Case ID: ad_98/html/0040-01.html
Source: Caselaw Access Project
Author: {"author": "\n      O’Brien, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Solomon Feiner, Plaintiff, v. Max Reiss, Defendant.
    
      Title to property held by the Society of Shakers of Mt. Lebanon — in whom it is vested and in what manner it may be transferred, considered — the society is not a religious corporation — it is a voluntary unincorporated association—form of approval by its “ ministry and elders.”
    
    Upon the submission of a controversy between a contract vendor of real estate and the contract vendee, as to whether the vendor could give a marketable title to the property, it appeared that the vendor acquired title from John S. Robinson, to whom the property had been conveyed by Benjamin Gates and Robert Valentine, trustees for the Society of Shakers of Mt. Lebanon on November 27, 1885. In addition, the vendor tendered to the vendee a written consent and approbation by the present ministry and elders of the society to the execution by the present trustees of the society of a quitclaim deed to the vendor and a written confirmation and approbation by them of the conveyance made by the former trustees to Robinson, aud also a quitclaim deed by such present trustees to the vendor.
    Upon the submission there was presented a copy of the “ Shaker Church Covenant,” which is the constitution of that society. Such covenant stated that all the members thereof consecrated their property to the purposes of the society and quitclaimed all personal right, title and interest in and to such property; that the trustees of the society, whose powers descended in regular succession, were “invested with power to take the general charge and oversight of all the property, estate and interest dedicated * * * for the benefit of the Church; * * * also all gifts, grants and donations,” the property to be held by them in trust for the church or society; and that "no disposal of any real estate of the Church nor any important contract shall be considered valid without the previous approbation of” the ministry and elders “to whom the said deacons and trustees are and shall at all times he held responsible in all their transactions.”
    The manner of obtaining the approval of the ministry and elders was not stated in the covenant, hut, from affidavits presented on the submission, the allegations in which were not denied, it appeared that such approval is always obtained of any purchases, sales or transfers of real estate, prior thereto, by consulting the ministry and elders, who verbally signify their approbation, the purchase or sale being then consummated by the trustees. The affidavits also stated that such approval was in this instance had and obtained, and the purchase and the sale of this property thus sanctioned by the society.
    It appeared that no statute had been passed expressly declaring the Shaker Society to be a corporation and that it never was incorporated under a general act. It did appear, however, that, by chapter 174 of the Laws of 1839, as amended by chapter 373 of the Laws of 1849 and chapter 203 of the Laws of 1852, the legal title of the property of the society was vested in the trustees thereof.
    The vendee’s objections to the vendor’s title were, (1) that if the Society of Shakers is a religious corporation no sale by it or its trustees is valid without an order of the Supreme Court; (2) that if it is an unincorporated association, title to its real estate is vested in all the members of the society, who must join in the deed; (3) that if the trustees have power to sell with the approbation of the ministry and elders as set forth in the Shaker covenant, no _ disposal of the real estate can be made unless after action taken by the ministry and elders as boards or joint council, and the written consent cannot be accepted because the individuals do not represent a deliberate board or council where such consent was obtained; and (4) that the annual income of the society from beneficial interests in real or personal property may be in excess of §25,000, the limitation fixed in the Shaker Act.
    
      Held,, that the objections were untenable, and that the vendor had a marketable title to the property;
    That the society was not an incorporated one, but a voluntary, unincorporated association formed by the consent of the individuals composing it for religious and business purposes, which had obtained the corporate power to have property held by trustees in perpetual succession;
    That, as the society was not a religious corporation, it required neither the approval of the court nor an act of the Legislature to enable it to convey title to real estate;
    That, in view of the statutes vesting in the trustees the legal title to all the property of the society and of the language of the covenant, it was not necessary that all the members of the society should join in a deed of its real estate;
    That, as there was nothing in the covenant requiring the ministry and elders to meet in deliberate board meeting or joint council and there manifest their approbation of a conveyance of real estate by the trustees in a formal, fixed way, or in writing, the informal, verbal approbation obtained at the time the deed to Robinson was executed, being in conformity with the uniform practice of the society, was sufficient;
    That, even if the formal written approbation of the ministry and elders was necessary, the failure to procure it when the deed to Robinson was executed was cured by the production of the approbation of the present ministry and elders and of the quitclaim deed from the present trustees;
    
      That the objection that the society might have property, the annual value of which exceeded §25,000, in violation of the provisions of the Shaker Act, was untenable, in view of the affidavit submitted on behalf of the vendor from which it appeared that the annual value or income of the property held by the society was within the §25,000 limit.
    Submission of a controversy upon an agreed statement of facts, pursuant to section 1279 of the Code of Civil Procedure.
    The parties hereto contracted for the sale of the premises 111 and 113 East Seventy-fifth street, but the defendant declined to complete the contract and take the property on the ground that the plaintiff could not give a marketable title.
    The title to the property was conveyed to Benjamin Gates and Robert Valentine, trustees for the Society of Shakers of Mount Lebanon, on November 27, 1885, and by them on April 1, 1890, deeded to John S. Robinson through whom plaintiff received the property. In addition to the deed from the trustees to Robinson, the plaintiff obtained and tendered to defendant a written consent and approbation by the present ministry and elders of the society to the execution by the present trustees of a quitclaim deed to the plaintiff and a written confirmation and approbation by them of th e conveyance made by the former trustees to Robinson and a quit claim deed by the present trustees to the plaintiff. Upon this submission there is presented a copy of the “ Shaker Church Covenant ” and affidavits stating the customs and practices of the society. The covenant recites that the members are “ connected together as a religious and social community ” and that “ the great object, purpose and design of pur uniting ourselves together as a church or body of people in social and religious compact” is “to occupy, improve and diffuse the various, gifts and talents, both of a spiritual and temporal nature.” The covenant states that all members do consecrate and devote their persons, services and property to the purposes of the society and quitclaim all private and personal right, title and interest in and to the estate and property so consecrated, agreeing to make no claim nor bring any charge for debt, damage or account against the church or society or its officers. The covenant provides that the primary administration of parental authority is settled in the ministry, including four persons, any vacancy to be filled by the surviving ministers in council with the elders and others. To the ministry is assigned the duty among others of nominating and appointing, in connection with the elders, ministers, deacons and trustees. The latter are “ invested with power to take the general charge and oversight of all the property, estate and interest dedicated "x" * * for the benefit of the Church; * * * also all gifts, grants and donations,” the property to be held by them in trust for the church or society. “ And no disposal of any real estate of the Church nor any important contract shall be considered valid without the previous approbation of” the ministry and elders “to whom the said deacons and trustees are and shall at all times be held responsible in all their transactions.” The covenant specifies as to books to be kept by the trustees, etc. The powers of trustees descend in regular succession. The manner of obtaining the approval of the ministry and elders is not stated in the covenant, but, from the affidavits, it appears that such approval is always obtained of any purchases, sales or transfers of real estate, prior thereto, by consulting the ministry and elders, who verbally signify their approbation, the purchase or sale being then consummated by the trustees. The affidavits also state that such approval was in this instance had and obtained, and the purchase and the sale of this property thus sanctioned by the society. The facts stated in the affidavits are not denied.
    The defendant’s objections to the title tendered are (1) that if the Society of Shakers is a religious corporation no sale by it or its trustees is valid without an order of the Supreme Court; (2) that if it is an unincorporated association, title to its real estate is vested in all the members of the society, who must join in the deed; and (3) that if the trustees have power to sell with the approbation of the ministry and elders as set forth in the Shaker covenant, no disposal of the real estate can be made unless after action taken by the ministry and elders as boards or joint council, and the written consent cannot be accepted because the individuals do not represent a deliberate board or council where such consent was obtained; and (4) that the annual income of the society from beneficial interests in real or personal property may be in excess of $25,000, the limitation fixed in the Shaker Act.
    
      Isaac Moss, for the plaintiff.
    
      Sol. D. Rosenthal, for the defendant.
   O’Brien, J.:

The first question presented is whether the Shaker Society is or is not a religious corporation under the law. If it is, then a sale of its real estate could not be made in this State without the sanction of the Supreme Court or of an, act of the Legislature authorizing such sale. The defendant concedes that it “ is not incorporated under any statute of the United States or of any State of the United States or of any foreign country, nor'is any certificate of its incorporation anywhere on file within the State of New York.”

There has been some legislation, however, affecting the Societies of Shakers (Laws of 1839, chap. 174; Laws of 1849, chap. 373, and Laws of 1852, chap. 203 ; revised by Rel. Corp. Law [Laws of 1895, chap. 723], § 92), the purpose of which was to authorize future trusts of real and personal estate for the benefit of any such society, but nothing in this legislation bears upon the legal status of such a body or solves the doubt as to whether it is or not a corporation or an incorporated society. With respect to property and contracts, and particularly with respect to the provisions of the law of 1839, which recognizes the right of trustees to be succeeded by others and thus in perpetuity to hold the title to property of the society, it was held in White v. Miller (71 N. Y. 118) that “ the authority to have the property held by trustees in perpetual succession is essentially a corporate power.” The court, however, expressly refused to decide the question which we have under consideration of whether the society or its trustees were a corporation in a full and unrestricted sense,” and if so, whether a religious or a business corporation.

As therein said: “ But we are of opinion that the trustees may and should be regarded as a corporate body and the property held by them as corporate property for the purposes of the remedy by suit, to enforce any authorized contract made by them for the society. It is apparent that the prosecution of business and the making of contracts connected therewith, was one of the purposes contemplated in the organization of the Shaker societies. This was not a mere incident to the religious features of the organization. It is also clear that the acquisition of property as the result of business enterprises, in which the society should engage, was contemplated.”

The question which, as we have pointed out, was in that case left undecided, as to whether cy not this was a corporation, business or religious, requires to be passed upon. We assume the general rule to be that no body of men can become associated together and can acquire the rights, privileges and obligations of a corporation without express legislative sanction. In other words, a corporation is the creature of the State, and every corporation owes its existence and its right to incorporate to express legislative enactment. As said in the American and English Encyclopaedia of Law (Yol. 1 [2d ed.], p. 632) : “A corporation is a body created by law * * * and possessed of a franchise by virtue of which it subsists as a body politic; ” and (p. 695) “ The powers of a corporation like its corporate existence, are derived from the Legislature. * * 'x' Its charter, therefore, is the measure of its powers and it can lawfully exercise such powers only as are expressly or impliedly conferred by that instrument.” This principle is thus stated in Morawetz on Corporations (2d ed. § 316): “The charter of a corporation serves a twofold purpose: it operates as a law conferring upon the corporators the right or franchise of acting in a corporate capacity, and furthermore it contains the terms of the fundamental agreement between the corporators themselves.” In Cook on Corporations (Yol. 1 [5th ed.], p. 3) it is said: “A corporation can be created by or under legislative enactment and by that alone.” And upon this subject Chief Justice Marshall, in Dartmouth College v. Woodward (4 Wheat. 636), said: “ A corporation is an artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it either expressly or as incidental to its very existence.”

The conceded fact here that there is no express act making this society a corporation and that it never was incorporated under a general act, seems to us to be conclusive upon the question. We regard it as a voluntary unincorporated society which has been formed by the consent of the individuals composing it for religious and business purposes and which has obtained, by the legislation to which we have adverted, the corporate power to have property held by trustees in perpetual succession.

This conclusion disposes of the first objection made to the title because, not being, strictly speaking, a religious corporation, the sbciety required neither the approval of the court nor an act of the Legislature to enable it to convey title.

Nor do we think there is force in the second objection to the effect that if the society is an unincorporated association title to its • real estate is vested in all its members, who, therefore, must join in the execution of a deed. This might be entirely sound were it not for the legislation to which we have already referred (Laws of 1839, chap. 174, as amd.), which vests in the trustees the legal title to all the property of the society. In addition, we have" in the very terms of the covenant of the society itself the provision which vests in the trustees “ the fee of all the lands of the society. And by one of the articles of the covenant, binding upon the individual members, we have the express surrender by the members of any right, title or claim to any of the property of the society, and by such covenant the dedication and consecration to the community of all individual property confirmed by the absolute and unqualified release and quitclaim to the trustees of all “ personal right, title, interest, claim and demand of ” all individual members in and to all property.

The third objection is that, conceding the power of the trustees of the society to sell with the approbation of the ministry and elders, it was still incumbent upon a vendor to produce the minutes or formal resolution or other written proof of the meeting in a deliberate board or council where such written consent ivas obtained.

It is undoubtedly the rule sustained by many authorities, of which Peoples Bank v. St. Anthony's R. C. Church (109 N. Y. 522) is an example, that the trustees of a corporation have no separate or individual authority to bind the corporation, and this, although the majority or the whole number acting singly and not collectively as a hoard should assent to the particular transaction.” The reason which lies at the foundation of the rule is well stated in that case in the following language : “ The statute creating it may prescribe its mode of action, and when the methods and agencies by which it may act are designated that designation operates as a limitation and excludes other modes of action.”

As we have endeavored to point out, the Shaker Society is not a corporation, religious or otherwise, but an unincorporated society having the corporate power and right of succession. There is no statute creating or which prescribes its mode of action, and hence it was entirely competent in its by-laws, or, as in this case, by its covenant, to prescribe for itself its mode of action. We fail, therefore, to find any force in the objection that it was essential for the vendor to produce a formal resolution or written evidence of the approbation of the ministry and elders, and for the sufficient reason that the defendant concedes that such never was the custom of the society and that its uniform and unvaried practice on the purchase, sale or transfer of real property has been to manifest approval verbally in informal consultation had between the trustees, ministry and elders.

It is not disputed but that in the present case the trustees who sold to Robinson followed strictly the practice of the society regulating a sale, and, before making such sale, consulted with the ministry and elders, obtaining their approval in the usual way. The statute (Laws of 1839, chap. 174, as amd. by Laws of 1849, chap. 373) vests the legal title in the trustees who in conformity to the constitution of said society have been duly chosen and appointed.” The Shaker Church covenant, which is the constitution of the society, likewise vests in the trustees the fee of all the lands of the church, and, with respect to sales, prescribes that they shall meet with the approval of the ministry and elders. It is not claimed, nor is it the fact, that there is anything in the covenant requiring the ministry and elders to meet in deliberate board meetings or joint council and there to manifest their approbation in a formal fixed way, or which required their approval to be in writing.

The distinction between a religious corporation and a religious body or society having the right to prescribe its own rules and fix its methods of proceeding appears in contrasting the case of People's Bank v. St. Anthony's R. C. Church (supra) with the case of Matter of Burst Presbyterian Society of Buffalo (106 N Y. 251). As correctly urged, therefore, by the plaintiff, inasmuch as the necessity for the approbation of the ministry and elders is found, not in any statute, but solely in the voluntary agreement of the community itself, the community has a right to interpret its own requirements and its interpretation long and invariably followed is decisive of the question of whether the approbation of the ministry and elders was properly obtained in the case at bar. Upon this record we do not find any basis for the defendant’s contention, because he concedes that the facts stated in the affidavits, as to the action taken by the society in reference to this particular property, show that not only the conveyance by the trustees evidenced by the deed, but the approbation of the ministry and elders, was in the form which the society itself prescribed.

We deem it unnecessary, however, to further dwell on this objection, because whatever criticism may have been made with respect to the title, resting as it did upon the deed from the former trustees to Robinson, the present trustees have executed to the plaintiff a deed quitclaiming to him all the right, title and interest of the society in and to the property; and in addition we now have the approbation in writing by the present ministry and elders, not only to the original conveyance to Robinson, but also to the execution by the present trustees of the quitclaim to plaintiff.

The remaining objection is based upon that provision of the Shaker Act {supra, as amd. by Laws of 1852, chap. 203) which limits the beneficial interest which any such society shall have in property, real or personal, by directing that the annual value or income, after deducting necessary expenses, shall not exceed $25,000. It is suggested that it is possible that this society may have property exceeding that amount; but against this possibility or speculative suggestion, we have the affidavit which has been submitted in behalf of plaintiff from which it appears that-the annual value or income of the property held by the society is within the limit. We do not think, therefore, that it rests with the defendant, in view of this statement and the concession made by him that the facts stated in the affidavits are true, to raise or urge this objection which, upon the record, has neither fact nor inference to support it.

We think, therefore, that the question submitted as to whether or not the plaintiff has a good and marketable title to convey to the defendant which would compel him to specifically perform the contract before the court, should be answered in the affirmative.

Judgment accordingly for plaintiff, with costs.

Van Brunt, P. J., Patterson, Hatch and Laughlin, JJ., concurred.

Judgment ordered for plaintiff, with costs.