Board of Church Erection Fund of the General Assembly of the Presbyterian Church in the United States v. First Presbyterian Church

The opinion of the court was delivered by Dunbar, J. This action was brought to foreclose a mortgage on certain lots in the city of Seattle. The complaint alleges that the plaintiff was a corporation organized and existing under the laws of the state of Hew York; that the defendant, the First Presbyterian Church, was a corporation organized and existing under the laws of the state of Washington; that the defendant, Walter Morgan, was doing business as Walter Morgan & Co.; that on May 12, 1893, the First Presbyterian Church of Seattle made and executed, by proper authority of law, its mortgage on the — 458 — said lots to the plaintiff to secure a loan, of $2,160, of a prior date; that the mortgage, in addition to the usual covenants, recited that in case the house of worship or the mortgaged premises should be alienated or abandoned as a house of worship by the party of the first part, except for the building or purchase of a better house of worship, then and in such case the defendant church should forthwith refund the money with interest thereon from the time of receiving it; that, upon the happening of either of such contingencies, said amount with interest should immediately become due and payable, with the other ordinary provisions with relation to the right of the mortgagee to sell the property; that the mortgage was duly recorded; that the Hirst Presbyterian Church has failed to comply with the terms, conditions and agreements of said mortgage; that on the 28th day of May, 1897, the sheriff of King county sold said property under an execution to defendant Walter Morgan & Co., and said sale was confirmed by the court of King county, June , 1897, and by the said sale Walter Morgan & Co. claim to have an interest or title to the property; that on June 14, 1897, by reason of said sale, the Hirst Presbyterian Church was dispossessed of said premises by a writ of assistance issued out of said court on petition of Walter Morgan & Co., and enforced by the sheriff of King county. The plaintiff ashed judgment against the Hirst Presbyterian Church for the sum of $2,160, with interest thereon at the legal rate; for the foreclosure of the mortgage, and for a receiver to care for and conserve the interests of the property. The Hirst Presbyterian Church made default. Defendant Walter Morgan filed a general demurrer to the complaint, upon the ground that the same did not state facts sufficient to constitute a cause of action, and upon hearing the court sustained the same. The plaintiff standing upon its complaint and refusing to plead further, a judg — 459 — ment of dismissal was in dne time entered. Prom this judgment an appeal is taken to this court. A motion is made to dismiss this appeal, but we think it is without merit. It is contended by the respondent that the demurrer was properly sustained for the reason, (1) that it appeared from the complaint that the cause of action — the consideration of the mortgage — was barred by the statute of limitation; (2) that the mortgage was void because of its covenants being contrary to public policy and in restraint of alienation; (3) because the time when the debt was supposed to become due was vague, uncertain and indefinite; (4) because there had been no breach of the conditions and no right to foreclose appeared. There are many answers to the first contention, viz., that the debt, which had been contracted several years before the mortgage was given, was barred by the statute of limitation, but it is necessary to mention only two. In the first place, a pleading of the statute of limitations is a privilege which is accorded by the law to the defendant — in this case the Presbyterian Church — and it can avail itself of that privilege, or answer upon the merits, or default, just as it pleases. It is not a right which defendant Walter Morgan can receive the benefit of. Second, it was not pleaded in the court below. The demurrer interposed was upon the ground and for the reason that the complaint did not state facts sufficient to constitute a cause of action. This is the sixth cause of demurrer which is specified by the statute. The seventh is that the action has not been commenced within the time limited by law. This objection may be taken by demurrer when it appears upon the face of the complaint. Otherwise it may be made by answer. But it is not comprehended within the sixth clause which provides for a demurrer when the complaint does not state facts sufficient to constitute a cause of action, and the question cannot be raised under the sixth objection — 460 — any more than upon the other grounds for demurrer specified by the statute, viz., that the court has no jurisdiction of the person of the defendant or of the subject matter of the action, or that the plaintiff has no legal capacity to sue, or that there is another action pending between the same parties, or that there is a defect of parties plaintiff or defendant, or that several causes of action have been improperly united. "When the attention of the court is intended to be directed to any of these specified grounds for demurrer it must be directed as specified by statute. The next contention is that the covenants of the mortgage were contrary to public policy and also in restraint of alienation. We do not think there is any alienation in this mortgage at all. It is true that where an estate is conveyed in fee simple, a proviso that the grantee shall not convey, or shall not convey without the consent of the grantor, is held to be void as a restraint upon alienation, because it is repugnant to the estate which has been created by the debt for the benefit of the grantee. But no estate was created by this mortgage. The title to> the land, both legal and. equitable, remained in the mortgagor. We have examined the cases cited by the respondent, upon which he so confidently relies, and we do not think they are in point at all. The principal case, and one in which the authorities are collated, is DePeyster v. Michael, 6 N. Y. 467 (57 Am. Dec. 470). In that case there was a lease of lands in fee, and in addition to the annual rent the lessor reserved to himself, his heirs and assigns, the right to purchase the premises, in case the lessee, his heirs, etc., should choose to sell, on paying three-quarters of the price demanded, the lessee covenanting to make the first offer to the lessor, his heirs, etc., on those terms, but in case the offer should be declined, then the lessor reserved to himself, his heirs, etc., one-fourth part of all moneys which should — 461 — arise from the selling, renting or disposing of the lands by the lessee, his heirs or assigns, when and as often as the same should be sold, rented or disposed of; with the condition that in case of a sale or other transfer, without the payment of such one-fourth to the lessor, his heirs or assigns, the sale or transfer should be void, and the premises should revertió the lessor, his heirs and assigns, who might then re-enter upon the premises and repossess and enjoy the same as of his former estate; and it was held that a reservation of the quarter sales and the condition and right of re-entry upon default of their payment were void. But the case and the arguments advanced and cases cited show conclusively that the doctrine contended for could not he applied to the conditions specified in this mortgage. The mortgagors are not prevented from selling this property. Ho restrictions are entailed upon it. But the effect of the stipulation or condition expressed simply is that if it is alienated or abandoned or not used for the purposes for which the money was loaned, the mortgage becomes due; and if a sale were made, it would simply be made subject to the mortgage. It is also contended that the mortgage is contrary to public policy, for the further reason that it provided that the debt should become due if the church should cease to be connected with the General Assembly; that this is a restraint upon religious belief, and a court of equity should not uphold such contract. "We do not see any merit in this contention. There is no restraint here upon any one’s religious belief. The board of church erection has a right to invest its money for the promotion and benefit of the Presbyterian churches in the United States, if it sees fit so to do. Presumably low rates of interest and liberal time are given by this association for the purpose of promoting the interests of the church, and favorable conditions are obtained which could not be obtained from any one else; and — 462 — there is nothing wrong or intolerant or against public policy in sustaining conditions which would prevent their money from inuring to the benefit of secular business. If conditions like these cannot be enforced, then church edifices, which the society has been instrumental in building, might be used for dance houses, theatres, drinking saloons, and for other businesses which are not only foreign to the object of the promoters, but in direct opposition to their principles. The third objection is that the mortgage was void because the time when the debt was to become due was vague, uncertain and indefinite. We think this is a provision of the mortgage which the mortgagor cannot take advantage of. 2 Jones, Mortgages, §§ 1183-84-85. Where the debt is made payable upon the happening of a contingency and no time for payment is mentioned in the mortgage, the mortgage is good. Fetrow v. Merriwether, 53 Ill. 275; Belmont County Branch Bank v. Price, 8 Ohio St. 299; 3 Pomeroy, Equity Jurisprudence, § 1188. It is in the fourth place contended by the respondent that no breach of the conditions of the mortgage has been shown, and that consequently a foreclosure could not be had. A number of authorities are cited by both appellant and respondent, as to when the legal title passes and as to whether the legal title to land passes upon the sale or upon the confirmation of sale. It was said by this court in some of the cases cited, notably Hays v. Merchants’ Bank, 10 Wash. 573 (39 Pac. 98), that the discussion of the title proposition was a discussion of a theory and did not affect the practical questions in that case; and so we think concerning that technical question here. This mortgage provides that in case the mortgaged premises be alienated or be abandoned as a house of worship by the party of the first part, except for the building or purchase of a better one, the mortgage — 463 — should become due, and that the mortgagee shall have power to foreclose the same. The complaint alleges that this property was sold under an execution issued out of the superior court to the defendant Walter Morgan, and that the sale was confirmed; that Walter Morgan & Oo. have closed the door of the church; that the church has been dispossessed of said premises by a writ of assistance issued out of the court, and that the said Walter Morgan was thereby put in possession of the premises. It seems to us that within the spirit of the contract this was an alienation. The church had refused or failed to pay its legal obligations; the law in the enforcement of those obligations dispossessed it, and in legal contemplation and for the purpose of construing this mortgage and giving effect to the intention and purposes of the mortgagor, the possession which was given to Morgan must be held to be a possession given by act of the mortgagee. We think that plainly there was a breach of the covenants of the mortgage, and that the court erred in sustaining the demurrer to the complaint. The judgment will be reversed. Scott, C. J., and Gordon and Reavis, JJ., concur. Anders, J., not sitting.