Court Opinion

ID: 6392935
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:21:00.604432+00
Date Added: 2024-06-11T14:54:53.743027
License: Public Domain

Dissenting Opinion
Hess, P.J.,
I respectfully dissent from the opinion of the majority of this court which orders distribution of the assets of Labor Lyceum of Reading, Pa., to the surviving members. The 26 members will share equally in cash assets of $77,489.35— assets which were acquired by the corporation during the 60 years of its history. During its span of life, the corporation numbered among its members thousands of Berks Countians, including many who played prominent parts in the economic and political history of Reading and Berks County. At the high point of its *587activity, it included 2,500 members. Among the deceased members were J. Henry Stump, honored on three occasions by being elected Mayor of the City of Reading; Andrew P. Bower, an outstanding labor leader; James H. Maurer, prominent in State and city government and candidate for Vice President of the United States. The present distinguished congressman from Berks County was formerly a member. Among the surviving members are two of the leading members of the Berks County bar. These individuals, along with thousands of others, labored to fulfill the corporate purpose of the organization: “. . . encouraging and promoting the study of social, industrial and economical problems and a general literary improvement among its members by means of courses of instructions to be offered to the members by lectures and by the maintenance of a well-equipped library”. At one time, the library included approximately 2,000 volumes.
The majority opinion relies on the pronouncement of Lawson’s Estate, 264 Pa. 77, 83: “When the bequest is to an association whose benevolence is restricted to its members only, it is not a public charity ...”. I have read numerous cases that discuss a so-called “purely public charity” and find that, for the most part, they relate to the validity of bequests by will and real estate tax exemptions. I do not consider them applicable to the question of distribution of the assets of a corporation. Furthermore, as I study the record, I would find it difficult to conclude that the literary and educational purposes of the corporation were restricted to the members. At one time, the corporation offered benefits in the field of education to as many as 125,000 people.
In my opinion, this case is ruled by Bethlehem Borough v. Perseverance Fire Co., 81 Pa. 445. In that case, the Supreme Court held that the corporation held title to property “. . . in trust for the uses and purposes of its creation, that was for the protection of the property *588of their fellow-citizens from fire. It had no right to divest the property of that general trust nor to divert it from that general purpose. The corporation may in good faith dispose of any specific article, using the proceeds thereof in the acquisition of new or improved apparatus, to be used for the purpose mentioned in its charter. In whatever form the company changes the property, the trust still inheres. It cannot sell it and divide the proceeds among its members”: page 458. (Italics supplied.) The pronouncement of the Bethlehem ease accords with the present law relating to disposition of assets of a corporation on dissolution: Act of May 5, 1933, P. L. 289, sec. 1001, as amended. In my opinion, the remaining assets of this corporation may not be divided among the members, but must be devoted to continuing and furthering the purposes which were advanced by the corporation throughout its long history.
The writer of this opinion has serious doubt that members of a nonprofit corporation may share in the assets of such corporation upon dissolution unless their rights are set forth in the articles of incorporation or the organization is established on a stockholding basis. “. . . It is only in the case of the latter [stock] that, upon dissolution of the corporation, the shareholders are entitled to a pro rata distribution of the assets”: Nokomis Tribe No. 307, Improved Order of Red Men of Pennsylvania Dissolution Case, 331 Pa. 53, 58. See also Grand Lodge Independent Order of Odd Fellows of Pennsylvania v. Baker, 192 Pa. Superior Ct. 14.
I also dissent from the pronouncement of the majority opinion which indicates what portion of the assets should be distributed by cy pres in the event that an appellate court should reverse the opinion of this court. I respectfully dissent from the tentative award to Al-bright College — not because I quarrel with the college as being a worthy and proper recipient. My disagree*589ment with the majority on this point is predicated upon the fact that no tentative distribution by cy pres is in order when the majority has found that the principle is not here applicable. In the event of a reversal, all claimants who can qualify should have a right to have their claims considered by the court before an award is made.