Case Name: Linn & als. Trustees, v. Carson's Adm'r and als.
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1879-09
Citations: 32 Gratt. 170
Docket Number: 
Parties: *Linn & als. Trustees, v. Carson’s Adm’r and als.
Judges: 
Reporter: Virginia Reports
Volume: 73
Pages: 69–74

Head Matter:
*Linn & als. Trustees, v. Carson’s Adm’r and als.
September Term, 1879,
Staunton.
1. Notes — Effect of Void Judgment — Though a judgment upon a note rendered by a court not having jurisdiction of the case is void, the note is still a valid security.
2. Equity — Anciliiary Bills. — An amended hill, which is not repugnant to the original hill, presenting no new case, and is only anciliiary to the original bill in presenting the case made by It more fully and accurately with additional averments, to the end that there may be a decision on the merits, and complete justice done between the parties, is not demurrable as inconsistent with the original bill.
3. Church Property — Liens. —The act, ch. 76, §§ 12, 13, Code of 1873, does not prohibit the sale of church property for the payment of debts incurred in the purchase thereof or Building thereon, or to reimburse a party who has advanced money, or made himself liable for any such debts at the Instance of the trustees of the church, and the discipline of the church authorizing parties so advancing money on account of such property to raise said sums of money by mortgage or sale, a court of equity will, at the suit of a party so liable or so advancing money, subject the lot and buildings to sale for the purpose of satisfying such claim.
In September, 1870, Joseph S, Carson instituted a suit in equity in the circuit court of Frederick county against John Linn and others, trustees of the Methodist Episcopal church of Winchester, Silas. Billings, Robert Barr and others. In his bill he stated that the Methodist Episcopal church of Winchester owned in 1858 a large building and lot, it being then the place of worship of the congregation at that time, and that, they sold the samé, on the 1st of January,. 1859, to Sidney P. York and George La *Monte, taking from them, as evidence of a part of the unpaid purchase money, a bond for $1,864.28, payable in nine months, with interest, and secured by a deed of trust upon the property so sold.
After the sale of this property, the said congregation, through their proper trustees, being desirous of building a house of worship elsewhere, procured the plaintiff’s signature to two negotiable notes — the first for $1,450.00, and the second for $900; and these notes were discounted at the Bank of the Valley, at Winchester, and the proceeds thereof were applied to the use of said church in the erection of their new building, situated at the corner of Market and Cork streets, in said town. At the time referred to, plaintiff was one of the trustees and treasurer of the church, and signed the notes as treasurer. These notes were renewed from time to time, until, on the 4th of April, 1862, the note for $900 was protested, and on the 25th of the same month the note for $1,450 was also protested. Since the close of the war the assets of the bank have gone into the hands of a receiver, in a chancery cause instituted by the Merchants National Bank, of Baltimore, in the circuit court of the United States for thd district of Virginia, and judgments have been rendered in said court against the plaintiff for the amount of- said notes, with interest from the day they were protested, and costs. These judgments are now liens upon plaintiff’s land, and execution may issue at any moment upon the same to be levied of his personal -estate.
Plaintiff further says that when he signed the said notes the trustees of the church authorized him to retain, as his indemnity, the bond of York and La Monte; that he had retained the same, and then filed it with his bill; that a pale of the property under the trust had been made by the trustees to Silas Billings. and the trustees have delivered to John Linn a large portion of the bonds received for the deferred payments; that Linn is one of the present trustees *of the church, and has undertaken to receive and control these funds as agent of the trustees, although the funds should have been paid over to the plaintiff to be applied to the discharge of said two notes; and that Linn had transferred $500 of these funds to one Robert Barr, to pay some debt of the church to him. He prays for an injunction against Linn and the other trustees, to restrain them from parting with said funds, and Billings from paying over any of the purchase money; that the fund may be _ applied to satisfy the said judgments, and if it is not sufficient for that purpose, that the property of said church may be subjected to the payment of said debts, and for general relief. The injunction was granted.
The cause came on to be heard on the 24th of November, 1870, upon the bill taken for confessed as to all the defendants except Barton, the trustee who sold under the York and La Monte deed of trust, who filed his answer, and the court decreed that Linn and the other trustees and also the defendant Barr should deliver to the general receiver of the court all. the bonds referred to in the plaintiff’s bill or in the answer of the defendant Barton, whi-ch may be in their possession or under their control, and the said general receiver was directed to collect the same and lend it out, and the defendant Billings was directed to pay the amount of said bonds to the said receiver as the same shall become due.
And a commissioner was directed to settle-the account of Barton, acting trustee in the deed of trust, aforesaid, and that the commissioner should report the total amount of the debt for which the plaintiff is bound, and which was contracted for and on behalf of said Methodist Episcopal church, and how much thereof will still remain unsatisfied after crediting thereon the balance of the fund which shall be collected by the general receiver from the defendant Billings. And if there should be any of said debt still unsatisfied after such credit, then the commissioner was *further instructed to ascertain and report what personal and real estate is now held by said trustees of the said church, together with the gross and rental value thereof; and also any liens existing on the same..
The plaintiff. Joseph S. Carson, having died, in June, 1871, Lewis N. Huck, his administrator, filed an amended and supplemental bill in the cause. He sets out that in June, 1853, the Methodist Episcopal church in Winchester purchased a lot on.the corner of Cork and Market streets in said town; that a deed therefor was made to the trustees of said church, and a deed of trust executed thereon by the trustees to secure the deferred payments of the purchase money. Josephs. Carson, Abram Nulton and. five others named were the trustees, and Carson was the treasurer. That steps were taken at once to build a church on said lot; and the sums of money raised by subscription or otherwise not being adequate to meet the current expenses for labor and materials as the work advanced, said congregation, through said trustees, determined to borrow from the bank from time to time, as their necessities required, upon negotiable notes made and endorsed by said treasurer and differenr members of the board. The bill sets out the different notes made, which were increased from time to time until they amounted to the two notes mentioned by Carson in his bill, of $1,450 and $900.
The bill further states, that the said Methodist church, through said Nulton, trustee, on the 6th of May, 1854, purchased a house and lot fronting on Cork street, and immediately in rear of said church lot, now occupied by the sexton of said church, from D. W. Barton, special commissioner in a suit then pending in the county court of Frederick; said property was purchased at the price of $900; and in payment thereof the said church through said trustees assumed the payment of the bank debts due by the estates of John and Abraham Miller, deceased, viz: one for $600 due at the office of *discount and deposit of the Farmers Bank at Winchester, and the other for $300 due at the Bank of the Valley; the said note for $600 drawn by said Abraham Nulton, trustee, and endorsed by said Joseph S. Carson, and S. R. Atwell, was renewed from time to time until July 3d, 1862, when it was protested; and said note for $300 drawn by said Nulton, trustee, and endorsed by said Carson, was also renewed from time to time until the 20th of March, 1862, when it was protested.
He refers to the suit mentioned in the original bill as pending in the United States court, and states that judgments were rendered in said court against Carson upon the three notes of $1,450, $900 and $300. And he states that a judgment had been rendered in the county court of Frederick county against Nulton, the maker thereof, on the note for $600.
He states that the said church is farther indebted to said Carson for payments made by him at the instance of the trustees, which, on the 1st of January, 1859, amounted to $481.78, exclusive of interest; and this sum was afterwards increased by payments of discounts in bank on the aforesaid notes, and interest on other debts of said church, until it amounted to $959.13, exclusive of interest, a part of which was advanced to pay off the notes given by the trustees on the 18th of June, 1853, for the purchase of the lot at the corner of Cork and Market streets.
The prayer of the bill is that an account may be taken of' the amount, principal and interest, due to the said J. S. Carson, treasurer, for money advanced by him to said church, and that said judgments, as well as the money advanced, may be paid off and discharged out of funds belonging to said church, if sufficient; and if not sufficient, that the real property belonging to said church be subjected to such payment, and for general relief.
At the July term of the court, Linn and the other trustees of the church demurred to the bills, and also answered. *They deny all the allegations in the hill out and out, and then proceed to notice the allegations separately. They also deny the allegations of the amended bill.
At the same term of the court, the court made a decree, directing the commissioner to execute the order of reference made at the November term, 1870, and in addition to the subjects therein referred to him, he is directed to state, settle and adjust the accounts of J. S. Carson as treasurer of the Methodist Episcopal church of Winchester, ascertaining and reporting what amount, if any, is due from said church to said Carson, and also the total amount of the debts, if any, for which he is bound and which were contracted on behalf of said church.
Robert Barr having died, his administrator hied an answer, in which he says that his decedent was the builder of the Methodist Episcopal church on Market street, and that the obligation of Silas Billings, which was transferred to him by John Linn, was so transferred and received by him in payment for work and labor performed by him on said property, under and by virtue of a previous engagement, and by virtue of an act of assembly approved the 5th of January, 1854, whereby the proceeds of sale of the property purchased by Billings was directed to be applied to the payment of expenses incurred in building the new church on Market streel.
In June, 1873, the commissioner returned his report. He reported the debts for which Carson was bound, and which were contracted for on behalf of the Methodist Episcopal church in Winchester, at $5,525.83. The fund collected by the general receiver from Billings he reports at $1,463.70; and deducting from it $250 for payment of the costs of the suit, leaves $1,213.75 to be applied to the payment of the debts for which the estate of Carson is bound; which will leave $4,312.04 of those debts unsatisfie'd.
The amount of the Billings’ bonds transferred by Linn *to Barr and Miller, was $1,648.81. The property held by ihe trustees for the church, all of which was real estate, was valued at $12,000, and the annual rental at $200.
The defendants excepted to the report so far as it found any debt due by the church. The plaintiff excepted to it so far as it stated that the amount reported as due from the said church to said Joseph S. Carson, deceased, treasurer, includes in any form the two protested negotiable notes, one for $300 and the other for $600. A. Nulton, trustee, drawer and Joseph S. Carson endorser in each case; said error being disclosed on the face of the report.
The commissioner afterwards made a supplemental statement, which, after allowing some payments which had been made to Carson, and bringing the account down to December 1st, 1875, makes the amqunt of Carson’s claims $5,862.48. The York fund, Billings’ purchase, bond held by Barr, $80S. with interest $275.39; amount, $1,083.39. Bond held by Miller, $571, interest, $194.61; amount, $765. Amount in hands of receiver, principal and interest, $1,599.70. After deducting $250 for costs, leaves for distribution between Carson’s and Barr’s estate, $3,198.70. To Carson’s estate, $2,696.74; to Barr’s estate, $498.36. The balance due Carson after this credit, $3,165.74, and the balance due Barr. $585.03. The amount due on the purchase of the sexton’s house; the total of the two notes of $600 and $300 with interest to December 1st, 1875, $1,634.06.
The cause came on to be heard on the 33d day of November, 1875, when the court overruled the demurrer of the defendant trustees to the original and amended bills, and sustained the plaintiff’s exception to the commissioners’ report; but that the said report, no further exceptions having been filed thereto, be approved and confirmed, except so far as it is affected by the allowance of said exception, *and so far as it has been modified by the supplemental statement of the commissioner, which, not being excepted to, is also approved and confirmed. And it was decreed that Barr’s administrator and Miller’s administrator should deliver tb the general receiver of this court the said unpaid bonds of Silas Billings now held by them respectively, which the said receiver was directed to collect, and of the proceeds thereof and the moneys already collected of Billings, after reserving $353.60 for costs, he should make .a rateable distribution between the said several claims due by the said church to the estates of Carson and Barr respectively, according to the scheme of distribution in the said supplemental statement, by paying to the plaintiff Huck, administrator of Carson, $3,696.74, and to Barr’s administrator the sum of $498.36, leaving due to Carson’s estate as of the 1st of December, 1875, $3,165.44, and to Barr’s estate as of the same date. $585.03. And holding that the building and lot of the said church at the corner of Cork and Market streets is, primarily liable to pay the said balances, but subject to the lien of the debt due to Miller’s administrator due by the bond of said Nulton and secured by a deed of trust, amounting to $765.61, with interest on $571 from December 1st, 1875, it was decreed that unless the trustees of said church, or some one for them or for the said church, should pay the said sums of money with interest to Miller’s executor, Carson’s administrator and Barr’s administrator, within ninety days from the rising of the court at its then present term, four commissioners named, after advertising, &c., should sell the said church building and lot at public auction on the terms, &c.
And it appearing to the court that the sexton’s house and lot is primarily liable to the payment of the two negotiable notes of $600 and $300, of which Nulton was the maker and Carson the'endorser, for the indemnity of the estate of Carson and of Nulton, it was further decreed *that unless the said trustees or some one for them or for the said church, shall pay the said sum of J>1,634.66, with interest on $903.30 from December 1st, 1875, as appears by said supplemental statement, to the assignees, of these notes within ninety days from the rising of the court, the same commissioners, after advertising, &c.. should proceed to sell in the same way and upon the same terms the said sexton’s house and lot, &c. From this decree Linn and the other trustees of the church applied for an appeal; which was allowed.
Holmes Conrad, for the appellants.
Byrd & Huck, Wm. L. Clark and R. Parker, for the appellees.
Church Property — Liens.—The principal case was cited, and Its holding that trustees of a church building, for the use of a congregation of members of the Methodist church, making advances for re pairing the building have a lien, under the discipline of the church, ou the building for such advances, which may be enforced in equity, was approved in Hoskinson et al., v. Pusey et al., 32 Gratt. 442. But compare Clark v. Oliver, 91 Va. 429.

Opinion:
ANDERSON, J.,
delivered the opinion of the court.
The objects of this suit were, first, to sell the sexton's house and lot to reimburse Carson for the purchase money thereof, which he had paid; second, to assert Carson's right to the application of the old church fund to the satisfaction of liabilities which he had incurred to raise money for the erection of the new church, and to effect the sale of said property to reimburse him for his advancements on the cost of its erection, and to relieve him from liabilities therefor, which the old church fund was inadequate to. The amount of his advances, and liabilities, is ascertained by the report of the master commissioner to be on the first of December, 1875, including interest, $5,863.48, to which report there being no exception, it was confirmed by the court below, and will be taken to be correct. It was excepted to by the defendants, but it appears from the certificate of the judge that the exception was afterwards withdrawn.
Robert W. Barr held the bond of the church, ascertained *by said commissioner's report to amount, with interest on the said 1st of December, 1875, to $1,083.39, the consideration of which was work and labor and materials furnished for the new church building. The court held that this debt was chargeable pro rata with Carson's on the old church fund, which had been raised» for the building of the new church. In that ruling of the court there was no error. After the application of the old church fund to these debts, the balance due Carson was $3,165.74, as of the 1st of December, 1875, and Barr, of the same date, $585.03, chargeable on the same property. Another bond was held by G. S. Miller, the consideration of which was purchase money for the lot on which the church was built, and which was secured by a deed of trust thereon, amounting on the said 1st of December, 1875, to $765.61. The court held that said debt was not chargeable on the old church fund, but was entitled to priority of satisfaction oyer Carson and Barr's debts, out of the proceeds of the sale of the new church and the lot on which it stood. We perceive no error in this ruling of the court, if the said property is subject to gale for the satisfaction of said debts. And the court decreed the sale of said property, to satisfy said debts, unless they were paid, with interest. &c., within ninety days from the rising of the court at its then present term.
The court also decreed the sale of the said sexton's house and lot, for the payment of the two protested notes, one for $600, and the other for $300; of each of which Abraham Nulton was the maker, and Joseph S. Carson endorser. The said house and lot were purchased by the trustees for the church, and the said Nulton and Carson as trustees made and endorsed said notes, which were discounted in bank and the proceeds applied by them, by agreement with the vendor, to the satisfaction of his notes in bank, which were .taken up by them and delivered to him in satisfaction of the purchase money of said sexton's *house and lot, for which no conveyance has yet been made by the vendor to the church, and if it had been made, it is hardly probable, could, under the limitations of the statute, have vested title in the church. The vendor retains the legal title, and he has received the purchase money. He is not entitled to both land and money. The church has paid nothing. And the trustees, who have paid the purchase money, have a right to be reimbursed by the sale of the house and lot. There is no error in the decree directing the sale.
Upon the authority of Isaacs v. Nulton, recently decided by this court and not jet reported, the president delivering the opinion, in which the whole court was unanimous, the judgments of the Federal courts set out by the plaintiff in his original bill, for which he alleged he was liable, are void judgments, and could not be enforced against him. But the securities upon which those judgments were founded were also stated, and were alleged to have been given by him, as treasurer and trustee, for and on behalf of the Methodist Episcopal church at Winchester, and for its benefit, and although the judgments were void, the securities upon which they were founded were still a subsisting liability on him. against which the church was bound to indemnify him.
We think it was competent for the court to give his administrator, in whose name the suit was received after his decease, leave to file an amended bill, to set out with more fulness, and greater particularity, those securities, and an account of advances which he had made for the church, and to correct any mistakes which maj- have been made by the original bill in the description of those securities, and the grounds of his liability therefor, and tp such reimbursement from the church for the moneys he had advanced for it, and to relieve his estate from those liabilities, and to place them upon the church for whose benefit he, as its officer and agent, had incurred 'Ahem with its approbation. We do not regard the amended bill as repugnant to the original bill, or as presenting a new case, but as ancillary to the original bill, in the presentation of the case made by it more fully and accurately, with additional averments, to the end that there might be a decision of the cause upon its merits, and the attainment of complete justice between the parties. We are of opinion, therefore, that the court did not err in overruling the demurrer to the amended bill. And if there were defects in the original bill which were reached by the demurrer to it, they were cured by the amended bill, unless it can be maintained that the church property was inalienable, or not liable to be incumbered by mortgage, or otherwise, to satisfy the claims of the plaintiff for the advances he made for it, or to indemnify and save him harmless for the liabilities he had incurred on its behalf; and that is the question which we will now consider. And that involves the question whether the court erred in decreeing the sale of the lot purchased by the trustees for the erection of a church, with the house which they erected thereon, to satisfv the balance of the purchase money for the lot, secured by a deed of trust thereon, and the balance due for the advances made, and the liabilities incurred by Joseph S. Carson for the erection of said house, and the balance due Barr's estate for work and labor and materials furnished by him for the same?
The Methodist Episcopal church at Winchester, though not a corporation, and incapable of incorporation under the constitution of the state, was an association of individuals, recognized by the constitution as a body capable of taking and holding land, under such limitations as might be prescribed by law, and entitled to be secured in the enjoyment of its property.
By the law, it is authorized to have a board of trustees, who may sue and be sued, in whom the title to its land or other property may be vested. But it is limited in the *right of holding land only as a place of public worship, or as a burial place, or a residence for a minister or bishop, or other minister or clergyman, who, though not in special charge of a congregation, is yet an officer of such church or religious society, and employed under its authority and about its business. And it is added, "the land shall be held for such use or benefit, and for such purpose, and not otherwise." That would restrict it to the sacred and religious purposes mentioned, and not for merchandising, manufacturing or other secular uses. But it is not a restriction on the mortgaging for sale of the land for debt. To sell the land would not be to hold it for other purposes; and it might be held for the sacred purposes mentioned, whilst at the same time it was encumbered by mortgage or otherwise for debt contracted in its acquisition. The title is authorized to be vested in the trustees of the church or religious society; but they are restricted as to the quantity of land they may take and hold "at any one time." These words — at any one time — seem to imply that they may alienate the lauds they hold at one time, and then buy other lands, so that they do not, at any time, exceed the limitation. There is certainly nothing in these provisions of the statute which restricts or inhibits the alienation. There are limitations upon the acquisition of lands, but none, it seems, upon the alienation of any they have acquired. And the 13th section of this 76th chapter expressly authorizes the circuit court of the county wherein the lands lie, upon the application of any member of the congregation, in a proper case, to decree the sale. The authority given in that particular case does not exclude the authority of a court of equity in other cases in the exercise of its general jurisdiction to decree a sale. It may be regarded rather as predicated of the amenability of church property to the general jurisdiction of courts of equity, just as the property of other individuals or association of individuals is, and that this section was designed *only to give the jurisdiction upon the application of any member of a religious society to effect a sale for the benefit of the society, and for direction to the court in the disposition of the proceeds of the sale.
The Methodist Episcopal church at Winchester, an association of individuals, had adopted the book of discipline of the Methodist Episcopal church as the law of their society. In chap. 3, § 2 of said book of discipline, p. 264, it is provided that if the trustees, or any of them, have advanced money, or are, or shall be, responsible for any sum or sums of money on account of the said premises (that is, for houses of worship or dwellings for the preachers) which they are obliged to pay, they are authorized to raise the said sum or sums of money by a mortgage or sale of the premises. The decree in favor of Joseph S. Carson is for advances and liabilities incurred in the erection of a house of worship for the society upon a lot which the trustees had purchased for that purpose. These advances were made and liabilities incurred for the benefit of the society, and with the approval. And it must be considered that they were made and incurred upon the faith of the assurance contained in the book of discipline just referred to, which he relied on for his security. It was in fact a contract between him and that society that if he would advance the money he advanced, and assume the responsibilities he did, to raise the money to complete the church building, so as to provide for them a place of worship, the property should be mortgaged, or sold, if necessary to reimburse and indemnify him.
And why may not this contract be enforced by a court of equity, just as it might if it had been made with an individual or anyr other unincorporated association of individuals? There being no inhibition or restriction at common law of such alienations or incumbrances of their property by churches or religious societies — and we have seen that there are none by statute — an affirmafive answer ^(speaking for myself only) would seem to be, logically, the conclusion, unless there is something opposed to it, either expressly or by implication, in the constitution and government of the church or religious society in which the question arises. Upon such a question, it would seem that the law of the church must govern, its authority being unaffected by the law of the state. But the court does not feel called on to decide that question, or to intimate an opinion on it, except as it arises in this case under the provision in the book of discipline of the Methodist Episcopal church — regarding the general question- as one of great importance, affecting all the churches in this commonwealth, which should not be decided except upon the fullest deliberation.
It is true that the section of the book of dicipline referred to provides the mode of procedure by which the sale may be effected by the society itself, and Carson did not proceed in that way, but resorted to a court of equity. How else could he have enforced the obligation of the society, which it was bound in good faith to fulfil — -when under its new organization, through its new board of trustees, it refused, though receiving the benefit of his advances, and though he had incurred heavy liabilities — the fruits of which it was enjoying — to fulfil its obligations tn him? His right to sue the trustee is expressly given by the statute. Upon the whole we are of opinion to affirm the decree of the circuit court.
Decree affirmed.