Rector of All Saints Church v. Lovett — 1 N.Y. Super. Ct. 191

Majority

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The Rector, Church Wardens and Vestrymen of All Saints Church in the City of New-York versus George Lovett.

Oct. Term, 1828.

Headnote

Where there has been a body corporate defacto for a considerable period of time, claiming at least to be such, and holding and enjoying property as a corporation, it will be presumed that every mere formal requisite to the due creation of the corporation has been complied with.

Where a person undertakes to enter into a contract with' a corporation in their corporate name, and accepts an official appointment under them, he thereby admits them to.be duly constituted a body politic and corporate under’such name; and cannot afterwards set up, by way of defence, that no such corporation ever existed, but is concluded by his admission.

Where the trustees of a religious incorporation, bring a suit'eofore officii, the defendant cannot object to their right of recovery, upon the ground that they arc not trustees, without showing that proceedings have been instituted against them by the government, and carried on to a judgment of ouster. Being trustees defacto, all their proceedings are valid, until they are ousted by a judgment at the suit of the people, and no advantage can be taken of any non-user or misuser, on the part of the corporation, by any defendant many collateral action.

Assumpsit for money had and received. Plea,[ the general issue, and payment, with a notice of set-off.

This cause was tried before Mr. Jutsice Oakley.

At the trial, the plaintiffs produced a certificate of incorporation, bearing date the 17th day of May, 1824, which recited, that in pursuance of notice given, the male persons of full age, belonging to the church, congregation or society in the city of New-York, in which divine service is celebrated according to the rites of the protestant episcopal church, met at the house of the Rector, the Rev. William A. Clarke, for the purpose of incorporating themselves under the act entitled “ an act to provide for the incorporation of Religious Societies,” “ and the act to amend the same.” That at said meeting George Dominick was called to the chair, and presided : that certain persons, therein named, were appointed vestrymen, and the name by which the said church, congregation or society, should’be known in law, was agreed upon and fixed. This certificate was

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regularly subscribed and sworn to, before the first Judge of the Common Pleas, in the city and county of New-York, and duly recorded in the office of the Register theieof.

The .plaintiffs then .produced their book of minutes, and called their secretary as a witness, who testified, that by a resolution passed by the plaintiffs in April, 1825, the defendant was appoint-? ed their treasurer, and acted as such, until the spring of the year 1827 : that the proceeds of certain property belonging to the plaintiffs had passed into the hands of the defendant, who had acknowledged to the witness, that the balance of such proceeds remaining in his hands was $807, 70. The witness further testified, that on the 21st day of April, 1827, Joseph F. Perry was appointed treasurer in place of the defendant. The plaintiffs then proved, that notice had been given to the defendant to deliver over to the new treasurer all the property belonging to the plaintiffs in his hands; but that he had declined, upon the ground that the election of wardens and vestrymen, who had made the new appointment, was illegal and void.

The plaintiffs here rested their cause; whereupon the counsel for the defendant moved for a non-suit, upon the ground that the plaintiffs had not shown themselves entitled to maintain this action. The motion was overruled by the presiding judge, whose opinion was excepted to by the defendant.

The.counsel for the defendant then offered to prove, that the church in question was originally established as a free church, and that its funds were subscribed with the express understanding, that the establishment should forever remain as a free Episcopal Church. That the certificate of incorporation was drawn by the said Rector, who having omitted to insert a clause stating that said church was to remain free, had promised, upon objections made by the vestry, that the omission should be supplied by a resolution, which was passed on the 10th of June, 1824, and stated that the pews of said church, when erected, should forever be free. That for the purpose of inducing persons to subscribe, a printed paper, headed “ plan for a free church,” bearing signatures of the bishop and other clergy, was circulated; together with another of a like kind, drawn up by the said Rector* that

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the original vestry were warmly in favour of the plan of a free church, and that the said rector, although professing to entertain the same sentiments, was secretly actuated by the fraudulent purpose of appropriating the funds raised, to the different object of a church upon the ordinary plan. That the said rector fraudulently avoided the meetings of the vestry, where his presence was indispensable for a period of move than seven months: that during said period, while the functions of the vestry were suspended, the said rector fraudulently endeavoured to qualify a number of persons having no interest in said church, to become voters at the next election: that in the month of April, 1827, the last-mentioned election was held, at which the said rector presided, and that he, notwithstanding the remonstrances of those who had contributed their funds, received the votes of persons having no interest in said church, for wardens and a vestry, according to a printed list, which he had prepared and circulated, whereby he procured the former wardens and vestry to be removed, although a large majority of the legal voters were in favour of their re-election. That several of the newly-elected wardens and vestry had refused to accept their appointments, but the remainder, with said rector, claiming to be the corporation, had erected a new church, in which the pews were not free, but had been sold to the highest bidder. That all the property of the corporation which could be obtained by the new wardens and vestry had been used to .defray the expenses of erecting said last-mentioned church, and the funds now in the hands of the defendant, if recovered, were to be devoted to the same object. That the whole of said proceedings were fraudulent, illegal and void ; that the defendant had never been legally removed from his office, and that the resolution appointing his successor was not a resolution of the corporation, and that no legal demand had ever been made upon the defendant for the money in his hands in behalf of the corporation.

These several matters we. 3 ruled-by the presiding judge to be inadmissible as a defence to this action, and the jury thereupon found a verdict for the plaintiff.

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Mr. Roosevelt for the defendant,

now moved for a new trial, and contended,

I. That the evidence produced on the part of the plaintiffs was not sufficient to entitle them to a verdict. On the plea of the general issue, the plaintiffs must prove themselves to be a corporation to be non-suited. [Hartford Bank v. Murrel, 1 Wend. R. 87. 19 John. R. 300. 14 John. R. 416.] In this case, the principal, if not the only proof produced by the plaintiffs upon this point, was the certificate of incorporation. This certificate having been filed and recorded under the provisions of the act under which the plaintiffs exist as a corporation, if they have any legal existence, [2 R. L. 112.] must be conformable to its requirements, or it will not be evidence to support the issue.

By this act it is expressly provided, that at the first meeting of the vestry, the rector, or if there be none, or he be necessarily “ absent, then one of the church wardens or vestrymen, or a ny other person called to the chair, shall preside at the first election.” And it is also further provided, [5 Vol. L. 34. it.] that he, “ together with two other persons, shall make certificate,” &c.

Now, from the certificate before the court, it appears that the rector did not preside at the first meeting of the vestry: but why he did not, is not shown. It does not even appear that he was absent; and from any thing disclosed by the certificate, he might have been present at the meeting, without presiding. If he was absent, then that certificate should have stated, that he was necessarily so, and have assigned that as a reason why another person was called to the chair. The certificate, so far from showing that the requirements of the act have been complied with, proves that they have been neglected": it cannot, therefore, be used as any evidence to- prove the, existence of the plaintiffs as a corporation. Upon this point, therefore, the plaintiffs are without proof, and should have been non-suited at the trial. [1 Kyd, 451.]

II. The plaintiffs, before they could bring this action, were hound to make a legal demand. [Utica Bank v. Van Gieson, 18 John. R. 486. 9 J. R. 361.] In order to do this, they must show an authority to make - such demand; and whether they had

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or not, depends entirely upon the validity of the election of the wardens and vestry which removed the defendant and appointed his successor. The evidence offered on the part of the defendant, as to this point, or some part of it at least, ought to have been admitted.

This evidence would certainly have established the fact, that the'last election was fraudulent and illegal. That all the objects for which the subscriptions were first obtained were perverted, and a church finally established which was the very opposite of the one intended by those who contributed their money. If the election was illegal, then the defendant has never been removed from office, no legal demand has been made upon him, and he has a right to retain the money in his hands, as trustee, for those who gave it, and who wish him to retain it.

The question in this case is not as to who are the trustees de facto, but who are the trustees de jure. Those who claim the money, must prove a right to demand it; and if their official stations have been obtained by fraud, they have no legal existence, and cannot have any legal or moral rights. In the case of the People v. Runkle. [8 John. R. 363.] (which was a contest betweeen two sets of trustees,) it was expressly decided, that the only question was, as to who were the legal parties, not who were trustees defacto. A new trial was granted on that ground, and the question finally settled in favour of the old trustees.

The question of a dissolution by surrender, or by acts, which in judgment of law amount to a surrender, may be tried in a civil suit without a quo warranto. And if a corporation suffers acts to be done, which destroy the end and object for which it was instituted, it is equivalent to a surrender of its rights. Slee v. Bloom, [ 19 John. 456 .] The defendant also offered to prove, that the persons by whose votes the present vestry were elected, were not qualified to vote at all; and that such votes were fraudulently procured by the rector. This evidence, also, should have been admitted, because these illegal votes, of themselves, avoided the election. [2 Kyd, 7, 8.]

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Mr. Beverly Robinson, for the plaintiffs, contended,

I. That the defendant had no right to question the legal existence of the corporation, having himself admitted that, by accepting and holding an office under the plaintiffs. If the question could be gone into by the defendant, there is enough before the court, to enable them to infer that all the requirements of law have been complied with. After the plaintiffs have been exercising their rights as a corporation, for years; after having filed and recorded a certificate, to which no objection was made by any of the parties in interest, it would be a stretch of nicety to say, that it was the presumption of law, that the provisions of the act had been violated, by the omission of a fact in the certificate which was in no way material. It is admitted, that if the rector were necessarily absent, at the first election of the vestry, then another person might preside.

We find by the certificate, that a person other than the rector did preside, and the natural inference is, that the rector was necessarily absent. But whether that be so or not, cannot be inquired into by the defendant, because he has, by his own acts, expressly admitted that the plaintiffs are duly incorporated. He is estopped to deny what he has expressly admitted: his own acts are conclusive upon him. [14 John. R. 238. 1 Phil. Ev. 171.]

II. The plaintiffs had a perfect right to make the demand, because the trustees chosen in 1827, became such de facto, let their legal existence be what it might. The evidence offered by the defendants was clearly inadmissible in this collateral action, even if it had been true. The plaintiffs had no objection to join issue upon the facts offered to be proved, if the inquiry could have led to any profitable result. But if the defendant wished to question the validity of the election, he should have done it by a proper course of proceeding, which would have put that matter directly in issue. It is an established principle, that any misuser or non-user, amounting even to ad issol ut.ion of the corporation, cannot be set up by way of defence to an action by such corporation.

The defendant personally is not permitted to question the validity of the proceedings of those who are trustees in fact, as

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great inconvenience and embarrassment would ensue, if those questions were constantly to be agitated by every person who might chance to come in collision with the corporation.

The evidence, therefore, was rightfully rejected. [6 Cow. R. 27. Trustees of Vernon Soc. v. Hills. ]

This was an action of assumpsit for money had and received. The defendant was treasurer of the church, and as such received the proceeds of certain lands which belonged to the church, and which were sold during the time he acted as treasurer. In 1827, a new treasurer was appointed, and the defendant refused to pay over to him the balance of moneys remaining in his hands. This action was brought to recover such balance.

The first objection to the plaintiffs’ right of recovery is, that the certificate of their incorporation is defective, and that they do not show themselves to have been duly created a body corporate, and entitled to sue as such.

By the act authorizing the incorporation of protestant episcopal churches [2 R. L. 112.] it is provided, that at the first election of a vestry, the rector, or if there be none, or he be necessarily absent, one of the wardens or other person shall preside, and shall unite in the certificate to be filed under the act. By the certificate produced by the plaintiffs it appears, that the rector did not preside at the first election; nor did it appear by the certificate or by any other evidence, that he was necessarily absent. The defendant contends, that the requisitions of the act were not complied with, and that the plaintiffs never became a corporate body.

The certificate of incorporation is dated on the 27th of May, 1824. From that period to the present, the whole case shows that there has been a body corporate, defacto at least, claiming to be a church, and holding and enjoying property as such. After such a lapse of time I am of opinion that it ought to be presumed, that every formal requisite to the due creation of the corporation was complied with. The presence or absence of the rector at the first election of a vestry was a very immaterial cir

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cumstance ; and as the law does not prescribe, that the fact of his absence shall be stated in the certificate, it will be intended if necessary to give validity to the incorporation. -

I am of opinion, also, that the defendant cannot be permitted to allege that the original incorporation of the church was invalid, or irregular. In the case of the Dutchess Cotton Manufactury v. Davis, [ 14 Johns. 238 .] the Supreme Court held, ’ that where the defendant undertakes to enter into a contract with the plaintiff in their corporate name, he thereby admits them to be duly constituted a body politic and corporate under such name. In the present case the defendant accepted from the plaintiffs, acting as a corporation, the appointmentof treasurer; hé acted several years under such appointment, and obtained possession of the money of the plaintiffs, now in his hands, by virtue of the official station he held under them. It would be a volation of all common sense and justice to permit him now to set up, that no corporation ever existed. I consider the defendant as coming fairly within the principle laid down by the Supreme Court in the above-mentioned case. He has, in the most formal manner, recognized and admitted the existence of the body corporate, and must now be concluded by such admission.

II. The defendant contended, that the defence set up by him at the time was improperly excluded. He offered to prove, in substance, that the church in question was originally established as a free church: that the rector by various fraudulent a.rd illegal claims defeated that object, and particularly, that the election of the vestry in 1827, (by which he was removed from the office of treasurer, and a new one appointed,) was illegal and fraudulent. The judge held this defence to be inadmissible.

In the case of the Trustees of Vernon Society v. Hills [ 6 Cowen’s R. 23.] the Supreme Court have expressly decided, that when the -plaintiffs have acted as trustees of a religious incorporation, and have brought a suit colore officii, the defendant cannot sustain an objection to their right of recovery, on the ground that they are not trustees, without showing, that proceedings have been instituted against them by the goverment, and carried on to -a judgment of ouster. The doctrine of the case is,

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that being- trustees de facto, all their proceedings are valid, till they are ousted by a judgment at the suit of the people, and that no advantage can be taken of any non-user or mis-user on the part of the corporation by any defendant, in any collateral" action.

la the present instance it appears, from the proof in the case, and from that offered by the defendant that the vestry chosen in 1827 became trustees of the church “ de facto That they acted as such: that they removed the defendant from his office as treasurer, and appointed a successor, and that they took possession of the temporalities of the church claiming to be the corporation. This suit, then, is clearly brought by them colore officii, and the character in which they sue cannot be questioned bn the ground of any illegality in their election. The case in the 6th of Cowen’s R. seems to be conclusive on the subject.

It was a part of the defence offered, that several of the vestry elected in 1827, refused to accept their appointment. This offer was clearly not broad enough, if under many circumstances the, refusal by those elected to act, could have been taken advantage of by the defendant. It is clear, that nothing short of the refusal of a majority to take upon themselves the character of trustees could, in any event, have affected the right of those newly elected to represent the corporate bodjr.

I am, on the whole, clearly of opinion, that the defence offered was rightly rejected, and that the motion for a new trial must be denied.

Motion to set aside the non-suit denied.

[B. Robinson, atty. for the plff. J.

Cases cited

Dutchess Cotton Manufactory v. Davis 14 Johns. 238 N.Y. Sup. Ct. p. 198