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BEREA COLLEGE v. COMMONWEALTH KENTUCKY.

decided: November 9, 1908.

BEREA COLLEGE
v.
COMMONWEALTH OF KENTUCKY.



ERROR TO THE COURT OF APPEALS OF THE STATE OF KENTUCKY.

Author: Brewer

[ 211 U.S. Page 53]

 MR. JUSTICE BREWER, after making the foregoing statement, delivered the opinion of the court.

There is no dispute as to the facts. That the act does not violate the constitution of Kentucky is settled by the decision of its highest court, and the single question for our consideration is whether it conflicts with the Federal Constitution. The Court of Appeals discussed at some length the general power of the State in respect to the separation of the two races. It also ruled that "the right to teach white and negro children in a private school at the same time and place is not a property right. Besides, appellant as a corporation created by this State has no natural right to teach at all. Its right to teach is such as the State sees fit to give to it. The State may withhold it altogether, or qualify it. Allgeyer v. Louisiana, 165 U.S. 578."

Upon this we remark that when a state court decides a case upon two grounds, one Federal and the other non-Federal, this court will not disturb the judgment if the non-Federal ground, fairly construed, sustains the decision. Murdock v. City of Memphis, 20 Wall. 590, 636; Eustis v. Bolles, 150 U.S. 361; Giles v. Teasley, 193 U.S. 146, 160; Allen v. Arguimbau, 198 U.S. 149.

[ 211 U.S. Page 54]

     Again, the decision by a state court of the extent and limitation of the powers conferred by the State upon one of its own corporations is of a purely local nature. In creating a corporation a State may withhold powers which may be exercised by and cannot be denied to an individual. It is under no obligation to treat both alike. In granting corporate powers the legislature may deem that the best interests of the State would be subserved by some restriction, and the corporation may not plead that in spite of the restriction it has more or greater powers because the citizen has. "The granting of such right or privilege [the right or privilege to be a corporation] rests entirely in the discretion of the State, and, of course, when granted, may be accompanied with such conditions as its legislature may judge most befitting to its interests and policy." Home Ins. Co. v. New York, 134 U.S. 594, 600; Perrine v. Chesapeake & Delaware Canal Co., 9 How. 172, 184; Horn Silver Mining Co. v. New York, 143 U.S. 305-312. The act of 1904 forbids "any person, corporation or association of persons to maintain or operate any college," etc. Such a statute may conflict with the Federal Constitution in denying to individuals powers which they may rightfully exercise, and yet, at the same time, be valid as to a corporation created by the State.

It may be said that the Court of Appeals sustained the validity of this section of the statute, both against individuals and corporations. It ruled that the legislation was within the power of the State, and that the State might rightfully thus restrain all individuals, corporations and associations. But it is unnecessary for us to consider anything more than the question of its validity as applied to corporations.

The statute is clearly separable and may be valid as to one class while invalid as to another. Even if it were conceded that its assertion of power over individuals cannot be sustained, still it must be upheld so far as it restrains corporations.

There is no force in the suggestion that the statute, although

[ 211 U.S. Page 55]

     clearly separable, must stand or fall as an entirety on the ground the legislature would not have enacted one part unless it could reach all. That the legislature of Kentucky desired to separate the teaching of white and colored children may be conceded, but it by no means follows that it would not have enforced the separation so far as it could do so, even though it could not make it effective under all circumstances. In other words, it is not at all unreasonable to believe that the legislature, although advised beforehand of the constitutional question, might have prohibited all organizations and corporations under its control from teaching white and colored children together, and thus made at least uniform official action. The rule of construction in questions of this nature is stated by Chief Justice Shaw in Warren v. Mayor of Charlestown, 2 Gray, 84, quoted approvingly by this court in Allen v. Louisiana, 103 U.S. 80-84.

"But if they are so mutually connected with and dependent on each other, as conditions, considerations or compensations for each other as to warrant a belief that the legislature intended them as a whole, and that if all could not be carried into effect, the legislature would not pass the residue independently, and some parts are unconstitutional, all the provisions which are thus dependent, conditional or connected, must fall with them."

See also Loeb v. Township Trustees, 179 U.S. 472, 490, in which this court said:

"As one section of a statute may be repugnant to the Constitution without rendering the whole act void, so, one provision of a section may be invalid by reason of its not conforming to the Constitution, while all the other provisions may be subject to no constitutional infirmity. One part may stand, while another will fall, unless the two are so connected or dependent on each other in subject-matter, meaning or purpose, that the good cannot remain without the bad. The point is, not whether the parts are contained in the same section, for, the distribution into sections is purely artificial; but whether

[ 211 U.S. Page 56]

     they are essentially and inseparably connected in substance -- whether the provisions are so interdependent that one cannot operate without the other."

Further, inasmuch as the Court of Appeals considered the act separable, and while sustaining it as an entirety gave an independent reason which applies only to corporations, it is obvious that it recognized the force of the suggestions we have made. And when a state statute is so interpreted this court should hesitate before it holds that the Supreme Court of the State did not know what was the thought of the legislature in its enactment. Missouri, Kansas & Texas Railway v. McCann, 174 U.S. 580, 586; Tullis v. Lake Erie & Western Railroad, 175 U.S. 348, 353.

While the terms of the present charter are not given in the record, yet it was admitted on the trial that the defendant was a corporation organized and incorporated under the general statutes of the State of Kentucky, and of course the state courts, as well as this court on appeal, take judicial notice of those statutes. Further, in the brief of counsel for the defendant is given a history of the incorporation proceedings, together with the charters. From that it appears that Berea College was organized under the authority of an act for the incorporation of voluntary associations, approved March 9, 1854 (2 Stanton Rev. Stat. Ky. 553), which act was amended by an act of March 10, 1856 (2 Stanton, 555), and which in terms reserved to the General Assembly "the right to alter or repeal the charter of any associations formed under the provisions of this act, and the act to which this act is an amendment, at any time hereafter." After the constitution of 1891 was adopted by the State of Kentucky, and on June 10, 1899, the college was reincorporated under the provisions of chap. 32, art. 8, Ky. Stat. (Carroll's Ky. Stat. 1903, p. 459), the charter defining its business in these words: "Its object is the education of all persons who may attend its institution of learning at Berea, and, in the language of the original articles, 'to promote the cause of Christ.'" The constitution of 1891

[ 211 U.S. Page 57]

     provided in ยง 3 of the bill of rights that "Every grant of a franchise, privilege or exemption shall remain, subject to revocation, alteration or amendment." Carroll's Ky. Stat. 1903, p. 86. So that the full power of amendment was reserved to the legislature.

It is undoubtedly true that the reserved power to alter or amend is subject to some limitations, and that under the guise of an amendment a new contract may not always be enforcible upon the corporation or the stockholders; but it is settled "that a power reserved to the legislature to alter, amend or repeal a charter authorizes it to make any alteration or amendment of a charter granted subject to it, which will not defeat or substantially impair the object of the grant, or any rights vested under it, and which the legislature may deem necessary to secure either that object or any public right. Commissioners on Inland Fisheries v. Holyoke Water Power Co., 104 Massachusetts, 446, 451; Holyoke Co. v. Lyman, 15 Wall. 500, 522;" Close v. Glenwood Cemetery, 107 U.S. 466, 476.

Construing the statute, the Court of Appeals held that "if the same school taught the different races at different times, though at the same place or at different places at the same time it would not be unlawful." Now, an amendment to the original charter, which does not destroy the power of the college to furnish education to all persons, but which simply separates them by time or place of instruction, cannot be said to "defeat or substantially impair the object of the grant." The language of the statute is not in terms an amendment, yet its effect is an amendment, and it would be resting too much on mere form to hold that a statute which in effect works a change in the terms of the charter is not to be considered as an amendment, because not so designated. The act itself, being separable, is to be read as though it in one section prohibited any ...


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