Summary
In Associate Presbyterian Congregation of Hebron v. Hanna, 113 A.D. 12, 98 N.Y.S. 1082 (1906), the court invalidated a non- court-approved conveyance of property held by a religious corporation despite a party's claim that the corporation retained both the property and the buyer's money.
Summary of this case from Mosdos Chofetz Chaim, Inc. v. RBS Citizens, N.A.Opinion
May 2, 1906.
D.M. Westfall, for the appellant.
Frank C. Brown, for the respondent.
On the 28th day of February, 1903, the trustees of a religious corporation incorporated under the name of "The Trustees of the Associate Presbyterian Congregation of Hebron" executed to the defendant a deed purporting to convey to him real estate of said corporation. The consideration for such conveyance was paid by the defendant to the said trustees and by them applied to the purposes of said corporation, and the defendant went into possession of the property described in said deed. It is alleged in the complaint and not denied that such consideration had been offered to be restored to the defendant.
"A religious corporation shall not sell or mortgage any of its real property without applying for and obtaining leave of the court therefor pursuant to the provisions of the Code of Civil Procedure." (Religious Corp. Law [Laws of 1895, chap. 723], § 11, as amd.) This statutory provision was not complied with in this case.
Said corporation brings this action under the name of "The Associate Presbyterian Congregation of Hebron." In its complaint it demands judgment both for the recovery of the possession of the premises described in said deed and also for the cancellation of the record of said deed. Facts are alleged in the complaint consistent with both forms of relief demanded.
At the trial defendant claimed that the action was for ejectment and that he was entitled to a jury trial and the court so held. But at the conclusion of the evidence no question of fact had developed and the court directed a verdict in favor of the plaintiff. The defendant indulges in some criticism as to the formation of the jury. But as no question arose for determination by the jury such criticism is academic and need not be considered.
The action was not instituted in the correct corporate name of the plaintiff. But it is provided by section 1777 of the Code of Civil Procedure that "the defendant is deemed to have waived any mistake in the statement of the corporate name unless the misnomer is pleaded in the answer." The answer in this case alleges on information and belief that the plaintiff is not a corporation, and then alleges the correct corporate name of the plaintiff as being the true and correct name of the grantee to which the grantors of the corporation conveyed certain premises of which the premises in question are a portion. The plaintiff proved its incorporation, and in doing so established the misnomer. But the question of such misnomer was not properly raised by the said allegation in the answer. This defense is technical, and if a defendant wishes to avail himself thereof he must raise the question by such an unequivocal allegation in his answer as will clearly apprise the plaintiff of the point raised so that the plaintiff may make the proper correction by amendment or otherwise. The answer fails to do this. This objection not having been properly raised, the defendant is deemed to have waived it.
The defendant insists that he has alleged certain facts in his answer as a counterclaim, and that as no reply was interposed such facts are admitted, and that they are of such a nature as to entitle him to equitable relief; that the court should now confirm or ratify the conveyance which the parties intended to make, or, in other words, should now grant its permission that the sale be made as it would have done had an application been made therefor as required by the Religious Corporations Law as above set forth; and thus carry out the intent of the parties and do equity to the defendant who is in possession of the property under the deed in question and who has paid the consideration thereof. The difficulty with this argument is that assuming as true all the facts contained in the answer they fall far short of being sufficient to authorize the court to grant leave for the sale of the property in a proceeding instituted directly for such purpose as required by the statute; and a fortiori such facts are insufficient to authorize the court in this action to grant the desired relief. Sections 3391 and 3393 of the Code of Civil Procedure provide that in such a proceeding by a corporation for leave to sell its real estate a petition shall be presented setting forth among other things that the interests of the corporation will be promoted by such sale and setting forth a concise statement of the reasons therefor and a statement as to the financial condition of the corporation and that if it shall then appear to the satisfaction of the court that the interests of the corporation will be promoted thereby an order may be granted authorizing the sale for such sum as the court may prescribe and that the court shall make direction as to the disposition of the proceeds of such sale. It is only when the interests of a corporation will be thereby promoted that a sale of its real estate can be made; and there is no allegation or evidence in this case that this proposed sale would be beneficial to the corporation.
But it is further urged that as the defendant is in possession of the property under the deed in question and that as the plaintiff is in possession of the purchase price thereof that the plaintiff should be estopped from maintaining this action. The logic of this argument would in all cases nullify the statute requiring permission of the court to make such sale. All that the parties would have to do in any case would be to ignore the court and consummate the sale as between themselves and then each party would be estopped from claiming as against the other that the sale was invalid. Even if the plaintiff is estopped, the court is not estopped; and the court should not abdicate its right and cannot disregard its duty to see that the real property of a religious corporation is not alienated unless the interests of such corporation will be thereby promoted.
The defendant also complains because the judgment contains equitable relief adjudging the deed null and void and directing the cancellation of the record thereof. Perhaps those provisions in the judgment are unnecessary. But they are in conformity with the allegations of the complaint and the demand therein for judgment. And the defendant is in no way prejudiced thereby. The effect as to him would be precisely the same if they had been omitted from the judgment. Moreover in connection with this equitable relief the court directed that the consideration of the deed be restored to the defendant by offsetting the same against the costs of the action which consideration the trustees of the plaintiff had improperly received from the defendant.
No inference can be drawn in this action that the plaintiff is seeking to repudiate a contract which its officers had any power or authority to make or to which the court could give its approval. The objections of the defendant are unmeritorious. There is no error in the case prejudicial to the defendant or available to him.
The judgment and order should be affirmed, with costs.
Judgment and order unanimously affirmed, with costs; SMITH, J. not sitting.