Case Title: In Re Estate of Bauer

Citation: 192 Kan. 538, 390 P.2d 16

Docket Number: 43,473

State: kansas

Court: Kansas Supreme Court

Date: 1964-03-07T00:00:00Z

Document:
192 Kan. 538 (1964)
390 P.2d 16
In the Matter of the Estate of Elmer Fred Bauer, deceased.
(MARJORIE CARTER, et al., Appellants,
v.
STERLING LODGE No. 171, A.F. & A.M., Appellee.)
No. 43,473

Supreme Court of Kansas.
Opinion filed March 7, 1964.
Edward Wahl, of Lyons, argued the cause, and Bronce Jackson, of Lyons, was with him on the briefs for appellants.
Arthur C. Hodgson, of Lyons, argued the cause and was on the briefs for appellee.
The opinion of the court was delivered by
FATZER, J.:
This appeal again presents the question whether a Masonic lodge has the capacity to take real property devised to it by will. The facts are not in dispute, and those pertinent are briefly summarized: Elmer Fred Bauer, an elderly unmarried Rice County farmer and landowner, died on September 19, 1960, leaving a last will and testament by which he devised the remainder interest in 160 acres of farm land in Rice County to the Sterling Masonic Lodge No. 171 A.F. & A.M. of Sterling, Kansas. A life estate in the real property was devised to a friend and neighbor, Glen H. Warnock, who died on May 28, 1962. At the time of final settlement, the heirs at law of the decedent contended that the lodge *539 was incapable to receive a devise of real property. The probate court found against the heirs at law, and on appeal the district court upheld the decedent's will and the specific devise to the lodge. The heirs at law have appealed from that judgment.
At the trial in the district court, counsel for the appellants stated there was no oral testimony to be adduced on their behalf. Evidence was presented on behalf of the lodge, and the court, after hearing the evidence, stated:
In harmony with its statement and findings, the district court entered judgment that the lodge had capacity to take the real property devised by the decedent's will and that it owned the same "without restriction as to its use."
The appellants contend that the devise of real property to the lodge is of no force and effect for the reason that G.S. 1949, 17-1703 prohibits the lodge from taking the real property for any purpose, and that since there was no residuary clause, the device lapsed and the property descended to the heirs at law.
The appellees contend that the devise of real property to the Sterling lodge vested title in the lodge subject to the life estate of Glen H. Warnock and that upon his death, it owns the property without any restriction or limitation as to its use.
The Sterling lodge was incorporated October 5, 1885, and its Charter was filed in the office of the secretary of state on that date. It was organized pursuant to Compiled Laws of Kansas, 1885, Chapter 23, Article 14, Section 122, the equivalent of G.S. 1949, 17-1701. The statute was first enacted in 1866 (Laws of 1866, *540 Ch. 57, Sec. 43), and was a part of the general law prescribing the powers and duties of corporations. (G.S. 1868, Ch. 23, Art. XIV, Sec. 122.) Generally speaking, the act conferred upon any religious society, literary, charitable or benevolent associations, or any grand or subordinate lodge of Free and Accepted Masons or of the Independent Order of the Odd Fellows, with the consent of a majority of its members, to become bodies corporate, and when so organized, it shall have all the powers and privileges and be subject to all the restrictions in the act contained. The act was later amended to include other specific named fraternal organizations, or "any other secret benevolent association or organization."
When the Sterling lodge was incorporated, G.S. 1949, 17-1703 or its equivalent was not then a part of our statutory law. The section was added in 1899 (Laws of 1899, Ch. 164, Sec. 1), and the part here pertinent reads:
Appellants' entire argument that the Sterling lodge lacks capacity to take the real property devised is based on the holding in Kennett v. Kidd, 87 Kan. 652, 125 Pac. 36. That case involved a decedent's will devising property to a local camp of Modern Woodmen, a fraternal insurance company whose legal source of income was limited to dues, premiums and assessments. There, the decedent owned a store at Milford, Kansas, and about a year before his death a stroke of paralysis greatly disabled him so that he was unable to attend the store without help. He owned considerable property and life insurance. After the decedent became partially paralyzed, a membership was applied for in a local Woodmen camp, and certain officers, upon the occasion of a meeting, went to the store where the decedent was initiated into the order as a social member, but he never attended any of its meetings. He was about 80 years of age, very feeble, and possessed none of the qualifications which would naturally lead to his selection as a social member. A member of the organization called upon the decedent and he executed a will devising the bulk of his estate to the local order to be used as the camp saw fit. In an action by an heir at law it was held that the local camp could not take and *541 hold the property given to it by the will, and upon the consideration of the equivalent of G.S. 1949, 17-1703, the court said:
A rehearing was granted to enable the parties to fully present their views, and in the opinion on the rehearing (Kennett v. Kidd, 89 Kan. 4, 130 Pac. 691) the court said:
As indicated in its opinion on rehearing, the court carefully distinguished fraternal insurance companies such as the Modern Woodmen from charitable and benevolent organizations such as a Masonic lodge which the court in the instant case found to be in part charitable and in part fraternal and benevolent. The Kennett case limits its application to the organization it was dealing with  a fraternal mutual benefit society authorized to issue certificates of insurance to its members. (Clark v. Watkins, 130 Kan. 549, 287 Pac. 244.) Such organizations were then and are today controlled under the insurance sections of the statutes. (G.S. 1949, 40-701, 40-704 and 40-705.) The activities and operations of insurance *542 companies are much more closely controlled than ordinary corporations.
In 1930, in Clark v. Watkins, supra, this court considered whether a Masonic lodge is capable of becoming the beneficiary under a decedent's will, and it was held that Kennett v. Kidd, 87 Kan. 652, 125 Pac. 36, was not authority that the Masonic lodge was incapable of becoming a legal recipient of a testamentary gift. In that case the question was raised by a demurrer to a petition which alleged that the decedent executed a will and died in 1927, leaving all of his property to Cable lodge No. 299 of the Ancient Free and Accepted Masons located at Arlington, Kansas, a charitable and benevolent association. There, as here, the appellant heirs at law contended that the lodge lacked capacity to take the property devised. Speaking through Mr. Chief Justice Johnston, the court denied the claim, and it was held:
In the opinion it was said:
..............
Since the Masonic lodge, the beneficiary named in the will, was a charitable organization and capable of receiving the gift for charitable uses, this court upheld the district court's ruling sustaining a demurrer to the petition of the plaintiffs heirs at law. And so here. The opinion on rehearing in the Kennett case and the opinion in the Clark case expressly state that Kennett v. Kidd, 87 Kan. 652, 125 Pac. 36, is not an authority that the Masonic lodge is incapable of receiving the gift made by the testator. However, in the Clark case, the decedent's will, as here, made outright testamentary gifts to the Arlington lodge and it was held that since the Masonic organization is a recognized institution of charity and benevolence, it was capable of becoming a devisee under a will and of devoting the property received to charitable uses.
As previously indicated, the district court found that the Sterling lodge was in part charitable and in part a fraternal and benevolent organization. An organization may be charitable for one purpose and not charitable for another, that is, it may be noncharitable for taxation purposes (Manhattan Masonic Temple Ass'n v. Rhodes, 132 Kan. 646, 296 Pac. 734), but benevolent and charitable for other purposes. (Masonic Home v. Sedgwick County, 81 Kan. 859, 106 Pac. 1082; Robinson v. Hammel, 154 Kan. 654, 658, 659, 121 P. *544 2d 200.) In McMillen v. Summunduwot Lodge, 143 Kan. 502, 54 P.2d 985, this court held that a subordinate lodge could have existence as a fraternal organization by the authority of the grand lodge of the order without obtaining a charter from the state, but if it incorporated pursuant to G.S. 1949, 17-1701, it could exercise the powers and privileges as a corporation as therein provided and that when incorporated, a subordinate lodge was a charitable or benevolent organization with statutory and charter powers. The fact that the Sterling lodge is not authorized by the provisions of its Charter to accept a testamentary gift or devise does not bar it from accepting such a gift and devoting it to charitable uses. (Barger v. French, 122 Kan. 607, 610, 611, 253 Pac. 230.) Compare McMillen v. Summunduwot Lodge, supra, where the provisions of the charter of the lodge authorized it to contract and be contracted with; to sue and be sued in all the courts of the state, and to lease, purchase, hold, sell and convey real or personal property, or acquire the same by donation or bequest.
We think the Clark case controls the decision in this case, and we hold that the testamentary gift to the Sterling lodge is required to be devoted to charitable uses. However, in view of the express provision of G.S. 1949, 17-1703, the lodge would be authorized to sell the property devised and use the proceeds in the erection and maintenance of a suitable building as may be necessary for adequate accommodations for holding its meetings and transacting its business, and that such building may be made large enough so that a portion of it may be rented to thus furnish income to the lodge.
Accordingly, we affirm the district court's judgment sustaining the will and the testamentary gift to the lodge, but modify the judgment to the extent that the property devised be devoted to charitable uses, or, if the property be sold, the proceeds be used for charitable purposes or to provide a suitable building to accomodate its meetings and transact its business.
It is so ordered.
FONTRON, J., not participating.
ROBB, J., (concurring specially):
I have no difficulty in concurring in the majority opinion so far as it goes. However, under G.S. 1949, 17-1701, the legislature clearly and unequivocally made it permissive for certain religious, charitable, and benevolent associations to incorporate. Included therein is any grand or subordinate *545 lodge of Free and Accepted Masons. Further pinpointing these lodges as such is the fact they are included along with "colleges, universities, academies, or seminaries." In my opinion G.S. 1949, 17-1703 gives them the authority to deal with their real estate in the same manner as other corporations and this is emphasized to me by the proviso: "That any such building or buildings as are provided for herein may be used in part for other purposes."
I believe the testator intended the lodge to have this property in fee simple absolute and I cannot see that it does violence to the statutes. To restrict it as the majority opinion does partially tends to defeat the testator's intent.
SCHROEDER, J., dissenting:
In my opinion the Sterling Masonic Lodge No. 171, A.F. & A.M., of Sterling, Kansas, a subordinate lodge under the control and jurisdiction of the Kansas Grand Lodge, is incapable of taking and holding the absolute devise of the farm land in question.
The applicable provisions of G.S. 1949, 17-1703 have been construed by the court in Kennett v. Kidd, 87 Kan. 652, 125 Pac. 36, and the appellee concedes this statute applies to it in the instant case. It was expressly enacted for "religious, charitable and other organizations." The significant language of the court on rehearing in Kennett v. Kidd, 89 Kan. 4, 130 Pac. 691, is not the emphasized portion of the quoted paragraph in the majority opinion, which has reference to grand or superior organizations, but the second sentence of that paragraph which reads:
Kennett v. Kidd, supra, has never been overruled or modified.
Clark v. Watkins, 130 Kan. 549, 287 Pac. 244, did not have the effect of overruling Kennett v. Kidd, supra, but was confined by the court to the language of a petition, which described the lodge as "a charitable and benevolent organization." The concluding paragraph of the opinion reads:
This court is committed to the proposition that once a devise or bequest is determined to constitute a charitable trust, courts look with liberality on the instrument creating it for the purpose of carrying out the intention of the donor. Technical rules of construction, which have often prevented conveyances or bequests from taking effect, are disregarded. (In re Estate of Freshour, 185 Kan. 434, 345 P.2d 689, 81 A.L.R.2d 806.)
It would appear from an examination of the language in 17-1703, supra, that if a subordinate lodge were permitted to own and hold real estate for any purpose, there would be no reason for the expression "such real estate, including such suitable building or buildings as may be necessary to provide suitable accommodations for the holding of its meetings and transacting of its business" in the statute.
The charter of the Sterling lodge, dated September 30, 1885, under paragraph Second, sets forth its purposes as follows:
It is readily apparent the charter does not authorize the Sterling lodge to conduct charitable activities. Furthermore, the evidence presented in this case does not support the finding of the trial court that the Sterling lodge is a charitable organization.
Prior to the filing of this lawsuit, and prior to the expiration of the life estate involving the quarter section of land in controversy, the members of the Sterling lodge received a letter from its officers. The letter reads:
Mr. Marrs, a Mason for 52 years, and a member of the Sterling lodge for 30 years, also one of the officers of Sterling lodge who signed the foregoing letter, testified:
"A. Not that I know of."
Actually, Sterling lodge wasn't even charitable to its own members or their families, as shown by further testimony:
The portion of the Bauer will in issue on this appeal reads:
It is readily apparent the decedent intended by the above devise to give the Sterling lodge a direct devise of the land in question without any conditions being imposed in the nature of a trust for charitable purposes.
What the court is doing by its decision in this case is to impress a trust upon the above described property contrary to the intention of the testator, as expressed in his will.
It is essential to the creation of a trust that there be a separation of the legal estate from the beneficial enjoyment, and therefore a public charitable trust cannot exist where property is given absolutely to an organization.
The third paragraph of the Bauer will devises 160 acres of farm land worth $30,000 to the Sterling Masonic Lodge. It was the intention of the testator to make such devise absolute  an unrestricted gift to that lodge. The devise in question is not a charitable devise. The court by its decision is rewriting the will of Bauer.
Under 17-1703, supra, which provides for "religious, charitable and other organizations," subordinate lodges under the control of superior or grand lodges, whether incorporated or unincorporated, can take and own only so much real estate, and no more, than is necessary to provide a suitable building or buildings as accommodations for the holding of its meetings and the transacting of its business, as such statute was construed in Kennett v. Kidd, supra. It *548 cannot take an absolute, unrestricted gift of real estate under a will which would circumvent the express terms of that statute.
For the reasons heretofore stated, it is respectfully submitted the judgment of the lower court should be reversed.
PRICE, J., joins in the foregoing dissent.