People Ex Rel. Attorney-General v. Stockton Savings & Loan Society

GAROUTTE, J.

The object of this action is to escheat to the state certain lands in San Joaquin County, alleged to be held by defendant, a corporation. The complaint alleges that the defendant acquired at trustee’s sale, made pursuant to the provisions of a certain deed of trust, these lands; that more than five years have elapsed since defendant acquired title thereto, and said lands have not been sold. The sufficiency of the complaint is the only question before the court.

The action is based upon section 9 of article XII of the constitution of the state, which provides: “No corporation shall engage in any business other than that expressly authorized in its charter, or the law under which it may have been or may hereafter be organized; nor shall it hold for a longer period than five years any real estate, except such as may be necessary for carrying on its business.” It is asserted by appellant that this provision of the constitution being mandatory and prohibitory, it follows therefrom that defendant’s title to these lands was cut off

instanter,

upon the expiration of the five-year period, and, as a necessary result therefrom, the land escheated to the state. The court fails to see how the declaration of the constitution to the effect that this provision is mandatory and prohibitory accomplishes an escheat under the facts of this case. The provision of the instrument says nothing whatever about escheats. Escheats and forfeitures are not favored by the law, and why some penalty, other than an es-cheat, should not be declared to follow a violation of this provision of the constitution is not made plain. The provision itself wholly fails to declare what results follow if it be violated. And for this reason it seems that the legislature has the power to prescribe penalties for its violation. There appears nothing in the provision so self-executing as to deny that power.

A provision of the Pennsylvania constitution, similar in principle to that here involved, was before the appellate court of that state in

Commonwealth

v.

New York R. R. Co.,

132 Pa. St. 605, and the court there said: “It will be noticed that this clause in the constitution affixes no penalty for its violation. It is

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