Methodist Episcopal Society v. Perry — 20 N.Y. St. Rep. 633

Majority

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Matter of Consolidation of the Court (alias Liberty) Street Methodist Episcopal Society of Rome, etc., App’lts, v. Henry N. Perry et al., Trustees of the Court Street M. E. Church, Resp’ts.

(Supreme Court, General Term, Fourth, Department,

Filed January, 1889.)

Headnote

1. Corporation (religious) cannot be incorporated for the purpose of CONSOLIDATING IT WITH ANOTHER.

In this state the purposes for which corporations can he organized are specified in the statutes, and they do not authorize the formation of a religious corporation for the purpose of consolidating it with another to the ultimate end of acquiring the properly of the other and applying it to the maintenance of a church of a different polity and with a somewhat different faith.

2. Same—When legally incorporated. •

A church is not a legal religious corporation until its certificate of incorporation is proved and recorded.

8. Same—Boards of trustees of two corporations composed of same PERSONS CANNOT-MAKE VALID CONTRACT'" OF CONSOLIDATION.

When am'aj-rity of tie trustees of one corporation are also the trustees of another corporation, hoards of trustees so constituted cannot enter into a valid contract for the consolidation of the corporations.

4. Same—Order of consolidation discretionary—Laws 1875, chap. 209; § 5, Laws 1876, chap. 176, § 3.

It is discretionary with the court to grant or withhold an order for the consolidation of two existing legal religious corporations.

Jenkins & Devereux and James B. Jenkins, for app’lts.

The Liberty Street M. E. Society was organized and continued independent of the conference. Miller v. Gable, 2 Denio, 493 , 516; Watkins v. Wilcox, 6 N. Y. Sup. Ct., 539 . Being independent it had the right to change its faith, name and discipline. Boons Law of Corporations, § 274; Robertson v. Bullions, 11 N. Y., 243 ; Petty et al. v. Tooker, 21 id., 267 ; 36 id., 161; Holmes v. Mead, 52 id., 332.

The church being closed for repairs the prayer meetings, etc., were held at Shepard’s house, and it was therefore a proper place for organization, etc. Trustees v. Bly et al., 73 N. Y., 323 .

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Unauthorized acts of officers of a corporation may be ratified; all of the members but two did ratify the proceedings by joining the Wesleyan church. Boon’s Law Corporations, § 281.

Scripture & Backus and Oswald P. Backus, for. resp’ts.

*No public notice of a meeting to consider the question of consolidation was ever given. Laws 1875, chap. 209, sec. 4, are not repealed by chap. 176, Laws of 1876. There is no express repeal, and there being no repugnancy, a repeal cannot be implied. Mark v. State, 97 N. Y., 572 , 578; 89 Nv Y., 401, 403. ■ ■ "

The Laws of 1875 and 1876, above referred to, have impressed on all religious corporation a denominational character. First R. P. Ch. v. Bowden, 14 Abb. N. C., 356 ; 10 id., 1; Isham v. Fullager, 14 id., 363; Isham v. Trustees, 63 How., 465 ; People v. Connelly, 3 N. Y. State Rep., 372; 42 Hun, 98 .

Trustee Perry having no notice of any of the proceedings to consolidate the action of the remaining, trustees acting separately and privately is void. Sec. 5, chap. 60, Laws 1813; Comemeyer v. W. G. L. Churches, 2 Sandf. Ch., 186 , 229; Peoples' Bank v. St. A. R. C. Ch., 39 Hun., 498 , 501; affirmed 16 N. Y. State Rep., 856.

Appeal from an order of a special term granted October 8, 1887, on notice vacating an order óf a special term granted November 11, 1885, without notice, consolidating the Court (alias Liberty) street Methodist Episcopal Society óf Rome, and the First Wesleyan Methodist Church of Rome, under the corporate name of the First Wesleyan Methodist Church of Rome, N. Y.

July 24, 1862, a religious corporation was duly incorporated (pursuant to section 3, of chap. 60, of the Rev. Laws of 1813, vol. 2, p. 212), under the líame óf “ the trustees of the Court Street Methodist Episcopal Church in Rome.” The corporators professed the faith of the Methodist Episcopal Cliurch. December 30,1862, the corporation received, under the' name of the “Court Street M. E. Society,” a grant of a church edifice and lot on Court street, in Rome, from.the Court Street Baptist Society in Rome. In 1862 the county of Oneida was within the Black River Conference of the Methodist Episcopal Church, and remained therein until 1868, when the Central New York Conference was formed which included said county; and it remained therein until 1872, wlien 'the Northern New York Conference, was organized which embraced said county, and within which conference said county now is. In April, 1863, said church applied to the Black River Conference for a preacher; its application

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was granted, and the church then became, and continued a member of that conference and its successors, until .1885, receiving its preachers from said conferences, and in all respects recognizing the jurisdiction of the conference. The church continued to own and occupy its property on Court street until October 7, 1878, when it was exchanged for a church edifice and lot on Liberty street, and thereafter the corporation (the civil organization) and the church (the religious organization) were known as ,“ the Liberty Street Methodist Episcopal Church in Rome;” but it.does not appear that the corporate name was changed, pursuant to the statute. In April, 1884, the Northern New York Conference assigned the Rev. Ebenezer Arnold as the preacher in charge of this church, and he entered upon the discharge of his duties; but before the expiration of the year many of the members of the church and congregatian became greatly dissatisfied with him, and in April, 1885, sixty-one of his parishioners petitioned the conference not to continue him in charge of their church for another year; but the petition was not granted, and he was assigned as the preacher in charge for the next ecclesiastical year, In the language of the referee, “From that time forward until October 6, 1885, troubles and discouragement continuously existed between him and such persons, and there was great lack of obedience by him and such memers, to those cardinal doctrines and behests of their denominational faith which all professed; to promote peace and unity; to bear one anothers’ burdens; to prevent each others stumR lings * * * and to pray and sympathise with each other.”

From April, 1885, to October 6, 1885, David Byam, Adir» H. Butler, Henry N. Perry, Charles Shepard and Jesse M. White, five in all, were the trustees of said corporation.

A few days before October 6, 1885, seventy-three out. of the eighty-five members of said church signed a paper which is called a “pledge,” of which the following is.a copy: “We, the undersigned, members of the Trinity M' E. Church, believing that the interests of said society would be promoted by a change of our church name, relations and discipline, pledge ourselves to change o.ur name to the First Wesleyan Methodist Church of Rome, and tó adopt the discipline of the Wesleyan Church of America,reorganizing as such, taking our church property with us.”.

This declaration of intention clearly discloses the motives which actuated these persons in subsequently attempting to organize another religious corporation, and obtain a consolidation of it with the old corporation October 6, 18851 Thirty-six of the members of the church met at the dwelling house of one of the members and signed/a certificate of incorporation, by which they assumed to incorporate the

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the First Wesleyan Methodist Church of Borne. Before this date no such corporation or church had existed in Borne. This meeting was not held pursuant to any public notice, nor at a place where the persons who met had been accustomed to meet for stated public worship. The execution of this certificate was proved by a subscribing witness October 20, 1885, and the certificate was recorded October 24, 1885, in the office of the clerk of the county of Oneida. In this certificate it is recited :

“We, the undersigned, four of the trustees and seventy-one of the late members of the Liberty Street M. E. Church of the city of Rome, Oneida county, N. Y., and whose names and seals are affixed to this instrument, do hereby certify that on the 6th day of October, 1885, the male members of full age worshipping in the church aforesaid, and all being members of the said Liberty Street M. E. Church aforesaid save fourteen only, and all the trustees save one, and all the stewards save three, believing the interests of said members and society will be promoted and enhanced by a change of our church relations, and desiring to withdraw from the discipline of the M. E. Church and unite with and be subject to the discipline of the Wesleyan Church of America, taking our church property with us, and belonging to a church in which divine worship is celebrated according to the rights of said church, not already incorporated, met at No. 9 Court street, in the city aforesaid, for the purpose of incorporating themselves, and did then and there, etc. David Byam, Adin H. Butler, Charles Shepard and Jesse M. White, four of the members and trustees of the old church, signed this certificate, and Byam and White were named in the certificate as trustees of the new church. October 6, 1885, an agreement to consolidate these two corporations (if they were two legal ones) was signed by David Byam, Adin H. Butler, Charles Shepard and Jesse M. White, four of the trustees of the old church, and by all of the trustees of the new church, by which it was recited that the new church had neither property nor debts, and that all of the property of the old church should be conveyed to the consolidated church, which was to be under the discipline of the Wesleyan Church of America.

October 23, 1885, Adin H. Butler, David Byam, Charles Shepard and Jesse M. White, still assuming to act as trustees of the old church, signed and verified a petition to the supreme court for the consolidation of the two corpora- . tians; and on the same day the seven trustees of the new church signed and verified, a like petition. Upon these petitions an order was granted at special term consolidating the corporations.- -

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.November 20, 1885, Henry N. Perry (who was one of the trustees of the old church) and four other members of the church signed and verified a petition for the revocation of the order of consolidation, upon the matter coming on to be heard, it was referred to a referee to take evidence in respect to the questions of fact in dispute, and to report, with his opinion. A great amount of evidence was taken, the printed record containing 292 pages. The referee reported that the attempted consolidation was illegal and that the order of consolidation should be vacated, which report was confirmed by the court.

In this staté the purposes for which corporations can be organized are specified in the statutes, and we know of no statute authorizing the formation of a religious corporation for the purpose of consolidating it with another, to the ultimate end of acquiring the property of the other and applying it to the maintenance of a church of a different polity and with a somewhat different faith; nor where the consolidation statutes designed to authorize the consolidation of an existing religious corporation with one organized solely for the purpose of consolidation, but they were designed to enable existing religious corporations organized in good faith for the advancement of religious interests, and for a time carried on for such purposes, to consolidate when it becomes apparent that such interests can be better advanced by the union of the corporations.

On the 6th day of October, 1885, the date of the execution of the consolidation agreement, the First Wesleyan Methodist Church of Rome was not a legal religious corporation, because the execution of its certificate had not been then proved or the certificate recorded. Burt v. Farrar, 24 Barb., 518 ; Mokelumne Hill Coal and Mining Co. v. Woodbury, 14 Cal, 424 ; 8 South L. Rev. N. S., 528; Min. Cor., § 17; Child v. Smith, 55 Barb., 45 , which was reversed on another question bjr the court of appeals, 46 N. Y., 34 , which court, in considering whether a corporation is legally organized before its certificate of incorporation is filed or recorded, said: “If the parties meant such an organization as-would create a corporation de jure, which could successfully maintain itself against an inquiry on the part of the state, then it is evident that the time had not, at the commencement of this action, arrived at which the $2,000 became due and payable, for the parties had neglected to. file certificates of association in accordance with law.”

While these serious defects of organization may not prevent a corporation from having, for some purposes, a legal ■existence until annulled by an action brought for that purpose, yet such defects are a sufficient reason for refusing an order carrying into effect the proposed consolidation, for

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from such a precedent great wrongs and-mischiefs might easily flow. But, if the First Wesleyan Methodist church of ¡Rome became a religious corporation October 6, 1885, David Byam, Adin H. Butler, Charles Shepard and Jesse M. White, four of the members and trustees of the Liberty Street church, became corporators, and two of them, Byam and White, trustees of the Wesleyan church, by which act the four ceased to be members and trustees (sec. 2, chap. 79, Laws of 1875, Laight Street Baptist Church v. Noe, 12 How., 497 ), of the Liberty Street church, and Byam and White were without power to sign the consolidation agreement or the petition for the consolidation of the churches in behalf of the Court (alias Liberty Street) church. Unless Byam and White were trustee's at this time, the agreement and petition were signed by not one legal trustee.

When a majority of the trustees of one corporation are also the trustees of another corporation, boards of trustees so constituted cannot enter into a valid contract for the consolidation of the corporations. Stokes v. Phelps’ Mission, 47 Hun, 570 ; Metropolitan Elevated Railroad Co. v. Manhattan Railway Co., 11 Daly. 373 ; Wardens, etc., of St. James Church v. Rector, etc., 45 Barb., 356 ; SanDiego v. S. D. & L. A. R. R. Co., 44 Cal., 106 ; 28 A. L. J., 366.

So if the position could be maintained, that the Wesleyan church was legally incorporated October 6, 1885, with Byam and White members of the board of trustees, and if it could be maintained that Byam and White still remained legal trustees of the Court Street church, the contract and the petitions for the consolidation of the two were not legally executed.

Though a legal contract and petitions for the consolidation of two existing legal religious corporations be duly executed and presented to the court, it may, in its discretion, give or withhold an order of consolidation. The statutes provide: “The supreme court may, in case it shall deem it proper, make an order for the uriion and consolidation of such corporations, determining all the terms, conditions and provisions thereof.” Sec. 5, chap. 209, Laws of 1875; § 3, chap. 176, Laws of 1876; § 3, chap. 167, Laws of 1880.

We see no occasion for doubting that the special term wisely exercised its discretion in withholding its confirmation of the attempted consolidation.

The order is affirmed, with costs.

Martin and Kennedy, JJ., concur.