Associate Alumni v. General Theological Seminary

McLAUGHLIN, J. The fund in question was offered to the defendant by the Alumni Association upon certain conditions, and it was accepted by the defendant “upon the conditions” imposed. A valid trust was thereby created, and the defendant, as a trustee, thereupon became obligated, both legally and morally, to honestly and faithfully use and apply the fund and income therefrom according to the conditions imposed. Those conditions, so far as the same are in dispute, have never been changed, waived, or modified by the Alumni Association or this plaintiff, its successor in interest. It is true, some action was taken by both parties in 1888 towards securing a modification of the conditions, but nothing definite was accomplished. The-committee appointed by the association, acting in connection with the committee appointed by the defendant, made a joint report, in which-a change was recommended, but the association did not adopt the report or assent to the proposed change. This the defendant understood, because the following year its trustees passed a resolution, which recited that the proposed change, “not having been officially ratified by the association,” should not be considered in force. And' one year later it acted upon a nomination made by the Alumni Association under the original conditions, by electing Dr. Cady for a period of three years. But it is urged by the defendant’s counsel that the Alumni Association never had any interest in or to this fund; that the fund was derived from contributions made by individuals for the purpose of promoting a specific part of the defendant’s work, and that, therefore, the defendant was entitled to take, hold, use, and apply the fund and income therefrom to this work, irrespective of the wishes of the association; that there was no consideration for the limitation imposed on the exercise of this right by the defendant; that the fund did not belong to the association, and that, therefore, it parted with nothing on the faith of the defendant’s agreement, or its assent to the conditions imposed when the fund was transferred. We are at a loss to understand how the defendant could believe or hope that its contentions in this respect would receive the sanction of any court. Honesty and fair dealing requires, when one person has received property [749] from another, under an agreement that he will do something with it, that he should do as he agreed, or else return the property to the one from whom he received it. The fund was offered to defendant by the •association on certain conditions. The defendant, in order that it might receive the fund, assented to those conditions, and agreed to be bound by them. It cannot now be heard to say that the association had no title to or interest in this fund. If it desired to make such ■claim, it should have done so when the fund was offered, and not after it had obtained possession of it. But there is no force to the contentions of the defendant in this respect, as a reference to the history of the fund will show. The first mention we find of this fund in the record before us is June, 1836, when the association appointed a committee to consider the advisability of attempting to establish a permanent fund to endow one of the professorships, then unendowed. The establishment of such fund was thereafter urged by defendant, and a committee was appointed by it to aid and encourage the association in their proposed undertaking. In June, 1839, the trustees of the defendant, in response to a communication from the association in reference to raising the fund, passed a resolution, npon the language of which the defendant now lays great stress as determining the true relations of the two bodies. The words in the resolution, which are considered by defendant as important, are: “This board * * * hereby recognizes them as agents accordingly, and earnestly commends their agency to the confidence and liberality of the church.” Standing alone, these words might possibly import, or be susceptible of the meaning urged by defendant’s counsel, that the association simply acted as agents of the defendant; but when they are considered in connection with the request of the association which prompted and called out the resolution in which the words are used, it becomes plain that no such inference can be made from them. The association asked “that the board of trustees be requested to give their consent” to the work of procuring funds for the endowment, and in response to this request a resolution was passed which contained the words quoted. Under all the facts, we do not think these words are entitled to the force contended for by defendant, or, indeed, to any force, in determining the title of the fund; and, if we were disposed to adopt another view, the defendant’s own acts would prevent our doing so. As early • as 1841 the defendant recognized the right of the association to possess and control the fund, because it then surrendered to the association, upon its demand, a sum contributed, which had been paid directly to the defendant. In addition to this, for many years a portion of the fund was from time to time loaned to the defendant by the association, and on such loans the defendant paid interest. These acts are inconsistent with a claim of ownership. But, in addition to this, we think the acceptance by the defendant of this fund upon the conditions imposed by the association was a recognition of ownership in the association which the defendant cannot be permitted to deny. If the defendant at that time had raised the question, a judicial determination of the rights of the parties could have been had before the transfer •actually took place. The defendant, however, having secured the possession, by assenting to the conditions proposed, is estopped from [750] denying the association’s title. Thus Bigelow on Estoppel (4th Ed. p. 661) says: “Indeed, it may now be broadly said that when one sui juris induces angther to contract lawfully with him, or to change his position under circumstances which at the time would justify a man of care and prudence in acting as was done, the person inducing such action and taking and retaining the benefit of it can neither in whole nor in part repudiate the effect of his conduct.” It may be said that it is for the best interest of the seminary that the conditions imposed by the association should be changed, or that some modifications should be made in respect to them; but that is a question not for us to consider. The question for us to determine is solely whether the defendant has complied with the conditions prescribed by the donors of the fund, and to which it agreed when it received the same. In this connection the language used by the supreme court of-the United States (Trustees v. Woodward, 4 Wheat. 518) is quite pertinent: “This [the proposed change] may be for the advantage of this college in particular, and may be for the advantage of literature in general; but it is not according to the will of the donors, and is subversive of that contract on the faith of which their property was given.” Finally, it is urged that the plaintiff did not succeed to the rights of the unincorporated association, and therefore it is not the real party in interest. After a careful examination of the steps taken by the unincorporated association antecedent to the incorporation of the plaintiff, as well as the subsequent recognition by the defendant of the plaintiff’s right to control the fund, we have reached the conclusion that the plaintiff did succeed to all the rights of the voluntary association, certainly to the extent of maintaining this proceeding. The action taken by the unincorporated association was sufficient of itself to transfer to the plaintiff, when incorporated, all its rights. At the annual meeting of the association in 1889, a committee, appointed for that purpose, was directed to take all necessary proceedings to incorporate the association; and, in obedience to this instruction, proceedings were taken which finally resulted in the incorporation of the plaintiff. This of itself was sufficient to vest in the plaintiff all the title and interest which the association had in or to the fund. Bac. Ben. Soc. § 64; In re St. Mary’s Church, 7 Serg. & R. 517; Rudolph v. League (Sup.) 7 N. Y. Supp. 135; Porter v. Robinson, 30 Hun, 209; Beardsley v. Johnson, 121 N. Y. 224, 24 N. E. 380. The resolution in favor of the incorporation was adopted at an annual meeting by a unanimous vote of all present, and from that time to this no member of the association has been heard to complain, or in any manner question what was then done. That the resolution thus passed empowered the committee then appointed to secure the incorporation of the association is clear, and it does not need the citation of any authorities to sustain the proposition. We therefore conclude that when this fund was offered to the defendant a trust was created which the defendant has violated by refusing to apply and use the fund according to the terms upon which it was offered, and to which it assented when it received the same; and that, in view of the peculiar provisions of the agreement, and the fact [751] that it comes before us on a submission, this'court does not deem it practicable to direct a specific performance, but instead it remits the parties to their original positions, by directing that the defendant pay over and deliver to the plaintiff the fund which it received in 1883, together with any and all accumulations of interest thereon. Judgment to that effect should be directed against the defendant and in favor of the plaintiff, with costs. All concur.