Dissenting Opinion
DeBruler, J.I dissent from the majority opinion which holds that the Indiana Constitution permits appellee, the Board of Trustees of Indiana University,' to maintain and invest donations from private sources in corporate stock.
Article 11, § 12, of the Indiana Constitution says:
“The state shall not be a stockholder in- any bank, after the expiration of the present bank charter.;, nor shall the credit of the state ever be given, or loaned, in aid of any *398person, association or corporation; nor shall the state hereafter become a stockholder in any corporation or association. (Emphasis added.)
The sole question then is whether the Board of Trustees of Indiana University is “the State” within the meaning of that article. I believe the Board is an integral part of the State and is thus prohibited by Art. 11, § 12, from maintaining, investing and re-investing its property in corporate stock.
Indiana University is one of only four “state universities.” 1 R. S. 1852, ch. 114, § 1, being Burns Ind. Stat. Ann. § 28-5301. The appellee, the Board of Trustees of Indiana University is the governing body of the University with the power to operate the university, expend its income, and hire faculty and staff. All of these powers are conferred by State statute. 1 R. S. 1852, ch. 114, § 2, as amended, being Burns Ind. Stat. Ann. § 28-5302. The method of selection and the term of office of trustees is regulated by statute. Acts 1891, ch. 53, § 1, being Burns Ind. Stat. Ann. § 28-5303.
Indiana University is an “agency of the State” within the meaning of the Budget Agency Act, Acts 1961, ch. 123, §§ 1 through 15, being Burns Ind. Stat. Ann. §§ 60-401 through 60-415. This government agency reviews and reports on the budget proposed for the operation of the university. The General Assembly has the ultimate authority over the appropriations of funds for Indiana University. Indiana University is completely a creature of the State and the appellee, Board of Trustees, is the State body that manages the university.
In opposition to my view, the majority opinion offers several arguments.
(1) The majority opinion appears to rely on the fact that the donated property had a private source. This is completely irrelevant. The important question is whether the recipient of the property was the State of Indiana.
In any case the Depository Act, Acts 1937, ch. 3, § 1, being Burns Ind. Stat. Ann. § 61-622 (e) says:
*399“The term ‘public funds’ means and includes all funds coming into the possession of the . . . treasurer of the board of trustees of any state . . . educational institution. ...”
(2) The majority places great reliance on the case of Trustees for Vincennes University v. State of Indiana (1852), 55 U. S. 268, 14 How. 268, 14 L. Ed. 416, and the claim that Vincennes University is in the “same category” as Indiana University.
The relevance of the Vincennes case depends upon a claimed similarity between Vincennes University and Indiana University. As far as I can see this claim is based on no more than some unconvincing sleight of hand tricks with the words “public corporation,” “quasi-Public corporation,” etc. The majority wholly fails to discuss the single important point: What is the relationship between the Board of Trustees of Vincennes University and the State of Indiana? Vincennes University is not one of the “state universities” in Indiana. Acts 1967, ch. 358, § 1, being Burns Ind. Stat. Ann. § 28-5784. The only relevant connection I can find is that some state funds are given to support Vincennes University. Acts 1961, ch. 105, § 2, being Burns Ind. Stat. Ann. § 25-3430 says that the auditor of the State is to issue a warrant on the treasurer of the State in an amount twice that given to Vincennes University by Knox County, Indiana. There is no discretion in this regard on the part of the State at all and the budget agency has no authority over Vincennes University. The many vital connections that Indiana University has with the State, as pointed out above, are apparently absent in the case of Vincennes University and this is decisive.
(3) The majority opinion holds that the Trustees of Indiana University act in a dual capacity: first, as directors of the university, and second, as trustees of private trusts created by private donors. In the latter role they are constrained only by the common law duties and privileges surrounding private trusts.
*400A private person may have several roles, one of which may be trustee for Indiana University. But in his role as a trustee of Indiana University, he acts for the State through an official position created and regulated by statute. That person receives these private donations only in his role as trustee of Indiana University, not as a private person. They are not made to him personally. The donations are to the trustees as the body politic governing the university, and not to the persons who happen to temporarily hold positions on the Board of Trustees. It is precisely and solely their public and official role as governors of the university that makes them the targets of the donations. When they leave the office of trustee they no longer take part in managing the “private trusts” and the new officeholder does become trustee of such funds, even though he may not have been alive when the trust was originally created.
It does not take a very hard look to see that talk of “dual capacities” is an untenable subterfuge to evade the constitutional prohibition in Art. 11, § 12.
The most disconcerting aspect of the majority opinion is its total failure to even notice the larger implications of its opinion. Under that opinion there is no limit on the percentage of shares appellee may own in any one corporation and no limit on the right of appellee to vote those shares. Thus, the appellee could either wholly own a corporation or own sufficient shares to have control of it. Neither is there any limit on the type of corporation in which appellee may own stock. This presents a potential conflict of interest between the appellee’s official obligation to serve the public by operating an institution of learning for the benefit of the State and its desire to serve its corporate interests. It is easy to imagine how this could come about, although I emphasize that there is nothing in the record to indicate that appellee has in any way misused its power. The majority opinion also permits the appellee to.place the university through its' busi*401ness corporations into economic competition with private business and industry.
Nothing I have said would prevent the donation of corporate stock to Indiana University. The appellee may accept such donations and it would have a reasonable time in which to convert the property into a form not prohibited by the Constitution.
If the citizens of this State want to amend the Constitution to permit appellee to invest donated funds in corporate stock, they may do so. The ensuing debate on the issue would go far towards clarifying the issue of what the main function of the board of trustees of a state university should be.
For the reasons stated, the judgment should be reversed.
Note. — Reported in 260 N. E. 2d 601.