Case ID: abb-pr-ns_11/html/0132-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.-—Grover, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE MADISON AVENUE BAPTIST CHURCH against THE BAPTIST CHURCH IN OLIVER STREET.
    
      Court of Appeals,
    September, 1871.
    Religious Corporation.—Authority oe Trustees to Convey Real Estate.—Sale.—Jurisdiction.
    It is not necessary to a valid conveyance under the act providing for the incorporation of religious societies (2 Rev. Laws, 212; 3 Stat. at L., Edm. Ed., 687, § 11), that a majority of the corporators should authorize the trustees of the corporation to initiate proceedings.
    The control of the temporal affairs of such corporations fe placed in the hands of those elected trustees, and they are the proper persons to ant.
    As to what is the remedy if the corporators disapprove the action of the trustees, Query ?
    
    Where the court assumes jurisdiction by the presentation of the petition of a religious corporation for the sale of real estate, the order granted thereon is conclusive upon the petitioners, and they cannot show the petition to be untrue.
    A sale is “a transmutation of property from one to another, in consideration of some price or recompense.”
    The petition of a religious corporation for the sale of real estate, stated that plaintiff (petitioner) and defendant (another religious corporation) had made arrangements for uniting upon the following terms : plaintiff was to convey all its property to defendant, and the two societies were to merge and meet for worship in plaintiff’s church; defendant’s trustees were to resign, and there was to be a new election of trustees by the united societies; defendant was to take plaintiff’s corporate name, and the property of both was to become liable for the debts of both; that the plan of union was agreed to by both corporations; that plaintiff was indebted and that defendant owned property over its indebtedness, which would become applicable to plaintiff’s debts; that each corporation had obtained subscriptions to be applied to the floating indebtedness of each. Held, that there being a total failure of consideration for the transfer, the proposed arrangement did not amount to a sale, and that the court acquired no jurisdiction to grant an order of sale.
    It is only where the consideration for the sale of real property enures to the corporation making it, as such, and not to the corporators as individuals, that the court acquires jurisdiction to grant an order of sale. In all other cases, application must be made to the legislature.
    Appeal from a judgment. .
    This was an action in the nature of ejectment brought by the plaintiff to recover possession of real property, including a church edifice, which defendant claimed had been sold under order of the court, granted upon the petition referred to in the opinion. Upon the first trial plaintiff gained judgment (19 Abb. Pr., 105), which was reversed on appeal and a new trial ordered (1 Abb. Pr. N. S., 214; S. C., 3 Robt., 570 ; 30 How. Pr., 455). Upon a second trial, defendant obtained judgment (2 Abb. Pr. N. S., 254; S. C., 32 How. Pr., 335), which was affirmed on appeal (1 Sweeny, 109). Plaintiff appealed.
    
      
      George F. Comstock and C. C. Langdell, for plaintiff, appellant, besides the authorities mentioned by the court,cited
    I. As to the meaning of the word sale: Williamson v. Berry, 8 How. U. S., 495.
    II. That the application for a sale should be made by a majority of the corporators: Robertson v. Bullions, 11 N. Y. [1 Kern.], 243; Stow v. Wyse, 7 Conn., 214; Wiggin v. Free Will Baptist Society, 8 Metc., 301.
    III. That the action was properly brought: Rice v. Parkman, 16 Mass., 326; Davison v. Johonnot, 7 Metc., 388.
    
      James Emott and William R. Martin, for defendants, respondents, besides the authorities mentioned by the court, cited
    I. As to the inherent power of a corporation to convey land: 4 Kent Com., 5, § 1; Barry v. Merchant’s Exchange Co., 1 Sandf. Ch., 280, 293; Robertson v. Bullions, supra; 1 Rev. Stat., 509; Bowen v. Irish Presbyterian Congregation, 6 Bosw., 245, 267 ; Baptist Church v. Wetherell, 3 Paige, 296, 300.
    II. As to the meaning of the word sale : Schermerhorn v. Talman, 14 N. Y. [4 Kern.], 93, 117; Long on Sales, 3 ; Matter of The Brick Presbyterian Church, 3 Edw. Ch., 155 ; Demarest v. Ray, 29 Barb., 563.
    III. That there was a valid sale, McCrea v. Purmort, 16 Wend., 460.
    IV. That the transaction was not ultra vires, Bissell v. Michigan Southern, &c. R. R. Cos., 22 N. Y., 258; Parish v. Wheeler, Id., 494 ; Petty v. Tooker, 21 Id., 267, 272; Clarke v. Van Surlay, 15 Wend., 436.
    V. That plaintiffs by this proceeding were dissolved and estopped: Slee v. Bloom, 19 Johns., 456, 474; Rumsey v. People, 19 N. Y., 41; Mount v. Morton, 20 Barb., 123; Baker v. Lorillard, 4 N. Y. [4 Comst.], 257; Tilton v. Nelson, 27 Barb., 595 ; Long v. Gray, 9 L. J. N. S., 805, 809 ; Trustees of Vernon v. Hills, 6 
      Cow., 23; 1 Bouv. Inst., § 104, subd. 1; Smith v. Smith, 3 Dess. Eq., 557; Woodbridge v. Allens, 13 Ad. & E., 269 ; Taylor v. Chichester, &c. Railw. Co., 39 L. J. Exch., 217; S. C., 4 H. of L. Cas., 628.
    VI. That, if the court had jurisdiction, its order could not be impeached collaterally: Clarke v. Van Surlay, supra; Hawley v. Mancius, 7 Johns. Ch., 174, 182; White v. Merritt, 7 N. Y. [3 Seld.], 352; Blakeley v. Calder, 15 N. Y., 617 ; Notes to Duchess of Kingston’s Case, 2 Sm. Lead. Cas., Am. Ed., 618, 693; Castrique v. Imrie, 4 H. of L. Cas., 414.
    VII. As to the jurisdiction of the court: Bowen v. Irish Presbyterian Church, supra. As to power of trustees to convey: Lee v. Methodist Episcopal Church of Fort Edward, 52 Barb., 116; Barnes v. Perine, 9 Id., 202 ; 12 N. Y. [2 Kern.], 18, 25 ; First Baptist Society v. Robinson, 21 N. Y., 235 ; People v. Runkle, 9 Johns., 147; Bayley v. Onondaga Ins. Co., 6 Hill, 476; Robertson v. Bullions, and Trustees of Vernon v. Hills, supra; Ang. & A. on Corp., § 221; Beckwith v. Windsor Manuf. Co., 14 Conn., 594.
    
    VIII. That irregularity in the proceedings, if any, must be shown: Sprague v. Bailey, 19 Pick., 436 ; People v. Cook; 8 N. Y. [4 Seld.], 67; People v. Van Slyck, 4 Cow., 297; The same v. Furguson, 8 Id., 102; The same v. Vail, 20 Wend., 12; The same v. Pease, 30 Barb., 588 ; 27 N. Y., 45.
    IX. That a vote of a majority of the corporators at a meeting, is binding on the corporation: 2 Kent Com., 293 ; Rex v. Varlo, 1 Cowp., 248; 1 Kyd on Corp., 308, 400, 424; 1 Blacks. Com., 478; Matter of St. Mary’s Church, 7 Serg. & R., 517, 543 ; Ang. & A. on Corp., 3 ed., 452, 460, § 8; 8 ed., § 501; Exp. Willcocks, 7 Cow., 402, 409, 410 ; Field v. Field, 9 Wend., 394, 403, and cases cited ; Rex v. Bellringer, 4 T. R., 810; Damon v. Granby, 2 Pick., 345; Wiggin v. Freewill Baptist Church, supra; Smith v. Dailey, 2 H. L. 
      
      Cas., 803; Stow v. Wyse, 7 Conn., 214; Rex v. Bowen, 1 Barn. & C., 492; Rex v. Miller, 6 T. R., 268; The same v. Morris, 4 East, 17; The same v. Whitaker, 9 Barn. & C., 648.
   By the Court.-—Grover, J.

The determination of this case depends upon the validity of the deed executed by the plaintiff to the defendant purporting to convey by the former to' the latter the title to the property, the possession of which is sought to be recovered by plaintiff, in? this action. The property consists of five lots of land, situated upon Madison-avenue and Thirty-first street, in the city of Hew York, upon which, at the time of the giving of the deed, there was situated a church edifice, which, prior thereto, had been occupied by the plaintiff for. religious worship. The validity of the deed depends upon the jurisdiction of the supreme cpurt to make the order directing a conveyance of the property by the plaintiff to the defendant. If the court had jurisdiction to make the order, the defendants acquired title to the property in ques-tion, in fee, under the deed based thereon, given by the plaintiff to it.

It is claimed upon the part of the plaintiff, that the court acquired no jurisdiction of the subject matter, and had no power to make the order, for the reason that the petition of the trustees of the plaintiff presented to the court, for such order, was not authorized by a majority of its corporators, duly convened for the consideration of the subject. The trial justice found that it was authorized by the majority of such corpora-tors present at such a meeting. To this finding of fact, an exception was duly taken by the plaintiff. This exception raises in this court the question whether there was, any evidence given upon the trial, tending to prove such fact, and would require an examination of the evidence given for the purpose, if the fact was at all material to the rights of the parties; but having come to the conclusion that it was not material, I shall not examine the evidence on this point. It was proved that the petition to the court and all the subsequent proceedings down to and including the giving of the deed, were authorized and carried on by a majority of the trustees of the plaintiff. Section 4 of the “Act to provide for the incorporation of religious societies ” (3 Gen. Stat., 687), among other things, authorizes and empowers the trustees to take into their possession and custody all the temporalities belonging to the ■ church, congregation or society, whether consisting of real or personal estate, and by their corporate name to sue and be sued in all courts of law or equity, and to recover, hold and enjoy property, real and personal, belonging to such church, congregation or society, as fully and amply as if the right or title thereto had originally been vested in the said trustees, and to purchase and hold other real and personal estate, and to devise, lease and improve the same for the use of such church, congregation or society, &c. In short, the trustees are constituted the managing officers and agents of the corporation in respect to all its temporalities, and the statute points out no mode for the doing of any corporate act in respect to its property, except by its trustees.

But it is claimed by the counsel for the appellant, that by the true construction of section 11 of the act, the trustees had not the power to initiate proceedings for the sale of the real estate of the corporation, as provided in said section, without the sanction and authority of a majority of the corporation. The language of the section bearing upon this question is, “that it shall be lawful for the chancellor (supreme court), upon the application of any “religious corporation, in case he shall deem it proper, to make an order for the sale of any real estate belonging to such corporation,” &c., by or through whose agency the application of the corporation is to be made. The section is silent, and it provides no mode of showing that the corporation have authorized the application, or for the preservation of any evidence of such authority. We have already seen that section 4 of the act makes the trustees the sole managers of the corporation in respect of its temporalities, and the fair assumption is that it was the intention to constitute them agents of the corporation, in respect to the acts required by section 11, for making sale of its real estate. Had it been deemed necessary for the corporation to meet, as such, and authorize by a formal resolution the sale of real estate, or do any other act to render the sale valid, provision would have been made, for convening such meeting, and recording such resolution or act, together with the deed to the purchaser, so as to furnish enduring evidence of all facts essential to sustain the title of the purchaser. . The absence of any such provision furnishes a forcible argument that no such meeting or resolution was intended by the legislature. The act, sections 3 and 7, among other things, in ef: feet provides that every male person of full age, who has been a stated attendant upon divine worship in the church, congregation or society for one year, and who shall have contributed to the support' of the church, congregation or society, according to the usages or customs thereof, shall be corporators.' It could never have been the intention of the legislature to make the title of the purchaser depend upon the question whether a majority of these approved of or were opposed to the sale, and to determine this question, as was attempted in this case, by parol proof of who were in fact corporators, and whether a majority so ascertained, favored or opposed the sale. The true construction of the act, considered as a whole, is that the trustees are the proper persons to act in behalf of the corporation.

There was nothing determined in Wyatt v. Benson. (23 Barb., 327; S. C., 4 Abb. Pr., 182), in opposition to these views. That was an action in equity instituted by a majority of the corporators against persons claiming to be the trustees of the corporation, to procure the revocation of an order obtained by such persons from the court, for the sale of the church property, and to enjoin them from proceeding to make such sale under and by virtue of such order. It is true that the learned judge, in his opinion, states that the trustees can' execute no trust except such as is acceptable to the majority of the congregation ; that the whole act shows that it was the intention of the legislature to place the control of the temporal affairs of these societies in the hands of the majority of the corporators, independent of priest or bishop, presbytery, synod, or other ecclesiastical authority. A closer examination of the statute would, I think, have satisfied the judge that such control is placed in the hands of those elected trustees by' the corporators. But the judgment was not placed upon this ground. In another part, the judge states that . it might, perhaps, have been assumed that the trustees did represent the views of the corporation in making the application, and that there was apparent authority for granting the consent of the court. ‘ ‘ The order is still in fieri, not having been executed; and no rights having been acquired under it, it is still under control of the court, and it is, therefore, competent for the court to revoke its consent'to the sale” ; thus clearly showing that in the opinion of the judge, an order for a sale, obtained upon the application of the trustees, without showing that a majority of the corporators concurred in such application, is apparently valid, and when executed, the title of the purchaser will be upheld. Whether the remedy, in case the application of the trustees was against the wishes of the majority of the corporators, should not have been a motion to the special term to vacate the order, instead of an action in equity, is a question not necessary to consider in this case.

In the Matter of St. Ann’s Church (23 How. Pr., 285), it was expressly held, that no meeting of the corporators or any action by them was necessary to authorize the trustees to make an application to the court for the sale of the real estate of. the corporation, but that the court acquired jurisdiction upon the petition of the trustees in the absence of any other action by the corporators. A like opinion was given by Mr. Justice Habbis, in the Matter of the Second Baptist Society in Canaan (20 How. Pr., 324), although the point was not involved in the case. Those conversant with the disposition of these applications by the court, are aware that, in some cases, the petition contains a statement that the application is made pursuant to a resolution passed by a majority of the corporators at a meeting held for the consideration of the subject, and in other cases no such recital is contained. And in neither case is proof taken, or any determination of the question whether the application for the sale- is approved by the majority of the corporators, unless opposition is made by some of the corporators to the sale prayed for. A judgment by this court, that the title of the purchaser could be defeated by proof that there was no authority given by a meeting of the corporators to the trustees, or by.proof that a majority was in fact opposed to the sale, would be' destructive to many titles acquired'by purchasers in good faith, at such sales, and create doubt and uncertainty as to all. In this case, proof was offered by the plaintiff that some statements of facts contained in the petition tending to show the expediency of the conveyance from the plaintiff to the defendant were untrue. This was rightly excluded. If the court acquired jurisdiction of the subject matter by the presentation of the petition, the order granted thereon was conclusive upon the plaintiff when acted upon, and the title of the defendant, in the absence of fraud or collusion on its part (of which there was no pretense), was perfect.

The only remaining question is whether the transaction between the plaintiff and defendant was a sale, within section 11 of the act. If it was, the defendant established a complete title, and the judgment in their favor should be affirmed. The petition of the plaintiff’s trustees in substancp stated that the plaintiff was the owner of the lots in question, and had erected a church edifice thereon, the whole costing one hundred and twenty-two thousand dollars. That their present indebtedness was seventy-three thousand dollars, sixty-one of which was secured by mortgages upon the property. That, from various causes stated in the petition, it was unable to pay its liabilities or meet the current expenses of the church. That the plaintiff and defendant (a religious corporation under the laws of the State), located in Oliver-street, which for some time had contemplated disposing of its property, and moving uptown, had formed a plan and made arrangements for uniting the two churches upon the following terms: that the plaintiff should convey all its property to the defendant, and that the members of the Madison Avenue Baptist Church were to become, and be, member's of the Oliver Street Baptist Church, and thereupon the regular services of the united churches were to be held in the house of worship owned by^ the plaintiff. That the trustees of the defendant were to resign, and a new election of trustees had by the united church and congregation. That, thereupon, the defendant was to take the corporate name of the plaintiff. That the real and personal property of both was to become liable for the indebtedness of both. That there was an agreement for the disposing of the pews in the edifice, after the union was consummated. That the plan of union had been agreed to by both corporate bodies. That the defendant owned pronerty over and above its indebtedness, of the value of from fifty to sixty-five thousand dollars, which,, upon the consummation of the union, would become applicable to the payment of the debts of the plaintiff, and that by the union the creditors of the plaintiff would obtain that amount of additional security for the payment of their debts. That the two churches had obtained subscriptions for about fifteen thousand dollars, to be applied to the payment of the floating indebtedness of each. Then follows a statement of a number of pew owners and pew holders, concurring in the application, and that the others favor it, —and that the rights of pew owners and holders will be protected. Upon this petition the court passed the order for the conveyance of the property by the plaintiff, to the defendant, in pursuance of which the deed was given. The stipulation executed by the trustees of the defendant to the plaintiff, at the time the deed was given, by which the defendant undertook to pay the debts of the plaintiff, does not affect the question, as it constituted no part- of the contract for the conveyance, and was not referred to in the petition upon which the order was based. The inquiry is whether the contemplated conveyance from the plaintiff to the defendant, upon the terms and consideration set out in the petition, would constitute a sale within the meaning of section 11 of the act. A sale, as defined by Blackstone (2 Com., 446), is “a transmutation of property from one man to another in consideration of some price or recompense in value”—by KENT (2 Com., 468), as “a contract for the transfer of property from one person to another, for a valuable consideration, and among the requisites to its validity is mentioned the price paid, or to be paid.” Bottviee, in his Law Dictionary (vol. 2, p. 493), defines-a saleas “an agreement by which one man gives a thing for a price in current money ”—that this differs from a barter or exchange in this, that in the latter, the price, instead of being paid in money, is paid in goods or merchandise, susceptible of a valuation. The term, as used in the statute, should be construed as defined by Blackstone (2 Com.). This would embrace every transfer for a valuable consideration, whether paid in cash or other property; in case it be payable in the latter, the property to be received should be specified in the petition, so as to enable the court to determine whether the proposed contract is judicious on the part of the corporation. Tested by this construction, the arrangement set out in the petition was in no sense a sale of the property, by the plaintiff to the defendant. There was no price whatever to be paid therefor—the plaintiff, as a corporation, was to derive no possible benefit as a consideration for the conveyance ; true, the members of the plaintiff’s church were to be received into and become members of the defendant’s church, and the plaintiff’s corporators were to become corporators of the defendant. This may be re garded as-a benefit conferred upon these classes as individuals, but can in no sense be so to the plaintiff, regarded as a corporation. Indeed, the arrangement could only be made effectual by the dissolution of the plaintiff; and this result it was the manifest purpose of the arrangement to effect. In Wheaton v. Gates (18 N. Y., 395), it was held by this court that the trustees of a religious corporation have no power to distribute its property among its individual members, or any class of them, and that an order for the sale of its real estate obtained upon a petition showing such to be the purpose of the sale, was without jurisdiction • and void, and that no title could be acquired by a purchaser at a sale in pursuance of such order. This necessarily determines that the consideration for the sale must enure to the corporation making it, as such, and not to the corporation as individuals. Whether the consideration be pecuniary, or, as in the present case, facilities for the enjoyment of religious worship, or of any other nature, can make no difference. The additional security to the creditors of the plaintiff under the arrangement, was not such a consideration to the plaintiff as to constitute the transaction a sale, if, indeed, it was any consideration whatever. Prom the petition, it appears that these creditors were abundantly secure, and there is no intimation of any desire on their part for any additional security. The conveyance to the defendant was not made upon a sale to Mm, by the plaintiff, pursuant to section 11 of the act, and the title of the defendant cannot be sustained upon that ground.

But it is insisted by the counsel for the defendant, that religious corporations had the same power at common law for conveying their real estate as other corporations, which they still retain, as regulated by section 11 of the act, requiring only the sanction of the court of the conveyance made. This is an important inquiry in the present case. If religious corporations, created under the act of 1784 (1 Greenl. Laws, ch. 18, p. 71), down to the ádoption of the present section 11, in 1806, possessed the power to alienate real estate, and the oMy restriction now existing arises from that section, it may well be that any conveyance made pursusuant to an order of the court, under section 11, would give a good title to the grantee. In the absence of any statute on the subject, there-can be no doubt that ecclesiastical corporations possessed this power (Mayor, &c., of Colchester v. Lowton, 1 Ves. & B., 226, 244; Dutch Church v. Mott, 7 Paige, 77, and authorities cited ; 2 Blacks. Com., 319; 2 Kent Com., 281), But several statutes were passed in the reign of Elizabeth, expressly taking this power from charitable corporations (2 Blacks. Com., 320, 321). The question is whether the restraining statutes were introduced into the colony of Hew York, and became operative as part of the common law of the colony. 2 Kent Com., 281, says: “We have not reenacted in Yew York' those enabling acts, but the better opinion of the construction of the statute for the incorporation of religious societies is, that no religious corporation can sell in fee any real estate, without the chancellor’s order.” In Bogardus v. Trinity Church (4 Paige, 178), the chancellor, speaking of the effect of the English statutes upon the law of the State, says : “ It is a natural presumption, and therefore is adopted as a rule of law, that upon a settlement of a new territory by a colony from another country, especially when the colonists continue subject to the same government, they carry with them the general laws of the mother country which are applicable to the situation of the colonists in the new territory ; which laws thus become the laws of the colony, until they are altered by common consent or legislative enactment.” He further says, that “the common law of the mother country, as modified by positive enactments, together with the statute laws which are in force at the time of the emigration of the colonists, become in fact the common law, rather than the common and statute law of the colony.” In De Ruyter v. Trustees of St. Peter’s Church (3 Barb. Ch., 119), the chancellor says: “Several statutes, however, were passed in the reign of Elizabeth, and one in the first year of her successor, restraining alienations of church property by religious corporations, and restricting the power of leasing the same for a longer pe-„ riod than twenty-one years, &c.” and adds, “these statutes, forming a part of the law of England, at the time of the settlement of this State by colonists from England under the charter of the Duke of York, were probably brought hither by these emigrants, and became a part of the laws of the colony, although they were not afterwards reenacted here.” See same case (3 N. Y. [3 Comst.], 238), also the Canal Apprs. v. People (17 Wend., 570, 584). The practice of religious , corporations desiring to sell real estate, of resorting to the legislature for special acts authorizing such sales, prevailing prior to the enactment of section 11 of the present act, shows that it was understood that these acts of Elizabeth had divested them of the power to alienate without the consent of the sovereign authority (Will. Eq. Jur., 734, 735). Section 11 was enacted to obviate the necessity of such applications to the legislature in cases of sales where, as we have seen, the consideration must enure to the benefit of the corporation, as such. In cases where it is desirable for these corporations to alienate real estate in "any other way or for any other purpose, application should still be made to the legislature for the necessary authority.

I have reluctantly arrived at the conclusion that the court had no power to make the order for the conveyance in the present case, and that therefore no title was thereby acquired by the defendant. The whole case shows that the plan of union originated in good faith, .was fairly and honorably negotiated and consummated, and, so far as can be seen, was eminently calculated to promote both the temporal and spiritual welfare of all concerned. But the security of the real estate of all religious corporations, requires a strict adherence to the statute. There is no danger to be apprehended from conveyances founded upon sales. In such cases the court can readily ascertain whether the consideration is adequate and the proposed investment judicious. Power over such transfers may safely be exercised by the court. This is all the legislature has delegated to the court. In all other cases, the application must be made to the legislature.

No questions arise upon this appeal, as to the equitable rights of the defendant, arising out of the mortgages purchased by it, upon the property, or the debts of the plaintiff which it has paid. There is no finding of fact enabling the court to consider these questions. The court at the trial held that the defendant acquired title under the deed to it from the plaintiff’s trustees. This was error. The judgment appealed from must be reversed, and a new trial ordered, costs to abide the event.

Judgment reversed and a new trial ordered, costs to abide the event.