First Baptist Church v. Caughey

Mr. Justice Mercer delivered the opinion of the court, January 7th 1878. All tho assignments of error may be answered in the considera-' tion of two questions. The one whether the corporation had the power to incur the alleged liability; the other whether there was sufficient evidence to submit to a jury that the liability was actually incurred. 1. The original charter declares one of the objects of the association tobe “the building of a meeting-house,” and settlement and support of a pastor or minister of the gospel for the worship of Almighty Bod, and the religious instruction of the congregation * * *• together with that of the purchase and tenure of such lands or lots as may be necessary and convenient for the site of a meeting-house, of a burial-ground, and of a parsonage house of convenient size for their minister.” A supplement to the charter gives the corporation power to assess and collect a tax on the pews ; but not to exceed in any one year twenty per centum upon a fixed valuation, for the purpose of defraying the expenses of repairs, insurance and minis [274] ter’s salary, together with incidental expenses. The charter is silent on the subject of Borrowing money. Some thirty years after the corporation was formed, the church edifice became unsuitable and inadequate for the enlarged congregation. It therefore resolved to rebuild and enlarge the meetinghouse. This required an expenditure beyond the sum subscribed by voluntary contributions, for that purpose. The meeting-house was rebuilt. Had the corporation power to contract a debt in rebuilding beyond the amount subscribed ? We think it had. The object of its incorporation could not be fulfilled without the meeting-house. No clause in its charter forbid its contracting a debt in the erection of its necessary buildings. Whether it hired laborers • and bought materials on a credit, or whether it borrowed money with which to pay for the labor and materials when procured, the liability incurred was for the same purpose. • As it could not have successfully defended against the wages of a laborer employed in the erection of the house through want of power to employ him, so it cannot defend against the payment of money borrowed and actually expended in the erection of the church. As to the policy of a church erecting a house of worship far beyond its available means, we do not now feel it necessary to indicate an opinion. Certain it is, that the small sum here in controversy, is trifling compared with the large debts resting upon many of the churches in towns and. in cities. 2. The charter declared the business and affairs of the association should be under the direction and management of five trustees, a majority of whom should constitute a quorum. It further declared the trustees should “ have the general care, superintendence, and management of the concerns of the same.” During the progress of the work, Mr. Liddell, one of the trustees, appears to have been the financial agent and manager, in behalf of the board of trustees. In raising the funds necessary, he borrowed $1200 from Mrs. Smith, and gave his individual note therefor. Subsequently the trustees borrowed $900 of Joseph Neeley, to pay so much of the debt due to Mrs. Smith, and four of them executed and delivered the note for the sum thus borrowed. The court doubted the power of the plaintiff in error to give the note, and the consequent liability of the corporation thereon alone; but substantially charged that there were certain implied powers incident to every corporation, and if they were satisfied, from the evidence, that the money, for which the note was given, was actually used in rebuilding the church, and thus went to the benefit of the society, the law raised an implied obligation on the part of the church to repay it. It was contended on the argument that there was no evidence that the money was- used in rebuilding the church. The answer to this objection is shown in several parts of the record. The note itself contains the written declaration of four of the trustees [275] jointly, when engaged in making the loan, that the §900 were “for use of First Baptist Church.” The settlement which Liddell subsequently made, as appears by the receipt signed by the president of the board of trustees, and one other trustee, declares, “ we hereby assume all liabilities of said church for which said W. J. F. Liddell, as trustee, has become responsible, including note given to Mrs. Catharine Smith, signed by himself individually, for the use of said church, according to settlement made this day.” On the trial of the cause, James Dunlap, president of the board of trustees, was called, by defendants in error, as a witness, and in his testimony in chief said, “ in repairing church had to borrow money ; were advised by counsel that church could not borrow it; must be individual; the money borrowed from Neeley was paid to Mrs. Catharine Smith, to discharge a debt to her for money borrowed by Mr. Liddell for the church.” It is true, on cross-examination, his evidence goes to impair the validity of the receipt to which his name was subscribed, and he further said “ none of the Neeley money was received by the church.” I think the fair interpretation of his testimony is that the money was not actually paid into the hands of the trustees, but was paid directly by Neeley to Mrs. Smith. It was, however, a question for the jury to determine. It is further shown by the evidence that the plaintiff in error made a payment of §800 on the note given to Neeley; the endorsement thereof being in the handwriting of the treasurer, now deceased, of the corporation. This chain of evidence, both written and verbal, tending to show how the business was conducted and settled, ratified by a partial payment, was certainly sufficient to submit to the jury to find that the money was used in rebuilding the church. Judgment affirmed.