Court Opinion

ID: 9841865
Source: CourtListenerOpinion
Date Created: 2023-09-22 20:09:39.901195+00
Date Added: 2024-06-11T09:05:47.534310
License: Public Domain

. Mr. Chief Justice Fuller,
with whom concurred Mr.-Justice Brewer,
dissenting.
Assuming, the validity of the trusts, the questions appear to be, whether the -condition of things has resulted in failure to carry out, and of ability to carry outothe .principles and purposes of the society, and the defeat of. the trusts; and, if so, whether the destination of the corpus of the- trust property has, thereupon, become such'that complainants or some of them have a locus standi to ask relief in a court of equity. ■
The courts below held that the society still existed in law and in fact, and that this case was not. one of “.dealing with the assets of a defunct or dissolved association or in other words, that the trusts had not been defeated ; and th'e'decrees rested on this conclusion. If erroneous, the inquiry then arises, to whom does the corpus of the trust property go in the. event of thede-feat of the trusts. ...
A brief recapitulation of the facts is necessary to indicate the grounds of my inability to concur in the Opinion and judgmént of the court.
*28In 1803, George Rapp and others located at Harmony, Butler County, Pennsylvania, removed in 1814 to Indiana, and returned in 1825 to Pennsylvania, and located at Economy, in Beaver County. TLey formed a society or association, which, as said by the Circuit Court,of Appeals, a was organized upon the principle of community of goods and land ownership.
“ The members of the said society who had brought with them from Wurtemburg, money, combined their funds and all their property in common, they lived as members of a common household and each member enjoying, alike Avith every other, the fruits of their common labor in equality and brotherhood. The occupation or business of the said society was agriculture, except in so far as it was necessary to manufacture shoes, clothing and other necessaries for the community. The members of the said society obeyed George Rapp as their spiritual and temporal leader and ruler. About the year 1807, the community pro-mulgatéd the doctrine of celibacy as being necessary for the success of a communistic society.”
Although styled “George Rapp and his associates,” Rapp was, from the beginning to his death in 1847, the absolute and exclusive ruler in whom all power was vested. Members were admitted by adoption and on adoption conveyed and transferred all their property, real and personal, to “ George Rapp and his associates,” an&) after 1836, to the Harmony Society, for the use and benefit of the community.
By article 5 of a written agreement of February 5,. 1805, if for any cause one or more of the subscribers should leave Harmony,. “ George. Rapp and his associates ” promised to refund the value of his or their property brought in, while those who brought nothing in might receive a donatio l.
The second agreement was dated January 20, 1821, and the third, March 9, 1827.
The first branch of the preamble of this agreement of 1827, read: “ Whereas, By the favor of Divine Providence, an association, or community, has. been formed by George Rapp and many others, upon the basis of Christian Fellowship, the principles of 'which being faithfully derived from the sacred Scriptures, include the government of the patriarchal age, united to *29the community of property adopted.in the days of the Apostles, and wherein the single object sought is to-approximate, so far as human imperfection may allow, to the fulfillment-of the will of God, by the exercise of those affections, ánd the practice of those virtues which are essential to the happiness of man in time and throughout eternity.”
By the first article the subscribers gave, granted and forever conveyed “ to the said George Rapp and his associates, their heirs and assigns, all our property, real, personal and mixed, whether it be lands and tenements, goods and .chattels, money or debts due to us, jointly or severally, in possession or in remainder or in reversion, or in expectancy, whatsoever or wheresoever, without evasion, or qualification, or reserve, as a free gift or donation, for the benefit and use of said association or community.”
Members were to be obedient to superintendents, were bound to promote the interests and welfare of the community, and were to receive support and instruction.
The sixth article (almost identical with article 5 of 1805), was as follows: “ And if it should happen as above mentioned, that any of the undersigned should violate his or her agreement, and would or could not submit to the laws and regulations of the church or community, and for that or any other reason, should withdraw from the association, then the-said George Rapp and his associates agree to refund to. him or them the value of all such property, without interest, as he or they may have brought into the community in compliance with the first article of this agreement, and the said value to be refunded in one,, two or three annual installments, as the said George Rapp and his associates shall determine. And if the person or persons so withdrawing themselves were poor, and brought nothing into the community, yet if they depart openty and regularly, the}r shall receive a donation in money, according to the length of their stay and to their conduct, and to such an amount as their necessities may require, in the judgment of thé superintendents of the association.”
The master found, among other things, as follows :
“Prior to his death in 1884, Frederick Rapp, a member of *30the society, had been the business agent of the society, transacting its external business. After his death the members of the society on July 5, 1834, executed a power of attorney to George Rapp — Exhibit No. 85 in evidence — constituting him general agent of the society in all its temporal affairs, with power, to appoint agents and substitutes under him. Under this power, he on the same day appointed Romulus L. Baker and Jacob Henrici his substitutes. This power of attorney was signed by four hundred and two members of the association, and with the substitution and not including the signatures, is as follows :•'
“‘ Know aH men by these presents: Whereas, Frederick Rapp, of Economy, in Beaver County, State- of Pennsylvania, recently deceased, was for a series of years the agent in.temporal affairs of the Harmonie Society, carrying on in his own name all the extérnai business of said society and taking to himself the titles to real estate as well as the evidence of claims arising out. of the various transactions of-said society ;
•“ ‘And Whereas,/By an instrument dated the 20th of July, 1825, under the hand and seal of said Frederick, he solemnly and irrevocably declared that all the property, real, personal and mixed, which then was or hereafter .might be in his possession or enjoyment, or the title to which he then held or might hereafter ■ hold, was and should be considered the property of the said society, in which he the said Frederick had no absolute interest whatsoever;
' “ ‘ And Whereas, The lamented death of the said Frederick Rapp renders it indispensable that a new agent should be appointed by whom the temporal affairs of the society may continue to be managed in a mode which has proved convenient and satisfactory; . .
“‘Now, Therefore, Be it known, that we the undersigned, constituting said Harmonie Society, do hereby nominate and appoint George Rapp, of Economy, in the County of Beaver, the general agent of said society in all its temporal affairs. •
“ ‘ The • powers intended to be conferred on the said George Rapp are hereby declared to be as follows, that is to say: •
“ ‘ 1. To ask for, demand and receive from each and every *31bank or other incorporated company, partnership, or individual person' or persons, the amount which may be due therefrom, in the way of principal, interest or dividend to the said Harmonio Society, or to Frederick Eapp, whether the same be evidenced by judgment, mortgage, bond, certificate of stock, note, bill of exchange, deposit of money, book account, verbal promise, sale or - barter, loan or money, or arise in any other manner whatsoever, the check, order, receipt, acquittance- or release of the said George Eapp to be as effectual as if executed by all and each of us, or as if it had been executed by the said Frederick Eapp in his lifetime..
“ ‘ 2. To execute and receive all deeds and conveyances, in fee simple or otherwise,.on behalf of the society, whether the title thereto stand in the name of the society or of Frederick Eapp or of George Eapp and associates., The act of the said George Eapp relative thereto to be as valid and sufficient as if executed by us or by the said Frederick Eapp in his lifetime.
“ ‘ 3. To carry on, by himself or through the agents whom he is hereinafter authorized to appoint, all the dealings and traffic of said society of every description.
• “ ‘ 4. To constitute and appoint an agent or agents under him ás he may deem advisable, imparting to such substitute or substitutes, should he think fit the' whole- or any portion of the authority hereby conferred on himself. He may also at his pleasure revoke such instrument of substitution whenever he .may think such revocation called, for by the interests of the society.
. “ ‘ 5. It is distinctly understood that in accepting and acting under this power the said George Rapp disclaims all personal 'interest other than that of a member of said society-in the present resources or future earnings of the society, in conformity with the principles and terms upon which the Harmonie Society was orginally founded, as fully and. effectually as was done by the late Frederick Rapp in the instrument already adverted to, dated 20th July, 1825, the terms of which instrument the said George Eapp hereby adopts for himself and repeats in every particular.
“ In witness whereof the undersigned members of the Har-*32monie Society who constitute said society, have hereunto set their hands and seals at Economy, in Beaver County, this fifth day of July, in the year of our Lord, eighteen hundred and thirty-four.’
(Signatures.)
(Acknowledgment.)
“ ‘ By virtue of the authority expressed in the fourth article of the foregoing power of attorney, I do appoint and substitute in my place and stead, Bomulus L. Baker and Jacob Henrici, of Economy, Beaver County, Pennsylvania, to act as general agents of the Harmonie Society aforesaid, jointly or severally in my name, and for the use of the said society, to do and perform all, acts and things which as the general agent of said society, I am authorized to do. It being distinctly understood, however, that in accepting and performing the office and business of general agents of the said society, the said R,.. L. Baker and Jacob Henrici shall neither acquire nor claim any personal interest in the present resources or future earnings of the said society other than that of a member of the said society, agreeably to the plans and terms of association, but shall be considered as exercising the same trust mentioned in a declaration of trust signed by Frederick Lapp on the 20th day of July, 1825, and referred to in the foregoing power of attorney to George Rapp.’ ”
Signed, sealed and delivered by George Rapp.
October 3.1, 1836, the following agreement was executed by-391 members, of the society and afterwards accepted and adopted by 33 others:
“Whereas, The Harmonie Society, consisting of George Rapp and many Others, now established in the town of Economy, in Beaver County, Pennsylvania, did on the 9th of March, 1827, enter into certain articles of association, of which the 6th in number is as follows, viz. [here follows that article] :
“ And whereas, The provisions of the said 6th article, though assented to at the time, manifestly depart from the great principle of a community of goods and-may tend to foster and perpetuate a feeling .of inequality, at variance with the true spirit and objects of the association;
*33'“ And whereas, The principle of restoration of property, besides its pernicious tendency, is one which cannot now be enforced with uniformity and fairness, inasmuch as the members of the association in the year 1816, under a solemn conviction of the truth of what is above recited, did destroy all record and memorial of the respective contributions up to that time;
“ And whereas, Continued happiness and prosperity of the association, and a more intimate knowledge of each other, have removed from the minds of all members the least apprehension ' of injustice and bad faith;
“Now therefore, Be it known by these presents that the undersigned, with a view to carry out fully the great principles of our union, and in consideration of the benefits to be derived' therefrom, do hereby solemnly enter into covenants, and agree with each other as follows:
“ 1st. The said 6th article is entirely annulled and made void, as if it had never- existed; all others remain in full force as heretofore. ' ■
“ 2d. All the property of the society, real, personal and mixed, in law or equity, and howsoever contributed or acquired shall be deemed now and forever joint and indivisible stock. Each individual is to be considered to have finally and irrevocably parted with all his former contributions, whether in land, goods, money or labor; and the same rule shall apply to all future contributions whatever they may be.
“ 3d. Should any individual withdraw from the society, or depart this life, neither he in the one . case nor his representatives in the other, shall-be entitled to demand an account of. said.contributions, whether in land, goods, money or labor, or to claim anything from the society as a matter of right. But it shall be left altogether to the discretion of. the superintendent to decide whether any, and if any, what allowance shall be made to such member or his representatives as a donation.
“ Invoking the blessing of G-od on this sacrifice of all narrow and selfish feelings to the true purposes of the association and to the advancement of our own permanent prosperity and happiness, we have signed the foregoing instrument, arid affixed *34thereunto, our respective seals, at Economy, this 31st day of October, 1836.”
George Bapp, sole patriarch and ruler, died in 1847, and thereupon, in that year certain articles were subscribed by two hundred and eighty-eight persons as the “ surviving and remaining members of the Harmonie Society, and constituting the same.” These articles created and nominated a Board of Elders of nine members, with the power of filling vacancies, and a Board of Trustees, consisting of two members of the Board of Elders, which had power to fill vacancies in the trusteeship. Instead of a single patriarch, a dual patriarchy was substituted, and those boards alone had the power over and control of the property.
The eighth article was as follows :
“ It is hereby distinctly and absolutely declared and provided that all the property, real, personal and; mixed, which now or hereafter shall be held or acquired by any trustee or trustees, or person under them, is and shall be deemed the common property of said society, and each trustee now or hereafter appointed hereby disclaims all personal interest in the present resources and future earnings of the society, other than that of a member thereof, according to the articles of association hereby established and continued, and according to the present government.”
From these documents it appears that prior to October 31, 1836, all contributions of property were for the use and benefit of the community on the condition that any member withdrawing was to receive back the value of his contributions.
But that by the contract of 1836, the property then held in trust was no longer held subject to reclamation on the basis of original contribution, but the whole aggregate was made a common fund in which each member was equally interested, subject to the previously existing trust for the use and benefit of the society ; that the corpus of the trust property included all future contributions, accretions and accumulations; and that the then and subsequently admitted members occupied the relation of donors and the society, as a society, of donee.
The joint and indivisible stock embraced all present and fu*35ture property subject to the trusts declared in the articles of 1827, which were reaffirmed in 1836, except the sixth .article. ■. That trust was described “ as a free gift or donation for the benefit and use of the said association.” And by the agreement of 1847, the property was to be held and deemed the common property of said society, and each trustee disclaimed all personal interest therein “ other than that, of a member thereof,”
If then the trusts are. defeated I concur in the view that the. trust property must go either to the owners or donors livings and to the heirs and legal representatives of those who are dead, by way of resulting trust; or to the surviving members of the society as joint tenants with right of survivorship, or by way of tontine.
It is -true that the third clause of the agreement of 1836, provided that on withdrawal, or death, no member, or his representatives, should be entitled to an account or “to claim anything from the society as matter of right.” But .that clause referred to the society as a going concern, and this bill is not filed against the society, but proceeds on the ground of the termination of the trusts and the existence of a condition of things demanding the winding up of the society’s affairs.
And if the system of patriarchal government has been abandoned; if for the communistic'scheme,A capitalistic scheme has been substituted; if the society has become a trading community and lost all its distinctive attributes; if it is undergoing the process of liquidation ; if all its property and assets have passed to a trading corporation and the power of carrying out its original principles has departed; if • its membership has' become practically incapable of perpetuation; it follows that the trusts have been defeated and the society ended to all intents and purposes.
Early in 1890, John S. Duss and two others, employés but not -members of the society were elected to fill vacancies in the Board ofcElders.
In April, 1890, certain articles were executed, the number of members being stated to be 45.
The Junior Trustee having died, John S. Duss was elected to fill the vacancy, and soon after, with his wife and children, *36took possession, of the official residence of the society. In 1892 the Senior Trustee died, and Duss was elected to that position, one Sieber, the town constable, who had a wife, being elected Junior Trustee. Later in that year other articles' were entered into, describing the then number of members as 37.
In February,.1893, certain members of the society filed a bill for its dissolution, the winding up of its affairs and the distribution of its assets.
While the bill was pending, seventeen members received . from the assets money and property to the amount of something over one hundred thousand dollars, and gave quitclaims and acknowledgments, of full-satisfaction of their interest or share in the property of' the society. The grantors in nearly all of.these instruments acknowledged in consideration of the • money paid or land conveyed, that he or she does “ hereby release, cancel and discharge any and all claims whatsoever, which I, my heirs, assigns or lawful representatives, may or could ever have against said society or its trustees, its property or assets, or any part thereof, I hereby declaring all such claims to be fully compensated, settled,- released and discharged; ” and, after reciting the various properties and assets, “ I am entirely satisfied to accept as my full share and interest therein,” etc. .
'Two of the deeds contained this paragraph : “ While it may be that said society may have and be the possessor of several hundred thousand dollars worth of property after paying all-debts, I am entirely satisfied to accept as my full share therein the sum of-thousand dollars.”
■ After these settlements began the bill was dismissed by con-' sent.
In January, 1894, a corporation styled the Union Company was organized, under the state statute, “ for the purpose of the purchase ánd sale of real estate, or for holding, leasing and selling real estate,” its business “ to be transacted in the borough of Beaver, county of Beaver, State of Pennsylvania.”
On April 11, 1894, sevénteen persons purporting to be all ■ the then members of the society, executed a paper stating: “We the members of said Harmonio Society, do each hereby *37express our consent with and request that John S. Duss and Gottlieb Riethmueller, the present trustees of said society, shall forthwith sell, transfer and convey to the Union Company, a corporation duly created and organized under the laws of the State of Pennsylvania, all the lands, tenements and heredita-ments situated in the Allegheny and Beaver Counties,'Pennsylvania, now. owned and held by said trustees for the benefit.of the said society, to the end that all said lands, tenements acta hereditaments may be owned, held and managed by said incorporated company, and be sold and otherwise disposed of from time to time in pursuance of proper corporate action as may be determined by the directors and officers of said incorporated' company.
“ The capital stock of said incorporated company, however, to' be owned and held by the said trustees for the benefit of the society, in accordance with,' and on the terms and conditions of the articles of association of said society and the ratifications and modifications thereof, as the same now exists, to the extent of three hundred and ninety-seven thousand five hundred ($397,500) dollars, out of a total capital of four hundred thousand ($400,000) dollars.”
The vast property of the society was conveyed to the Union Company, and the stock of that corporation assigned to the trustees.
Since April 11, 1894, nine of the seventeen subscribers have died, leaving eight, consisting óf John S. Duss and his wife, one Gillman, 77 years of age, and unable to read or speak English; and five women of the ages of'80, 77, 58, 54, and 47, respectively.
Duss and Gillman became the sole remaining male members of the society and the women, with the exception of Mrs. Duss, were mostly old, infirm or ignorant.
No new member has been admitted since 1893. It is suggested that this was because none desired admission. This may be so, and this would explain the diminishing of over five,.hundred members in 1827 to two hundred and eighty-eight in 1847, arid .forty-five in 1890. But the result is the same. The eight remaining cannot reasonably be held to represent the great *38communistic scheme which the Wurtembergers of 1803 sought to found on “ the basis of Christian Fellowship-, the principles of which being faithfully derived from the sacred Scriptures include the government of the patriarchal age, united to the com-ún unity of property adopted in the days of the Apostles, and wherein the sihgle object sought is to approximate, so far as human imperfection may allow, to the fulfillment of the will of God, by the exercise of those affections, and the practice of those virtues which are essential to the happiness of man in time and throughout eternity.”
As the membership diminished the wealth increased, but not from contributions by new members, and operations were carried on by hired labor.
Not one of the eight contributed to the three or four millions of property accumulated. It is conceded that Duss alone is the active member; But he is not the society, nor does the society in respect of its avowed principles any longer exist.
Moreover the transactions by which seventeen members of the society, not old and infirm, but vigorous and capable, were bought out, were in themselves acts of liquidation. It is idle to say that these payments were “ donations ” to withdrawing inembers. They were purchases, in terms, and in effect. They were settlements by agreement instead of through litigation.
Finally, substantially the entire property of the society and its affairs have been turned over to a corporation created under the laws of Pennsylvania, authorized to purchase and sell land. This corporation has none of the powers confided by the articles óf 1847, to the Board of Elders and. the Board of Trustees. It has no power to feed, lodge, maintain and support, or to care for the spiritual welfare of members of the society, or to perform -any of the duties imposed upon the boards. The trustees have no distinct title to the society’s property, but only the rights pertaining to the stock of the Union Company. All the industries carried on in Economy are carried on by tenants and lessees of the Union Company, and the society has ceased to possess the power to carry out the purposes for which its property was accumulated.
The affairs of the Union Company must be wound up under *39the state statutes in that behalf, and proceeds derived from the lands by sale or otherwise would go to the stockholders by way of dividends. The legal effect of the transaction was the same as a sale, out and out, for cash, and it was irrevocable. And' this point so arises on the record that it must be disposed of. as matter of law.
The master found, as matter of law, that the society continued to exist because the surviving members had not formally declared it to be dissolved, and that the purposes and principles of the society could not be held to have-been abandoned unless by the formal action of all its members. But this could only be so on the assumption that the scheme of the trust created a joint tenancy with the right of survivorship, or a system of tontine; and that a single surviving member might' be the society although to the integrity of a community, numbers are essential. By the articles neither the members, nor the Board of Elders, nor the Board of Trustees, nor all together, possessed the power voluntarily to formally dissolve the association, and it is for a court of equity to adjudge whether a condition of dissolution or a condition requiring winding up is or is not created by acts done or permitted.
Such being, in my opinion, the condition here, the trust property must go, as.I have said, either to the surviving members as joint tenants with right of survivorship, ór by way of ton-tine ; or to the owners or donors living, and to the heirs and legal representatives of those who are dead by way of resulting trust.
Appellees contend for the first of these propositions. Their counsel says in his brief: “ It is the society, as a society, which owns this property. It is the entire body as one-whole. If at any time the society did dissolve, its property would go to the persons who then were its members. No one else has any legal or equitable claim to it except' those members. To them, and to them alone, it would belong, and among them it would be divided.”
It is inconceivable that the creators of the trust contemplated any such result, when they sought to perpetuate Christian fellowship by the renunciation of their property.
*40The present membership has shrunk to eight members, less than enough to fill the Board of Elders, and that board consists of Duss and his wife ; an old man and five women, aged or ignorant. Practically Duss is the last survivor and he claims the ownership of this Vast estate as such survivor. By the articles no period was fixed for the termination of the life of the society. There is no remainder over, nor provision of any kind for the disposition of the trust estate in the event of the society’s extinction.
Joint tenancy with survivorship or tontine excluding all but living members and casting accumulations on the survivor, are neither of them to be presumed. They are the result of express agreement and there is- none such in these documents.
On the contrary, this property was held in trust for the use and benefit of the society as a society, and not for the individual members. The trust was for the use and benefit of the society in the maintenance of its principles as declared by its constitution and laws. When the purposes of the society were abandoned, or could not be accomplished, or the society ceased to exist, the trust failed, and the property reverted by wav of resulting trust to the owners, who subjected it to the trust, living, and to the heirs and legal representatives of those of them who are dead.
This conclusion does not involve the assertion of a reversion secured by the express terms of the contracts, but rests on the familiar principle of equity jurisprudence that when the trust clearly created by the documents terminated a resulting trust arose to the grantors or donors or their heirs. The distinction is thoroughly elucidated by Mr. Justice Gray in Hopkins v. Grimshaw, 165 U. S. 342. It was there said, among other things:
• “ But the trust was restricted, in plain and unequivocal terms, to the particular society to be benefited, as well as to the purpose of a burial ground, adding (as if to put the matter beyond doubt) and for no other purpose whatever.’ The trust would end, therefore, at the latest, when the land ceased to be used as a burial ground and the society was dissolved. . . .
“ In the case at bar, the trust created by the deed having *41been terminated, according to its express provisions, by the land ceasing to be used as a burial ground, and the dissolution and extinction of the society for whose benefit the grant was made, there arises, by a familiar principle of equity jurisprudence, a- resulting trust to the grantor and his heirs, whether his conveyance was by way of gift, or for valuable consideration.”
The titles held by the trustees in this case were held for the benefit and use of the society in the maintenance of its principles. "When the purposes of the trusts failed the property reverted, not because of special provision to that effect, but because that was the result of the termination of the trusts.
Complainants, or some of them, are the heirs and next of kin of members who signed the articles of 1836 and 1847, and who died in fellowship. The service of one of these families is said to aggregate three, hundred years of unrequited toil. They are entitled to invoke the aid of the court in the winding up of this concern, and these decrees ought to be reversed.
I am. authorized to state that Me. Justice Beewee concurs in this dissent.