NEW YORK COURT OF APPEALS.

JANUARY 14, 1890.

THE PEOPLE, ex rel., Cornell University, Appellant, V. IRA DAVENPORT, Comptroller, &c., Respondent.

OPINION.

This is a case agreed upon in a controversy submitted without action. In such submission the following are the material facts: On the second day of July, 1862, the United States Congress passed an act donating public lands to the several states and territories which might provide colleges for the benefit of agriculture and the mechanic arts. By such act an amount of public land was apportioned to each state equal to thirty thousand acres for each senator and representative in Congress to which the state might be entitled, and this land was apportioned, as was stated in the act, for the benefit of agriculture and the mechanic arts. This land was to be sold by the state seceiving it and the money's which were received as the purchase price of such sale, were to be invested by the state in stocks of the United States, or of this state, or in some other safe stocks yielding not less than five per cent. per annum upon the par value of said stock, and the moneys so invested were to constitute a perpetual fund, the capital of which was to remain forever undiminished, and the interest of which was to be by the terms of the act inviolably appropriated to the endowment, support and maintenance of at least one college where the leading ob

ject should be to teach such branches of learning as relate to agriculture and the mechanic arts, in such manner as the legislatures of the states might respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life.

By the third section of the act it was enacted that all the expenses of management, superintendence, and taxes of the date of selection of said lands previous to sale, and all expenses incurred in the management and disbursements of the moneys which might be received therefrom, should be paid by the states to which the lands belonged out of the treasury of such states, "so that the entire proceeds of the sale of said lands shall be applied without any diminution whatever to the purposes hereinafter

mentioned."

The grant of the land by the Congress, under the act above mentioned, was in and by section five of such act, made on the conditions stated therein, and provided that "the previous assent of the several states shall be signified by legislative acts." Among those conditions was one which provided that if any portion of the fund invested or any portion of the interest thereon, should by any action or contingency be diminished or lost, it should be replaced by the state to which it belonged, so that the capital of the fund should remain forever undiminished: and the annual interest should be regularly applied, without diminution to the purposes mentioned in the act. It was also provided that no state should be entitled to the benefits of the act, unless it should express its acceptance thereof by its legislature within two years from the date of its approval by the president.

On the third of May, 1863, the legislature of the state of New York passed an act (chap. 460, Laws of 1863) entitled "an act relative to the lands granted to this state by the act of Congress entitled "An act donating public lands to the several states and territories which might provide colleges for the benefit of agriculture and the mechanic arts," approved July, 1862, and the sale thereof and the investment of the proceeds of such sales." By section one of this act the Comptroller of the state was authorized to receive from the authorities of the United States the land scrip to be issued for the lands granted to the state by the act of Congress above mentioned, and the Comptroller was to give all necessary receipts and acknowledgments for the scrip which might be so received by him. By the second section the Comptroller was authorized, with the approval of the officers named therein, from time to time, as he might deem proper, to sell the said land scrip, or any part thereof, for cash, or for stocks of the United States, or of the states, or some other safe stocks, yielding not less than five per cent. upon the par value of said stocks, and to execute all necessary and proper transfers thereof.

By section third of the act the Treasurer was authorized to pay on the warrant of the Comptroller out of any moneys in the treasury, not otherwise appropriated, all the expenses of management and superintendence, and taxes, if any, from the selection of said lands previously to their sale; and also all expenses incurred in the management and disbursement of the moneys which might be received therefrom, and of all incidental matters connected with or arising out of the care, management and sale of the said lands; so that the entire proceeds of the sale of said

lands should be applied, without any diminution whatever, to the purposes mentioned in the said act of Congress. Provision was made by the fourth section. for investing the moneys which might be received on the sale of the said lands or land scrip, in stocks of the United States, or of this state, or in some other safe stocks yielding not less than five per centum per annum on the par value of said stocks; and the money so invested was to constitute a perpetual fund, the capital of which should remain forever undiminished, except as provided for in and by the said act of Con

gress.

Subsequent to the passage of this state statute and on the 27th day of April, 1865, the legislature passed an act to establish the Cornell University and to appropriate to it the income of the sale of public lands grauted to this state by Congress on the second day of July, eighteen hundred and sixty-two, also to restrict the operation of chapter five hundred and eleven of the laws of eighteen hundred and sixtythree.

By the sixth section of such act it was provided that the income, revenue and avails which should be received from the investments of the proceeds of the sale of the lands, or of the scrip therefor, or any part thereof granted to this state by the act of Congress (above mentioned) were thereby appropriated to, and should from time to time, as the same might be received, be paid over to the trustees of the Cornell University, for its use and behoof, in the mode and for the purposes defined in said act of Congress.

By the tenth section of the act, all payments made under the act out of the treasury of the state, were to be made by the treasurer on the warrant of

the Comptroller out of the special fund on deposit with the treasurer, arising from the receipt of the income, and revenue, and avails of the proceeds of the sales of the lands or of the scrip already mentioned.

The University thus incorporated, and to which the avails of the sales of the lands and scrip above mentioned were to be paid, was also in and by the ninth section of the act compelled to annually receive students, one from each assembly district of the state, to be selected as provided in the act, and was to give them instruction in any or in all the prescribed branches of study, in any department of said institution, free of any tuition fee or any incidental charges to be paid to said University.

By virtue of the acts above mentioned, and by compliance with the terms and conditions named. therein, the relator, the Cornell University, became, and ever since has been, and now is the sole beneficiary of the trust created by the act of Congress, and the act of the state accepting the same, and as such is entitled to the benefits derivable therefrom. In 1881, the principal of the trust fund above mentioned. became settled and fixed at $473, 402.87, and is desigignated and known as the college land scrip fund. In that year and by chapter 185 of the laws of that season, the legislature "appropriated $25,000 to Cornell University payable from the college land scrip fund ; the language and form of the clause in said act making such appropriation as follows:

"PAYABLE FROM THE COLLEGE LAND SCRIP FUND. REVENUE.

For the Cornell University, twenty-five thousand dollars."