People v. President & Trustees of College of California

Crockett, J., delivered the opinion of the Court: This is an action to quiet the title of the State of California to a tract of one hundred and sixty acres of land, situate near the City of Oakland, on which it is proposed to erect the State University; and the only question for our decision on this appeal is, whether or not the conveyance from the President and Trustees of the College of California to the State, under the facts stated in the agreed case, was and is operative in law to vest the title in the State. In other words, whether or not, upon the agreed facts, the President and Trustees of the College had the power in law to convey [170]the land to the State, under the circumstances and for the purposes disclosed in the record, or whether the transaction was ultra vires.

The College was incorporated under the Act of April 20, 1850, entitled “An Act to provide for the incorporation of Colleges,” (Stats. 1850, 273), and the Act amendatory thereof, passed April 13, 1855. (Stats. 1855, 110.) In defining the powers of the Trustees, it is provided in Section 7, that they shall have power “ to receive and hold by purchase, gift or grant, any real or personal property, provided that the yearly income of the College shall not exceed its necessary yearly expenses ten thousand dollars;” and “to sell, mortgage, lease and otherwise use and dispose of such property in such manner as they shall deem most conducive to the prosperity of the College.” The general Corporation Act provides (Sec. 1) that every corporation, as such, shall have power “to hold, purchase and convey such real and personal estate as the purposes of the corporation shall require, not exceeding the amount limited by law.” Under these provisions, it is quite evident the Trustees have an unlimited discretion in respect to the sale or other disposition of the corporate property, for the advancement of the interests of the College; and it is equally plain that so long as they act in good faith, their discretion, in this respect, is absolute. They alone are to decide whether the proposed disposition of the property will be “most conducive to the prosperity of the College.” There is no room for argument on this point. But it is suggested that the action of the President and Trustees of the College of California, in alienating its property, is not only not “conducive to the prosperity of the College,” but is avowedly intended to terminate its existence in order that its corporate property may be devoted to the building up of a new institution of learning, with a different name, and under a new management; that the conveyance of the tract in question to the State was in part execution of this general plan; and that when the State, through its authorized agents and officers, accepted the conveyance, it had notice of the intention and purposes of the Trustees in making it; that whilst the Trustees may make such dispo