 17 Ohio St. (N.S.) 52 (Ohio 1866).

17 Ohio St. (N.S.) 52 (President of Medical College v. Zeigler) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.