Title: Lutheran Free Ch. v. Lutheran Free Ch.(not Merged)

State: minnesota

Issuer: Minnesota Supreme Court

Document:

141 N.W.2d 827 (1966) The LUTHERAN FREE CHURCH, et al, Respondents, v. The LUTHERAN FREE CHURCH (NOT MERGED), et al, Appellants. Nos. 39574, 39663. Supreme Court of Minnesota. March 18, 1966. *829 Wright, Storlie & Wanglie, Minneapolis, for appellants. Faegre & Benson, Armin M. Johnson, and Gordon G. Busdicker, Minneapolis, for respondents. *830 THOMAS GALLAGHER, Justice. On February 24, 1964, in an action in the District Court of Roseau County, instituted by The Lutheran Free Church, The Board of Administration of The Lutheran Free Church, and The American Lutheran Church against The Lutheran Free Church (not merged) and Richard Snipstead, its secretary, the court ordered judgment permanently enjoining the defendants and their representatives and employees from using either the name "The Lutheran Free Church (not merged)" or the name "The Lutheran Free Church" or any name similar thereto; or from initiating or participating in any action under which any group shall seek to make use of either of said names or any name similar thereto. The litigation arose out of certain procedures taken under the Fundamental Principles and Rules for Work of The Lutheran Free Church. (The Rules for Work in effect constitute the constitution and bylaws of this church.) Thereunder more than two-thirds of the congregations of The Lutheran Free Church voted to and did consummate a merger between it and The American Lutheran Church. Thereafter plaintiffs instituted this action asserting their right to use the name "The Lutheran Free Church" and prayed for an injunction enjoining defendants from any further use of that or any similar name, including the name "The Lutheran Free Church (not merged)." The findings, made after a lengthy hearing, included the following: In its conclusions the court determined that the merger procedures described were valid and in compliance with the powers of the Annual Conference of The Lutheran Free Church and did in effect result in a valid merger and union between The Lutheran Free Church and The American Lutheran Church, which presently in all respects stands as lawful successor to The Lutheran Free Church and to all of its rights including the right to use the name The Lutheran Free Church as against all rival organizations such as defendants. The Fundamental Principles and Rules for Work of The Lutheran Free Church as originally adopted and amended at its Annual Conferences, which are referred to in the findings above, include the following: The present appeals are from an order denying the motion of the defendants for amended findings or for a new trial and from the judgment. The motion in effect would have required a determination that the merger procedures adopted by plaintiff The Lutheran Free Church and plaintiff The American Lutheran Church were valid and lawful as to those congregations of *833 The Lutheran Free Church which ratified or voted in favor of them, but were without prejudice to the rights of those individual congregations which had voted against them or which had refrained from any affirmative action with respect thereto. Accordingly it would have been necessary to find that the latter continued to constitute The Lutheran Free Church as originally organized with the right to use such name and that the congregations ratifying such merger had thereby ceased to be members of The Lutheran Free Church and in effect had become members of The American Lutheran Church, losing any right individually or collectively to be known as The Lutheran Free Church. The motion sought judgment that under the merger proceedings a schism had occurred within The Lutheran Free Church by the withdrawal of a number of its congregations, which in effect constituted a voluntary repudiation on their part of the Fundamental Principles and Rules for Work of The Lutheran Free Church. On appeal defendants set forth the questions presented substantially as follows: 1. It is clear from the various documents submitted in evidence, including the Revised Rules for Work of The Lutheran Free Church, that the name "The Lutheran Free Church" was the name selected not by any particular congregation of this church but rather by an association comprised of all its congregations adhering to the beliefs set forth therein. Thus, section B.1 of the Rules for Work provides that the name of this association shall be The Lutheran Free Church. Section B.4 provides that The Lutheran Free Church shall consist of congregations which in their constitutions unreservedly subscribe to the ancient ecumenical symbols, Luther's Small Catechism, and the Unaltered Augsburg Confession, and which by congregational action accept the Principles and Rules for Work of The Lutheran Free Church. Section B.5 specifically recognizes that the Annual Conference of The Lutheran Free Church shall recommend activities to the congregations of such church and section B.9 provides for the Board of Administration which in general is "to have charge of the Lutheran Free Church treasury." Under section B.15 specific provision is made for amendment to the Rules for Work only by "[a] motion * * * in writing to the Annual Conference * * * [which] shall be voted upon at the following Annual Conference. For the adoption of the motion a two-thirds majority of the votes cast is required." From the foregoing it cannot be doubted that long prior to the present merger proceedings the various congregations of The Lutheran Free Church had adopted rules and procedures whereby the right to the use of the name The Lutheran Free Church became vested in an association comprised of all such congregations as reported by its Annual Conference. 2. Here defendants are comprised of some of the congregations of The Lutheran Free Church which declined to merge with The American Lutheran Church; certain *834 individuals not members of any member congregation but formerly members of a congregation; other individuals withdrawn from The American Lutheran Church; and certain congregations and individuals not affiliated with The Lutheran Free Church. They have formed an association and adopted organizational rules similar to those of The Lutheran Free Church, although the exact nature of the new association and its precise doctrinal basis are not fully disclosed by the evidence. The new association requires adherence to the ancient ecumenical symbols, Luther's Small Catechism, and the Unaltered Augsburg Confession, but also appears to require adherence to the belief that each word of the Bible must be accepted as literally true. As indicated, prior to this litigation, this association was using the name The Lutheran Free Church (not merged). These factors and the evidence described require affirmance of the trial court's findings and conclusions. It is well established that a new association such as defendants' cannot adopt a name so similar in terms to that of an existing association that its use may result in confusion. 18 C.J.S., Corporations, § 167; 18 Am.Jr. (2d) Corporations, § 146; 4 Dunnell, Dig. (3 ed.) § 1971; Purcell v. Summers (4 Cir.) 145 F.2d 979; Annotation, 27 A.L.R.2d 954. Nor does the fact that an older organization is not presently using a name under which it has done business and to which goodwill has become attached give to a new association the right to appropriate to itself such name and the goodwill attached, which rightfully belong to the former. Referring to the principle that such a procedure would imply misrepresentation, the court in Purcell v. Summers (4 Cir.) 145 F.2d 979, 986, stated: 3. Further, in the instant case there can be no question that under the Rules for Work of The Lutheran Free Church a valid merger with The American Lutheran Church was consummated. The merger procedures adopted at the Annual Conference of The Lutheran Free Church were carried out with exactitude under the resolutions adopted at the Annual Conferences and were in full accord with the Rules for Work of such church. Thereunder it seems clear that the property of The Lutheran Free Church and the right to use such name became vested in the merged organization. This fact, coupled with the absence of any right on the part of defendants to adopt and assume this name, would of itself compel affirmance of the trial court's determination. 4. Defendants, however, also base their contention that a valid merger did not occur on the ground that the merger called for a deviation in doctrine in that the majority of congregations have thereby imposed their will upon a minority of such congregations in violation of the guiding principles of The Lutheran Free Church in so far as they relate to the independence of member congregations. It is their contention that under the Rules for Work unanimous congregational approval of the merger was required for otherwise the result would be a domination of the minority by a majority of the congregations. That this contention is inconsistent with the Rules for Work of The Lutheran Free Church is manifested by provisions which specifically provide that Rules for Work may be amended at the Annual Conference *835 by a two-thirds majority of the votes cast. In adopting this provision, the various congregations must have recognized that thereunder a majority of the congregations possessed the right to do the things done here by a vote of two-thirds of the congregations. Further, the merger procedures did not in any way detract from the freedom of individual congregations not wishing to acquiesce. The merger agreement contains express provisions guaranteeing the respective congregations complete freedom to withdraw from The American Lutheran Church and to assert their freedom and independence by refusing participation in the programs of the merged church. This is entirely consistent with the independence guaranteed by the Rules for Work of The Lutheran Free Church. 5. Defendants further contend that as a result of the merger there will be a doctrinal difference between the two churches and that hence a schism has occurred authorizing them to continue the use of the name here involved. It is their contention that this deviation in doctrinal principles arises from the fact that while The Lutheran Free Church requires a literal interpretation of all books of the Bible, The American Lutheran Church permits its members to place a symbolic interpretation thereon. In opposition to this contention, plaintiffs submitted the testimony of Dr. John Stensvaag, former president of The Lutheran Free Church, and Dr. F. A. Schiotz, president of The American Lutheran Church, which in substance was to the effect that whether all parts of the Bible should be interpreted literally or symbolically is not a matter of doctrine under the Rules for Work of either The Lutheran Free Church or The American Lutheran Church. Reverend John Strand, president of the defendant association, testified for defendants on this issue. In substance his testimony was that a literal interpretation of all parts of the Bible is required by "The Minneapolis Thesis" (to which The Lutheran Free Church subscribes) in which it is provided: and which would constitute a doctrinal principle under which a literal interpretation of the Bible is required of members of The Lutheran Free Church. Assuming that this testimony would support a finding that a literal interpretation of the Bible constitutes a doctrinal principle of The Lutheran Free Church, it is significant that the quoted portion of the "Minneapolis Thesis" has been incorporated in the constitution of The American Lutheran Church as part of the latter's statement of doctrine. It follows that if defendants' construction of the above quotation is correct, then the majority of the congregations which are now part of The American Lutheran Church adhere to the doctrinal principle that there be a literal interpretation of all parts of the Bible. Therefore they are in full accord with defendants' position that such a belief must be a fundamental doctrine of The Lutheran Free Church. But as the trial court found and as the evidence clearly indicates Based upon such evidence and legal principles applicable, we conclude that there was nothing in the actions of the majority of the congregations of The Lutheran Free Church in merging with The American Lutheran Church that constituted a schism or a deviation from doctrinal beliefs either with respect to the Rules for Work or the fundamental doctrinal beliefs of The Lutheran Free Church. See, Lindstrom v. Tell, 131 Minn. 203, 154 N.W. 969; Mattson v. Saastamoinen, 168 Minn. 178, 209 N.W. 648. 6. It would follow that plaintiffs having strictly complied with the Rules for Work of The Lutheran Free Church in merging with The American Lutheran Church; and in so doing not having been shown to have deviated from or altered the fundamental doctrine beliefs of The Lutheran Free Church or otherwise imposed their will upon the minority of congregations choosing not to join with them in the merger proceedings, the order and judgment appealed from must be affirmed. Affirmed.