Nichols v. Fox

McCQY, J. One Mary C. Hanson, in the year 1911, made a will, and codicils thereto, by the terms of which, among other things, she devised certain sums of money to the First Congregational Church of Sioux Falls. When said will was offered for probate, in the county court, after the death of Mrs. Hanson, Lydia Ann Nichols, a daughter and only heir, contested the validity of said will on the ground, among others, that the First Congregational Church of Sioux Falls, being a religious corporation organized and existing under and by virtue of the laws of the state of South Dakota, had no legal authority to receive and hold property acquired by will. The county court found and rendered judgment in favor of the said First Congregational Church of Sioux Fall, from which finding and judgment the said contestant plaintiff appealed to the circuit court. The circuit court found and rendered judgment that the said Congregational Church of Sioux Falls, being a corporation, is not expressly authorized by statute, or its charter to' take property under a will. From this finding and judgment the First' Congregational Church of Sioux Falls has appealed. [1-5] The only question presented' on the merits of this appeal is whether or-not the said religious corporation is authorized and empowered, either by charter or the statute, to take and hold property bequeathed' to it by the said will. It is contended by respondent that the said bequest to said religious corporation must fail by reason of the provisions contained in section 1002 of the 'Civil Code, viz.: “A testamentary disposition may be made to any person capable by law of taking the property so1 disposed of, except that no corporation can take under a will, unless expressly authorized by its charter or by statute so to take.” The articles of incorporation of said First Congregational Church of Sioux Falls expressly authorize it to acquire and hold property, real and personal, by devise, gift, grant, or other conveyance or testamentary disposition. This leads us to a con [4] sideration of the last clause of said section 1002, “unless expressly authorized by its charter or by statute so to take.” It will be observed that this- clause does not read “unless expressly authorized by statute.” What, 'then, is the purpose, force, and effect of the words “by its charter” therein contained? It is quite evident that there was legislative intention to give this section a broader meaning and scope than if it had read- “unless expressly authorized 'by statute.” It seems- to- be generally held, under Constitutions and laws similar to those in this state, -that the charter of a corporation consists -of its articles of incorporation and the .laws of the state under which such corporation has- been -created. Cook on Corporations, § 2; Bent v. Underdown, 156 Ind. 516, 60 N. E. 307; Traer v. Lucas Co., 124 Iowa, 107, 99 N. W. 290; Van Etten v. Eaton, 19 Mich. 187; Dewey v. Cent. C. M. Co., 42 Mich. 399, 4 N. W. 179; Atty. Gen. v. Perkins, 73 Mich. 303, 41 N. W. 426; People v. Gas Co., 130 Ill. 268, 22 N. E. 798, 8 L. R. A. 497, 17 Am. St. Rep. 319; Bixler v. Summerfield, 195 Ill. 147, 62 N. E. 849. It also seems to be generally held that corporations may incorporate in their articles of incorporation such -powers and privileges as the governing statute may .permit, but that the law is -always supreme in this respect. 10 Cyc. 222. The laws under which a corporation is -created are as much a part of its charter as if actually written into and -made a part of the charter. The laws standing by themselves do not constitute the charter; neither -do the articles of incorporation. People v. Gas Co., supra. It necessarily follows that powers and privileges contained in articles of incorporation, .permissible under the law, are a part of the charter. Therefore we are of the opinion that when this concluding clause was placed in said section - 1002 it wa-s intended thereby that the express authority required to- be given to a corporation to take property by will might be so expressly -conferred by either of two- ways: (1) By the charter when permitted by law; (2) by the statute law itself. This concluding clause of section 1002, !by its- very inherent terms and language, expressly -permits- the articles of incorporation, as a -part of the charter, to contain the power to take by will by means of the terms of the charter, as distinguished from express authority to so- take by means of the statute. This is the only method of giving force and effect to the language, “unless express [5] ly authorized by its charter or by statute so to take”; otherwise the words liby its charter” are wholly meaningless. Formerly corporation charters were frequently granted by special ads of the Legislature, in which every charter was in effect a direct legislative act; but in this state under the present Constitution all corporations, with some few exceptions, must be chartered or created under the general law. Section I, art. T7, Stat. Const. The corporation in question is not within the excepted class mentioned in the Constitution, and therefore could only 'be created under the general law.' Whether a corporation charter is created by special act or under general law, the effect, as far as the powers and limitations upon corporate acts are concerned, is the same. A charter granted under the general law is, in all respects, the equivalent of a charter created by special act of the Legislature. 10 Cyc. 222; Ellerman v. Chicago Co., 49 N. J. Eq. 217, 23 Atl. 287, 295. Section 1002 of our Civil Code was in 1903 reenacted as a new and original enactment, at a time when most corporations could only secure a charter under the general law. This section is a general section of statute law, and makes no distinction 'between charters created under general law and those created under special act of the Legislature. This section clearly comprehends within its purview charters created under general law. If it only embraced charters 'by special act of the Legislature, then, the use of the word's “by its charter or” are superfluous, because a special legislative act creating- a corporation, of itself, would constitute authorization by statute, and be within the term “authorized by * * * statute so to take.” The articles of incorporation, not repugnant to any statute, may authorize the corporation to -take by will, such articles constituting a component part of the charter of a corporation created under general law. We are therefore of the opinion that the word “charter” as used in said section 1002 means and includes the articles of incorporation of corporations .created under general law, and, there being no statute law in this state forbidding such religious corporations from acquiring property by w-ill, the said, religious corporation in question was legalfy authorized by its charter,to take said property under the said will in question. [6] Motion was made 'to dismiss this appeal as to' appellant Frank Eox, executor under said will. This motion should be [6] granted. Schlegel v. Sisson, 8 S. D. 476, 66 N. W. 1087. The First Congregational Church of Sioux Falls is the only appellant interested in the matter presented by -this appeal. The judgment and order appealed from are reversed, and the cause remanded for further procedure in harmony with this* decision.