Madison Avenue Baptist Church v. Baptist Church in Oliver Street

The common law right of alienation, as well as the power conferred- by the Revised Statutes (2 R. S. 556, § 1, sub. 4) upon corporations generally, to convey their real property, is restrained in its application to religious corporations, by the eleventh section of the act providing for their incorporation (2 H. L. [1813], 212). That section provides that upon the application of a religious corporation, it shall be lawful for the court to make an order for the sale of any real estate of such corporation, and to direct the application of the moneys arising therefrom. Without such an order any sale made by a religious society is void. (Manning agt. Moscow Presbyterian Society, 27 Barb. 52 .) The objections to the order in this case are four-fold:

First. That the court had the power to order only a sale.

Second. That the application for the order was made by the trustees, and not by the corporation.

Third. That the order did not direct the application of the moneys arising from the sale; and

Fourth. That the transaction produced a dissolution and abandonment of the plaintiffs’ corporation, and not a continuance of it for the purposes of its organization.

The petition of the trustees does not ask for an order to sell, but for an order to convey, pursuant to an agreement previously made between the parties, and set out at length in the petition. If such agreement was a proper one, such as should receive the sanction of the court, and would conduce to the temporal and spiritual welfare of the corporation, it would seem to be of not much importance whether the application was in the one or the other form. It was contended, however, that as the court can make an

The section referred to confers no power upon religious corporations to alien its property. None was needed. The power is inherent in every corporation, which, at common law, has an unlimited authority over its property, and could alienate the same in fee, by grant or otherwise. (Coke Litt. 44 , 300 b; 1 Burr R. 221.) And a like power is given by the Revised Statutes, before referred to. Neither does the section take away the power of alienation. It merely limits its exercise, by requiring the corporation to obtain the consent of the court, and so far. only it operates as a restraint upon its alienating powers.

If the right of a religious corporation to sell its property was derived solely from the statute, and the power was limited in terms to a sale, it might be that a literal observance would be required. But where the corporation has the power to sell, independently of any statute, upon merely obtaining the sanction of the court to the sale, a substantial compliance with the spirit and intent of the section referred to should, it seems to me, bo deemed sufficient. The restraint placed upon religious corporations was intended to prevent an improper alienation of their property. An unlimited power of alienation could be exercised by a corporation injuriously to the temporal interests of church societies, and the cause of the Christian religion. But when the purposes of a sale are proper, and in no wise opposed by the policy or design of the statute, no court would be justified, in my opinion, in withholding its consent, merely because the corporation had applied for permission to convey.

It will be seen that the section referred to authorise the court to make an order for the “sale,” and not for a sale and conveyance. A sale without a conveyance would be wholly ineffectual to pass title to real property; and the use, therefore, of the word “sale” only, in the statute,

In the case of Williamson agt. Berry (8 How. [U. S] 495), to which we were referred, Mr. Justice Wayne gives as a definition of the word “sale,” a “contract to give and pass rights of property for money,” and he held that an authority given to Clarke by the legislature “to sell and convey,” did not authorise a conveyance in payment of his debts. If that learned justice intended so contracted a signification to the word as he expresses, it would render void all transfers of property not founded on a money consideration, which it cannot be believed he designed. As a decision, however, it is wholly unsatisfactory, and must be considered as overruled by De Ruyter agt. St. Peter's Church (3 Coms. 238), where an assignment by a church of its property for the payment of its debts was upheld.

All that the statute requires is, that the sanction of the court approving the sale shall be procured. But to enable the court to form a judgment, it must be put in possession of all the facts which furnish the reasons for the sale. In the Butch Church in Garden street agt. Mott (7 Paige, 77), the late Chancellor says: “As the law of patronage has never been extended to this state, aiid was inconsistent with the spirit of our institutions, it became necessary to vest in some tribunal the power of sanctioning alienation of church property,” and therefore the intention

As I have already stated, if the reasons are good and the object proper, it is of small importance in what form the sanction of the court is obtained; and where such reasons and object, and the purpose to which the consideration for the sale is proposed to be applied, are fully stated in the petition, and the court thereupon ratifies the agreement, and directs a conveyance in pursuance of its terms, and in fulfillment of it, it does not seem to me that any provision of law would be violated. It is not uncommon in applications by religious societies desiring to sell their church property, to state the proposed application of the moneys arising therefrom. It was done in De Ruyter agt. St. Peter’s Church, supra. In that case, the corporation being insolvent (see S. C., 3 Barb., Ch. R., 120), the trustees resolved, to convey all its property to trustees for the payment of its debts. Their petition, presented to the vice-chancellor, was for an order permitting the corporation to sell and convey its property to trustees, “in trust as aforesaid;” and an order was made according to the prayer of the petition. Hot only the reasons for the sale, but also the proposed manner of applying the proceeds, were stated in the petition, and the chancellor says, it was a matter of discretion with the vice-chancellor, whether he would make the order or withhold his consent. The practice of negotiating and agreeing upon terms first, and then laying the

The next objection is that the application was not made by the corporation, but by the trustees. The petition states that, at a meeting of the church and congregation duly called, the trustees were authorized and directed to make application for leave to convey. A religious corporation consists of the persons who have been stated attendants upon divine worship for one year, and have contributed to the support of the church, according to its usages and customs. Such persons are also the corpora-tors. All corporations act through and by their officers, or other constituted agencies to which the corporators have delegated the power to act; and especially are the trustees of religious corporations invested with the custody, care and supervisory control of all the temporalities appertaining to the church, and through them alone the corporation can act. The direction and authority given to the trustees made the application as much the application of the corporators, as if each individual had signed the petition. The statute does not prescribe any form, nor docs it, in terms, require that a majority of the corporators should unite. No corporation, however, can act unless its action is invoked by a majority of the corporators. This rule is applicable to all bodies, unless a less number are'given the power by some special provision of law. The statute being silent, the court will intend, for the purpose of acquiring jurisdiction, that a sufficient number have authorized the

All difficulty in the way of the case before us, is removed by the statements made in the petition, and the papers annexed to it. It says there were sixty-seven pew-owners or pew-holders, of whom forty-one or nearly two-thirds had signed a written consent and request, that an order be made directing the trustees to convey. It further states, that all the other pew-owners and pew-holders were in favor, and approved of forming the union of the two churches. Besides, the proceedings of a public meeting of the church and congregation, called pursuant to public notice, which are annexed to the petition, show an express authority from the corporators to the trustees. There was, therefore, an abundance of evidence before the court to show that the application had the approval of all the corporators. The third objection is, that the order does not direct the application of the moneys arising from the sale. The consideration for the sale was not the nominal sum of five dollars named in the deed.

The agreement set out in the petition, by which the defendants agreed to assume and pay the plaintiff’s debts,

But it is said the transaction between these parties, although sanctioned by the court, was not such a transaetioh as should be sustained. Let us see what it was.' The Madison Avenue Baptist Church had purchased lots, and erected thereon a church edifice, at the cost of one hundred and twenty-two thousand dollars, and were ill debt to' the amount of seventy-three thousand dollars. Owing to derangements of business, and of the finances of the country, and the existence of the war (1862), they had failed to realize from subscriptions, or the sale of pews, what they had anticipated, and were, therefore, unable to pay their liabilities, or meet the current expenses of the church. In this exigency it was found that the Baptist church in Oliver street had resolved to sell their church property and remove up town. It was also found that the church in Oliver street would have a surplus in money, on a sale of their property, of about sixty-five thousand dollars. The church in Madison avenue sought the union, and- it was finally agreed, with the consent of all the corporators of each society, that the Oliver Street Church should take title to the church in Madison avenue, pay the

It is quite clear that the arrangement was mutually advantageous, each party receiving a substantial benefit. TJie plaintiffs were at once relieved from the pressure of a heavily impending debt; and, in this aspect, the sale may be regarded as a quasi transfer of their property in payment of their debts, within the principle of De Ituylev agt. St. Peter’s Church, sup. Although, in strictness, it dissolved the plaintiffs’ corporation, and was an abandonment of their distinctive separate organization, in reality it was a mere union with another congregation, holding the same tenets, conforming to the same faith, and submitting to the same governmental discipline.

A corporation aggregate has perpetual succession in its trustees or officers, vested with its temporal concerns. The officers may cease to act, but the succession continues. The change in this case was nominal rather than real. The plaintiffs’ corporators became corporators in the transformed church, by force of the agreement; they were eligible to office, and entitled to vote. In short, the agreement guaranteed to all the corporators of the Madison Avenue Church the rights, privileges and powers in the united church, which they had before possessed and enjoyed in their separate organization.

I am not prepared to say that if the. sale had operated to extinguish the plaintiffs’ corporation as a religious denomination, it would be freed from exception. Yet such a sale, with a distribution of the proceeds among all the corporators, with the consent of all having an interest in the subject, would seem to be within the discretion of the court to sanction and approve. (Matter of Church in Saugerties, sup.) The mere denominational character of a church may be changed by its corporators at pleasure. (First Baptist Church agt. Wetherel, 3 Paige 296 ; Miller

The idea that the denominational or sectarian character of a church enters as an element into the act of incorporation, is exploded in the cases last cited. A society becomes incorporated as a religious, not as a sectarian body (Petty agt. Tooker, 21 N. Y. R. 267); and the same principle which allows a majority of corporators to change the articles of faith would seem to authorise a majority of two societies, entertaining the same belief, to unite and form themselves into one church. And such a union, in my judgment, cannot be improper. An example of such a union is found in the case of Cammeyer agt. The United German Lutheran Church (2 Sandf Ch. R. 186), where one church society transferred all its real and personal property to another church society, and the united churches thereafter worshiped as one congregation. It is true of that case that neither of the societies were incorporated at the time of the union; nevertheless, the case is an apt illustration of the propriety, as it is a pointed instance of such a union.

I am not aware that any court has assumed to have jurisdiction over the spiritual body which constitutes the church, as distinguished from the temporal body, which consists of its members and is represented by its trustees. Over such spiritual body, legal or temporal tribunals do not profess to have any control; hence., all questions concerning the faith or practices of the church and its members, belong to the church judicatories in their connection; while on the other hand, such ecclesiastical judicatories cannot interfere with the temporal concerns of the society with which the church members are united. I may state in this connection, that the society long in existence, insti

The doctrine that contracts of corporations, which are ultra vires, are void, does not receive favor with the courts. Where parties have contracted in good faith with a corporation, and have executed their contract, and the corporation has received and accepted the benefits, it is not to be tolerated that they can be permitted to seek exemption, on the ground that they had no power to contract. (Fuller agt. Heath, 11 Wend. 477 ; State of Indiana agt. Warren, 6 Hill., 33 ; Sherman agt. N. Y. Central R. R. Co., Barb. 239.) The only exceptions to this rule are those cases where corporations are prohibited by some express provision of law, or are required to contract in some prescribed form. (Brady agt. The Mayor, &c., of N. Y., 20 N. Y. R., 312; Bonesteel agt. The Same, 22 Id., 168 .) In this view, it seems plain that the plaintiffs could have been compelled specifically to perform their contract, by procuring an order to convey, and by transferring the title to their property to the defendants. (Fry on Spec. Perf, 233.) The case of Wheaton agt. Gates, before referred to, seems to have been regarded by the learned justice at special term as controlling. It was also insisted by the respondent’s counsel that it was conclusive. It is proper to say of that case, at the outset, that it was an action brought by a corporator for the purpose of having declared null and void an order of a county court, giving its sanction to a sale of church property. In that respect it differs from this case, which is an attempt to attack collaterally the validity of a similar order, which, m my opinion, can be done only by a direct action. (Clark agt. Van Surlay, 15 Wend., 436 .) The petition in the case cited was verified by four only, of six trustees, and had annexed to it the concurrence of a few only of the members

As a decision, Wheaton v. Gates shstains these general propositions : That the statute confers no power upon the ''court, to control or manage the property of religious societies ; that the Avhole power of administration is conferred upon the trustees, with the single qualification, that before they can sell they must apply to the court for its allowance of the transaction, and to allow or disallow the application of the moneys to such purposes, as the corporation shall represent to be most for the interests of the

The judgment should be reversed, and a new trial ordered, with costs to the appellants on the appeal, to abide the event.

Barbour and Garvin, JJ., concurred.