95 Neb. 491 | Neb. | 1914
Lead Opinion
This action was commenced by H. W. Horton in the district court for Lancaster county, for the foreclosure of a mechanic’s lien against an incorporated charitable institution known as “Tabitha Home,” situated near the city of Lincoln. The petition was in the usual form for materials furnished Tabitha Home under an alleged contract. Certain other persons claiming mechanics’, judgment and mortgage liens were made parties defendant, and filed answers and cross-petitions setting up their
By leave of court an answer and cross-petition was also filed by tbe aged inmates of tbe Home, in wbicb it is alleged: “That Tabitba Home is a charitable institution duly incorporated, as appears from a copy of tbe articles attached to this cross-petition as exhibit A; that tbe Home was organized and is maintained as a charitable institution, and not for profit; that tbe corporation has no capital and has no funds or income outside of a few contributions, and that it has no property except that in controversy; that all of these answering inmates who bad any funds made a contract with said Home for tbeir support, board and lodging for tbe remainder of tbeir’ lives, and that they paid tbeir money to said Home for that purpose; * * * and before any of the alleged material was furnished or labor done, they entered said institution, in pursuance of tbeir contract and payment of tbeir money, and that they were in said Home long before and at tbe time when it .is claimed that these materials were furnished and this labor was done; that the alleged material was not furnished at tbe request of these inmates, nor for tbeir use and benefit, nor was it necessary to maintain tbe institution for its original charitable purpose.” Then follows a list of tbe aged inmates, 19 in number, with tbe dates of tbeir several entries, extending from November 21, 1887j to June 25, 1913, with tbe allegation “that they have each contributed all they had to tbe Home for their support, and that said sums of money so paid were accepted and are being retained by tbe Home under said contract for maintenance of these inmates; that they paid tbeir money in good faith, and relied upon tbe charitable purposes of said Home and tbe articles of incorporation, believing the same to be true; that tbe Home was incorporated so that no one person might bold, own or control its property or funds, and that tbe board of trustees and tbe officers have no right or interest in this prop
The answer of J. H. Humpe, trustee, and a mortgagee, consists of a general denial of the averments of the answers and cross-petitions of the alleged mechanics’ lien-holders, admits that the defendant Tabitha Home is and for many years has been duly incorporated as a charitable institution under the laws of this state; that it is the owner of the land described in the petition and cross-petitions. It is alleged that for the purpose of securing the payment of certain described notes, amounting in all to the sum of $10,250, issued by the corporation of Tabitha Home, said notes drawing interest as therein provided, and in pursuance of a resolution therefor duly adopted directing the trustees so to do, they, on the 22d day of. September, 1908, duly executed and delivered to said Humpe a trust deed upon the said real estate; that the notes are outstanding and unpaid, though some are not yet due, but that the said trustee has a lien on said property for the security of said hotes, which he asks to have protected by the decree of the court.
The Woodmen Accident Association filed an answer and cross-petition, setting up the execution of two promissory notes, amounting to $8,000, with 6 per cent, annual interest, secured by mortgages on the premises involved, which were duly executed by leave of the district court, and the mortgages, duly recorded, constitute prior liens; that the debt was not yet due, and there was no default in the payment of interest. The decree found the mortgages to be the first and prior liens, but not subject to foreclosure. No objections having been made thereto, the mortgages need not be further noticed. Replies were filed to all the cross-petitions, and the issues fully formed.
A trial was had, which resulted in findings and a decree in favor of plaintiff and all the cross-petitioners claiming mechanics’ liens, and ordering a foreclosure thereof; that the liens of the several mechanics’ lien-holders constitute a second lien; that J. H. Humpe, trustee,
At the beginning of the trial it was stipulated that the material and labor furnished by the parties claiming the liens were as stated in the accounts attached to plaintiff’s petition and the several cross-petitions of the lien-holders, and that the statements were filed and recorded as alleged, and the materials were furnished and used on the premises described, but thát such stipulation would not be construed to mean that they were furnished by order of Tabitha Home or any of its officers. The stipulation is of considerable length, referring to each cross-petition, and “that the balance due on the above amounts and items is the amount specified in the petition and in the answers and cross-petitions of the respective parties, subject to the defenses tendered here by the Tabitha Home, as to the legal rights of the parties incurring these expenses to obligate the Tabitha Home to pay for them.”
The fact that the material and labor was furnished to remodel one of the buildings is not disputed; but it is contended that it was not furnished for the Home, nor under any contract with the corporation therefor. We find no cross-appeal as against the Woodmen Accident Association, nor in favor of J. H. Humpe, trustee. This leaves for our consideration the contention against the mechanics’ liens claims, and the Herpolsheimer Company judgment.
It is shown by the record that Tabitha Home is a • charitable institution; that the title is in the corporation, with a board of trustees to manage its affairs, who are not vested with the title; that it has no fixed income, and is instituted, supported and maintained alone by voluntary contributions and donations by the charitably inclined, and by contributions made by the church organization of the denomination in. whose interest the Home
It appears that Tabitha Home is an institution of charity. The real estate and funds provided for the building were contributed by generous people for the good of human beings who were not able to take care of themselves. It is a general charity. Its benefits are not limited to any class of people, and it appears that its doors are open to all alike.
It further appears that certain doctors practicing their profession in the city of Lincoln thought it would be a good thing to have a hospital at this institution; that it would help them in their business, and would be of benefit generally. They proposed to the trustees of Tabitha Home to make a hospital there. The trustees of the Home appear to have been cautious and discreet persons, and made a plain arrangment with the doctors that, if the
The first question presented and discussed is, whether the contractors and materialmen have placed themselves in a position to have a lien upon this property, even if it is ordinary property and is not protected by the statute. It is by all parties considered that they did not make their contracts with the owners of the property; and, if they are held to have had a contract with the owners or trustees, it must be one implied from the conditions and circumstances under which they acted. The title of the property was in the Tabitha Home. The trustees of the Home had made their record plainly show that the property was not to be chargeable with these expenses. On a former occasion, when the trustees desired to charge the property with an indebtedness, they applied to the courts for permission to do so, and this was a matter of public record. That this was a charitable institution was also a matter of public record and notoriety. This court has many times held that “a person furnishing material for an improvement on real estate must take notice of the interest and title in the premises of the person with whom he contracted as shown by the public record, as
In Fordyce v. Woman’s Christian Nat. Library Ass’n, 79 Ark. 550, 7 L. R. A. n. s. 490, it was said: “The immunity of the property of a charity from sale under execution rests on special grounds. The property of a corporation organized solely for charitable purposes is exclusively dedicated to public uses, as much so as the streets and alleys of a town or city; for this purpose the corporation is a mere trustee. Benton v. Boston City Hospital, 140 Mass. 13. It is of primary importance to the public that the trust shall be perpetuated. The trus
It follows that in this case the board of trustees could not do by indirection what- they could not do directly. Avery v. Baker, 27 Neb. 388; Grissom v. Hill, 17 Ark. 483; Fordyce v. Woman’s Christian Nat. Library Ass’n, supra; Zion Church v. Parker, 114 Ia. 1.
Another question of importance is whether the property of the Home could be incumbered with a mortgage or ■otherwise, except under the direction of the court, pro-
The property in question in the case at bar was owned by the Tabitha Home, a corporation organized for the purpose of holding the title thereof. This corporation is not a religious society. A religious society, however, concluded to build a home. They solicited funds from the charitably inclined with which to construct it, and of course the religious society itself contributed towards the construction of the building. If we look to the form of the matter only, this was not the property of a religious society; if we look to the substance however, it was the property of such society. If it can be held to be the prop- - erty of a religious society, it comes directly within section 651, Rev. St. 1913, and if it does, then, in case it is desired to sell or exchange the property or incumber it by a mortgage or otherwise, the district court, upon petition and good cause shown, might authorize it to be done; and, if that authority was granted, there would be included in the order a direction as to how the proceeds of the incumbrance should be appropriated or invested. Such order would require that the proceeds be appropriated and invested in accordance with the original terms upon which the real estate became invested or entrusted to such religious society. The lienholders, however, have cited some sections of the statute, which is a general one, and in
While there is some conflict in the authorities, the great weight of the adjudicated cases favor the conclusions above expressed. It is to be regretted that the claimants, seeking to establish their liens are denied that remedy; but, on the other hand, a decree establishing such liens and an order of foreclosure would divert the property
The judgment of the district court establishing the claimants’ liens, and ordering a foreclosure and sale to satisfy the same, is reversed, and the cause is remanded to the district court for such other and further proceedings in harmony with this opinion as may be desired.
Reversed.
Concurrence Opinion
concurring.
The corporation seems to have been organized as a charitable institution to maintain a home for orphans and aged people — persons who are unable to provide for themselves. The purpose of the existence of the institution is not for profit. It has no property except that in controversy. The aged persons, for the benefit of whom the Home in part exists, appeared to have contributed all their means to establish and maintain it. This was done under a contract so that the inmates should have a home that would shield them in their old age, infirmity, and feebleness.
It is provided in its articles of incorporation that the transaction of the business of the Home “shall be vested in five trustees to be elected by the members of the corporation.” These trustees have no authority to bind the corporation and create a debt against it, unless they act within the purposes of the corporation as set forth in its
Section 153, ch. 16, Comp. St. 1911, contains a provision that all funds received by any such corporation (charity society) shall be used in the first instance, or shall be vested, and the income thereof used (after paying the necessary expenses) “for the exclusive purpose set forth in the articles of association, and no portion thereof shall be used for any such purpose except within this state, and no portion of the funds of any such corporation shall be used or contributed toward the erection, completion, or furnishing of any building not OAvned or used by such corporation.”
Section 154c of the same chapter provides that “the books, records and files pertaining to any such Home shall be subject to the inspection of the auditor of public accounts of this state or any deputy or clerk authorized by
It wall be seen that the spirit of this legislation tends to prevent any diversion of the property from the charitable purpose intended. It seems to the writer that, if the trustees undertook to endanger the safety of the property by engaging in a contract which might incumber it with mechanics’ liens in carrying out a purpose not contemplated by the articles of incorporation, such effort of the trustees would be beyond their jursdiction, and forbidden by the general spirit of our laws towards charitable institutions.
Dissenting Opinion
I am unable to agree with the conclusions of fact announced in the opinion, and also with the legal principles stated as applying to the facts in evidence in the case. I therefore dissent.