Southern Realty Co. v. Tchula Cooperative Stores

Smith, C. J., delivered the opinion of the court. Two questions are presented to us by this record: (1) Has chapter 162, Laws 1912, amended appellee’s charter so as to make it unlawful for it to acquire the land here in controversy? (2) Can this question be raised by appellant? Taking these questions up in their inverse order, we will say: First, the rule that the power of a corporation to own land at all, or in excess of the land prescribed by its charter, cannot be questioned collaterally, but only in a direct proceeding instituted by the state for that purpose, has no application “where the corporation is seeking the aid of a court of justice to [323] enable it to acquire lands which it has no power to acquire and hold. Here the principal is that a court of justice will not aid a corporation to do that which is impliedly forbidden by its charter or by the law.” 10 Cyc. 1135; 3 . Thompson on Corporations (2d. Ed.) section 2393; Case v. Kelly, 133 U. S. 21, Sup. Ct. 216, 33 L. Ed. 513. Second, the grant by the state to appellee of power to acquire and enjoy real estate, without limit as to value and quantity, is a contract within the meaning of section 16 of our state Constitution, and article 1, section 10, of the Constitution of the United States, and cannot now be withdrawn, no right so to do having been reserved when the grant was made. Dartmouth College v. Woodward, 4 Wheat, 518, 4 L. Ed. 629. “The state must observe good faith as well as individuals, and she can no more withdraw what she has granted than can an individual, unless she has reserved the power to do so.” Payne v. Baldwin, 3 Smedes & M. 661. But it is said that this rule has no application here, for the reason that the state, under its police power, and “for the purpose of preventing the monopolization of agricultural land,” can withdraw from corporations power heretofore granted them of acquiring such land, although the right so to do was not reserved when their charters were granted. Conceding, for the sake of the argument, that the state has the power to prevent appellee from monopolizing agricultural land, it is not necessary, in order to accomplish such a purpose, to withdraw from it all power to acquire any such land. We are of the opinion, therefore, that chapter 162, Laws 1912, has no effect on appellee’s charter. Affirmed and remanded, with leave to appellant to answer within thirty days after filing of mandate in court below. Affirmed and remanded. Ethridge, J., took no part in the decision of this case.