In re Church of Messiah — 25 Abb. N. Cas. 354

Majority

p. 354

MATTER OF CHURCH OF THE MESSIAH.

N. Y. Supreme Court, Second District, Special Term ;

September, 1890.

Headnote

Religious corporations ; leave to mortgage lands.] Under L. 1890, p. 780, c. 424, amending L. 1813, c: 60, § 11, authority is expressly 1 conferred upon the supreme court at special term, or the county court, to entertain an application by a religious corporation for leave to mortgage its real estate ; and upon obtaining such leave the corporation has power to mortgage its lands as provided by the order made upon such application.* The proceedings upon such

p. 355

application are regulated by L. 1890, c. 95, establishing Code Civ. Pro. §§ 3390 et seq., and the petition must conform to the requirements of section 3391.

2. Forms.] Form of petition and order granting leave to mortgage lands of religious corporation.

This was an application by the petitioner for leave to mortgage part of its real estate. The petition was as follows:

To the Supreme Court of the State of New York:—

The petition of the rector, wardens and vestrymen of the Church of the Messiah, a Protestant Episcopal Church in the city of Brooklyn, respectfully represents :

I. That the name of the said corporation is, The Rector, Wardens and Vestrymen of the Church of the Messiah, and the names of its trustees and its principal officers and their places of residences are as follows : [statmg them.]

II. The object or purpose of the incorporation of said church is the propagating of the Christian Religion, and said church as a religious association is duly incorporated under the Act, entitled “ An Act to amend the acts to provide for the incorporation of religious societies so far as the same relate to churches in connection with the Protestant Episocopal Church,53 passed May 9, 1868.

III. As such corporation they are the owners of the following described piece or parcel of land, situated in the twentieth ward of the city of Brooklyn, N. Y., bounded and described as follows : [description.]

p. 356

I"V. Tour petitioners further show that the interests of the said corporation or association will be promoted by the mortgage of the real property above specified, and the reasons therefor are as follows :

Tour petitioners are desirous of mortgaging said real estate in the sum of twenty-five thousand dollars ($25,000), payable in one year with interest, and the Dime Savings-Bank of the city of Brooklyn, X. T., has agreed to lpan said sum to your petitioners upon the security of their bond add mortgage upon said property in the usual form; your petitioners wish to borrow said sum upon the security of said mortgage because they have commenced the erection of a chapel upon said premises which adjoin the church edifice of your petitioners ; the necessities of your petitioners’ congregation require the speedy completion of said chapel, and the contract for its erection calls for payments at stated intervals; your petitioners have not sufficient funds to complete said chapel and fulfill the terms of said contract, and said mortgage is to be placed for the purpose of raising the-necessary funds therefor; it is expected that said mortgage will be paid at an early day from -voluntary contributions by your petitioners’ congregation. Xo real estate or interest in real estate, belonging to said corporation, has ■ been sold or mortgaged under any order of the-court at any time within five years last past.

V. That at a regular stated meeting of the trustees of' the church of the Messiah, held July 17, 1890, more than two-thirds of said trustees were present, and a resolution was unanimously adopted directing that this application be made. A copy of said resolution, attested by the church clerk, is. hereunto annexed and made a part of this petition.

VI. That the market value of the real property of said corporation or association is one hundred thousand dollars i ($100,000), upon which there is no encumbrance ; that said corporation or association has no outstanding debts or liabilities ; that the cash value of its personal assets is twenty thousand dollars ($20,000).

p. 357

VII. Tour petitioners show that they have no funds wherewith to complete said chapel, and it is - proposed to apply the avails of said mortgage, when received by them, to payments for the erection of said chapel, as aforesaid.

VIII. Your petitioners therefore ask that an order be ■entered giving them leave to mortgage the real estate above described upon the terms aforesaid, and that the moneys .realized from such mortgage be applied as above specified.

Alexander S. Bacon, for petitioner.

[holding that the application was properly made under the Act of 1890]—

Ordered : That the said trustees be and they are hereby authorized to mortgage said real estate for the sum of twenty-five thousand dollars ($25,000) and to execute and ■deliver a mortgage therefor in the usual form; said real ■estate is described in said petition as follows:

[Description J]

It is further ordered : That the proceeds of said mortgage loan be applied by said trustees as follows, viz. ; To complete the chapel now being erected on said premises and to fulfill the terms of the petitioners’ contract for the ■construction of said chapel.

Footnotes

* It has long been the practice of the supreme court to entertain applications of this nature under the provision of the act of 1813, authorizing the chancellor to grant leave to sell, the mortgage being regarded merely as a conditional sale. Any questions which may have existed as to the power of the court to grant leave to mortgage, the necessity of obtaining such leave, the proceedings and the scojrie of the order directing disposition of the proceeds, are set at rest by the act of 1890. The new act took effect May 1, 1890, and the regularity of sales, etc., under proceedings commenced since then, is to be tested by the new act.
* The act of 1890 amends the act of 1813 to read as follows : § 11. Any religious corporation may make application to the supreme court, at any special term thereof held in and for the district where the property of said corporation is located, or to the county court in and for the county where the property of said corporation is located, for leave to mortgage or sell any real estate belonging to such corporation, and upon obtaining such leave said corporation shall have power to mortgage or sell its real estate as shall be provided by the order of the court made upon such application : provided that this act shall not extend to any of the lands granted by this State for the support of the gospel.