Application of LLOYD'S MEMORIAL CONGREGATIONAL CHURCH. (Supreme Court, Special Term, Erie County. October 14, 1919.) RELIGIOUS SOCIETIES21-TRUSTEES OF CONGREGATIONAL AS DISTINGUISHED FROM INDEPENDENT CHURCH CANNOT CHANGE CHURCH ALLEGIANCE. Persons constituting the majority of the trustees and congregation of a religious corporation organized as a Congregational church, according to Religious Corporations Law, §§ 160-171, which recognizes a distinction between a "Congregational" and an "Independent" church, have no power under sections 5 and 171 to change the church allegiance of the corporation to the Methodist Episcopal Church. In the matter of the application of Lloyd's Memorial Congregational Church to change its name to Lloyd's Memorial Colored Methodist Episcopal Church. Application denied. Parton Swift, of Buffalo, for petitioner. WHEELER, J. This is an application to change the corporate name of the petitioner from that of "Lloyd's Memorial Congregational Church" to that of "Lloyd's Memorial Colored Methodist Episcopal Church." This application is opposed by a minority of the trustees and congregation of the petitioner. The petition set forth that at a special meeting called by the trustees a resolution was passed by more that a two-thirds vote of those present for changing the name of the corporation as asked, and "for affiliation with the Colored Methodist Episcopal Church." It is thus made to appear the action taken is an effort to change the church allegiance of the petitioner from the general Congregational Church body to the Colored Methodist Episcopal Church, and, at the same time, so change its corporate name as to clearly indicate the attempted change of church affiliation. It is frankly stated by counsel for the petitioner that such is the purpose of this proceeding. The minority of the congregation and board of trustees challenge the right of the majority to make the change contemplated. While this court has a right to authorize a change in a corporate name, nevertheless we are of the opinion that no such change should be authorized in this case, if it should be of the opinion that the petitioner or its trustees have no power or right to change its church affiliation, and devote its church property to public worship according to the uses and discipline of the Colored Methodist Episcopal Church at large. It is alleged in the petition that the petitioner is an "Independent church," but the certificate of incorporation gives the corporate name as "Lloyd's Memorial Congregational Church." It is fair to assume that it was the purpose and intention of the incorporators to organize a church which should act in harmony and in affiliation with the general Congregational Church. Just how the general Congregational Church is organized is not disclosed by the papers before the court, but we know that the church holds its General Assemblies and conventions, while the management and control of its affairs are largely committed For other cases see same topic & KEY-NUMBER in ali Key-Numbered Digests & Indexes (178 N.Y.S.) to the congregations of the individual churches. In any event the opposing affidavits show that church discipline and control of the Methodist Episcopal Church is radically different from that of Congregational bodies. In the Methodist denomination the church government and control is largely vested in the bishop of that church; whereas, in the Congregational churches the congregation exercises large, if not exclusive, control. While the petition alleges the petitioner to be an "independent church," I very much doubt such a designation to be a true and accurate one. By referring to the statute known as the Religious Corporations Law (Consol. Laws, c. 51), we find various provisions for the incorporation and organization of churches of different denominations. Article 8 of this general statute prescribes the method of organizing Congregational and Independent churches. It provides for "notice of a meeting for the purpose of incorporating an unincorporated Congregational or Independent church shall be given as follows," etc. If the court reads this statute correctly, it recognizes a distinction between a "Congregational" and an "Independent" church; the one name being used to designate churches affiliated with the general church body known as the Congregational Church, and the other a church unit affiliated with no general church body. It will be observed that in the statute both the word "Congregational" and "Independent" is spelled with a capital letter, thus indicating these words were employed to designate a separate and distinct class of church bodies, while prescribing for both the same method and steps of corporate organization. This distinction may be of some importance, for it is conceded by counsel for the petitioner that, where a church corporation is not an Independent church, its trustees and governing board have no right to change the church allegiance from one denomination to another, or to divert its temporalities and property to other uses than in accordance with the discipline, rules, and usages of the corporation and of the ecclesiastical governing body. We need but quote the language of section 5 of the Religious Corporations Law upon this subject. It provides: "Sec. 5. General Powers and Duties of Trustees of Religious Corporations. -The trustees of every religious corporation shall have the custody and control of all the temporalities and property, real and personal, belonging to the corporation and of the revenues therefrom, and shall administer the same in accordance with the discipline, rules and usages of the corporation and of the ecclesiastical governing body, if any, to which the corporation is subject, and with the provisions of law relating thereto, for the support and maintenance of the corporation, or, providing the members of the corporation at a meeting thereof shall so authorize, of some religious, charitable, benevolent or educational object conducted by said corporation or in connection with it, or with the denomination, if any, with which it is connected; and they shall not use such property or revenues for any other purpose or divert the same from such uses. * *" Prior to the enactment of the acts of 1875 (chapter 79) and 1876 (chapter 110), subsequently incorporated without material change into the Religious Corporations Law of the Consolidated Statutes, a majority of the members of any religious corporation had a right to control the corporation in all respects, and it was held that corporations formed under the third section of the act of 1813 (2 Rev. Laws 1813, p. 212), have no denominational character, nor could any such character be engrafted upon them, and that such corporations might change from one denomination to another. Petty v. Tooker, 21 N. Y. 267; Gram v. Evangelical Lutheran Society, 36 N. Y. 161; Watkins v. Wilcox, 66 N. Y. 654; Westminster Presbyterian Church v. Trustees, 142 App. Div. 866, 127 Ν. Y. Supp. 836. In substance the decisions were to the effect that property acquired by a religious corporation organized under the act of 1813 was impressed with no particular trust to be used for the purposes of any particular sect or denomination, unless so expressly provided by the deed of conveyance or gift to such church. This latitude given to trustees of religious corporations led to abuses. Many religiously minded persons had made large contributions of money and property to church organizations to which they were attached, to have their gifts diverted from the original purposes intended when perchance the control of the board of trustees passed into the hands of those without sympathy with the religious views of the original donors. To remedy this condition the Legislature passed the acts of 1875 and 1876, and the law as enunciated by the courts in their prior decisions under the statute of 1813 was changed, so that now the trustees of church corporations are bound to administer the temporalities of their church * * * "in accordance with the discipline, rules and usages of the corporation and of the ecclesiastical governing body, if any, to which the corporation is subject, and they shall not use such property or revenues for any other purpose or divert the same from such uses." Section 5, Religious Corporations Law. Since the passage of this statute the courts have been constrained to recognize the denominational character of religious corporations. First Reformed Church v. Bowden, 14 Abb. N. C. 356; Isham v. Dunkirk First Presbyterian Church, 63 How. Pr. 465. In the case of Trustees of Presbytery v. Westminster Church, 222 N. Y. 315, 118 N. E. 803, Judge Hiscock, of the Court of Appeals, in discussing the force and effect of section 5 of the Religious Corporations Law, said: "There appears to be no doubt that under it a church which has become affiliated with and a constituent part of the church at large, and as such has acquired property, would be compelled while this relationship continued to submit to the government of such church at large. Thus plainly says the statute. The only question which would remain would be whether by rebellion or secession a constituent church can terminate the relationship and become free from such obligations and control, and we think that this question quite answers itself. It cannot." It is unnecessary to cite or discuss decisions further as to the general proposition stated, as they are conceded by the counsel for the petitioner. He, however, contends that the petitioner is an Independent church, with no denominational or ecclesiastical affiliations, and that therefore the restraints imposed by section 5 of the Religious Corporations Law have no application to the case now under consideration. We think counsel is in error in claiming the petitioner to be an "Independent" church. It was incorporated as a "Congregational" church. At least the corporate name adopted by its incorporators (178 N.Y.S.) clearly discloses the intent and purpose that it should be a constituent unit of the Congregational denomination. The history of its organization related in the affidavits submitted clearly indicates the purpose to make it such, to be controlled and guided by the ecclesiastical polity and the religious belief of what is commonly known as the Congregational Church. In its certificate of incorporation the petitioner did not designate or class itself as an "Independent" church, but as a "Congregational" church, and for the purposes of this application we must deem it such. It may be that the government and control of churches of this denomination is vested largely in members of the congregation of each individual church. It may be that the Congregational Church has no general ecclesiastical governing body to which the corporation is subject. Of just the extent and limit of general authority in that denomination the court is not advised. But the application of the statute to religious corporations is not dependent upon the existence of some "ecclesiastical governing body." The statute imposes the duty on church trustees to "administer the same in accordance with the discipline, rules and usages of the corporation and of the ecclesiastical governing body, if any, to which the corporation is subject," clearly recognizing that in certain cases there may be no "ecclesiastical governing body." Nevertheless we do not understand that the mere nonexistence of some "ecclesiastical governing body" absolves the trustees of a church from administering its property according "with the discipline, rules and usages" of the denomination with which it is connected. The statute makes no exceptions, and had it been the intent of the Legislature to have exempted any class of churches from the operation of this section we are of the opinion it would have so said in plain and explicit language. It may be unnecessary, but we think proper in this connection, to call attention to section 171 of the Religious Corporations Law authorizing * * * * * * * "any incorporated Congregational Church, by the concurrent vote of two-thirds of its qualified voters, to direct the transfer and conveyance of any of its property, real or personal, to any religious, charitable or missionary corporation connected with the Congregational denomination," etc. This section not only recognizes the Congregational Church as a denominational church, as distinguished from an Independent church, but authorizes certain conveyances by churches belonging to that denomination, which churches of other denominations could not make by virtue of section 5 of the act. It defines, however, to just what organization such conveyances can be made, and by implication excludes all other conveyances. We think that the petitioner comes clearly within the provisions of the statute, and to hold otherwise would be to defeat its plain purpose. Certainly the Congregational Church is generally regarded as a denominational organization as distinguished from independent churches. The petitioner must be regarded as "connected" with the Congregational Church within the meaning of the statute. It may be that it would be better on the whole that the reorganization of the petitioner as contemplated should be perfected. But we are face to face with the prohibitions of the statute, which we think forbid this action. Convinced, as we are, that in coming into the Colored Methodist Episcopal Church this church organization and its property violates the Religious Corporations Law, we think that this court should not aid an illegal act by giving its sanction to a change of the corporate name as prayed. This view of the matter obviates the necessity of inquiring into the regularity of the corporate meetings authorizing the proceedings which are challenged on this motion. The petitioner's application is denied, with $10 costs. (Supreme Court, Appellate Division, Second Department. October 3, 1919.) TRUSTS272(3)-RIGHTS OF BENEFICIARY IN STOCK DIVIDEND DETERMINED. Where trustee, holding corporate stock, received stock dividend, and as holder of stock so received purchased treasury stock under the subscription right given stockholders, life beneficiary, under holding of court that stock dividend was income, was entitled, in addition to the stock received as dividend, to treasury stock purchased by trustee as holder of dividend stock, upon payment to trustee of amount trustee paid therefor. Appeal from Surrogate's Court, Westchester County. In the matter of the intermediate settlement of the accounts of Anson Baldwin, as trustee of the trusts created by and under the last will and testament of Abijah Curtiss, deceased. From parts of a decree entered on the second intermediate accounting, Anson Baldwin and Frederick H. Curtiss appeal. Decree reversed in part. Trustee's account settled as amended and filed. Part of the principal under the trust created by the will of Abijah Curtiss, of which Frederick H. Curtiss was to be paid the income, was originally 35 shares of the stock of the Rome Brass & Copper Company. Before the first accounting, and on September 1, 1910, that corporation issued a 300 per cent. stock dividend from surplus profits, so that these 35 shares thus brought other 105 shares. There was also offered a subscription right to take $200,000 new treasury stock, giving to existing stockholders of record the right to take 1 new share for every 7 shares held. The trustee first treated the 105 new shares as principal. He thus appeared on the stock ledger as trustee holding 140 shares. He was confident of the intrinsic value of the subscription right. So he also took the 20 shares offered on this 140 shares, paying therefor out of cash on hand and from borrowing. He testified that he "exercised the right in behalf of all parties," taking all the stock available on his record holding. When it was decided that this stock dividend was income (In re Baldwin, 74 Misc. Rep. 341, 133 N. Y. Supp. 1109; Id., 157 App. Div. 897, 142 N. Y. Supp. 1107; Id., 209 N. Y. 601, 103 Ν. Ε. 734), it established the title of the beneficiary. The trustee on March 31, 1914, therefore, passed to the beneficiary the 15 new shares obtained upon the subscription rights of his 105 new shares, and the beneficiary paid the trustee for For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes |