Page:Harvard Law Review Volume 9.djvu/127

99 OWNERSHIP BY FOREIGN CORPORATIONS. 99 ascertained by reference to the general course of legislation, either by prohibitory or enabling acts, or by its general course of legisla- tion upon a given subject." It appeared by reference to the gen- eral laws authorizing the formation of corporations for various purposes, as well as from many special laws, that the legislature has restricted the power of corporations organized thereunder to hold real estate, either to a specified amount in value or in quan- tity, or to such as might be necessary to carry on the business for which they were chartered ; and in some cases, where corporations had been authorized to receive donations of lands, it was provided that they should sell the same in three, five, seven, or ten years at the most. The court came to the conclusion that these restric- tions unmistakably showed a settled policy, on the part of the legislature, that no means should be possessed by corporations, whether as the primary or auxiliary purpose of their creation, to hold lands in perpetuity. It was said that the legislature had in other modes, and on many occasions, — as, for example, in abolishing entails, — manifested a determination that perpetuities in real estate should not exist in the State. It was accordingly held that it was against the policy of the State to permit a foreign land company to purchase lands in Illinois, because it might hold such lands in perpetuity.^ The soundness of this conclusion may well be doubted. It may fairly be asserted that the restrictions upon corporate ownership of real estate imposed by the legislature, in place of indicating the policy inferred by the court, were intended merely to confine cor- porations to the purposes of their incorporation, and to secure a prudent management of their funds, by forbidding them to invest in real estate except within certain defined limits. The restriction of the right to acquire real estate contained in the National Bank- ing Act is so interpreted. In referring to similar restrictions in the charter of a State bank. Chancellor Kent speaks of them as capital in real property, and engaging in land speculations." ^ In 1 Note. — In pursuance of this supposed policy, the same court has held that a for- eign trust company could not be a trustee of real estate in Illinois. U. S. Trust Co. v. Lee, 73 111. 142. It also held void a devise to a foreign Bible society, on the rule adopted in Carroll v. East St. Louis; Starkweather v. American Bible Society, 72 111. 50; but in a subse- quent case a similar devise to a Wisconsin corporation was sustained. Female Academy V. Sullivan, 116 111. 375. a Silver Lake Bank v. North, 4 Johns. Ch. 370. 14
 * only meant to prohibit the banking company from vesting their