40 A.2d 506 | Md. | 1945
Isabel G.H. Brown, of Baltimore, in her will executed on January 22, 1935, after leaving small bequests to her brother, Edward Hamilton Hough, and sister, Le Page Hough Robbins, and several others, directed that all the residue of her estate be divided equally among Volunteer Hospital of America, Inasmuch Mission, Fresh Air Society, and Salvation Army. "These four," she added, "I consider are carrying on a great work. This money I wished used in some fitting memorial for my beloved son, Hamilton Freeman Brown. I would suggest it be used in fitting up a room or ward, * * * or any other thing they may need, but it is not to be used for current expenses."
The testatrix died in July, 1940. In February, 1943, after delay caused by a caveat, Mercantile Trust Company of Baltimore qualified as executor in the Orphans' *234
Court of Baltimore City. The residue amounts to approximately $45,000. There is no doubt that Inasmuch Gospel Mission, Inc., which has been operating for many years on West Saratoga Street in Baltimore, was intended as one of the four residuary legatees. Misnomer of a corporation will not defeat a devise or bequest to it, provided that the identity of the corporation is otherwise sufficiently certain. Woman's Foreign Missionary Society v.Mitchell,
It is well settled that an executor has the right to file a bill in equity to obtain a construction of the will of the testator. Littig v. Hance,
Inasmuch Gospel Mission was incorporated in 1924 by J. Le Roy Hopkins, its founder; Frederick Grimes, its first superintendent, and Charles H. Isreal. By provision of the charter, the three incorporators were made trustees with power to add to their number from time to time to the extent of five trustees. The objects of the corporation were (1) to provide homes for destitute men, (2) to operate an industrial department to enable them to be self-supporting, and (3) to conduct a non-denominational religious mission. It is unquestioned that a charitable corporation, authorized by its charter to acquire property, may receive devises and bequests to be applied in a specified way within the charitable purposes of the corporation as described in its charter. American National Red Cross v.Felzner Post,
In 1927, after the death of Isreal, Grimes resigned as superintendent. In a letter to Hopkins, he ascribed his resignation to his physical condition, but gave assurance that there would always be a warm spot in his heart for the mission. He was succeeded by J.V. Christy, who served until his death in 1933, when his widow became superintendent. Mrs. Christy (now Mrs. Margaret Heintzman) testified that she and her husband served as trustees. Grimes, however, declared that he did not resign as trustee, but only as superintendent. When Hopkins became ill, Charles W. Gosnell and W.J. Shamberger were elected to the board. After the death of Hopkins in 1938, Gosnell served as president of the board. From that time on the mission encountered *236 financial difficulties. The corporation had no money, and the real estate was mortgaged for $3,900. Gosnell testified: "The wagons and trucks broke down; * * * the horses died; things were slow; and we were going back all the time." At a meeting on June 3, 1940, attended by Gosnell, Mrs. Christy, and Shamberger, Gosnell reported that the income of the mission had been falling off for a long time, that it was unable to pay its bills, and it could not continue any longer. The board accordingly resolved to file a petition in bankruptcy. The corporation was adjudicated bankrupt on June 5, 1940.
In the Summer of 1940 Grimes took first steps to save the gospel mission. He bought the contents of the mission buildings for $200, and was also instrumental in having several men stay in the buildings as a protection to the property, pending foreclosure sale. In 1941 the buildings were sold under foreclosure to a real estate company, but Grimes shortly afterwards purchased them from the company. He then arranged for a reorganization meeting in the office of Oregon Milton Dennis on October 1, 1941. At that meeting Grimes, Dennis, F. Murray Benson, William E. Hearn, and Howard P. Wright were elected trustees. The board thereupon elected Dennis president, Hearn secretary, Wright treasurer, and Grimes superintendent. Since that time the work of the mission has flourished. It was testified that the mission now owns and operates five motor trucks for making collections of waste paper and junk, and at times employs as many as 22 men. Gosnell admitted that, since the reorganization, he had seen the mission in operation under the same name as before, and had found its store stocked and doing business in the same manner as before. In addition to the buildings which it owns on Saratoga Street and one on Bradley Street where waste paper is baled, it has also contracted to purchase two others on Greene Street, which it has been using under a lease.
It is not disputed that Gosnell, Mrs. Christy, and Shamberger intended to close the mission in 1940 because they "could not make it go." But its main activities are being *237
conducted at the same place as before, and have even been intensified. Gosnell, while attempting to defeat the bequest of more than $10,000 to the mission, of which he himself was once superintendent, admitted in the court below that the sign in front of the mission had never been taken down. In 1834, Justice Story stated the doctrine that a corporation is subject to dissolution either by a surrender of its corporate franchises or by a forfeiture of them for misuser and nonuser. Mumma v.Potomac Co., 8 Pet. 281, 287,
We have likewise held in this State that the courts are bound to regard a company, incorporated in accordance with all the requirements of the law, as an existing corporation until it is dissolved by a judicial proceeding on behalf of the government that created it. Laflin Rand Powder Co. v. Sinsheimer,
It is urged that Grimes resigned from the board of trustees, and hence possessed no right to use the corporate franchise. Grimes, however, vigorously maintained that, although he and Mrs. Christy, "could not get along together," he never resigned from the board. The law is clear that failure to elect officers of a corporation at the proper time does not cause a dissolution of the corporation or operate as a surrender of the corporate franchise, for the corporate body has a potentiality which might be called into action by proper authority without affecting its identity. Of course, if the corporate offices are filled and their functions exercised by officers de facto, the fact that there is a deficiency of officers may be established by judicial proceedings brought to enforce a forfeiture on that ground.Bridge over River Lehigh, President, etc., of, v. Lehigh Coal Navigation Co., Pa., 4 Rawle, 9, 26 Am. Dec. 111. It is significant (1) that Gosnell and Mrs. Christy, who failed in their efforts to operate the mission, make no claim to the bequest, but challenge the claim of the board, which has been operating the mission since 1941 with conspicuous success; (2) that after Grimes testified that he did not resign from the board, it was reported that the minute book of the corporation has been lost; and (3) that when Grimes inquired in 1941 whether it would be necessary for him to form a new corporation, the trustee in bankruptcy told him he could keep the same corporate name as far as he was concerned. Grimes, as the only living incorporator, was vested with power by the charter to fill vacancies on the board of trustees. When incorporators are clothed with *239 power to fill any vacancy in their body, their rights are not extinguished by neglect, but are merely dormant. Philips v.Wickham, N.Y., 1 Paige, 590, 595.
It is recognized that when a corporation is organized for charitable purposes, its property is held in trust for the public. Commonwealth ex rel. Schnader v. Seventh Day Baptists ofEphrata,
Even if the mission corporation were adjudged to be dissolved, Grimes could incorporate his mission again. Under the Maryland chancery statute, amended by the Legislature in 1931, whenever any charitable or religious corporation is dissolved or about to be dissolved, or for any reason it is impracticable or inexpedient to continue the corporation activities, and all or any part of the corporate property is not needed for the payment of the corporate debts, a court of equity has power to determine the disposition of such property. In such case the court shall, so far as possible, direct or provide for the transfer of such property to any other corporation or association having a similar or analogous character or purpose, or in some way associated or connected with the corporation to which the property has previously belonged. It is the declared intention of the Legislature that courts of equity in such cases shall exercise the judicial power of cy pres in order to carry out the general purpose of the donor of the property in regard to the application and utilization of the gift in spite of the change of circumstances. Acts of 1931, Ch. 291, Code, 1939, Art. 16, Sec. 122.
The mission corporation has never been dissolved, but on the contrary is actively engaged in the benevolent work for which it was organized. Therefore, we conclude that the executor should distribute one-fourth of the residue of Mrs. Brown's estate to the corporation, to be administered by it in the manner designated by her as a memorial to her son.
Decree reversed, and case remanded for the passage of a decreein accordance with this opinion, the costs to be paid out of theestate. *241