Court Opinion

ID: 5189395
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:33:33.285774+00
Date Added: 2024-06-11T08:26:51.934375
License: Public Domain

Ingraham, J. (dissenting):
I do not concur in the affirmance of this judgment.
Assuming that the transfer of these bonds to the defendant was valid, that the title thereof vested in the defendant, and that upon the acceptance thereof it was bound to appropriate the income of the bonds as therein required, it seems to me entirely clear that the plaintiff had no right to the specific income for which judgment has been given it. This was a gift of a large sum of money for charitable purposes. Mr. Rockefeller, the donor, was under no obligations to provide money for the continuance of the church work, and it is his intention in making the gift that we are to ascertain and carry into effect.
It was not his intention that these bonds nor the income realized from them should be used for the personal or individual purposes of anybody, but the plain intention was to provide an income to be used for church purposes. To carry out that intention he selected as donee the defendant, a religious corporation engaged in church work in the city of New York, and then provided that the income realized from the fund should, during a stated period, be paid over to another religious corporation of the same denomination. The provisions of the instrument were clearly intended to provide an income to he applied to the work which the plaintiff was then doing in the particular locality specified. This appears from the whole instrument. It provides that the defendant during the term of *341ten years from December 1, 1891, should '“ pay over the income received from the' said bonds * * * semi-annually, to the
Tabernacle Baptist Church of the City of New York, a corporation organized under the laws of the State of New York, and hereinafter called the Tabernacle Church, for use by the Tabernacle Church only for its work at Second Avenue between Tenth and Eleventh Streets, in the City of New York.” Here is a distinct limitation of the use to be made of this income, which it appears was the intention of the donor in making the gift. Then after making provision for the extension of this term, the instrument continues : “If during the two terms above mentioned, the Fifth Avenue Church shall become satisfied that the income paid to the beneficiary thereof for the time being is not used in accordance with the terms of this instrument * * * the Fifth Avenue Church may, in its discretion, thenceforth discontinue payments of income to the then beneficiary, and such discontinuance shall be taken as ending the term then current.” .
It would seem that the donor endeavored to prevent this money from being used in any way except as was expressly provided. The injunction was that when the income was paid to the plaintiff it was to be used only for its work bn. Second avenue, between Tenth and Eleventh streets, in the city cf New Ycrk, and if the defendant shculd beccme satisfied that the inccme paid to the beneficiary for the time being was not used for that purpose or in accordance with the terms of the instrument, then the defendant, in its discretion, should discontinue payment of the income. There was thus an obligation laid upon the plaintiff to use the income for this particular work,' and a duty imposed upon the defendant to see to it that the income was so used, and, if it should become satisfied that the income was not so used, it was to discontinue payment of the income.
It is true that this duty imposed upon the defendant must be exercised in good faith, and there must be facts that would justify the defendant in the conclusion that the income would not be used for the specific purpose provided by the agreementbut if tl\e defendant in good faith and upon sufficient foundation found that this money was not to be used for the specific purpose, it would be not only justified in refusing to pay the income over to the plaintiff, *342but was bound to refuse, and the plaintiff would not be entitled to such income.
Now what was the situation at the time the defendant received this income ? For it was the conditions then existing which the defendant was bound to consider in determining whether or not the income, if it was actually paid to the plaintiff, would be applied as required by the instrument. ' This instrument was dated December 1, 1891, and it seems to have been executed about that time. The income received on these bonds was paid to the defendant from December 1,-1891, to June 1,1893, and paid over by the defendant to the plaintiff. Subsequent to June 1, 1893, the railway company, the obligors, defaulted in the payment of the interest, and such default continued until June 23, 1896, when certain cash and securities were paid in lieu of the interest for this period, amounting to $7,123.67, which was paid to the defendant by the obligors in lieu of interest upon the bonds from June 1, 1893, until June 23, 1896: It cannot be claimed that the defendant was liable to pay the income to the plaintiff until it had been received, and it was not until the income was.,actually received and in the hands of the defendant that the question could arise whether or not the money, if paid to plaintiff, would be used for the purposes specified in the agreement.
At the time that this instrument was executed and the bonds delivered the plaintiff was a religious corporation, occupying an edifice on Second avenue, between Tenth and Eleventh streets, and carrying on church work in that locality.. There was a mortgage upon this church property, and prior to January, 1896, the corporation had got into difficulties, the nature of which it is not necessary to discuss ; but in January, 1896, nearly six months before the payment of this income was made to the defendant, proceedings had been commenced to foreclose the mortgage, and in July, 1896, just after this income had been received by the defendant, judgment of foreclosure was entered directing the sale of the church property, in pursuance of which judgment the property was sold, and after some litigation the possession of the church property was taken from the plaintiff. So the situation, at the time that the defendant had to determine whether or not this income should be paid to the plaintiff, was that an action to forclose the mortgage *343was pending, a trial had been had, and just about the time that the interest was paid to the defendant a judgment of foreclosure was entered directing the sale of the property occupied by the plaintiff in its church work. Under such circumstances, what was the duty of the defendant ? It had undertaken to pay this money to the plaintiff corporation for use only for its work on Second avenue between Tenth and Eleventh streets in the city of New York, and it was to determine whether or not such income would be used for .that work, and if in good faith it determined that this money would not be used in such work, it was then not to pay it. The continued occupation of the premises by the plaintiff weCs necessary to comply with the conditions of the instrument transferring these bonds.
I think it clear that not only was the defendant justified under the circumstances in determining that the income would not be used in accordance with the terms of the instrument, namely, only for its work on Second avenue between Tenth and Eleventh streets in the city of New York, but that any other determination under these facts would have been a breach of duty which would have been a violation of its obligation; but at least the defendant was justified in. holding on to the money until it could ascertain from subsequent events whether or not the plaintiff would continue its church work at the place specified; and when it became evident that it would not so continue its work and had lost the means of doing the work to which the donor intended this income should be applied — as must have been apparent upon the sale of the property in the following December, 1896, when the plaintiff was ejected from the church edifice — this defendant was bound not to pay this money to the plaintiff.
This action was not commenced until 1898, and until after the plaintiff had been ejected from the property and had' lost all title to it and after its work had ceased at the place named in the agreement. Certainly when this action was commenced there was not the slightest justification for the .claim that this income would be applied by the plaintiff to the purposes specified in the instrument, namely, the plaintiff’s work on Second avenue between Tenth qnd Eleventh streets in the city of New York. It seems to me that to affirm this judgment will be to appropriate money to a use *344directly in violation of the expressed intention of the donor, and under the form of law to compel the defendant to violate its trust and misappropriate the money paid to it for religious purposes.
I think the judgment should he reversed.
Van Brunt, P. J,, concurred.
Judgment affirmed, with costs.