Case ID: monaghan_2/html/0169-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Nolde’s Appeal.
    The right to an office in a corporation will not be tried upon an application for an injunction, nor will one who has been wrongfully removed from such an office be restored by injunction. The proper remedy is quo warranto. A court of equity will not assume jurisdiction in such a contest, where there is nothing involved calling for the interposition of equity.
    A court of equity has no jurisdiction by the allegations of such a bill of the special circumstances that the defendants obstructed the plaintiffs in the discharge of their duties as trustees in collecting rents and debts due the religious society, took forcible possession of the property, cut down trees, opened stone quarries, and otherwise damaged and destroyed the property, etc.
    May 15, 1888.
    Appeal, No. 75, Jan. T. 1888, from a decree of C. P. Lancaster Co., dismissing a bill in equity, by Lorenz Nolde, William Madlem and Jacob S. Spangler, against A. F. Madlem, Jos. J. R. Zerfass and Timothy Konigmacher, at June T. 1880, No. 2. Trunkey, J., absent.
    The bill, filed June 2, 1880, averred, inter alia, that plaintiffs were duly elected and acting trustees of The Seventh Day Baptists of Ephrata; that defendants, by various acts, interfered with them in the proper discharge of their duties as such; that they threatened further interference, even unto bloodshed; that they molested and interrupted them in the discharge of their duties, in collecting rents and debts due to the society; that defendants, by force and arms, took possession of the “ Saal ” and the Academy, and put on new locks and bolts; that, without plaintiff’s consent, they caused trees to be cut down, stone quarries to be opened, and otherwise damaged and destroyed the property; that they incited and encouraged their servants and employees to commit sun’dry breaches of the peace, and contemplated other revolutionary and violent designs; that, owing to such threats of violence, plaintiffs entertained fears for their personal safety; that such conduct, if persisted in, would not only lead to irreparable injury to the society, but to its financial ruin; to redress which there was no adequate remedy at law; praying for an injunction, etc., and general relief.
    The answer denied the material averments of the bill, and averred that the defendants were the duly elected trustees. The answer also admitted that plaintiffs, after the filing of the opinions of the judges of the orphans’ court in regard to the plaintiffs’ bond, had proceeded to take charge of the real and personal property of the society, but denied their authority to do so. Defendants also denied that plaintiffs’ demand was cognizable in a court of equity. A general replication was filed.
    The case was referred to A. Slaymaker, Esq., as master, who reported recommending that the preliminary injunction be dissolved, and that plaintiffs’ bill* be dismissed, with costs, substantially upon the ground, 1st, that the court had no jurisdiction, quo warranto being the proper remedy; and, 2nd, that the equities were with the defendants. Exceptions were sustained and a decree entered, making the injunction perpetual, by Patterson, J., Livingston, P. J., dissenting. This was reversed, on appeal, in Madlem’s, Ap., 103 Pa. 584, on the ground that no valid judgment or decree could be entered by a divided court. A fi. fa. for costs was set aside in Nolde v. Madlem, 5 Cent. 728, for the same reason.
    On June 27, 1887, plaintiffs filed a supplemental bill averring, inter alia, that, since the filing of the bill, Jacob S. Spangler, one of the plaintiffs, had abandoned his claim as trustee; also that Lorenz Nolde, William Madlem and David King were duly elected trustees at the last quadriennial election, on Jan. 3, 1887, by twenty out of the total number of thirty votes; that defendants claimed to be elected trustees by eight or ten votes of the society; that the court did not agree as to the rights of these claimants; and praying for a substitution of David- King in place of Spangler as plaintiff. This supplemental bill was stricken off by Futhey, P. J., of the 15th judicial district, specially presiding. Counsel then moved the court to be allowed to file the supplemental bill as an amendment, which was refused.
    
      The facts appear in the following opinion of the court below, by Futhey, P. J., specially presiding:
    “On June 2, 1880, the plaintiffs filed a bill in equity alleging that they were the trustees of the Seventh Day Baptists of Ephrata, and that they were interfered with in the performance of their duties by the defendants, who claimed to* be the trustees, and praying the court to restrain and enjoin the defendants from interfering with the management of the property of the society. Judge Patterson, one of-the members of the court, granted a preliminary injunction. The case was duly proceeded with, an answer and replication filed, and a master appointed. The master, after hearing, made a report, recommending that the preliminary injunction be dissolved and that the plaintiff’s bill be dismissed with costs. Exceptions to this report were filed by the plaintiffs, which were argued before Judges Livingston and Patterson, who composed the court, and, on May 6, 1882, Judge Patterson filed an opinion and entered a decree sustaining the exceptions and making the injunction perpetual, and directing the defendants to pay the costs of the proceedings. Judge Livingston dissented from this action of Judge Patterson, and entered his dissent on record. An appeal was taken by the defendants to the supreme court, and that court, in an opinion delivered June 4, 1883, and reported as Madlem’s Appeal, in 103 Pa. 5 84, s. c. 13 W. N. C. 437, reversed the decree of the court below on the ground that, the. court being equally divided, no valid order or decree could be made. The supreme court in the conclusion of their opinion, say: ‘ The decree below was improvidently and unlawfully entered, and must be set aside. This leaves the case precisely as if no decree had been made. If the learned judges below cannot agree upon a proper - decree, they have the power to call upon a judge from another district to decide the case for them. ' But, until we have a lawful decree, we cannot reach the merits.’ In* accordance with the suggestion thus made, the judges of this court, finding themselves still unable to agree, on June 18, 1887, requested that I should hear and decide the case. I have accordingly heard the arguments of counsel submitted to me, and duly considered the case, 'and am now prepared to dispose of it.'
    “ The society of the Seventh Day Baptists of Ephrata, has existed from early in the last century, and was for a time monastic in its character, and possesses a very interesting history. It became the owner of considerable real estate, and was incorporated by Act of Assembly passed Feb. 21, 1814. This Act was amended by a supplement passed Feb. xo, 1865. Under this Act, as amended, it is provided that three trustees shall be elected on the first Monday of January in every fourth year, and also that, whenever any vacancy shall happen by reason of death, absence out of the state, resignation, inability or x*efusal to serve of any trustee, such vacancy may be filled by election. These trustees, of whom it is provided that two shall be a quorum for the transaction of business, are invested with authority to conduct the temporal affairs of the society. The Act further provides that' the said trustees, before entering upon the duties of their office, shall respectively give bond with sureties to be approved by the orphans’ court of Lancaster county for the faithful performance of the trust.’
    “ The society at the present time owns a meeting house, school house, two farms and a number of dwelling houses. It has also some money at interest. The income and profits of their property is used in the support, either wholly or partially, of members of the society needing assistance. They were once a large and flourishing society, but are now greatly reduced in numbers.
    “ On the first Monday of January, 1879, being the time for the quadrennial election, the members of the society met at the usual place, in pursuance of notice given in the manner practiced by them for the purpose of electing three trustees. At this election, the defendants were elected trustees, at what the master finds to have been the regularly organized and conducted election. Some dispute having arisen, a separate election was organized and held in tire room, at which the plaintiffs were elected trustees. Returns of the elections were made to the orphans’ court and bonds presented by both sets of trustees, who respectively claimed to have been elected, of which the approval of the court was asked. The court declined to approve .either of the bonds, and suggested that another election should be held, and advised harmony and united action.
    “Another election was held on July 7, 1879, called and participated in however, wholly by those who had voted for and elected the plaintiffs at the election held in the previous January, and they elected the same persons. Those who had then voted for and elected the defendants, did not attend or participate at this election in July, claiming that, at the election in January, the defendants had been regularly and lawfully elected, and that no other election was needed. The bond of those thus elected in July, was presented to the court for its approval; and, at the same time, the bond of the defendants elected in January was again presented for approval. The judges differed in opinion on the question of the approval of the bonds, Judge Patterson, on Feb. 21, 1880, approving of the bond of the plaintiffs, who claimed to have been elected in July, and Judge Livingston dissenting and objecting to the approval of the bond.
    “ This bill in equity was then filed by the plaintiffs, alleging that they had been elected trustees of the society in July, 1879, that their bond had been approved Feb. 21, 1880, and that, immediately upon the approval of the bond, they entered upon their duties, but that they were interfered with by the defendants,- who claimed to be the trustees, and asking for an injunction.
    “ It is clear to me that the plaintiffs had no right by virtue of their alleged election in July, 1879, to. act as trustees. Independently of any consideration of the question whether the election was regular and could in any sense be recognized as valid, the Act of incorporation, as we have seen, requires the trustees, before entering upon the duties of their office, to give bond with sureties approved by the orphans’ court. This was not done. The judges of the court differed in opinion as to the validity of the proceedings, and the bond offered was not approved by the court. One of the judges had no authority to make the rule for the approval absolute in the face of the dissent and objection of his colleague. The supreme court in the case of Madlem’s Appeal, supra, say: ‘ The rule, where the court is equally divided, is that no valid order or decree can be made; and, if there is a motion before the court, it falls. That is the rule everywhere, and requires no argument to vindicate it.’ The rule for the approval of the bond of the plaintiffs, therefore, fell by reason of a divided court. [It follows that the plaintiffs had no authority to act as trustees by virtue of their alleged election in July, 1879, n°t having first given bond approved by the court, as required by the Act of Assembly.] [5]
    “ The plaintiffs say, however, that, after the approval of their bond by Judge Patterson, or, as they express it in their bill, by the court, they proceeded to take charge of the real and personal property of the society, and that the defendants having interfered with them in the attempt to perform the duties of trustees, they are entitled to the protection of the court. The defendants, in answer, say, that while the plaintiffs did proceed to take charge of the property of the society, they had no authority to do so, and were resisted in such action. That A. F. Madlem- and Joseph J. R. Zerfass, two of the defendants, were duly constituted and authorized trustees to take care of such property, and charged with the management and conduct of the affairs of the society, and that they were in possession and had tenants under them, and were properly performing their duties.
    
      “ After a full consideration of the bill and answer and of the testimony taken, as well as the report of the master, I am satisfied that the plaintiffs had not taken such possession, upon the approval of their bond by Judge Patterson, as authorized them to ask for this injunction on that ground. They undoubtedly supposed that they were authorized to act upon such approval, and attempted to do so, and may have performed some acts. They say, in their bill asking for an injunction, that the orphans’ court recognized them as the duly elected trustees and approved their bond. The defendants, A. F. Madlem and Joseph J. R. Zerfass, may have supposed, until otherwise advised, that the approval of the bond by one of the judges gave the plaintiffs a right to the office of trustees.
    [“ It is, however, clear that the defendants, A. F. Madlem and Joseph J. R. Zerfass, had the control and oversight of the property of the society at the time of the supposed approval of the plaintiffs’ bond, and there was no surrender of them to the plaintiffs, but they continued to perform such duties, and were doing so when the bill was filed.] [4] The plaintiffs, without having the authority they claimed, were endeavoring, by virtue of their supposed authority, to take the control from those in actual charge. This they could not do, whether the defendants named were rightfully or wrongfully in possession of their office.
    “ It is now further contended by the plaintiffs that two of their number — Lorenz Nolde and Wm. Madlem — were trustees when the election of Jan. 6, 1879, was held, and, as such, that they, at least, with A. F. Madlem, one of the defendants, are entitled to exercise the office after expiration of the term for which they were elected, until such time as successors were duly qualified to take their place.
    “ This claim is not in accordance with that made in the bill and pressed before the master. The claim in the bill is in behalf of all the plaintiffs, by virtue of their election in July, 1879, and the alleged approval of their bond after such election, and, as we have seen, this has not been sustained; and the bill might, on that account, be dismissed without more. I will, however, consider the claim thus made, assuming that the trustees whose term would expire in January, 1879, were entitled to hold over until others were authorized to succeed them.
    “ It appears that, in January, 1876, Nolde was elected a trustee to fill a vacancy, and his term of office would regularly expire in January, 1879, ^me °f the quadrennial election. William Madlem and A. F. Madlem were the other trustees, whose term would expire at the same time. Nolde was the treasurer, appointed after his election by the board of trustees. Difficulties appear to have arisen with regard to the administration of affairs. The minutes of the trustees state that Nolde made certain investments of funds which are objectionable, that he refused to attend the meetings of the board, and to make settlement of his accounts, as treasurer, according to the rules and standing custom of the trustees, and a meeting of the whole society was called by the president of the board, and was held on Jan, 7, 1878, at which meeting his seat was declared vacant, as stated in the minutes, ‘ on account of his persistence in willful and arbitrary acts, and refusal to comply with the requirements of the charter and the duties of trusteeship in this society.’ It was also ordered that an election should be held to fill the vacancy, and the president of the board of trustees was directed to give notice that such an election would be held, and appointing the time. An election was accordingly held, in the usual place, after notice had been given in the manner practiced in the election of trustees, the notice stating that the election was ‘ for the purpose of electing a trustee to fill a vacancy in the board of trustees, as declared by a resolution at a congregational meeting of said society, on Jan. 7, 1878,’ and at such election Joseph J. R. Zerfass was elected. The bond of Zerfass, with security, was presented to the orphans’ court and approved Jan. 19, 1878. This action of the society was doubtless under that clause in the charter which provides for filling the place of a trustee where there is a refusal to serve; and the ground of action was the alleged refusal of Nolde to perform the duties of trustee. From that time, Zerfass acted as a trustee and as secretary of the board, and he and A. F. Madlem, another of the trustees, being a quorum, conducted the affairs of the society, and were so exercising the office when the bill in the case was filed, on June 2, 1880. Samuel Nissley was appointed treasurer by them in place of Nolde. Wm. Madlem, the other trustee, did not meet with them, but was not prevented from doing so. His absence was his voluntary act.
    “ Nolde and Wm. Madlem claimed that the election of Zerfass was without authority and unlawful, and that there was no vacancy, within the meaning of the charter, to fill; and it appears, by the record of the court, that, on Feb. 23, 1878, they sued out a writ of quo warranto, ‘ to inquire by what authority he claimed to have, use and occupy the franchises, rights and privileges of a trustee.’ An answer was filed and some progress made in this proceeding, but a final hearing was never had. The period for the quadrennial election of 1879 came on, and it appears to have been supposed that the election of plaintiffs in July of that year, and the approval of their bonds by Judge Patterson, notwithstanding the dissent and refusal of Judge Livingston, constituted them the lawful trustees, and hence this proceeding in equity, which seems to have taken the place of the quo warranto proceeding, the further prosecution of which Was probably deemed unnecessary.
    “The question then presented, in this aspect of the case, is, whether Nolde or Zerfass was entitled, when the bill was filed, to exercise the duties of a trustee, and, as such, administer the affairs of the society. There is no question but that A. F. Madlem and William Madlem were properly qualified trustees at the time of the election in 1879, and we are asked by the plaintiffs to declare that Zerfass' was not thus qualified, and that he should in this proceeding be restrained from acting as such.
    “ Can we properly determine the question in this proceeding ? The authorities, it seems to me, abundantly show that, under such circumstances as here exist, the proper method of proceeding is by quo warranto, and that we cannot here inquire whether the election of Zerfass, and the approval of his bond by the court, invested him with the right to perform the duties of the office. The question presented simply involves the determination of the right to the office, and that question,.without more (and there is nothing else here), cannot be determined by a bill for an injunction. The rule of law on this subject is that the right of an office in a corporation will not be tried upon an application for an injunction, nor will one who has been wrongfully removed from such an office be restored by injunction.
    “A court of equity will not assume jurisdiction in such a contest, where there is nothing involved which calls for the interposition of equity. High, Injunction, §§ 781, 789; Hilliard, Injunctions, 403. In Com. v. Graham, 64 Pa. 341, the court say that quo warranto is the proper remedy against persons usurping the office of trustees of a chartered church, as settled by the uniform course of decision and practice for more than half a century.
    “ It is true that, where there are circumstances which call for the interposition of a court of equity, and where it therefore has proper jurisdiction of a case, the court will consider and determine all questions involved in the controversy and make a complete decision in the case. Where the object is simply to determine the regularity of an election, or whether the proper person is filling an office, a court of equity, as we have said, will not assume jurisdiction, and a resort must be had to a court of law as the only proper and competent tribunal; but if the question of the legality of an election, or whether a person holds an office rightfully, arises incidentally in the course of a suit in which equity has jurisdiction, that court will inquire into and decide it, as it would any other question of law or fact that arises in the cause. But the decision is only for the purposes of the suit; it does not settle the right to an office, or vacate it, if the party is in actual possession. 8 E. C. Green, 216-226. In Kerr v. Trego, 47 Pa. 296, where, under the peculiar circumstances, the court assumed jurisdiction in equity, the court say: ‘ This case is therefore regularly before us and we proceed to the consideration of it, premising that there is no -material fact in dispute and that we have no authority to decide directly upon the validity of the election of any of the claiming members.’
    [“ As I understand the facts, and as they are found by the master, there is no question, in this aspect of the case, except as to whether Zerfass should fill the office of trustee. He had been exercising that office in place of Nolde from the time of the approval of his bond, after the election in 1878, and was doing and claiming the right to do so by virtue of such election when this injunction bill was filed in 1880.] [2] His title to the office he thus fills is disputed, but, like all other questions of disputed right, is subject to the rule that an injunction will not be granted, at least where a court of equity does not otherwise take jurisdiction, until the question of right is settled at law. Gilroy’s Appeal, ioo Pa. 8; Pa. Coal Co. v. Snowden, 42 Pa. 488.
    
      “ The master finds that it is not even alleged that there has been any attempt by the defendants to divert the funds of the society from their proper objects, or that they are in anjr way unfitted to perform the duties of the office of its trustees, and hence there is nothing which calls for the interposition of equity.
    “ My attention has been called to matters which have occurred since the bill was filed. Those do not properly belong to the case before me, and cannot be considered in its determination. [My duty simply is to ascertain what decree should be made in the case as presented by the pleadings and evidence and the report of the master.] [3.]
    
      “ The case, as it now presents itself, is, perhaps, from the lapse of time, largely a question of costs, but I have not given it the less consideration on that account. The quadrennial elections have been held since the institution of these proceedings, and, although I am informed that some questions growing out of these elections have arisen, I may be permitted to express the hope that the good sense of counsel, and of the parties, will, bysome satisfactory arrangement, put an end to this prolonged, litigation, and that peace and harmony will be restored to this little community.
    “ In the case before the coürt, I have arrived at the conclusion recommended by the master, that the preliminary injunction should be dissolved, and that the plaintiffs ’ bill should be dismissed with costs.
    [“And now, Sept. 26, 1887, this cause having been fully heard and considered, it is ordered, adjudged and decreed that the exceptions filed by the plaintiffs to the report of the master be overruled and the report confirmed, that the preliminary injunction be dissolved, and the plaintiffs’ bill be dismissed, with costs to be paid by the plaintiffs.”] [1]
    
      The assignments of error specified, 1-5, the portions of the opinion within brackets, quoting them; that the master erred, 6, in finding that defendants were duly elected trustees at the election held Jan. 6, 1879; 7, in finding that plaintiffs were not duly elected trustees at the election held July 7, 1879. Pie, as well as the court, should have found that there was a vacancy in the trusteeship at the time of the election held July 7, 1879; and that plaintiffs were properly elected trustees to fill such vacancy. 8. The master erred in passing upon either election, because the question raised by him was res judicata. He, as well as the court below, should have found that defendants had improperly and illegally obstructed and interfered with plaintiffs in the discharge of their duties as the acting trustees of said society. 9. The court erred in ordering plaintiffs ’ supplemental bill to be struck off; 10, in disallowing said bill when offered as “ an amendment ” to the original bill; 11, in giving great prominence to the fact that the special election directed by the court to be held, viz: July 7, 1879, was only participated in by adherents' of plaintiffs; but failed to notice the converse feature of the election that ousted Mr. Nolde in January, 1878, which was only participated in by adherents of defendants; 12, in not ordering, directing and decreeing that the preliminary injunction against defendants be made perpetual, with costs. 13. The court ought to have ordered, adjudged and decreed that, in virtue of the quadrennial election of January 3, 1887, Lorenz Nolde, William Madlem, and David King, were the duly elected trustees. 14. The court erred in giving weight and credit to what defendant calls the “ minutes ” — they being but the minutes of their side, and made up by the contestant of„Nolde’s seat.
    
      
      Wm. R. Wilson, with him D. McMullen and S'. H. Reynolds, for appellants.
    Jurisdiction is determined by what appears on the face of the bill; and, in doubtful cases, after the parties have voluntarily proceeded to a hearing on the merits, the court will not permit an objection to its jurisdiction to prevail, but will administer suitable relief. Adams’s Ap., 113 Pa. 449.
    The bill sets forth sufficient ground for an injunction. Henry v. Deitrich, 84 Pa. 292; Kisor’s Ap., 62 Pa. 428; Kerr v. Trego, 47 Pa. 295 ; Brush Electric Co’s Ap., 114 Pa. 574; Roshi’s Ap,, 69 Pa. 462; Sutter v. Church, 42 Pa. 503; Schnorr’s Ap., 67 Pa. 138.
    Although this bill was not brought to decide whether the plaintiffs or the defendants were the lawful trustees, it is the duty of a court of equity to do so, if that question is involved in the issue raised by the bill. Harper’s Ap., 1 Cent. 589; Grubb’s Ap., 79 Pa. 120; Sochér’s Ap., 104 Pa. 609 ; Winton’s Ap.,97 Pa. 385 ; Souder’s Ap., 57 Pa., 498.
    The acts of the trustees before giving security were not invalid. Dixcy v. Laning, 49 Pa. 143 ; Leedom v. Lombaert, 80 Pa. 381; Gregg Twp. v. Jamison, 55 Pa. 468.
    A mere misemployment of corporate funds is no cause for amotion. Com. v. Guardians, 6 S. & R. 469.
    The books and minutes of a corporation are only evidence where there is nothing to raise suspicion that the proceedings have been irregular. Angelí v. Ames, Corp., 11 ed., § 513.
    The supplemental bill or amendment should have been received. Pligh, Inj., § 847; Story Eq. PL, §§ 335, 336, and 340, pages 386 and 398, with notes; 2 Daniel Ch. Pr. 1595; Pitts. & Connellsville R. R. v. R. R., 76 Pa. 481; Winton’s Ap., 97 Pa. 385 ; Wilhelm’s Ap., 79 Pa. 121; Darlington’s Ap., 86 Pa. 512; Woods v. McMillan, 32 Pitts. L. J. 363. ...
    ... Plaintiffs’ reference in the bill to their election as trustees of July 7, 1879, was not material, claiming, as the bill does, that they were trustees de facto. The reference to their election had no necessary connection with their right to sue out the injunction, and may be treated as surplusage. Grubb v. Mahoning Nav. Co., 14 Pa. 302.
    
      H. M. North and E. K. Martin, with them T. B. Edolahan, for appellees.
    We adopt as our argument the master’s report as printed in appellants’ paper book. We also adopt and print Judge Futhey’s opinion as a part of our argument.
    The master shows that the cases relied upon by the appellant, as authority for his injunction, are inapplicable, some ground of general equity jurisdiction existing, as, for instance, an attempt to divert trust funds from the uses to which they had been dedicated, or divisions in the body of a congregation, where, from the number of persons concerned, the common law remedies must prove inadequate, or where the action complained of is prejudicial to the interests of the co'mmunity or a considerable portion of it. This distinction is clearly stated in Johnston v. Jones, 8 C. E. Green, 216-226. See also 5 Stewart, N. J., 236.
    Oct. 1, 1888.
    The master cites the following cases, on the question of jurisdiction : N. Pa. Coal Co. v. Snowden, 42 Pa. 488 ; Norris’s Ap., 64 Pa. 275; Tillmes v. Marsh, 67 Pa. 507; Minnig’s Ap., 82 Pa. 373; Clark’s Ap., 62 Pa. 447; Gallagher v. Fayette Co. R. R., 38 Pa. 102; Brown’s Ap., 66 Pa. 155; Patterson v. Lane, 35 Pa. 275; Com. v. Graham, 64 Pa. 339 ; Com. v. Arrison, 15 S. & R. 127; Hagner v. Pleyberger, 7 W. & S. 104 ; Updegraff v. Crans, 47 Pa. 103; Mickles v. Rochester City Bank, 11 Paige, 118 ; High, Inj., §§ 781, 799; Abbot’s Dig. Corp., Title, Officers, pi. 21, 22 and 23.
   Per Curiam,

This case has'been so well disposed of by the learned j udge of the court below, that nothing remains for us to do but to affirm it on his opinion.

Appeal dismissed and decree affirmed at costs of appellants.