Lynch v. Pfeiffer

Headnote

Religious corporation — right of, when unaible to pay its current expenses, to sell its property to another religious corporation, subject to the payment of all debts and liens.

Appeals from judgments of tbe Special Term in both of tbe above entitled actions, which were cross actions to compel the specific performance of a contract for the sale of certain lands.

Tbe principal question on these appeals arose upon tbe validity of tbe sale of tbe premises agreed to be conveyed, by the contract described in tbe complaint, by tbe Manhattanville Presbyterian Society to tbe trustees of tbe Presbytery of New York, a body corporate under tbe laws of the State of New York. That sale was made under and pursuant to an order of the Special Term of the Supreme Court of this district, entered on the 12th day of May, 1875, upon the petition of tbe Manhattanville Presbyterian Society, presented in that month. The petition set forth that the petitioners were a religious corporation incorporated under an act entitled “ An act for the incorporation of religious societies,” passed April 5, 1813, and the acts amendatory thereof; that the corporation was seized in fee of the premises; that the premises were mortgaged under and pursuant to an order of the court to one William Yan Allen, to secure the sum of $3,250 and interest, by a mortgage bearing date April

30, 1857, on which there was then due the principal sum of $1,500 and interest from the 1st day of June, 1877, and by several •■assignments was then held as a subsisting incumbrance by the trustees of the Presbytery of IS ew York; that there were unpaid assessments upon the premises f» r street openings to the amount of -$1,500, bearing interest at twelve per cent; that the church membership and congregation were so i educed in numbers as to make it impossible to sustain the current, expenses of the church property .and of religious worship therei i; that the corporation had no income except from the rental of pews, which was wholly insufficient for the purposes afores, lid, and that it had no means of paying the incumbrances except by a sale of the premises; that besides the incumbrances it was owing a floating debt of $300, and the church building required expensive repairs for its preservation which it was unable to make; that the property was so located as to be exposed to other assessments for street openings or •other objects, and that at a met ting of the congregation, on due notice, it had been resolved to tr¿ nsfer the church property to the trustees of the Presbytery of Neir York, and that the trustees were j authorized to take all measures i eeessary for the legal transfer of the same. The petitioners furth )r showed that the trustees were duly incorporated by act of th s legislature, and were thereby declared to be capable in law of taking by gift, devise, bequest, grant or purchase for religious or charitable purposes, and of holding and otherwise disposing of s ich property; and “ they prayed that an order may be entered her« upon authorizing them to execute -and deliver to the trustees of the Presbytery of New York a good ;and absolute deed in fee simple for conveying to them and to their ■successors and assignees the premises above described, with the ■buildings thereon erected, subject to all existing incumbrances, the amount of which, together v ith said floating debt, shall constitute the consideration to be i ^pressed therein, to be had and ■holden for the purposes expressed n their said act of incorporation.”

Upon this petition the court granted an order reciting the material facts of the petition and authorizing the society to execute and ■deliver to the trustees of the pres jytery, etc., a good and absolute deed in fee simple, for conveying the premises, subject to all existing incumbrances, and that the ai munt thereof, together with the

floating debt of $300, should constitute the consideration to be expressed in the deed, and that said premises be held by the said trustees for the purposes designed and expressed in their charter,, as set forth in the petition. Subsequently, and on the 18th of May, 1875, a warranty deed, with full covenants, was accordingly-executed, the consideration of which was declared to be the sum of $3,766, and the land was conveyed subject to all the severalincumbrances mentioned in the petition.

The court at General Term said: “ While the question is not entirely free from doubt, we are of opinion that the court acquired; jurisdiction to make the order under the petition, that the order is-a valid one, and that the deed executed thereunder conveyed a good title to the trustees of the Presbytery of New York. That body was, at that time, the owner and holder of the mortgage to Van Allen of $1,500, with the accrued interest thereon which remained unpaid, and that indebtedness was extinguished as part of the consideration by the deed. The land was conveyed also subject to all existing incumbrances, and the incumbrances are shown to have-been assessments upon the property itself to the extent of $1,500-, and the interest at twelve per cent which had accrued thereon. This was a charge upon the land and not upon the Manhattanville Presbyterian Society; that is to say it could only be enforced against the land by a sale thereof, and not against the society or any of its other property, if any it had. The sale and purchase, therefore, of the land, subject to that assessment, was equivalent, on the part of the presbytery, to an assumption of the lien of the assessment, inasmuch as there was no way of enforcing it but by a sale of the property. It is not material, therefore, that there should be any covenants on the part of the presbytery, because the nature of the lien made the conveyance, in the form in which it was executed, equivalent to such covenants. So far, therefore, as respects the great bulk of the consideration expressed in the execution and delivery of the deed, it either extinguished it or so subjected the land to its payment, that it was equivalent, so far as the vendor is concerned, to the áctual payment of that part of the consideration.

“ The residue of the consideration was the floating debt to which the land was subjected by the deed. The particular nature of that does not appear, but the presbytery received the property as a

fund out of which, that indebted ness was to be paid, and the society executing the grant had no other means of payment. There would be little difficulty, therefore, ii holding that the property in the hands of the presbytery was a i rust for the payment of the claims constituting the floating debt, and as the case fails to show whether they were or were not paid, it s fair to presume that that part of the consideration was in some i orm paid by the purchasers. The Manhattanville Society must be assumed to have received the full benefit of the consideration to be paid for the property, and the -circumstances shown as to the < ondition of the society at the time •of the sale were sufficient to authorize the order of the court. They showed a necessity for tlu disposition of the property, and there is no reason, apparently, to doubt that the disposition made was for the best interests of the society. The title derived, therefore, under the deed executed to the presbytery, so far as the question of the validity of the order is concerned, was, we think, properly held to be good.

“ The result of our examinatio a is that the conclusion reached by the court below was right, and tl te judgment should, therefore, be affirmed, with costs.”