76 A.D.2d 712 | N.Y. App. Div. | 1980
OPINION OF THE COURT
This is an appeal by the defendant from a judgment of the Supreme Court, Kings County, which awarded the plaintiff money damages for breach of a contract to sell real property owned by the defendant and upon which its church edifice was erected. The plaintiff cross-appeals from so much of the judgment as failed to direct specific performance of the contract.
Because of a decline in its membership the defendant, Fourth Church of Christ, Scientist, of Brooklyn, New York, decided to sell its house of worship and move to a smaller facility which it also owned. Plaintiff, Church of God of Prospect Plaza, offered to buy the real property and, after negotiations, defendant’s membership voted unanimously to sell the same in accordance with plaintiff’s offer. In accordance with defendant’s instructions, its attorneys prepared a proposed contract and sent it to plaintiff. Plaintiff executed the contract and returned it with a deposit according to the instructions given by the attorneys for the defendant.
At about the same time, defendant received an offer from a sister church to merge their congregations and also received an all cash offer for the property from yet another prospective purchaser. Subsequent to the return of the contract signed by the plaintiff, defendant’s membership voted to consolidate with the sister church and to rescind the acceptance of plaintiff’s offer. The contract was never executed by the defendant.
In light of the merger, plaintiff was content to forego its rights to purchase the property, but when it subsequently developed that the merger was not permitted by defendant’s mother church and defendant entered into a contract of sale with the other buyer which had made an "all cash” offer, plaintiff decided to commence this action. In fact, the merger was eventually approved, the contract between defendant and the second offeree was canceled and that offeree purchased the property of defendant’s sister church. Defendant’s attorneys, who had obtained court leave approving all the transactions except the contract with the plaintiff, never informed the court of the plaintiff’s status.
The corporate minutes of the defendant indicate that its membership unequivocally accepted the offer of the plaintiff to purchase its church property on the terms proposed by the plaintiff. Although the vote of defendant’s membership constituted an acceptance, such acceptance was not effective until communicated to plaintiff (see White v Corlies, 46 NY 467, 469; 1 Corbin, Contracts, § 67; Simpson, Contracts [2d ed], § 36). At defendant’s direction, its attorneys sent plaintiff a written instrument for execution on its behalf which embodied the same terms as had been proposed by plaintiff and agreed upon at defendant’s membership meeting. The sending of the transmittal letter and this formal written instrument for execution constituted sufficient notice of acceptance.
Defendant contends that it never intended to be bound until the written contract was executed by both parties. In determining whether the parties entered into a contract, it is necessary to examine the words and deeds of the parties which constitute the objective manifestations of their intent
Defendant next contends that that contract is unenforceable by reason of the Statute of Frauds (see General Obligations Law, § 5-703, subd 2). It is our opinion, however, that the plaintiff’s written offer, the signed corporate minutes of the defendant accepting the terms of that offer and the formal unsigned contract prepared by defendant’s attorneys which unequivocally refers to the same transaction, when read together, constitute a sufficient memorandum of the contract to satisfy the Statute of Frauds (see Scheck v Francis, 26 NY2d 466, 470-471; Crabtree v Elizabeth Arden Sales Corp., 305 NY 48, 54-56; DFI Communications v Greenberg, 41 NY2d 602, 606-607).
The law is clear that a religious corporation can enter into a valid contract for the sale of its real property without first obtaining court approval (Muck v Hitchcock, 149 App Div 323, 328-329, revd on other grounds 212 NY 283; Congregation Beth Elohim v Central Presbyt. Church, 10 Abb Prac [NS] 484, 488-489; Sun Assets Corp. v English Evangelical Lutheran Church of Ascension of Borough Park, Brooklyn, 19 Misc 2d 187, 192). Although a court of equity may decree specific performance of an executory contract for the sale of the real property of a religious corporation (Muck v Hitchcock, 149 App Div 323, 328-329, supra; Sun Assets Corp. v English Evangelical Lutheran Church of Ascension of Borough Park, Brooklyn, supra, p 192; Bounding Home Corp. v Chapin Home for Aged & Infirm, 19 Misc 2d 653; Congregation Beth Elohim v Central Presbyt. Church, supra, p 490), it must first determine, in accordance with subdivision (d) of section 511 of the Not-For-Profit Corporation Law, that the terms and consideration of the transaction are fair and reasonable and that the purposes of the corporation or interests of its members will be promoted by the sale (cf. Associate Presbyt. Congregation of Hebron v Hanna, 113 App Div 12, 14). The purpose of this requirement is to protect the members of the religious corporation, the real parties in interest, from loss through unwise bargains and from perversion of the use of the property (Bowen v Trustees of Irish Presbyt. Congregation in City of N. Y., 6 Bosw 245; Muck v Hitchcock, 212 NY 283, 287, supra; Congregation Beth Elohim v Central Presbyt. Church, supra, pp 488-489; Madison Ave. Baptist Church v Baptist Church in Oliver St., 1 Abb Prac [NS] 214, 224; Reformed Prot. Dutch Church in Garden-St. v Mott, 7 Paige Ch 77, 83-84).
It has been said that in making the determination required by section 12 of the Religious Corporations Law and section 511 of the Not-For-Profit Corporation Law the court must either "ratify or veto” the contract of the parties (Matter of Minister, Elders & Deacons of Ref. Dutch Church in Saugerties, 16 Barb 237, 241-242). In the case of Congregation Beth Elohim v Central Presbyt. Church (10 Abb Prac [NS] 484, 492-493, supra), the court clearly explained that although a contract made by a religious corporation for the sale of its property is valid, it is "liable * * * to be defeated” where the court finds it not to be in the best interests of the membership and that where consent to the alienation of the property has been withheld by the court, the contract of sale is "inoperative”. It thus appears that contracts for the sale of the real property of a religious corporation are valid, subject to being defeated by the veto of the court, i.e., they are voidable by the court where the two-pronged test of subdivision (d) of section
By this determination we do not wish to be understood as holding that a religious society may, at its whim, change its mind as to the sale of its real property after it has entered into a contract of sale but before the requisite court approval has been obtained. Where the seller refuses to perform and the buyer sues for specific performance, the trial court must satisfy itself that the test prescribed in subdivision (d) of section 511 of the Not-For-Profit Corporation Law has been met before awarding relief to the plaintiff. Such a determination must be made on a case-by-case basis because it entails the assessment of differing and often complex facts. Suffice it to say that where the terms and price are reasonable and the sale is only opposed by the membership because of a slightly better offer from some other party, a court of equity should not hesitate to approve the contract and decree specific performance. But where, as here, the sale is opposed by the membership because of merger with another church and the combined congregations now use the edifice, the contract is not in the present best interests of the membership and must be disapproved.
The final issue raised by defendant concerns the question of the money damages awarded by the Referee. Since the contract has been voided, that issue has become academic.
Accordingly, the judgment appealed from should be reversed and plaintiff’s complaint dismissed.
Hopkins, J. P., Martuscello and Weinstein, JJ., concur.
Judgment of the Supreme Court, Kings County, entered July 5, 1979, reversed, on the law and the facts, without costs or disbursements, and plaintiff’s complaint is dismissed.