Hyperlawhypertext legal database Madison Avenue Baptist Church v. Baptist Church in Oliver Street 26 N.Y. Super. Ct. 570

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Madison Avenue Baptist Church v. Baptist Church in Oliver Street

26 N.Y. Super. Ct. 570 3 Rob. 570 Court N.Y. Super. Ct. Decision date 1866-02-05 English

Contents

Majority

p. 570
The Madison Avenue Baptist Church, plaintiff and respondent, vs. The Baptist Church in Oliver street, defendant and appellant.

Headnote

1. A religious corporation has, at common law, an inherent light to part with and transfer its property; and statutes which require the consent of a court to such transfer in certain cases, are restrictive upon such common law right, and not the source of it.
2. A particular statute which does that (2 JR. X. 212, $ 11) does not tales away, entirely, the power of alienation. It merely limits its exercise, by requiring the consent of the court thereto; and so far, only, it restrains its power of alienation,
3. As a religious corporation thus does not derive its power to sell from the statute, and any sale by it is made good upon merely obtaining the sanction of the court to it, a substantial compliance with the spirit and purpose of the statute should be all that is required; and be deemed sufficient.
4. When the object of a sale is proper, and in no way conflicts with the policy or design of such a statute, no court would be justified in withholding its consent merely because the corporation had formally applied for permission to convey. An agreement to sell always implies an agreement-to convey as a necessary means of carrying the sale into effect; and an agreement to convey implies a
■ sale previously agreed upon, which needs only a conveyance to consummate it. Her Momeli,, J.
6. The case of Williamson v. Berry, (8 How. H. S. Hep, 495,) commented on, and disapproved.
6. Whenever a religious society has resolved to dispose of its property, and determined upon the terms and conditions of sale, and the application to be
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made of the money arising therefrom, it is in a condition to seek the sanction of the court; and such sanction, when given, may extend to the entire agreement.
7. An application for such sanction is properly made hy the trustees of the corporation, when it is shown that a majority of the corporation have approved of it.
8. It is no objection to an order allowing a sale made upon such an application that it does not direct the application of the moneys arising from the sale. The court having acquired jurisdiction, by a proper application, any mere irregularity or defect in the proceedings subsequent to the petition is amendable. Moreover, the application of the proceeds may be directed by a separate order.
9. Two religious societies may be united, by the abandonment by one of them of its distinctive name and organization, and its merger in the other; and a conveyance of the property of the first to the new society may, under the statute, be sanctioned by the court.
10. The doctrine of the voidness of contracts of corporations by reason of their being ultra vires is not favorably received by courts. Where parties have contracted in good faith with a corporation, and have performed their part of the contract, and the corporation has received and accepted the benefits, it is not to be tolerated that they should be permitted to seek exemption from performance on their part on the ground that they had no power to contract.' The only exceptions to this rule are those cases, either where corporations are prohibited from making certain contracts by some express provision of law, or are authorized to contract only in some prescribed form. Per Moneli, J.
(Before Barbour, Monell and Garvin, JJ.)
Heard January 10, 1866;
decided February 5, 1866.
This action was brought to recover the possession of a plot of ground, on the southeasterly corner of Madison avenue and Thirty-first street, in the city of New York. Prior to the 21st of October, 1862, the plaintiffs, a religious corporation, being the owners of .the plot in question, had erected thereon an edifice, which they occupied as a house of worship. The complaint alleged the ownership of the plaintiffs, and an entry of the defendants. The answer, after denying all the allegations in the complaint not afterwards admitted, for a further and separate defense, set forth certain facts, which appear in the offers of evidence to sustain them, made on the trial. The action was tried before a justice of this court, without a jury.
On the trial, the plaintiffs proved a deed to themselves of the lot in question, dated August 1, 1859, from Catharine Vanderpool, and the possession of the defendants. The defendants
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then offered in evidence a petition, resolutions, consents, and order thereon, which was annexed to and forming a part of their answer, which petition was addressed to “ The Supreme Court,” and by was “ The Trustees of the Madison Avenue Baptist Church.” It is stated, that the Madison avenue Baptist church being a religious incorporation, and owners of the lot on the southeasterly corner of Madison avenue and Thirty-first street, on which they had erected a church edifice and lecture room, at a great cost, ($122,000,) one hundred and twenty-two thousand dollars. That their indebtedness therefor was a large sum, ($73,000,) of which a large part ($61,500) was secured by mortgages upon the premises. That owing to causes set forth in the petition, they were unable to pay their liabilities, or meet their expenses. That such church, and the Baptist church in Oliver street, (also a religious incorporation, located in Oliver street, in this city, which had contemplated disposing of its property and moving up town,) had formed a plan and, made arrangements for uniting said two churches into one, and had agreed upon the following terms for such union: •
“ First. The Madison avenue Baptist church- was to convey all its property to the Oliver street Baptish church, and the members of the Madison avenue Baptist church were to become members of the Oliver street Baptist church ; and thereupon the regular services of the united churches were to be held in the house of worship owned by the Madison avenue Baptist church.
Second. The trustees of the Oliver street Baptist church were to resign, and an election for new trustees ordered by the church and congregation united. The resignation of the present trustees to take effect when others should be elected.
Third. The Oliver street Baptist church to take the necessary steps to cause its corporate name to be changed to the Madison avenue Baptist church.
Fourth. The property now owned by each of such churches, upon such transfer and union, to become liable for the indebtedness of both of them.
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Fifth. As soon as practicable after such union was perfected, and new trustees elected, a sale of the pews in the Madison avenue Baptist church, at their then assessed value, was to be ordered, upon the same terms and conditions as provided by the form of deed formerly adopted by the Madison avenue Baptist church ; at which sale, the present owners of pews theretofore sold, (amounting together to S31,000,) were to have the right to purchase a pew or pews of equal value to those theretofore purchased by them, without further payment than the premium bid for choice, and to receive a deed for the same. The present members of the Oliver street Baptist church, or congregation, also were to have the right to. purchase pews to the amount of thirty-one thousand dollars, without any payment, or merely a nominal one, except the premium bid for choice of pews.”
The petition then stated that such plan and terms for forming a union had been agreed upon by a joint committee appointed by each of said churches, respectively. That such committees had reported to their respective churches such plan, arrangement and terms for the union of the two churches. And, that at a public meeting of the church and congregation of the Madison avenue Baptist church, duly called, the report of their committee of such plan, arrangement and terms of union was adopted, and the trustees of the Madison avenue Baptist church authorized and directed to petition the court for an order authorizing them to convey the property of the Madison avenue Baptist church to the Oliver street Baptist church, in pursuance of such plan and arrangement for the union of such two churches on these terms.
The petition further stated, that at a public meeting of the Oliver street Baptist church and congregation, the report of their committee of the plan, &c. of the union, was adopted, and the trustees authorized and directed to take the necessary legal steps to perfect the union of the two churches ; and that, subsequently, the trustees of the Oliver street Baptist church had adopted a resolution pledging themselves to perfect the union of the two churches.
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■ The petition further stated, that the Oliver street Baptist church owned property, over and above all their indebtedness, of the value of from fifty to sixty-five thousand dollars, which, on the consummation of the union, would become applicable to the payment of the debts and liabilities of the Madison avenue Baptist church. That a portion of the pew holders of the former church had consented to the transfer of the property, and that the residue of the said pew holders had approved of, and were in favor of forming the union,
The petition then asked for an order authorizing and directing the petitioners “ to convey” the premises in question to the Oliver street Baptist church. Annexed to the petition was an authenticated copy of the proceedings of the meeting of the congregation of the Madison avenue Baptist church, which had approved of the plan for the union ; and also the consent of the pew owners and holders.
Upon such petition, the court made an order authorizing and directing the trustees of the Madison avenue Baptist church “ to convey,” by a proper deed of conveyance, the said premises to the Oliver street Baptist church. The order was afterwards amended, by changing the words “ the Oliver street Baptist church,” to “ the Baptist church in Oliver street.”
The plaintiffs objected to these papers so offered, on several grounds, and the court excluded them, to which exclusion the defendants’ counsel excepted.
The defendants then offered in evidence, a deed dated October 21, 1862, from the Madison avenue Baptist church, to the Baptist church in Oliver street, conveying to the latter the premises in question, for the expressed consideration of five dollars.
The defendants then offered to show, that under that deed they entered upon the customary religious services in the church edifice conveyed by such deed, in connection with the plaintiffs, and by their consent, and that the two congregations united in such services. The defendants further offered to show, a petition and order for the change of their corporate name to .the Madison avenue Baptist church, in pursuance of
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the agreement aforesaid. Also, that they had sold their church property in Oliver street, in execution of the agreement for the union of the two churches ; and that all the conditions and terms of the union, as set forth in the petition, had been fully carried out and performed by the parties respectively.
To each and all of the matters so offered in evidence, the plaintiffs objected. The court excluded all and each part of the evidence offered. To which rejection of evidence, the defendants excepted.
Further evidence was offered on the part of the defendants, and excluded on the trial, not affecting the decision of the court, or necessary to be stated.
The justice rendered judgment in favor of the plaintiffs, that they recover possession of the premises, with costs. The opinion delivered, at special term, is found in 19 Abb. Pr. R. 105. From that judgment the defendants appealed.
L. B. Woodruff, for the defendants, appellants.
I. The conveyance to the defendants is a valid conveyance, upon a sufficient and proper consideration, executed by competent authority, and was so intended at the time by both parties.
1. The transfer of property so provided for in the union agreed upon between the Madison avenue and Oliver street corporations, was a sale within the meaning of the statute. (a.) It was the only way in which the property could be conveyed. The petition for leave to convey by the Madison avenue church, the order, petition to amend, and order amending, all describe the matter as for “ a sale.” This was the light in which the plaintiffs viewed it when the application to the court was made, (b.) The word “ sale ” is not used in the statute in a narrow or technical sense. The definitions are collected in Schermerhorn v. Talman, (4 Kern. 117.) (c.) Here were parties ; a thing sold ; and a consideration. The consideration was good, valuable and adequate. The value of the vendors’ property at cost was $50,000 over the incumbrances. The surplus property of the purchasers, $50,000 to $65,000,
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was adequate to this, and to apply it to the payment of the vendors’ debts, was the object of the union. This application Of the moneys was made by bond, and in fact, and saved the vendors’ property. It was a good consideration for the conveyance. (d.) Additional consideration by parol can be proved in support of the deed. (McCrea v. Purmort, 16 Wend. 460 .) The suggestion that the conveyance to the defendants was a mere gift, is without foundation. The transaction, so far as the conveyance of the real estate is concerned, had all of the elements of a sale.
2. The court had jurisdiction to make the order, (a.) The plaintiffs themselves presented this case to the court as a sale within the statute, and asked, under section 11, for an order authorizing it, spreading out in their petition all those circumstances and peculiarities which, it is now claimed, make it something else than a sale. Such petition came from the majority of the plaintiffs’ corporators, the assent of all of them not being necessary. And the defendants had a right to rely upon the petition and orders thereupon. (Wyatt v. Benson, 23 Barb. 327 .) (5.) The order of the court must be construed as adjudging. (1.) That the proposed transfer was a sale within the statute, and that the court had power to make the order. (2.) That the proposed application of the moneys was most for the interest of the vendors, fixed by the agreement, and not open to any change. The petition and order thereupon, granting the relief prayed for, were an approval and practical affirmance of the application of the money which the petition contemplated, (c.) It is not essential that the order should direct the application of the proceeds. This order cannot be attacked either collaterally or by these plaintiffs, who have assented to the jurisdiction of the court. (Bidwell v. Astor Ins. Co., 16 N. Y. Rep. 263 .) In this respect the plaintiffs in a suit to recover possession are in no better situation than a third person who had intruded would be, if sued by these defendants. Even if the object or purpose for which the permission of the Supreme Court to make the conveyance was obtained, was not proper for any reason, still the proceeding
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cannot be collaterally impeached. No case is to be found in which the deed executed pursuant to such permission is adjudged inoperative. The case of Wheaton v. Gates, ( 18 N. Y. Rep. 395 ,) cited by the plaintiffs, was a bill filed directly to set aside the proceeding ; at most, it only indicates that the deed is voidable in a direct attack upon the proceeding. It is clearly distinguishable from the present.
3. If two religious societies agree upon an exchange of their respective church properties, and present such an application to the .court, the court would have power to authorize it. It would not make it any more of a sale, or bring it any nearer within the statute, if, a sum of $50,000 being raised to stand for the purchase money of each property, separate orders for the simple sale of each property were made, and the money handed from one to the other and then back again. The real character of the transaction would not be changed by such manipulation. Nor in the present case would the real character of the transaction be varied, had the Oliver street property been converted into money on the day of the delivery of the deed, which had been paid over to the vendors, and by them applied in reduction of their debts. That conversion and payment have in fact been made, though not on that particular day. The power of sale resides in the corporation, subject to the power of the court merely to approve or veto. (Dutch Church, Saugerties, 16 Barb. 239 . Wheaton v. Gates, 18 N. Y. Rep. 401 . Dutch Church v. Mott, 7 Paige, 77.)
4. In substance and legal effect, the petition was by the corporation itself, acting through those who by the express terms of the statute have charge of the temporalities thereof, and through whom,alone it can speak and act. (Act of 1813, 2 Rev. Laws, 212, §§ 3, 4. 5. Barnes v. Perine, 9 Barb. 202 . 2 Kernan, 22. Matter of St. Ann’s Church, 23 How. 285 .) The act itself declares that the trustees shall be the corporation. The proceeding is of an informal character, and no precise words are necessary. It is sufficient that upon the face of the petition it appears to be done on behalf of the corporation. (Robertson v. Bullions, 1 Kern. 243.)
p. 578
5. But the only condition to he regarded as in anywise limiting the power of the plaintiffs to convey, being satisiieci by the express sanction of the Supreme Court, it will be presumed, upon showing a petition and order giving such sanction, and a conveyance in pursuance thereof, that whatever was necessary to its complete effect was done. (Mechs. Bk. Assoc. v. Spring Valley Co., 25 Barb. 420 . Partridge v. Badger, id. 146. Wilmarth v. Crawford, 10 Wend. 341 . Mead v. Keeler, 24 Barb. 25 .)
6. The plaintiffs insisting as a ground for dispossessing the defendants, that the statute only authorizes “a sale” of the .real estate, and gives jurisdiction to the Supreme Court to sanction “a sale” only, it is competent for the defendants to show an application to the court for leave to convey upon a valuable consideration, an agreement for the payment of such consideration, and complete execution of the contract by a conveyance, all of which constitute the very thing which the statute authorizes, and are, in fact and in law, a sale. (2 Kent, 468.)
7. The requirement of the statute that the court shall give proper directions for the application of the moneys was fully satisfied by authorizing a conveyance for the payment of the debts, and contemplating the continued use of the property for the benefit of the members of the Madison avenue Baptist church, under the plan of union set forth in the petition. It is not essential to the validity of a sale (under • section 11 of the statute) that any moneyed consideration should be paid. It is sufficient that the consideration is satisfactory to the court and is approved of.
II. The conveyance is not liable to objection as working the entire destruction of the former corporation, the Madison avenue Baptist church.
1. Practically it was invigorated by the accession' of members and wealth. It was an appropriation of its property to the precise purpose to which it was devoted when such property was in danger. The tribunal which had authority both
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to order a sale and to direct how the proceeds should be appropriated, merely did both in one- order.
2. The faith and practice of both churches were in all respects alike. The united church had the name; property; members ; corporators ; forms of worship ; site and location of the former Madison avenue church, unchanged, with all the rights of its pew holders preserved. The Oliver street church gave to the united church, accessions of members and corpora-tors ; a pastor, (the Madison avenue church having none;) and money to pay off its debts. It had an organization some seventy years old, and some reversionary interest in real estate, which formed the reasons for preserving its church organization and corporation.
3. But for every substantial and beneficial purpose, whether regard be had to the trust upon which the property is held, the uses to which it is devoted, or the persons to be benefited thereby, the Madison avenue church still exists, and the property is now in their possession and held for their benefit. A court of equity will regard the transaction according to its real or substantial character and results, without attaching much importance to mere forms or legal technicalities.
III. If the result of the entire arrangement was to work a surrender by the corporation then known as the Madison avenue church, that would not invalidate the transaction.
1. Such results may follow from the acts of corporators, and if their acts are equivalent to a surrender, the corporation is dissolved. (Slee v. Bloom, 19 John. 474 , per Spencer, Ch. J.) All that is said by Judge Spencer in that case, about trading corporations formed by certificate under the general manufacturing law, has an equal application to religious corporations formed under the general act. It establishes the conclusion that the old Madison avenue Baptist church is dissolved. The principles decided in that case were recognized in Trustees of Vernon v. Hills, (6 Cowen, 26,) and in which religious corporations were held to stand upon the same ground as others. That the common and even tacit consent of a body, (»'. e. the individual members,) may virtually dissolve it without further
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■forms, is impliedly asserted in 1 Bouvier Institutes, (§ 104, subd. 1;) Smith v. Smith, (3 Dess. Eq. R. 571, 575;) Woodbridqe Union v. Colneis, (13 A. & Ellis, N. S. 269.) The statute of 1813, section 16, also recognizes the fact that the corporation may he dissolved by the acts and neglects of the corporators. In Wheaton v. Gates, ( 18 N. Y. Rep. 403 ,) it is distinctly asserted that if every individual having any interest in the. matter should concur, it might he done ; because there would be no one to question the act. Common concurrence, or acquiescence without objections, would be sufficient under this view. But it appears by the answer in this case, that all the corporators actually consented to what was done, and the defendants actually surrendered, by formal dissolution. ■ The agreement that the ©liver street church should change its name to that of the Madison avenue church, implies an intention to dissolve the Madison avenue church. The statute only allows a religious corporation to assume a name not already borne by an existing corporation. (2 R. S. 5th ed. p. 620, § 20.)
2. Even at law, one who has received the benefit of a contract in form with a corporation, which assumes the existence of that corporation, will not be permitted to deny it. (Palmer v. Lawrence, 3 Sandf. 161 . Brouwer v. Hill, 1 id. 629. Eaton v. Aspinwall, 19 N. Y. Rep. 119 . 6 Duer, 176 . Dutchess Cotton M. Co. v. Davis, 14 John. 238 . Steam Nav. Co. v. Weed, 17 Barb. 378 .) A rule of such obvious justice must be equally applicable to the other party to the contract, or when a transaction involves the dissolution of a corporation. In State of Indiana v. Woram, ( 6 Hill, 37 ,) Bronson, J. said : “ I do not see that a corporation can ever avoid its obligation on the ground that it was given for property which the corporation was not authorized to purchase ; and if the company was bound, I see no reason why the defendants should not also be bound by the contract.” By like reasoning, and with most manifest justice, even at law, (and much more in equity,) if' one who has received the benefit of a contract, on the understanding that a corporation exists, will not be permitted to deny it, neither will he who has received the ben
p. 581
efit of an arrangement on the understanding that a corporation has been dissolved, be permitted to deny the fact of such dissolution. The defendants have the actual concurrence and deliberate acquiescence of the plaintiffs, and acted on it in good faith, nay, have the actual concurrence and acquiescence of all who had any interest in the subject. That is enough. Since the defendants have acted on this it cannot be retracted ; the plaintiffs cannot how dissent.
3. The idea that a corporation cannot divest itself of its property and surrender its corporate existence, has a place, undoubtedly, in the discussion of the powers of corporations and their officers. But there is nothing involving mere rights of property, or its management or use, which may not be controlled, by the express or implied united agreement of every human being who has an interest therein, provided it be honest in itself, consistent in its nature and effect, with the general principles of justice and morality, and involves no public mischief or inconvenience. All this may be affirmed of the transaction in question. The proposition that it shall all be overturned for want of due solemnity, is preposterous. The observance of formal requisites or technical rules is not important to such a result; because if there be irregularity, or neglect of technical or rigid legal precision, the parties consenting or acquiescing will not be permitted, after having drawn another party into a new condition thereby, to retract such consent and acquiescence; certainly a court of equity would not permit it. See Long v. Gray, (9th Land, Jurist, p. 809, 2d col.) for rule for judicial dealing with the action of religious societies in respect to their temporalities. “ Implied assent” by those concerned is deemed to bind, as in common business transactions.
IV. The transaction in question should be sustained by this court as a court of equity.
1. As proper, wise and expedient, in no way a substantial violation of any statute, even if there was any formal irregularity.
2. The defendants should be protected in the purchase
p. 582
made under the order of the court, and in reliance thereon. This is not merely a ground for invoking the equitable jurisdiction of this court. But such an order, acted on by all parties, acquiesced in by all, carried into actual execution, the court will maintain, to prevent its becoming the instrument of injustice. The plaintiffs are buying under the order of the court, as trustees of a charitable trust, and are entitled, on that ground, to the aid and protection of a court of equity. Both corporations are peculiarly subject to equitable control, not so much because the persons who manage the property are called “ trustees,” but because the corporation itself is the holder of the property in trust for a religious or pious use. The trustees are mere managers; the property is held in trust for pious uses by the corporation itself. The rights and interests pertaining to the trust or use are therefore peculiarly subject to equitable control and protection.
3. In every view of the facts offered to be proved, the plaintiffs are entitled to be protected in their possession. (See Wyatt v. Benson, 23 Barb. 327 ; Silver Lake Bank v. North, 4 John. Ch. 373; M cCutchen v. The Steamboat Co., 13 Penn. R. 13; Steam Nav. Co. v. Weed, 17 Barb. 382 ; Bidwell v. Astor Ins. Co., 16 N. Y. Rep. 263 .) The property is held upon the same trusts precisely, and is devoted to precisely the same uses as before ; the execution of the trusts is far better secured, and the application of the property to the uses to which it was devoted effectually and permanently secured ; while greater vigor, strength and ability is infused into the enterprise begun on Madison avenue, and which had so nearly failed and become extinguished when the union was projected. No change has been wrought'at all, except a purely ideal one. The present trustees are not objectionable. They were in due form elected. The difference is purely this : It traces its pedigree to the Oliver street corporation as an ancestor, instead of saying that it is merely a renovated Madison Avenue corporation.
Y. The transaction being consummated, the parties cannot be reinstated in their former condition.
p. 583
1. The court will not permit so montrous an injustice as that the defendants should be ejected, and allow the plaintiffs in the ejectment suit to enjoy all the benefits of the arrangement, at otir cost, and actual extinction as a religious society, in disregard of the wishes of the majority of those who formmerly worshipped there,- and still desire to do so, when the property is devoted to the same uses, and the trusts on which it is held executed in the same manner, ifo illustrations can adequately describe the disasters that attend the disruption and subversion of a religious society. It is, therefore, not only impossible to reinstate the parties, but no reason exists for changing the condition of things.
2. The plaintiffs not only promoted what has taken place, but have acquiesced until it is too late to object. Meantime, while the defendants have placed themselves in a situation in which irreparable mischief would result to them, the plaintiffs suffer no prejudice. The extinguishment of the former corporation is purely technical. The church and congregation were intended to be the Madison avenue Baptist church. The new body bears its former name ; its corporators are corpora-tors still, and none have been added to their number but by common consent. '
3. Any attempt to disturb an arrangement so long acquiesced in, and upon which so many rights depend, which would thereby become unsettled, would be unjust, and against public policy. (Rumsey v. People, 19 N. Y. Rep. 41 . Mount v. Morton, 20 Barb. 123 . Baker v. Lorillard, 4 Comst. 257.)
4. In the present case the plaintiffs not merely passively stood by and saw acts done inconsistent with their assertion of title, but were actors, and by means thereof drew in the defendants and their corporators. They availed themselves of the forms of law to place both parties in a position in which the mischief is- irreparable, and the injury grossly inequitable, if they are permitted to retract.
5. They are enjoying all the benefits of the transaction, and now seek to deprive the defendants of the consideration. Parties who have concurred in and taken the benefits of a trans
p. 584
action (not malum in se,) cannot be heard to allege its invalidity, and to claim another or further benefit, from setting it aside. . This is the condition of the plaintiffs’ corporation, no less than the condition of its corporators. The corporation of the plaintiffs did in fact consent to the arrangemént, and did, and still do, enjoy the benefit of it. (Tilton v. Nelson, 27 Barb. 595 , 608. Lowry v. Tew, 3 Barb. Ch. 407 . Martin v. Sherman, 2 Sandf. Ch. 341 . Lee v. Porter, 5 John. Ch. 268.)
■■ YI. The doctrine that an equity does not .arise in favor of. the party to an illegal transaction, may be true as to a transaction contra bonos mores, or to one which is prohibited by law, but it has no application to a case like this, in which one party to an agreement seeks to avoid it, on the ground that he had no legal authority to make it. If invalid at all, it is as an agreement ultra vires, and then no rule of public policy, goo.d morals or good sense forbids that he should be held to restore, the benefits received in faith of his acts. (Bissell v. Mich. So. R. R. Co., 22 N. Y. Rep. 258 , and cases cited under points III, IV, V.)
He who seeks equity should do equity. Even in this view, until the plaintiffs’ reinstate the defendants in their former position, so" far at least as that is now possible, the possession of the deféndants cannot be disturbed.
In any event,' if the transaction were illegal, each of the parties is particeps criminis, and the- law will not aid one party to disturb the other party in the possession acquired by it. In Wheaton v. Gates, (ubi sup.) the party receiving the deed consented that it be canceled.
J. S. Bosworth and J. T. Brady, for the respondents, (plaintiffs.)
I, The order of the Supreme.Court and the deed executed in pursuance thereof, offered in evidence by the defendants, are null and void, and vested no right or title to the property in question in the defendants.
1. A religious society has no authority or power to make a
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conveyance in fee of its real estate, except what is contained in the 11th section of the act of April 5, 1813. (2 R. S. 5th ed. p. 610. Montgomery v. Johnson, 9 How. Pr. 232 . De Ruyter v. St. Peter’s Church, 3 Comst. 238. Wheaton v. Gates, 18 N. Y. Rep. 395 .)
I II. Under the section above cited, the Supreme Court is only authorized to order a sale of the property of a religious corporation, i. e. a transfer thereof for money. “ Sale is a word of precise legal import, both at. law and in equity. It means at all times a contract between parties, to give and to pass rights of property for money, which the buyer pays or promises to pay to the seller for the thing bought and sold.” (Per Wayne, J. in Williamson v. Berry, 8 How. U. S. 495, 544.) The context also places the point beyond doubt, for the chancellor is required, when ordering a sale, “ to direct the application of the moneys' arising therefrom and this he is required to do in every case ; he cannot order a sale without directing such application ; much less can he order a conveyance which is no sale, and from which no proceeds are to arise, as in the present case. (Williamson v. Berry, supra.)
III. The application to the court, for an order of sale under the act, even when a sale is sought for a lawful purpose, must be made by a majority of the corporators or at least authorized by them. It cannot be made by the mere .authority of the board of trustees. ( Wyatt v. Benson, 23 Barb. 327 .) In the present case, the application was made by the trustees ; and although it is alleged that the consent of a majority of the pew holders was obtained, the defendants did not offer to prove, though the objection was expressly taken, that the application was authorized by a majority of the corporators.
IV. The act does not authorize a sale of the property of a religious society for the purpose of applying the proceeds arising therefrom in any mode the applicants may suggest, and the court in its discretion may sanction, but only in some mode which may be considered to be for the interest of the society, “as an association which is to continue organized for the purposes of its creation.” (Wheaton v. Gates, 18 N. Y. Rep.
p. 586
395 , 403.) For this reason, therefore, the proceedings under consideration derive no aid whatever from the statute ; for it is admitted on all hands that their direct scope and object was to destroy and put an end to the plaintiff’s society. To give effect to the order of the court, and the conveyance under it, would be giving effect to an act which is illegal, and a breach of trust on the part of the plaintiffs.
Y. In receiving the application and making the order offered in evidence by the defendants, the Supreme Court was acting by virtue of a special statutory power, and not in the exercise of its general jurisdiction, and the application and order having failed, in all the particulars before specified, to conform to the statute, the entire proceeding was null and void. (Wheaton v. Gates, supra.)

The common law right of alienation, as well as the power conferred by the Revised Statutes ( 2 B. 8 . 556, § 1, subd. 4,) upon corporations generally, to convey their real property, is restrained in its application to religious corporations, by the 11th section of the act providing for their incorporation, (2 B. 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 v. 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

p. 587
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 order only for the sale, the statute giving the power must have a literal compliance. The section referred to, confers no power upon religious corporations to alien their 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 Lit. 44 a, 300 6. 1 Burr 221.) And a like power is given by the Revised Statutes before referred to. Neither does the section talce 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, be 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 nowise opposed to 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 authorizes the

p. 588
court to make an order for the “ sale,” and not for a sale and conveyance. A sale without a conveyance, would he wholly ineffectual to pass title to real property ; and the use, therefore, of the word “sale” only, in the statute, would seem to indicate that it was intended to give to the word a signification sufficiently broad to include conveyance. An agreement to sell always implies an agreement to convey, as a necessary means of transfer to complete the sale; and an agreement to convey implies a sale agreed upon, which needs only a conveyance to consummate it.

The plaintiffs agreed with the defendants, “ to convey and transfer” all its property. Such a contract, independently of any restraining statute, would he sufficient as a contract of sale ; and under the statute, as a contract, its specific performance could have been compelled, by requiring the plaintiffs to apply to the court for its consent.

In the case of Williamson v. 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 authorize 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 v. St. Peter’s Church, (3 Comst. 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 reason for the sale. In the Butch Church in Garden Street v. Mott, (7 Paige, 77,) the late chancellor says: “ As the law of patronage has never been extended to this state, and was inconsistent with the spirit of

p. 589
our institutions, it became necessary to vest in some tribunal the power of sanctioning alienations of church property,” and therefore, the intention of the act of 1816, (which was the same as the act of 1813,).was to give to religious corporations an unlimited power to convey any real property held by them in trust for the corporators ; provided, the previous consent of the court to such alienation was obtained. And in Matter of Reformed Dutch Church in Saugerties, ( 16 Barb. 237 ,) Judge Harris says: “It was deemed necessary for the protection of those who are the real owners of such property to require the sanction,of that officer before the corporation could make a valid conveyance.” But the chancellor could only ratify or veto the sale.

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 v. St. Peter’s Church, (supra.) In that case, the corporation being insolvent, (see S. C. 3 Barb. Ch. 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. Not 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 agreement before the court for

p. 590
its sanction, is approved in Bowen v. Irish Presb. Church, ( 6 Bosw. 245 .) Indeed, it would be singular, if it was required that the contract of sale should succeed and not precede the allowance of the court. Whenever, therefore, a religious society has resolved to dispose of its property, and has agreed upon the terms and conditions of sale, and the application to be made of the money arising therefrom, it is in a condition to seek the sanction of the court, and such sanction may properly be of the entire agreement.

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 year5< and have contributed to the support of the church, according to its usages .and customs. Such persons are also the corporators. 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 does it, in terms, require that a majority of the corporators shall 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 hy 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 application. But the cases of Matter of St. Ann’s Church, ( 23 How. Pr. 285 ;) and Matter of Baptist Society of Ganaan, (20 id. 324 ,) go farther, and hold that the tiras

p. 591
tees may make the application irrespective of any vote of the corporators.

The case of Wyatt v. Benson, ( 23 Barb. 327 ,) cited by the plaintiff’s counsel, is not opposed. The application in that case was by a majority of the trustees; and, it appeared on the part of those opposing the application, that a large majority of the corporators were not favorable to it. If the opposition had not appeared, the learned judge who gave the opinion, says: “ It might be assumed that the trustees represented the views of the corporators, in making the application.” But the order in that case, being in fieri, the court revoked its sanction, on the ground that a majority of the corporators were opposed to a sale.

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 plaintiffs’ debts, amounting to seventy-three thousand dollars ; to unite with the plaintiffs in forming one church organization ; to adopt the plaintiffs’ corporate name ; to sell their property in Oliver street; to cause the resignations of its own trustees, and to provide for the selection of new trustees by the united

p. 592
church and congregation, constitutes the real and only consideration for the transfer ; and the court was asked to give its sanction to that agreement, and nothing more. Judge Denio says, in Wheaton v. Gates, ( 18 N. Y. Rep. 402 ,) that “ as to the disposition of the proceeds, the court has no power to originate any scheme, or even to execute any enterprise determined on by the corporation, but only to allow or disallow the application of the moneys to such purposes as- the corporation shall represent to be most for the interest of the society.” The allowance of the court to the application proposed by the trustees in this case is sufficiently shown by the order it made; and, it appears to me, it could not have been shown in a more satisfactory or effectual a manner.

But, even if the order should have been more specific, it cannot affect the title made, under it. The court having jurisdiction,- any mere irregularity or insufficiency in the proceedings subsequent to the petition was amendable, and would probably be- cured by the action of the parties under it. Besides, the order allowing the- sale might have been made separately from the order directing the application of the proceeds. In Matter of Brick Presbyterian Church, ( 3 Edw. 155 ,) the vice-chancellor made a provisional order allowing a sale to be made, “ if a proper site for a new church could be obtained.”

I do not think, in this case, that it was required that the order should do more than sanction the arrangement by ordering the conveyance to be made. That was a substantial compliance with the statute.

The remaining objection is one of more difficulty.

It is contended, that by the consummation of the sale of the plaintiffs’ property, their corporation became extinct, and that such result, being opposed to the policy of the statute, rendered the whole transaction void. The object of the statute was to prevent improper dispositions of church property. The framers of the law -must have feared that cases might arise where it would be proper to-put a restraint upon the power of alienation,- and they have most wisely, I think, given to the court the discretion to sanction, or withhold its sanction, in all

p. 593
cases. In any given case, the propriety of a sale must be determined by the court. If the application comes up in proper form, with facts necessary to give jurisdiction, the court alone is authorized to judge of the expediency of the sale ; and the duty to direct the application of the money arising therefrom, in a measure, controls and prevents any improper exercise of the discretion of the court.

But it is said the transaction between the these parties, although sanctioned by the court, was not such a transaction 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 a cost of $122,000 and were in debt to the amount of $73,000 dollars. Owing to derangement 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 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 soeiety, that the Oliver street church should take title to the church in Madison avenue ; pay the debts and assume its corporate title ; and thenceforward the two societies and congregations worship as one congregation in the same edifice.

It is quite clear that the arrangement was mutually advan- • tageous, each party receiving a substantial benefit. The 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 Ruyter v. 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 congrega

p. 594
tion, 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 free 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, supra.) The mere denominational character of a church may be changed by its corpora-tors at pleasure. (First Bap. Ch. v. Witherell, 3 Paige, 296. Miller, v. Gable, 2 Denio, 492 . Robertson v. Bullions, 1 Kern. 243. Parish of Bellport v. Tooker, 29 Barb. 256 .) In the last case, the form of church government was changed from a congregational church to an organization in connection with the Presbyterian body.

The idea that the denomination 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 v. Tooker, 21 N. Y. Rep. 267 .) And the same principle which allows a majority of corporators to change the articles of faith, would seem to authorize 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 v. The United German Luth. Churches, ( 2 Sandf.

p. 595
Ch. 186 ,) where one church society transferred all its real and personal property to another church society and the united churches thereafter worshipped 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, instituted to aid feeble churches, has, where it was practicable, recommended a. union of weak churches, upon the conviction ’ from long observation and experience, that the strength acquired by the union would add to the efficiency and usefulness of both.

The doctrine that contracts of corporations which are ultra vires, are void, does not receive favor with 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. (Feeter v. Heath, 11 Wend. 477 . State of Indiana v. Woram, 6 Hill, 33 . Sherman v. N. Y. Central R. R. Co., 22 Barb. 239 .). The only exceptions to this rule, are those cases, where corporations are prohibited by some express prevision of law, or are required to contract in some prescribed form. • (Brady v. The Mayor, &c. of N. Y. 20 N. Y. Rep. 312 . Bonesteel v. Same, 22 id. 168.) In this

p. 596
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 v. 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, in my opinion, can be done only by a direct action. (Clarke v. 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 of the society. The prayer was, that the church might be sold, and the proceeds, after paying debts, might be divided among the persons who held deeds of pews, in proportion to the sums paid by them. The referee, who tried the action, found as facts, that there was no necessity for selling to pay debts, and that the sole object was to effect a distribution of the proceeds among a portion of the members ; and he decided that the order for the sale was void, “ on account of the provision for the distribution of the proceeds among the pew owners.” It nowhere appeared that any considerable number of the corporators, certainly not a majority, applied for the order. It is stated that several members of the society concurred, but it is evident, from the statement of the case, that only a small portion of the members and a bare majority of the trustées consented to the application. The decision of the court follows and adopts the decision of the referee, that there was no necessity for a sale to pay debts; and that the division of the proceeds among the pew holders, was illegal, and rendered the order void. The decision, both of the referee and of the court, is based upon the fact that

p. 597
all the persons interested had not consented, and the learned judge says, “it was not in the power of the trustees, or a majority of the members, or of the court, to abolish the corporation or dissolve the society.” But, he seasonably adds, “ if every individual having any interest in the matter should concur, it might be done.”

As a decision, Wheaton v. Gates, sustains these general propositions ; that the statute confers no power upon the court to control or manage the property of religious societies ; that the whole 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 society.

From those propositions it follows, that upon an application for the sale of church property, the only duty of the court is to see: First. That sufficient reasons exist therefor ; and Second. That a proper disposition of the proceeds is made, and the case decides nothing more.

I have examined the case before us, upon strictly legal grounds, and have endeavored to show that the court had jurisdiction to make the order directing the plaintiffs to convey, and that the order was a proper one. It therefore becomes unnecessary to examine the other questions raised on the appeal.

If I am right in the views I have expressed, it follows, that the rejection of the evidence offered, to establish the defense, was erroneous, and the judgment for that reason should be set aside.

But before concluding I may be indulged, I hope, in a single suggestion in regard to another aspect of the case. The entire good faith of the parties who entered into this mutually beneficial agreement, cannot for a moment be questioned. The promptness with which they carried it into immediate effect; and the desire they manifested to complete, in a spirit of fairness, what they had undertaken to do, cannot fail to

p. 598
satisfy any one, that the intentions of the parties were upright. The plaintiffs procured permission to convey and deliver their deed. The defendants sold their property in Oliver street; came into the plaintiffs’ church and united with them, and as one congregation engaged in divine worship. Debts of the plaintiffs, amounting to upwards of fifty thousand dollars, were,' in effect paid, and the corporate name of the Madison avenue Baptist church retained. So far the parties appear to have acted in strict accordance with their engagements. They came together, in a spirit of fraternal love, .and conformed to the faith and submitted to the discipline of the united church. Having done this—having gone thus far, it would seem as if á Christian spirit, if not a better judgment, should have counselled acquiescence and peace.

Among men who do not profess the Christian religion, moral obligations are not always recognized. With such, the compulsory power of the law alone has its terrors. But there is, nevertheless, or should be, a conscientious sense of right " and justice, and of moral duty, which ought to control the actions of men, • and influence them in the discharge of their obligations, even where the law exempts ; and, whatever may be the' conceived legal rights of parties, if there is any -moral duty unperformed, it should restrain them from the entangle-' ments and consequences, always disastrous,.of strife and litigation.

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

Cases cited