188 Iowa 300 | Iowa | 1920
“The name and style of this corporation shall be thc-e 'Central University of Iowa,' and its object shall be the establishment, holding and government of a literary and theological institution in Pella, under the particular auspices of the Baptist denomination, yet offering equal advantages to all students having the requisite literary and moral qualifications irrespective of denomination or religious profession. It shall have perpetual succession, and fill its own vacancies; establish by-laws and make all rules and regulations in accordance with law and these articles, and in general may do all acts which are necessary and proper to carry into effect the object of the corporation.
“Article 4th. Board of Trustees. The government of the university shall at all times be vested in a board of trustees which shall consist of thirty members; and one third of whom and not more than one half shall be ministers of the Baptist denomination in good standing and full fellowship, and twenty-four at least members of the Baptist church in good standing and full fellowship.
“Article 5th. Classes of Trustees. The board of trustees shall be divided into three classes to be numbered 1st, 2d, and 3d. The term of the first class shall expire in one, the second in two, and the third in three years from date and the members of any class may be eligible to re-election.
“Article 7th. Future Election. Hereafter all elections to the board of trustees shall be made from year to year by the trustees, themselves, and elections always to be made by a ballot vote of three fourths of the members present at
“Article 8th. Officers of the Board. The board shall choose fróm its own members annually and as often as may be necessary a president of the board, a vice-president, a secretary, a treasurer and three other members who together shall constitute an executive committee whose duty it shall be to carry out the design of this incorporation in accordance with the provisions of these articles and the laws of Iowa.
“Article. 9th. Amendments. The board of trustees shall have power at any regular meeting to amend these articles provided due notice shall have been given to all the members of the proposed amendment and" it shall pass by an affirmative vote of a majority of the board, except that part of Article 2d which defines the object of this incorporation, and that part of Article 4th which requires 24 of the members of the board to be members of the Baptist churches and which parts shall be unalterable.”
Later, the articles of incorporation were renewed for 50 years from 1893.
For a good many years prior to 1916, and, as we understand the record, as early as 1881, propositions had been pending at intervals, and efforts made to abandon the school at Pella, and move it to Des Moines. In 1915, the board of education of the Northern Baptist Convention had a meeting in Chicago, at which they requested the Reformed Church in America to take over the defendant university, and meetings were afterwards held to consider the matter. A witness testifies:
“I do not know how often, since I was elected treasurer, in 1900, down to 1916, that either the Des Moines Baptist College or the educational board of the Northern Baptist Convention stirred up this question of turning over the assets, or part of them, but quite frequently.
The Northern Baptist Association is a suggestive body, not a governing body. But it is the highest body of the Baptist church in the north. It appears that both H. G. Curtis and E. G. Barker, constituting the firm of Curtis & Barker, were students at the Central University at the time of the breaking out of the war, and' enlisted in the army. At the close of the war, Curtis returned to the university, and completed his education. Then Barker engaged in farming. Curtis was a lawyer. Both were deeply interested in the school, and were active in its upbuilding. They made many contributions, prior to the one in controversy. It is claimed by plaintiffs that Curtis & Barker were aroused by the talk of removal, and conceived the idea that they would donate shares of stock in a silver mine, an enterprise in which they were engaged. At any rate, on August 26, 1881, Curtis & Barker made a written proposal to the defendant university, as follows:
“In consideration of the love and affection for our Alma Mater, we the undersigned, hereby agree that we will set apart and donate for the use and benefit of the Central University of Iowa, at least 60,000 shares of the capital
“And we further agree, in order to make the same available and valuable to the university, that we will cause the sale of so much of said stock as shall seem advisable after consultation with the chancellor of the college, and turn the net proceeds to the use of the school.
“The said donation by us to be for such special professorships or work or fund or purpose and on such reasonable conditions as we may name when formally presented to the board.
“And the same to be taken and accepted in lieu of and in full discharge of all our obligations to the university, in other words, all former donations and obligations to be deducted from the total amount otherwise covered by this gift and are canceled hereby.
“We further desire to say that we regard this property mainly as dedicated to the university and desire only to retain such an interest as will, when the mine is developed, enable us in common with those who invest, to reap some benefit from the enhanced value and of the proceeds to cover actual expenses of placing the mine, working the same before company is organized and to cover all expenses on account of the mine previous thereto and time spent in reference thereto.
“And of the balance, if any, we will be still mindful of the needs of the college and act as we are prospered in the enterprise with the same liberality with which the foregoing plan and purpose is seconded by the other friends of Christian education and of the Central University.
“Trusting that all our efforts herein may be eminently successful.
“It is further understood and agreed that at least $80,-000 shall be applied to the college funds from the sales of the first 50,000 shares.”
“Conditions of the Curtis and Barker donation to the Central University of Iowa.
“Know all'men by these presents that we the undersigned, H. G. Curtis and E. G. Barker for and in consideration of the love and affection we bear our cherished Alma Mater, the Central University of Iowa, have made and by these presents do make and-confirm unto said Central University of Iowa, a donation to the permanent fund thereof of the net sum of forty-eight thousand five hundred and nineteen dollars and ninety cents ($48,519.90) in cash and good notes accepted by the chancellor thereof and the sum of three thousand three hundred and ninety-four dollars ($3,394.00) in stock of the Plymosa Mining Company, valued at two dollars ($2.00) per share making a total of fifty-one thousand nine hundred and .thirteen dollars and ninety cents ($51,913.90) all now in the hands of the chancellor which is donated upon and subject to the following express terms and conditions by the donors and to be formally placed in the treasurer of the college on the acceptance of the same with the conditions, by the board of trustees.
“I. The said sum to be a part' of the permanent fund of the college to be known and designated as the Curtis and Barker fund shall be kept distinct from the other funds of the college, and the principal sum to be sacredly held and no part of it to be in any manner consumed by or for the use of the university and in no case shall it be liable for the debts, defaults, liabilities or obligations of the uni-
“II. The said university shall under no pretence ever be removed from the city of Pella in Marion County, Iowa, but shall be kept and maintained there.
“III. After the A. D. 1885 the work of instruction done and actually maintained and performed in and by said university in its several college departments must be as good as and in all respects equal to the average college work in the colleges of Iowa.
“IV. Curtis and Barker shall each have the right to nominate the occupants of the chairs bearing their names respectively, subject to the approval of the "Board of trustees by confirmation.
“V. Curtis and Barker shall have the right to name each chair which is endowed in whole or in part by the said funds so contributed by them and they may designate what chairs shall be benefited thereby and the amount to be applied to each but less than five thousand dollars ($5,000.-00) applied to one chair shall not give the right to name the chair, and until such designation is made by them the fund may (or the income therefrom rather) be used for the benefit of the whole school or faculty as the board of trustees shall deem best for the general good.
“VI. The safe-keeping of this fund being of prime importance to all parties, the board of trustees shall have a special watchful and advisory care of it and are enjoined to exercise special vigilance and to this end shall also require of the officers and agents who have the custody and investment thereof a bond or bonds in a penalty or amount deemed sufficient by the executive board to secure the whole amount liable to come into their hands with good and sufficient sureties to be approved by the board conditioned upon the faithful performance of their duties in all respects
“VII. Said donors or either of them, their representatives, agents or attorneys shall have the right to an inspection of the books and vouchers relating to said fund at any time and full statements of the condition of the funds shall be rendered Curtis and Barker once a year or oftener if demanded. The said fund shall be kept in a separate account from the balance of the funds of the institution and losses if any occurring through the neglect, fault or miscarriage of any of the officers or agents of the institution or otherwise shall be made good to this fund by the university so far and to the extent that it is able to do so and its assets that may be legally used for such purpose will allow.
“VIII. Approval is hereby given of the loan of seven thousand five hundred dollars ($7,500.00) of said funds while in the hands of the chancellor and before covered into the treasury of the university to the Plomosa Mining Company and that the notes and securities given by said company shall be and hereby are accepted and considered as part of this fund and shall be held by the college instead of cash received by the chancellor and when paid by said company shall then be subject to all conditions herein and this condition and disposition of so much of this fund is an express condition of this donation by the donors.
“IX. The income from dividends on the said Plomosa stock (viz., the three thousand three hundred and ninety-four dollars $3,391.00) shall be held and be disposed of the same as interest on loans and the proceeds from stock hereafter sold shall be a part of said fund and be subject to the same conditions but shall not be sold except with the consent of the donors.
“The foregoing amounts being in full of the proposed
“The failure to comply with any of the foregoing conditions or in the execution of any of the aforesaid trusts in good faith reasonable consideration being made for unavoidable delays and unforeseen contingencies shall work a forfeiture of the said fund and the whole thereof shall be at once the property of Curtis and Barker upon the declaration of said failure by them or either of them and shall be payable to them, their heirs, representatives or assigns, but shall not in any case be liable to any creditors of the donors or either of them.”
These conditions were accepted by the university on September 10, 1883.
The institution continued in full control of the Baptist denomination until about June 6, 1916, when, as plaintiffs claim, the property in controversy and the buildings were turned over to the control of the Reformed Church in America, and the remainder of its property was turned over to the American Baptist Educational Society, to be used in connection with the property of the Des Moines College, in establishing and endowing the Central College, a Baptist institution, located at Des Moines, Iowa. The Reformed Church of America has a central body — the Presbyterian system of government. Its teachings are not the same as the Baptist Church. The Baptists have no higher body to which they are responsible. The Dutch Reformed church in America and the Baptist church are separate organizations. There was turned over to the Northern Baptist Association $5,000 in securities and over $100,000 in individual subscription notes, part of them to the endowment fund. All the notes that were held by the Central University, except the Curtis & Barker fund, were so turned over. Later, and upon the amendment of the articles and the turning over of the said funds, the defendant university proceed
“1st. That Article eleven (11), be amended by striking out the following, ‘except that part of Article Two (2) which defines the object of this corporation, and that part of Article Four (4) which requires twenty-four (24) of the members of the board to be members of the Baptist churches, and which shall be unalterable.’ So that said Article Elevgn (11) when amended shall read as follows: ‘The board of trustees shall have the power at any regular meeting to amend these articles, provided due notice shall have been given to all members of the proposed amendment, and it shall pass by an affirmatives vote of a majority.’
“2d. That Article Two (2) be amended by striking out the words ‘Baptist denomination’ and inserting in lieu thereof the words ‘The Reformed Church in America,’ so that Article Two (2) when amended shall read as follows: ‘The name and style of this corporation shall be the Central University of Iowa, and its object shall be the establishment, holding and government of a literary and theological institution in Pella, Iowa, under the particular auspices of
“3d. That Article Four (4) be amended by striking out the words, 'one quarter of whom, and not more than one half, shall be ministers of the Baptist denomination in good standing and fellowship, and twenty-four at least members of the Baptist churches in good standing and fellowship,’ so that said Article Four, (4) when amended shall read as follows: ‘The government of the university shall at all times be vested in a board of not more than sixty-five (65) nor less than fifteen (15) trustees, of whom the president shall be a member ex officio, and a majority of whom shall be members of the Reformed Church in America, in good standing.’ ”
On April 20, 1916, plaintiffs made formal written de: mand for a return of the fund known as the Curtis & Barker fund, under the instrument entered into September 10, 1883, and later, in writing, specified the grounds wherein it was claimed that defendant had failed to comply with the terms and conditions of the contract. Among these grounds were the three before set out, and now relied on.
The board of trustees is now under the control of the Reformed Church of America. The president of defendant university is of that denomination, and nearly all of its professors. For some years before this, the professors were not all members of the Baptist church, nor were all of the trustees of that faith. It is being conducted and supported by the Reformed church, to teach the tenets and advance the cause of that church. The buildings and equipment still remain in Pella, and a university has been maintained and operated, under the conditions before stated.
For a better understanding of the situation, some other circumstances should be stated, and it may be that still
1. Appellees contend that there has been a diversion of
“Even a casual exploration of the perplexing labyrinth of subsequent cases wherein its holdings have been applied or distinguished, according as a given state of facts has seemed to necessitate judicial acquiescence or evasion, will leave one profoundly convinced of the entire applicability of these terms [‘the great case of Dartmouth College v. Woodward’].”
And further, at page 958, that:
“Most familiar among the principles deemed to have been laid down by the college case is the proposition that a corporate charter is a contract, within the protection of the Federal Constitution. It would seem strange that the
Some cases are given in the note where the cited case has been distinguished. Plaintiffs also cite the case of Associate Alumni, etc., v. General Theo. Seminary, etc., 26 A App. Div. 144 (49 N. Y. Supp. 745), as in point. In that case, the alumni undertook to raise a fund to be donated to the college, which was donated under certain terms as to its use. The college accepted the fund, and used it in accordance with the terms of the donation for several years; but, after ineffectual negotiations to modify the conditions, the college sought to disregard the conditions and to use the fund according to its own direction. The court. said:
“But it is urged by the defendants’ counsel that the alumni 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 defendants’ work, and that, therefore, 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 defendants’ 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 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 whbm he received it. The fund was offered to the defendant by the associa
But, on appeal in that case, the judgment was modified. See Associate Alumni, etc., v. General Theo. Sem., etc., 163 N. Y. 417 (57 N. E. 626). In that case, however, there was no provision that the fund should revert, and the court expressed no opinion on that question. The condition alleged to have been violated was in regard to the character of the professorships, and the right of donors to nominate. The court decreed specific performance, and that the purposes of the trust should be-carried out. There was no abandonment or diversion to the extent that the purposes of the donors could not be carried out. The court did say, however, in that case, that a trust might entirely so fail, because the purpose for which it was created, became impossible of accomplishment, that the fund ought to be returned to the donor. They cite, also, 1 Beach on Trusts and Trustees, Section 349, as follows:
“Where a charitable trust has been created, and the object of the trust unequivocally designated in the conveyance, it cannot be changed, as a matter of convenience, or with a view to increasing the value or usefulness of the charity, even by the consent of all the parties in being. In a case relating to the establishment of a divinity school in connection with Harvard, and where relief was sought by the corporation of the college, it was held that this court cannot, in the exercise of its chancery jurisdiction, withdraw funds given by individuals to the corporation of Harvard College, in trust for the promotion of a theological education at the college, or for the benefit of a divinity school
We do not understand appellant to dispute this legal proposition. Its defenses are on other grounds. It contends that, under the evidence, there has been no abandonment, because the buildings still remain in Pella, and a college is being maintained, and under the same name. Defendant further contends that there is no provision for forfeiture in case of change of denominational management or auspices, when it is done in good faith, because of unforeseen contingencies; that the instrument of date September 10, 1883, in so far, at least, as its forfeiture clause is concerned, is without consideration, and that it did not change the prior proposal of donors; that, where the trustee and the cestui que trust are the same, the title merges; that equity will not enforce a forfeiture, and that the failure of the treasurer to give bond, under the circumstances, is not sufficient ground upon which to decree a forfeiture.
We think the trial court rightly held that the fund reverted, because of the violation of "the contract by the defendant. By the amendment to the articles of incorporation, and the transfer of the funds and the control to other institutions, the purposes, or one of the main purposes, of the original articles of incorporation of the school, and of the donation, were abandoned. It was no longer a Baptist school, and no longer under the control of the Baptist denomination. The donation clearly creates a trust, which required that the principal should be held intact, and the interest used. It was to be held as a permanent fund. To determine the nature and scope of the work, we turn to the charter, and the terms and conditions of the donation. The charter created a Baptist institution, and provided that this
“For failure to comply with any of the foregoing conditions, or in the execution of any of the aforesaid trusts, in good faith, reasonable consideration being made for unavoidable delays and unforeseen contingencies, shall work a forfeiture,” etc.
It will be noticed that the failure to comply with any of the foregoing conditions shall work a forfeiture. The latter clause, we think, had reference to other matters, and that the parties did not contemplate that the fund itself could be converted to another use. The donation provides that, after 1885, the work of the university must be as good as and equal to the average college work in the colleges of Iowa; also the naming of professors, and the endowment of chairs, etc. It seems to us that the reference to unavoidable delays and unforeseen contingencies applies to such last-named matters. The fund was to revert upon two conditions : First, the failure to comply with any of its conditions ; and second, the failure in the execution of the trusts upon which the funds were given.
“The donee is under no compulsion to accept the gift. He is free to elect. The question he has to decide is the ordinary one which arises in nearly every business transaction — whether the thing offered him is worth the price demanded. He may attach to his offer such lawful conditions as his reason, caprice, or malice may dictate, but he is dealing with his own, and the donee, who claims the benefit of the gift, must take it, if at all, upon the terms offered.”
See, also, Miles v. Miles, 168 Iowa 153, 161; Rogers v. Law, 66 U. S. 253.
7. It is thought by appellant that plaintiffs have waived the breaches complained of by acquiescence, negligence, and otherwise, and that their cause of action is stale. As said, appellees concede that there has been a waiver as to a part of the fund, but we see nothing in the record to indicate a waiver as to the fund now on hand, and for which a recovery was allowed. Appellees acted promptly, after the articles of incorporation were amended, the property transferred, and the purpose of the donors changed.
“If the intention of the donor can be legally executed, * * * it will be done, but if this cannot be accomplished, the claim of the heir will not be defeated by appropriating the property to another and different object.”
Whether or not the doctrine has been rejected, we
“The doctrine of cy pres with reference to charitable trusts in that, where a definite function or duty is to be performed which cannot be done in exact conformity with the plan of the person who has provided therefor, such function or duty will be performed with as close approximation to the original plan as is reasonably practicable.” See note to Hadley v. Forsee, 14 L. R. A. (N. S.) 49, at 59; People ex rel. Smith v. Braucher, 258 Ill. 604 (47 L. R. A. [N. S.] 1015, 1021).
It occurs to us that defendant, having voluntarily put it beyond its power to carry out the purposes of the donors as to the denominational control of the college, is not in a position to ask that this fund be disposed of cy pres. We do not understand that defendant is asking that; neither is anyone else. If that were done, defendant might be required to turn it over to some other institution, such as defendant was before the change. There is no other such institution at Pella to which it could be turned over. The conditions require that it shall be maintained at Pella. The fund is retained by the defendant for purposes other than intended by donors, and contrary to the conditions of the donatioh. In People v. Braucher, supra, it was held that the court cannot, upon abandonment of the use of church property purchased by funds donated by members of the society, and its attempted sale by the surviving members of the congregation, require the application of the proceeds cy pres, if no other organization or society exists which has the same purposes and religious belief as the society to which the property belonged.
We are of opinion that the trial court rightly decided the case, and the judgment is, therefore, — Affirmed.