« AnteriorContinuar »
suspend the operation of the statute, and it | them. It was entirely independent of, and continued to run after that date as before. unrelated to, any cause of action the plainSuch having been the condition of affairs for tiff might have. It had and could have no more than five years before suit was com- effect whatever upon the conduct or rights menced, the right to recover was then of the mortgagee, and waiver cannot be predbarred. The taxes were paid by one who bore icated upon it. no privity to the debt, and owed the mortgagee no duty concerning it. His conduct implied no recognition either of the existence of the notes or of the right to enforce | All the Justices concur.
IOWA SUPREME COURT.
Evalyn ALLEN, Appt.,
NORTH DES MOINES METHODIST EPIS-
The judgment of the District Court is affirmed.
This note is confined to a consideration of those cases in which the liability of the members of a religious society for its debts as members merely is decided, and does not include cases in which the members whom it is attempted to hold liab'e acted as officers of the church, or in some representative capacity, as that of deacons, vestrymen, members of building committees, etc.
1. In the absence of fraud, a creditor of a religious corporation has right to enforce his claim against property formerly belonging to it after it has been sold on mortgage foreclosure, the corporation dissolved, a new corporation organized out of the old members and new ones, and the property bought from the purchases at the NOTE.-Liability of member of religious society | ship. It followed residence within the limits for its debts. of the parish as a matter of course. To support and maintain religious instruction and
I. Scope, 255.
II. Early rule in Massachusetts, Connecticut, worship through the agency of religious socieand Maine, 255.
III. Incorporated societies, 256.
ties was a public duty enjoined by law. By
II. Early rule in Massachusetts, Connecticut, for the support of ecclesiastical societies, and
no person can become a member of such a society until he has voluntarily united with it. These societies, therefore, seem now to differ in no way, so far as the rights and liabilities of their members are concerned, from any other associations or corporations.
In Massachusetts and Connecticut this early rule has been repudiated, but in Maine the question seems not to have come before the courts in recent years.
The early cases and dicta on this subject in Massachusetts, Connecticut, and Maine have been placed in a division by themselves because of the existence of the parish system in those states, and the peculiar character of these ecclesiastical societies before the adoption of modern constitutions. They were neither private corporations, nor yet mere voluntary, unincorporated associations, but were in fact municipal and public corporations, the parishes being originally coextensive and identical with the several towns, which at first exercised parochial powers; and, when in some instances the parishes became separate communities, they still retained their public and political character. They embraced substantially all the persons residing within their territorial limits, and no act was necessary to constitute member
foreclosure sale, although the new corporation proceeds to carry on the work of the old one at the old location, and maintains the same relation as the old one to the general religious denomination.
A creditor of a religious corporation has no right of action against the individual members of it as such.
3. A religious corporation is not bound by the act of its minister in making use of the membership roll of a former corporation, the title to whose property it acquired through a foreclosure sale, so as to make such act significant upon the question of the identity of the two corporations. 4. Refusal to grant leave to amend the
The property of an individual member of a territorial parish may be taken to satisfy an execution against the parish; but such an execution cannot be levied on the property of one who has ceased to be a member of the parish before the levy, although he was a member when judgment was recovered. Chase v. Merrimack Bank, 19 Pick. 564, 31 Am. Dec. 163.
So, execution against a parish for the cost
complaint so as to set up a new issue, after the introduction of the evidence, is not reviewable on appeal.
(March 10, 1905.)
ration has been created, or an old one continued, is a question of intent.
1 Thomp. Corp. 1895 ed. p. 256; Bellows v. Hallowell & A. Bank, 2 Mason, 31, Fed. Cas. No. 1,279.
PPEAL by complainant from a decree of the District Court for Polk County dismissing a bill filed to subject certain real estate to the lien of a judgment which complainant held against the Prospect Park Methodist Episcopal Church. Affirmed.
The North Des Moines corporation, being a separate and distinct corporation, cannot be held liable for the debts of the Prospect Park corporation, unless it is pleaded and proved that it received from the older corporation, or from other sources, assets belonging to the Prospect Park corporation.
1 Thomp. Corp. § 263; Beach, Corp. § 796; Austin v. Tecumseh Nat. Bank, 49 Neb. 412, 35 L. R. A. 444, 59 Am. St. Rep. 543,
The facts are stated in the opinion. Messrs. William M. Wilcoxen and Bowen & Brockett for appellant. Messrs. S. F. Prouty, W. L. Smith, and 68 N. W. 628; Hopper v. Moore, 42 Iowa, E. D. Samson, for appellees: 565; Texas State Fair & D. Exposition Asso. v. Caruthers, 8 Tex. Civ. App. 474, 29 S. W.
The question whether or not a new corpo
of repairs on its meetinghouse cannot be levied on the property of a member who has withdrawn from the parish, but only on the property of those who are members at the time of the rendition of the judgment, or at most at the commencement of the action. Fernald v. Lewis, 6 Me. 264. The court refers to the fact that at common law corporators are not answerable in their persons or their private property for the debts or liabilities of the corporation, but says that, "by the usage and practicefor it does not seem to have any other founda
tion of Massachusetts and Maine, the case of
towns and parishes forms an exception to this principle."
And in 5 Dane's Abridgment, 158, it is said that, to the principle that an individual member of an aggregate corporation is not liable for debts or demands against it, towns parishes in Massachusetts are, by immemorial usage, an exception, for on an execution against one of them the body or estate of any inhabitant may be taken to satisfy it, and he has his remedy over against the corporation.
Ecclesiastical societies incorporated before the adoption of the Connecticut Constitution stood upon the same footing with respect to the liability of their members for debts as towns, school societies, cities, etc. Dictum in McLoud v. Selby, 10 Conn. 395, 27 Am. Dec. 689.
It is also said, obiter, in Beardsley v. Smith, 16 Conn. 368, 41 Am. Dec. 148, that thereto
fore it had not been doubted that the inhabitants of located ecclesiastical societies were individually liable for debts of the society.
And in a case where the property of the member of an ecclesiastical society was taken by distress for the payment of a tax levied against the society, and in which it was contended that the property of a member could not be taken for the debt of the society, the court said that, if the tax was properly laid, he could not see but that the distress was warranted, reasoning by analogy from the practice of New England to hold the inhabitants of a town liable for the town's debts, which practice also obtained in England. But it was held that the tax was illegal because the society was exempt. Atwater v. Woodbridge, 6 Conn. 227, 16 Am. Dec. 46.
III. Incorporated societies.
The members of a religious corporation are
not individually liable, as such, to a creditor of the corporation. ALLEN V. NORTH DES MOINES M. E. CHURCH.
The property of a member of an incorporated religious society organized by voluntary association, having no territorial limits, cannot be seized on execution against the society itself for debt. Richardson v. Butterfield, 6 Cush. 191.
A debt against a voluntary religious corporation without local limits cannot be enforced by
levying an execution against the corporation
upon the private property of one of its members. Jewett v. Thames Bank, 16 Conn. 510. The court said in this case that, although this society was without a special charter, it was essentially incorporated by virtue of the statute relating to religious societies and congregations.
But persons who were members of a religious corporation at the time of the death of its minister are individually liable to his estate for arrears of salary due him, where at that time there existed a fund which had been raised by the society for the support of the minister, sufficient to pay the indebtedness, and this money passed into the hands of the members, who formed a new society, and, instead of appropriating the fund to the payment of the former minister's salary, as was their duty, permitted it to be wasted or used for other purposes. Bigelow v. Congregational Soc. 11 Vt. 283. The court in this case says, however, that the individuals composing the society were not personally liable, unless they had made themselves so by some act or default, and that an execution against the society for the debt could not be levied on the separate property of the individual members. A receiver was appointed to collect whatever might remain of the fund, and apply the same, and the case was referred to a master to ascertain the situation of the fund at the time of the death of the minister, and who were members of the society at that time. The master's report was excepted to, and the matter again came before the chancellor, who overruled the exceptions, and de creed that certain individuals found to have been members of the society at the death of the minister should pay to the clerk the amount found due, with costs, and this decree was affirmed in 15 Vt. 370.
48; National Foundry & Pipe Works v. Oconto City Water Supply Co. 105 Wis. 48, 81 N. W. 125.
Weaver, J., delivered the opinion of the court:
Briefly stated, the plaintiff claims that in the year 1887 the defendant was incorporated for religious purposes under the laws of this state, and assumed the name of Prospect Park Methodist Episcopal Church, and that thereafter, by proper proceedings, the name of the corporation was changed to North Des Moines Methodist Episcopal Church. It is further alleged that prior to the beginning of this action plaintiff obtained a judgment against the corporation in the district court of Polk county, Iowa, un-corporation is identical with the Prospect
der the name of Prospect Park Methodist Episcopal Church, which judgment is still unpaid, and that since the change in the name of the organization it has become the owner of certain real estate upon which the plaintiff asks to have the lien of such judg ment established and confirmed. By a second count of her petition the plaintiff alleges that the present church organization is identical with the one against which she obtained judgment, and that the change in its name and designation was a fraudulent scheme or device to hinder and delay its creditors. The defendants admit that the North Des Moines Methodist Episcopal Church is a corporation, and owns the real estate above referred to, but deny that said
IV. Unincorporated societies.
rears of salary, and who agreed in writing, jointly and severally acting by their trustees and agents, to pay such sum, are individually liable for the indebtedness. Sheehy v. Blake, 72 Wis. 411, 39 N. W. 479, Affirmed in 77 Wis. 401, 9 L. R. A. 564, 46 N. W. 537. But the court stated explicitly that this responsibility does not rest upon the mere fact that the defendants were members of the association when the debt was incurred, but upon the ground that they approved of, or participated in, contracting it, and subsequently unassumed and agreed to pay it through their authorized agents.
Members of an unincorporated religious society, who participated in a business meeting at which it was agreed to employ a pastor at a certain salary, are not liable to him individually for arrears of his salary; and such contract of employment created at most an obligation, if any, upon such members to pay their apportional share only of such expense, where the pastor accepted his position with full knowledge that a fund to pay his salary would be raised by voluntary contribution of the members, to which alone he could look for compensation. Riffe v. Proctor, 99 Mo. App. 601, 74 S. W. 409.
A member of an unincorporated religious society, who purchases an obligation against the society contracted while he was a member, and who is still a member at the time the action is brought, cannot recover a personal judgment against the other members of the society. German Roman Catholic Church v. Kaus, 6 Ohio Dec. Reprint, 1028. The court refers to the fact that the supreme court of the state has decided that members of such a society, who personally participate in creating a debt, may be held liable personally therefor. The evidence in this case tended to show that the persons against whom the judgment was sought had participated actively in the borrowing of the money, but, because the party suing on the claim was also a member, it was held that he could not recover.. His remedy was held to be
But members of an unincorporated religious in equity against the property of the society. society, who were actively instrumental in inA member of an unincorporated religious curring liabilities for it, are liable either as society, who brings an action against the other principals or agents having no legal principal members of the society on a promissory note behind them; members of the society who eiwhich declares on its face that all the properther authorized or ratified the transactions are ty of the church is held for the payment thereagainst the members; but, inasmuch as he was of, is not entitled to a personal judgment a member of the society, and must have received some part of the benefit arising from the money loaned, there should be an accounting in order to determine who are the members and what proportion of the amount loaned the members other than himself must pay. Meyer v. Lipski, 8 Ohio S. & C. P. Dec. 584, 7 Ohio N. P. 366.
also liable, while those who did not are exempt from liability. Clark v. O'Rourke, 111 Mich. 108, 66 Am. St. Rep. 389, 69 N. W. 147.
And in Burton v. Grand Rapids School Furniture Co. 10 Tex. Civ. App. 271, 31 S. W. 91, it is also said, obiter, that in case of a debt against an unincorporated religious society the members who incurred the liability, assented to it, or subsequently ratified it, became personally liable.
So members of an unincorporated religious association, governed in their secular affairs by a priest and trustees having power to incur debts for the association, who, through such agents, stated an account with their priest for money advanced to build a church and for ar
Members of a voluntary unincorporated religious association are not individually liable for its debts, unless they authorized the incurring of the obligation, or subsequently ratified the same. First Nat. Bank v. Rector, 59 Neb. 77, 80 N. W. 269.
And it is said obiter, in Devoss v. Gray, 22 Ohio St. 159, that a member of an unincorporated religious society cannot be held personally responsible for the debts of the lety less it be shown that he in some way sanctioned or acquiesced in their creation.
This statement was quoted with approval in Males v. Murray, 7 Ohio N. P. 614, Affirmed in 23 Ohio C. C. 396, although the point was not directly involved in the case.
In Georgia it has been held that the members of an unincorporated religious society are liable on its contracts as joint promisors or partners. Thurmond v. Cedar Spring Baptist Church, 110 Ga. 816, 36 S. E. 221.
And in another Georgia case,--Wilkins v. St.
Park Methodist Episcopal Church, or is in proposition of law or of morals. The fact any way responsible for the debts of such that the new organization embraces the old church. They deny all allegations of fraud. membership is immaterial, and in itself afIt is also alleged that the organization fords no reason why it should be held liable known as the Prospect Park Church became for the debts of the old corporation. True, indebted beyond its ability to pay, and its the courts will watch such reorganization church property, which is the property now with care, that no fraud be accomplished. owned by the defendants, was sold under and to that end will insist that there shall foreclosure of mortgage, and the title be a bona fide intention to make a new and wholly lost; that in such condition it was independent organization, and that it shall impossible to obtain contributions for the not take over, absorb, or convert to its use, support of the society, or to purchase or the property or assets of the old corporation erect 2 new building, and the corporation to the prejudice of its creditors. There and society were disbanded. Under these must be something more than a mere succescircumstances it is said the North Dession in business to charge the successor with Moines Methodist Episcopal Church was the debts or delinquencies of the party sucorganized, and an incorporation effected as ceeded. Hopper v. Moore, 42 Iowa, 563; a new and independent body having no con- Wyman v. Hallowell & A. Bank, 14 Mass. nection with or responsibility for the debts 58, 7 Am. Dec. 194; National Foundry & of the old organization. Pipe Works v. Oconto City Water Supply Co. 105 Wis. 48, 81 N. W. 125; Memphis Water Co. v. Magens, 15 Lea, 37; Texas State Fair & D. Exposition Asso. V. Caruthers, 8 Tex. Civ. App. 474, 29 S. W. 48. The legal identity of the new corporation with the old ordinarily depends upon the intention of the incorporators. 1 Thomp. Corp. 256; Miller v. English, 21 N. J. L. 317; First Soc. of M. E. Church v. Brownell, 5 Hun, 464; 2 Morawetz, Priv. Corp. § 812.
From this outline of the issues it will be readily seen that the one question to be considered is whether the reorganized North Des Moines Church is a mere continuation of the old corporation under a new name, or is a new corporation, which is under no legal liability for the debts of its predecessor. That the members, or some of the members, of an insolvent or dormant corporation may organize a new corporation for the promotion of the same purposes to which the old one is dedicated without becoming chargeable with its debts or obligations is too well settled for dispute. On the other hand, it is equally well settled that the mere change in the name of a corporation has no effect upon its legal status, or upon the rights of creditors. Among corporations organized for business purposes it has been, and still is, a matter of most frequent occurrence that in the initial struggle for existence they become hopelessly insolvent. Under such circumstances, the organization of a new corporation to build, if possible, a successful business on the ruins of the old is entirely legitimate, whether considered as a
There can be no doubt in the present case that the incorporators of the North Des Moines Church intended to create a new and independent organization, which should not be chargeable with the debts of the Prospect Park Church. Their legal right to perfect such an organization is also clear. If, then, their organization was 'n regular statutory form, and no fraud was practised upon the plaintiff as a creditor of the old corporation, the conclusion of the trial court must be upheld as correct. No question has been raised as to the formal or statutory sufficiency of the methods pursued, and we shall therefore confine our inquiry to the question of fraud.
Mark's Church, 52 Ga. 351,-where it was held that a suit against an unincorporated religious association could not be maintained, the court said that, had all its members been served, they might have been charged as joint promisors or partners.
It would seem that the liability of a member of a religious association for its debts should be the same as that of a member of any other corporation or association, and the majority of the decisions, which are not numerous, are decided on this theory. If the society is incorporated, the members cannot be held liable individually. If it is not incorporated, the general rule is that the members can be held liable only when they have in some way been instrumental in creating the debt, or have ratified it afterward. In Georgia, however, the rule seems to be different, as it is there held that the mem
bers of an unincorporated religious society are liable on its contracts as joint promisors or partners. But it has been frequently declared by the courts that a partnership is an association of persons formed to carry out some undertaking from which it is expected to make a profit, and that any association from which the element of profit is absent cannot be considered a partnership.
In some of the New England states, also, the members of a religious society have been held liable for its debts, but this liability is the result of the peculiar character of such associations, and the peculiar relation of the members to them, as shown in division II. The early cases that declare this liability are now of but little value, aside from their historical interest, since, with the passing of the parish system, the reason for holding individual members liable also passed away. F. H. L.
debt for which it had been sold, and the new corporation purchased it, and now holds the title. It is against this property that the plaintiff now seeks to enforce her judgment. In none of the circumstances of the case do we liscover anything on which a charge of fraud may be justly predicated. It is true, we have said the new church is principally made up from the membership of the old; that it is affiliated with the same conference, acknowledges the same ecclesiastical authority, professes the same faith, occupies the same locality, and pursues the same gen
The Prospect Park Church was organized | sell it for less than one half the mortgage and incorporated in the year 1887, and obtained title to the tract of land mentioned in the pleadings. Encouraged by persons interested in the values of residence property in that neighborhood, and relying upon subscriptions and promises which eventually proved valueless, it erected a church building out of proportion to its financial ability, and incurred expenses beyond its power to meet. The property was heavily mortgaged, and this burden, with others incident to the mismanagement or misfortune attending the first years of the society's existence, proved too great to be removed or successfully car-eral policy; but these do not constitute corried. In the year 1899 the mortgage was porate identity. Had the North Des Moines foreclosed for something more than $5,000, Church taken over any property or valuable and, the property having been sold, and not thing which the plaintiff was entitled in redeemed, the purchaser took a sheriff's law or equity to subject to her claim, a deed. The record discloses no fact or cir- different question would arise. But even cumstance indicating that the foreclosure then her remedy would be confined to a subwas a collusive transaction, or that the cor- jection of such property to the payment of poration had any agreement, express or her judgment. In other words, the new corimplied, with the mortgagee, for the repur-poration would not ordinarily be chargeable chase of the property. The loss of the title as her debtor, but as a trustee, liable to acleft the society wholly without assets. Cor- count for such assets of the old corporation porations of this character issue no stock, as it may have received. 2 Morawetz, Priv. and are wholly without power or authority Corp. § 811; Marshall v. Western North to levy assessments upon, or enforce contri- Carolina R. Co. 92 N. C. 322; Bruffett v. butions from, their members. As is quite Great Western R. Co. 25 Ill. 353; Donnally sure to be the case in organizations which | v. Hearndon, 41 W. Va. 519, 23 S. E. 646; depend solely upon voluntary good-will of- 1 Thomp. Corp. § 263. Plaintiff is not the ferings for income and support, an excessive creditor of the members. She has not, and indebtedness proved an insurmountable ob- never has had, a right of action against stacle to prosperity and growth. At the end them as such. The only duty owed to her of some thirteen years' effort, the society by the individual members was the moral found itself without a church building, and duty to use all reasonable effort by their without means or ability to obtain another, own contributions, and by such assistance as or to pay its outstanding obligations. Its might properly be obtained from others, to assets had been wholly eliminated. It had maintain the solvency of the corporation. neither property, money, nor franchises There is nothing before us to show that this which creditors could subject to their full measure of duty was not performed, claims. There is nothing to indicate that while the proved fact that the church strugits members had not contributed to the full gled with its difficulties for so many years extent of their ability and duty under the before surrendering to the inevitable affords circumstances. Its corporate organization some presumption that its members were even had ceased to be available for the not unmindful of their obligations. society's future needs, because the existence of its indebtedness and the discredit attach ing to its failures in the past were quite sure to paralyze every effort to enlist the help, support, and sympathy which were essential to success. Under this stress, it was determined to disband the old organization, and from its membership, with such others as could be induced to co-operate, endeavor to create a new one. This was done. The new organization was made up largely from the old members, but with a new list of officials, and incorporated as the North Des Moines Methodist Episcopal Church. The owner of the church property under the sheriff's deed, finding it no doubt an undesirable and profitless asset, consented to
It is suggested in argument that some few articles of furniture and miscellaneous supplies belonging to the old church went into the possession of the appellee. It is true the evidence indicates that a portable organ, which was placed in the church before the foreclosure, has remained there, and that the pastor makes use of the original membership roll. As to the first item, we can only say that, if such property was liable to seizure and sale upon the plaintiff's judgment, it may still be reached in the hands of the appellee; but no such relief is sought in this proceeding. Of the other matter, it may be said that the pastor is not an officer of the corporation, and it is not bound by his act in the premises. Moreover, it ap