The opinion of the court was delivered by
This was a certwra/ri prosecuted by the Elizabeth Library Association against William Leester, collector of taxes of the second ward of the City of Elizabeth, in the county of Union. The plaintiffs complain of the entire tax assessed against them, and ask to be relieved therefrom, insisting that tlieir charter exempts
' Dangerous in the extreme would it be, and exceedingly impolitic, to create corporations to hold real and personal estate, and allow them to engage in any and every kind of business ad libitum. Soon we should find all legislative functions a nullity, aud we should be transferred to the despotism of a series of overgrown and unwieldy corporations. But the wisdom and foresight of our law makers have secured us against any such results thus far, by defining the powers and privileges of particular companies, or have given them- a charter, the objects of which, the meaning and intention of the corporators and the legislature, are to be gathered from the law itself.
Then what was the object of the Elizabeth Library Association in asking for corporate powers ? They say for themselves, in the preamble to the law incorporating them, 'which was no doubt "shaped by themselves, or according to their wishes and directions, that their “ object is the establishment of a library, with all proper conveniences aud appurtenances, and the erection of a suitable edifice for its accommodation, with a view to advance the interest of learning generally.”
The first section of the act then goes on declaring William W. Pinneo and a number of others, together with all other persons who are or may become their associates, their successors and assigns, to be incorporated by
Whatever may have been, or may yet be the ultimate aim of this association, not clearly and fully expressed in, their charter, is not to be guessed at. The mere recital of the preamble and the sections of their own special act, and that part of the general act of eighteen hundred and forty-six, made by themselves equally binding upon them, are amply sufficient to show the limited purposes for which they were incorporated. The ostensible object held out by the company, with the view to induce the legislature to clothe them with corporate powers, is that expressed in the preamble, to “ establish a library, with a view to advance the interests of learning generally.” The latter clause would seem to be but one of the expected results of the establishment of the library, thus making the “ establishment of the library, with all proper conveniences and appurtenances, and the erection of a suitable edifice for its accommodation,” the plain and sole object of the association, according to >ts true legal construction. Be this as it may, it can, in point of principle, maker no difference because the object is expressed; and all powers necessary to carry out that object they have the right to exercise, either by implication or by the provisions of the
The next matter to be inquired into is as to the means, the rights and powers which the company may legally exercise and 'enjoy, with the view to effect the object proposed. Upon this point we are not without authority ; but as a matter of principle, it must necessarily be apparent that only such rights and powers are delegated to the company as are consistent with the object, and proper and necessary to be exercised with a view to the accomplishment of that object. If this company had said to the ■legislature, when they were incorporated, that 'they intended to effect their object by the purchase and sale of •real estate on speculation; that they intended to erect a great number of stores, dwelling houses, hotels, concert ■rooms, ball rooms, and a variety of other buildings; that ■they intended to connect with their business extensive manufacturing establishments of various kinds, in addition to which they intended to establish railroad communication through all the counties of the state, (and this they have the right to do if they can do the other) ; that they also intended to initiate and build up a grand system 'Of education, by establishing academies in every county in the state; and from these sources of profit effect the •object of establishing a library,with a view to advance the interest of learnmg generally, it will be at once admitted that no such corporation as the Elizabeth Library Association would 'ever have had an existence. 'The mere allusion to such "absurdities clearly shows the necessity of an implied prohibition, that a corporation can exercise such rights, powers, and means as are consistent with and necessary to effect the object expressed or intended by the charter, and no others. The 3d section of the act, approved -Feb
But what has a drug store, a tea store, or any other kind of a store (except perhaps a book store belonging to the company itself), or a lecture room for renting, or a ball room, or a freemason’s lodge, to do with the library edifice, or any-of its conveniences or appurtenances ? Or what necessary or consistent connection can there be ? It might have been thought convenient by the stockholders, at the time of the erection of the building, to put up a very large building, cut it up into rooms of various sizes, and by the rents arising therefrom, to secure an income to the association. But it is not the kind of edifice spoken of by their charter, or rather it may contain all
It is urged that the building is an entirety; that no separate and correct valuation of the library room or any of the- other apartments can be effected. This is a matter, I take it, to be determined, in the first place, by the assessor of the proper ward. If he rates any portion of the building too high, or taxes what he ought not to, the remedy is by appeal, and ultimately by certiorari. But the mere fact of its being an entirety can make no difference. The paramount, and indeed the sole question is, was all this great number of rooms authorized by the charter, and necessary and compatible with the object specified. The mere difficulty of making a correct assessment is no reason why an assessment should not be made. Difficulties of this kind are continually arising, and must continue to arise so long as men differ as to the value of property. Remedies, however, are provided for all proper ■cases. If this-association has the right to build and fit up rooms under the same roof for the acommodation of a dozen different shopkeepers and manufacturers, &c., and claim their exemption, they have the right, upon the same principle, to put them up as separate buildings, and claim
The case in 1 Dutcher 315, State v. Newark, is but a repitition of the State v. Mansfield, and is determined by that case without further references. Afterwards this case was taken to the Court of Errors, and after elaborate argument by very able counsel, the court, at November term, 1856, unanimously confirmed the judgment of the Supreme Court, referring again to the very important decision made by the Supreme Court in State v. Mansfield, and no other. See decision of this case in Court of Errors, 2 Dutcher 519.
Some of the English judges have held, that if a corporation fulfilled the objects of its creation, they might embark in other undertakings, however various, if the object of the directors be to increase the profits of their ■company. But the better and settled law now seems to be (the same that it is in New Jersey), that whatever is not expressly granted, or necessarily implied, is impliedly forbidden, as fully appears by the cases herein referred to.
The association has, then, clearly transcended its chartered franchises and powers, by purchasing, building, holding, and renting property not necessary to the accomplishment of the objects of - their charter. As to the right of the directors to invest the funds of the association in property which is not compatible with and necessary to the design of the company, that is a matter between the stockholders and directors—-we have nothing to do with it here. Such property, however, if acquired and held by the company, they are legally bound to pay tax for. It was said, upon the argument, that the entire building, all its rooms might become necessary for the accommodation of the library and its attachments, and the business operations necessarily connected with it. When this shall become the fact, it will alter things very much from their present condition; and that necessity and the fact of occupying the whole building for the purposes of the library will at once relieve the association of any further tax. At present, however, and this is the only state of things we have any right to consider—a very small portion of the building is occupied by the association. All the remaining portions of the building are rented out to different persons, and occupied for business operations entirely foreign to, inconsistent, incompatible with, and unnecessary to the accomplishments of the objects of their charter. For this property, so long as it remains in this condition, the o company is liable to pay tax. This propo
I see no possible ground upon which this association can claim exemption for the whole of their building, although it be an entirety, but every reason and authority seem to impel us the other- way. The tax must be set aside or abated as to the amount for property actually occupied by the association; but we cannot rule the same in regard to the remainder of the property. All not in the immediate personal occupation and use of this association is legally subject and liable to taxation, Let a rule to this effect be entered.
If any difficulty arise as to determining the amount to be paid by the association, it will be a proper subject for some future rule by the court.
Reversed 5 Dutch. 541.