*1 Mаy A. No. 22217. In Bank. [L. 1953.] In re LOS ANGELES SOCIETY, COUNTY PIONEER
Corporation, Voluntary in Process of Dissolution. LOS Ap ANGELES COUNTY PIONEER al., SOCIETY et pellants, v. HISTORICAL SOCIETY OF SOUTHERN (a CALIFORNIA Corporation) al., et Respondents; THE PEOPLE al., Respondents. et Interveners and *3 Appellant Angeles Morris Lavine for County Pioneer Society. *4 Appellant for
Roy Howard Lelande. Lawler, Respondents. Felix & Hall and Lawler for Oscar Attorney Brown, General, Edmund G-. and Edward Sum- Attorney Deputy General, for ner, Re- Interveners and spondents. Angeles County
TRAYNOR, J. Society Pioneer Los and Harry Lelande, thereof, appeal separately from a member appointing Society an order the Historical of Southern Cali- property possession fornia of all in Pioneer. trustee the The order after the trial court that was entered determined property purposes, Pioneer held for charitable Pioneer its that repudiated appointment its that Historical trust, had carry trust. necessary as trustee was by amply supported have the order We concluded that the evidence and be affirmed. must unincorporated 1897 as associa-
Pioneer founded in an was аbout living Angeles County, with pioneers tion in a non- incorporated as In 1910 the members 600 members. years membership decreased profit corporation. Over year In 100 members. until in were less than 1941 there Pioneer, Stoltenberg, a member of years and later Mrs. Emma gifts her in Pioneer and on death made substantial gifts by Her amounted will. left sums to Pioneer additional building a money purchase used to $53,000. The was to about for com- meetings and rented for of Pioneer that was used membership to decrease The continued purposes. mercial corporation, dis- members decided dissolve organ- continue the among themselves, and assets tribute the carry pur- out the unincorporated association ization as an incorporation. poses of articles impressed its To whether assets were a determine declaratory filed an for trust, against action relief society. 1, 1949, judgment June en- member of the On was declaring impressed upon trust of kind was tered no petition signed membership, Thereafter the assets. agreed members, corporation. to dissolve the by 53 of the 58 to cash and, property converted since The assets were greatly appreciated value, had owned petitioned superior Pioneer then $95,243.54 was realized. supervision Code, (Corp. dissolution. judicial court objected of Pioneer to the dissolu- 4607.) members Several stipulation parties, attorney tion. Pursuant alleging petition intervention, general filed a ap- praying that a new trustee be its trust assets ground that Pioneer had abandoned its trust. pointed on the May impounded. assets be On ordered that the court judgment that Pioneer entered was a the court pur- were dedicated to charitable assets corporation, threatening had abandoned trust poses, that it
857 private and members, assets benefit of its divert necessary. judg- The appointment that of a new trustee was judgment” “interlocutory and the ment was entitled court jurisdiction further orders retained make such as were necessary to a action. complete determination Pioneer appeal. 1950, hearing, 18, did not On after a further October appointed im- court Historical trustee and ordered the pounded present appeals are assets turned over to it. The from order. this question presented
The first
whether
is
the trial court cor-
rectly determined
all of
assets of
given
that
Pioneer were
and received
for charitable
and held
Pioneer
purposes.
those
declaratory
Pioneer
judgment
contends that the
relief
is
judicata
question
res
as to the
whether Pioneer holds its assets
purposes,
for charitable
opposition
characterizes the
proceedings
the dissolution
as a collateral attack on the former
adjudication,
relying upon City
Diego
Superior
San
v.
Court,
Historical,
The and Historical contend that the “inter locutory judgment” May entered on 19th an appealable judgment through final became failure Pioneer to appeal therefrom, judicata now it is res that Pioneer purposes. holds assets for charitable label judgment “interlocutory” is upon determinative question, judg- and effect since it is the substance finality. Goss, (Lyon ment that v. 19 Cal.2d determines County 11]; Prop. 669-670 P.2d Peninsula Co. Cruz, 635].) Cal.App.2d 669, Santa appeal only except judgment, An lies a final from 963.) (Code Proc., applicable certain cases not here. Civ. *6 “ general par test, adapted As a which to the must case, ticular be said circumstances of the individual except consideration where no issue is left for future noncompliance compliance the fact of or with the terms of anything where decree, final, the first that decree is but of the judicial part further in on the the nature of action rights of court of the the is essential to a final determination 19 interlocutory.” (Lyon Goss, supra, v. parties, the decree is May 659, 670.) present In case the 19th Cal.2d the the court judgment provided account to should trustee, that a new trustee performance for the its duties as of Pioneer, the cоurt replace and that appointed should be and further orders would from time to time “make such other complete de competent, proper for a as are lawful and were im of Pioneer termination this action.” assets by February 1950, but it pounded on the court the they Historical until order over to ordered be turned expressly for reserved 18th. the court October Since duties, and rights, questions regarding the future decision not final judgment was May 19th Pioneer, liabilities of the Boothe, (Erickson v. appealable. as to Pioneer and was not Lacey Bertone, 33 Cal. 454]; v. 35 Cal.2d P.2d supra, 19 Cal.2d Lyon Goss, 2d Error, and C.J.S., Appeal 659, 671; see cases in collected appeal could not 184-193.) that Pioneer pp. The conclusion contention May disposes of the judgment 19th from the must be appeal appellant Lelande the it was taken too late. dismissed because declaratory judgment neither the relief nor the Since May judgment settled the issue whether Pioneer held 19th purposes, question fоr charitable determinative its assets supports the order of October substantial evidence is whether incorporation provide: of Pioneer 18th. The articles corporation formed purpose for which this is “That friendship among members, intercourse and cultivate social touching early history preserve data to collect and County California, to collect Angeles and State and Los things articles, specimens and material preserve illustrative demonstrative, customs, of the modes and habits of the State; memory perpetuate aforesaid times said who, by heroism, those their to make labors and contributed history County State; and in of said furtherance of purpose necessary said do all for convenient [to acts] promotion purpose; of the aforesaid and to exist as a social under provisions of the laws of the California, covering State of and not corporations, such pecuniary profit.” petition In answer Pioneer’s to the alleged intervention it is that between 1945 and 1950 Pioneer engaged in acquiring concerning pioneers material Angeles County founders of California; the State of memory perpetuated that Pioneer of those who their labors and history heroism contributed to make the county state; and the meeting that the members attended a at the Hotel in memory Biltmore 1948 to honor the pioneers during discovery dead gold California; participated in plaque Ingle- that Pioneer of a erection at wood, California, to mark the site of the building first school Inglewood; picnics that Pioneer four at which time *7 the memory the pioneers of former and founders of Los Angeles County commemorated; were in 1947 Pioneer anniversary celebrated the 166th of the founding city of the of Angeles the members dressed in costumes of the Spanish period; monthly that at meetings the talks and dis- cussions held recollecting were the activities and labors of pioneers the and their memories were perpеtuated and many honored; and that further and additional activities engaged pursuant were purposes to the set forth in the incorporation. articles of
The commemoration of historical events and the col preservation lection and of data of historical interest are for the community educational and recreational benefit of the as recognized a whole and are purposes. (Rest., charitable Trusts, 81 374; Butin, Cal.App.2d 76, Estate 81 § [183 of 304]; P.2d Valley In re Centennial Memorial Forge, & Assn. of 235 206, ; Pa. 211 A. Appleton, Steenis v. 230 [83 683] Wis. 530, ; Society 533 N.W. Missouri Historical v. [284 492] Academy Science, 94 459, ; Mo. 466 12 S.W. A.L.R. [8 346] of allegations 2d 888-896.) By its answer, the Pioneer conceded actively engaged carrying objectives. that it was out such Even if the concessions in the answer disregarded, are incorporation supply the articles of sufficient evidence to sus the the may tain action of trial It court. be assumed that if
860 only purpose of Pioneer were social “to cultivate inter among and friendship
cоurse its members” it would not be a corporation (see 2 Bogert, Trustees, charitable Trusts and 380, therein), and cases cited reading but it is clear from a § of the articles as purposes whole that the social Pioneer public purposes. are incidental and charitable Since organization members of a participate charitable often in its object activities with the making new friends par ticipating pleasurable group activities in the course .carrying charitable organization, incidental social deprive activities of Pioneer do not it of its Young Boy America, charitable (See character. Scouts of 9 Cal.App.2d P.2d Estate Wirt, [51 Cal.App. 7, 11 95].) The same conclusion was reached Dol, in Estate 1039], 186 Cal. where this gift court held that a to Pioneer was invalid under the mort (Civ. main statute Code, Code, §41) now Prob. on ground that corporation. Pioneer was a It charitable .is necessary here determine whether the Dol decision is judicata res as to the issue whether is а Pioneer charitable corporation, urged attorney general, since the action trial court present in the case be sustained giving only. the Dol decision the effect of decisis stare gifts Stoltenberg Mrs. were
Pioneer contends personally of Pioneer members the benefit for provided: purposes. Her will for received charitable were not given Society be my to the estate “the Balance during life gifts her Hotel.” The Meeting at the Biltmore understanding money subject oral to an time were society. permanent home for purchase a used to would be gift could not for erroneously assumes gift expressly the instrument of purposes unless charitable organized society for to a devise provided. so [A] the use to a declaration of which purpose without carry objects out the given in trust to put is gift is to be (Estate Clip organization was created.” which *8 ; 433 P.2d Estate 426, Cal.App.2d ping er, [171 567] 75 in 75).) Similarly, 328, P.2d 332 McDole, 215 Cal. [10 Stoltenberg her in will was gift of Mrs. case the present the articles, and the expressed Pioneer’s purposes the for building to be used to for a during her were gifts lifetime purposes. carry those charitable its assets conclusion that
The
trial
contention that the
court
of Pioneer’s
disposes
purposes
attorney general
should not have allowed the
to become a
party
proceedings.
to the dissolution
attorney
general
necessary
is a
party
proceedings affecting
the
disposition
(People Cogswell,
of assets
a charitable trust
Cal.
269]; Society
35 L.R.A.
of Calif.
McElroy,
Pioneers v.
The next to be determined is whether the trial justified court in appointing a successor trustee. Pioneer only remedy attorney contends that the gen available eral was order of directing an the trial court Pioneer to comply previously its pointed articles. As out, substan tial supports finding evidence of the trial court purposes. Pioneer held its assets for charitable Under Corporations a corporation subject Code supervision by attorney general same nonprofit as is a corporation holding subject its assets to a charitable trust (§§ 9505, 10207; 80), see 26 So.Cal.L.Rev. and deviations from the stated Pioneer’s articles are subject thus to the same corrective measures would against taken a similarly trustee of a charitable trust that carry refused to out its duties. by-laws membership amended to close its
provide existing proprietary members had a interest brought assets;1 declaratory relief action to obtain ruling trust, assets were held in paying attorney parties thеreto; fees for both it sold its assets and property cash; reduced its pro- it commenced dissolution 1 By-Iaws adopted May 4, provided: The class of active member ‘ ‘ rights ships proprietary property shall exclusive to the have and assets voting corporation power corporation and the shall be exclusively memberships. vested the holders of active Each active member shall be entitled to one vote. ‘ ‘ memberships proprietary rights no The social shall have' whatsoever property corporation any voting in rights. shall assets not have . . . present up corporation paid memberships "The shall constitute memberships the active and those who hereafter be- only.” come members be social shall members *9 862 court, petition trial in a
ceedings; and it maintained in the mandate,2 appeal and on this prohibition for writs and purposes. not held for charitable that its assets are proceed throughout these of conduct Pioneer’s course ings it and abandonеd its thus demonstrates that has abused determination the trial court amply supports the trust and Code, 10207; appointed. (Corp. be that new trustee should § Att 117, 488]; 147 131 N.W.2d Grblny, Estate Neb. [22 orney 214 N.E. Armstrong, 196, 231 v. Mass. General [120 399.) “If the trustees Trusts, 387, Rest., §§ trust, equity will way cor any or in abuse their abandon (People offenders.” and remove the rect the abuses 387.) 141; Trusts, Cogswell, supra, 129, 113 Cal. see on Scott § the evidence showed that Pioneer invokes cases where nonprofit corporation existed corporation was a that involved thereof and that the private for the benefit of the members In purposes. such cases were not held for charitable assets among the that the assets are distributed properly it is (Corp. 9801; Code, see Brown v. upon members dissolution Mutuelle, 475, DeB. 138 Cal. 477 La Societe Francaise Inc., 112 Cal. 516]; Center, Townsend Social Abalian v. 965]; 956), but those App.2d A.L.R. controlling here, since substantial evidence decisions are not of the trial court that Pioneer supports the determination expressed in its the charitable holds its assets for incorporation. articles by-laws in 1948 its were points 11 shall members have exclusive provide that active amended corpora rights property and assets of the proprietary ’’ prospective may have been the effect of this Whatever tion. any from record amendment, appear it not does and, by Pioneer after the amendment were received donations appropriate could course, of Pioneer the members acquired by the device of previously themselves assets in its articles. purposes expressed renouncing the the assets must upon dissolution Pioneer contends any^ holding allow- among its members be distributed petition, District Court of was denied 2 The Civil 11, 1951, January hearing opinion Appeal and a was denied on without Pioneer contended that “was 1951. this court on March members,” advantage private organized of its interest proper thing to do was to dissolve the “the fair large, public assets,” at nor and that “neither distribute community tioner. peti “any Angeles” interest the affairs of had ” to another cor ing the assets to transferred poration property a confiscation of the would be members’ in contravention the Fourteenth Amendment. The con since merit, tention is without the members of Pioneer have any right not at time had to receive property. *10 corporation A charitable cannot dissolve and distribute (See among Dashaway its assets members. Ashton Assn., its 1091, 84 Cal. P. 809]; 7 L.R.A. Zollmann, 476.) Charities, American Law of Thus in apposite a case present ease, to the the Centennial and Memorial Association Valley Forge, corporation, charitable a received contribu perpetuate preserve upon tions to and George site which Washington encamped quarters. Upon had in winter dissolu tion, a member contended that the funds should be distributed among corporation, the members but the court held that right no individual to the funds prop existed and that the erty go corporation should to another chаritable pur with poses (In akin to those of the corporation. dissolved Centennial re Valley Memorial Forge, & Assn. supra, 235 Pa. 213; see In re Hospital, Mt. Sinai 103,113 N.Y. N.E. 871].) Pioneer proceedings contends that in under section 10207 a corporation charitable given must be opportunity an its articles, to correct deviation from its as it would if the quo proceeding were in (§4691.) warranto. Pioneer’s con tention attorney general’s comes too late. The petition in alleged intervention that Pioneer had failed comply to with prayed articles that the court distribute Pioneer’s willing comply assets to a trustee to with the charitable purposes expressed in Pioneer’s articles. stipulated Pioneer the petition attorney general that of the could be filed and denying filed an answer that its assets were purposes, alleging that it had at all times complied with its articles, praying that its assets “be pro distributed rata among the members of the Angeles County Pioneer Society.” By stipulation and the answer Pioneer failed put to in issue in the question trial court the whether the attorney general obliged give to opportunity Pioneer an prior petition comply to the intervention to with its articles. January 26, 1953,
On at argument the oral ease, of Pioneer filed motion to remand the case to the trial court making purpose “for the a further order in the above en- permit to society titled case to operate continue to society petition revoke- its former to dissolve the society the funds restore to corporation and further alleged in society Pioneer was divested.” which 19, 1953, January the members that motion on dissolve and decided petition voted their to revoke the articles.3 provisions they comply would Corpora under 4606 of position is that section Pioneer’s at proceedings terminate dissolution tions Code it could assets, of Pioneer that the assets time before distribution court does distributed,4 and the trial been have not if of Pioneer to Historical transfer the assets power have attorney proceedings are terminated. dissolution appointment has a suc general, however, power obtain Corporations Code section 10207 cessor trustee under Cogswell, supra, 129, 141-142) 113 Cal. People v. (see attorney limiting power of the nothing therein there is general assets of the charitable to eases where the present in the case It is true have been distributed. brought in the light of its trust was Pioneer’s abandonment not follow that termina proceeding, but does dissolution would proceeding establish tion of the dissolution be returned to Pioneer. assets should trust *11 if even is that that neither contends Pioneer Pioneer assets, receive the trial nor its the members court should heirs of Stoltenberg the assets to the Mrs. have distributed We will that Pioneer and not to assume is Historical. entitled In property cases where point. is con raise this veyed express to a an declaration of a trustee charitable equity donor, appоint a court purpose of will a suc carry purpose expressed by the charitable cessor trustee original (Fay Howe, upon failure of the trustee v. the donor ; 599, Upham, 90, P. Estate 603 127 Cal. 136 Cal. 423] [69 Charities, §27), 14 315]; 94 P. C.J.S. Historical [59 govern here. in where, cases But that these cases contends conveyed without restriction a here, property to charitable as interlocutory 32 months not made until about after motion was 3 The appealed from, judgment, 6 after order and During after 27 months months Appeal period affirmed the District order. this Court repeatedly as called to status a charitable Pioneer’s corporation. attention hereby 18, 1950, provided that October Historical 4 The order of "is Angeles County property appointed all . . . which trustee of for the Los persons having Society and orders all is accountable Trustee” His turn such assets or records of Pioneer to forthwith over assets stayed pending has Execution of the order been outcome of torical. impoundеd custody appeal. have in the The assets been are Angeles. National Bank of Los Farmers and Merchants 865 corporation and the. charitable intent the donor is ascer donee, tained reference to difficulty. courts have had more Some decisions state upon property dissolution of the reverts to (see donor or his heirs Mormon United States, Church v. 1, 136 47 Danville Seminary, U.S. L.Ed. Mott v. [34 478] 403, early 129 Ill. 416 case 927]), N.E. and a dictum an [21 indicates that that rule would be followed this jurisdiction, property. (People at least real as to v. President Trustees & College 166, 174; 38 Cal. Vic (1869), California cf. All Hospital Persons, 455, toria Assn. v. 464 169 Cal. [147 124].) P. contends that Constitution of the compels United States us to follow here the Col dictum the lege of case; settled, judicial it is however, California de cisions'may disapproved be overruled and dicta without violat ing process either the clause or the contract clause of the due (Tidal United Flanagan, States Constitution. Oil Co. v. 263 444, 450-451 197, 382]; U.S. S.Ct. 68 L.Ed. v. [44 Alferitz Borgwardt, 201, 126 Cal. 208-209 460].) Accordingly, [58 we are free reexamine the College dictum the of Cali fornia case. holding gifts
Decisions
to charities revert to the donors
upon
subjected
dissolution have been
(see
severe criticism
Simes, The
Interests,
Law of Future
185; Gray,
The Rule
Against Perpetuities
ed.], §51.1; Turrentine,
[4th
Sugges
tions
Revision
Provisions
Civil Code
California
Regarding
Interests,
Future
21 Cal.L.Rev. 1, 14), and other
contrary
(In
states reach
result.
re Centennial & Memorial
Valley Forge,
Assn.
supra,
206,
235
213;
Pa.
McAlhany v.
Murray, 89
440,
S.C.
446
; see,
S.E.
also,
[71
Wilson
1025]
v.
Leary,
N.C.
S.E.
geles Society Pioneer court, to the trial remand the case the motion appellant appeal Lelande dismiss the appellant Angeles Society, Los and Pioneer the motion appellant Angeles Society appeal Los dismiss appellant Lelande, are, is, denied. and each
Gibson, J.,C. Shenk, J., Edmonds, J., Spence, J., concurred.
CARTER, J.—I dissent. I cannot agree organization. that Pioneer awas Angeles County Society organized an unincorporated as association. In it was in- friendship among members; 5 111.To cultivate social intercourse and preserve touching history Angeles To collect and data of Los “2. County California; and the State of preserve articles, “3. specimens things To collect and and material customs, modes, illustrative or demonstrative of habits of the State; aforesaid times said perpetuate memory “4. To of those who their labors and history County State; heroism contributed to make the said purposes, receive, purchase, And furtherance of the aforesaid “5. sell, hold, convey, encumber, lease, prop- rent and maintain all kinds of erty, personal; both real and any acts, “6. including To build clubhouses and do and all but not borrowing money, may necessary limited to- the as be and convenient promotion purposes, for the of the aforesaid appointment “And is further [that ordered is ineffective until acceptance trusteeship providing Historical files an that Historical] accepts for holder, trusteeship specific purposes for the set forth above any purpose any any, private which will result in benefit share- individual, way member or and that said assets shall no be carrying propaganda devoted to the influence attempting on of or otherwise ’’ legislation. provided 6 Theresolution that the funds -wouldbe used to erect build ing, Building, Stoltenberg known as the Emma that it would a be home Society, would have offices for for the Historical Native Sons existing nonprofit corporation under the laws corporated as a incorporation, state. the time of section At nonprofit “A corporation may provided Civil Code three, by any persons, not less than formed number social, religious, charitable, edu- lawful such *14 cemetery rendering services, or recreational, for cational, profits contemplate gains, of or which do not the distribution thereof, and for which individuals dividends to the members subject regu- lawfully themselves, to and laws associate nonprofit corpora- of applicable classes particular lations to carrying at or on business a activity. tions lines of of corporation the profit main and incidental to the of the on dissolution shall not assets to distribution members of corporations.” (Emphasis nonprofit be deemed to forbidden pur- added.) incorporation provided “That the articles of Its pose is to cultivate social corporation is which for formed among members, to collect and friendship intercourse and early history Angeles preserve of Los touching data California, preserve County to collect and and the State of things or articles, material illustrative demon- specimens and of customs, of the and habits the aforesaid strative modes memory who, State; of those perpetuate times said to history to make the heroism, contributed their labors and purpose, County State; of in furtherance of said and and said convey, and maintain receive, purchase, sell, hold, lease, rent build personal; and club- all kinds of both real property, necessary con- houses, other acts and and to do and all purpose; and to promotion venient for the of the aforesaid provisions a under laws social exist covering corporations, California, such and the State (Emphasis added.) It pecuniary profit.” was also not for period for of 50 provided corporation should exist a that the years. membership оrganization decreased years,
Over members; there less than 100 at time of in 1941 were until living. 58 members still approximately there were this action Society the Pioneer was appear to clear that It would brought together by were organized by group people who history in the and historical relics of common interest their purpose Angeles County and that their and the state companionship, enjoy each other’s organizing so West, Daughters and would Golden West and the Native Golden jointly hy foregoing organiza- meeting the three to he used have a hall tions. exchange In Bogert, reminiscences Trusts information. IIA, seq.) (vol. p. pointed Trustees et provide enjoyment social out that “Gifts to the members private of a group club or other limited have been held not Probably to be charitable. this is on account narrow- effect, of their ness rather than on of the nature account eating drinking benefits to conversation, be derived. Good together, playing games, other music, and entertain- pleasure ment no doubt add to of life and to some extent gift maintain health. for a A clubhouse where all citizens of community might have such social intercourse has been held charitable. support private But donations for the organizations of limited a similar type lacking are in the necessary give breadth of influence public them a or chari- (Emphasis table character.” added.) In it was held England pay trust income to maintain an institute people in London for Welsh descent where lectures, study, entertainment, obtained, recreation and refreshment could be purpose for the promoting social, spiritual moral, educational welfare of the Welsh people, solely is not devoted *15 (Trustees to charitable Sowell Wil- Sir Jones liams’ Comrs., Eng.R Trusts v. Inland Revenue All 513). Society members of the Pioneer held meetings, gave picnics meeting honoring a themselves, memory pioneers gold who discovered California, erected a plaque to commemorate the site of building the first school Inglewood, California, pioneers at discussed the of California (according majority opinion) to the “recollected” the pioneers. According (Int. activities of those to Webster Diet. ed.) 2d the word means recollect “to recover or recall the knowledge of; mind; to to call to remember.” Taking into average age years consideration the of 75 the members of logical Pioneer, they it seems to assume were the children pioneers they paid of these to whom tribute and that their honoring purpose in society them was not for the benefit at large, but honor to their own ancestors as well as to con- dwindling solidate their fast ranks for their own social benefit. organization canary fanciers, horticulturists, An rose or purebred purebred of those or cattle, interested in Irish Setters, or an association breeders of Palomino horses could hardly organizations though be called charitable even an in- might society cidental be said large, benefit to result to at portion society also particular interested in sub- ject. Groups vitally subject people interested in the same enjoy company of that interest
matter ca.ch other’s because discuss, socially, their com- organizations form to often organ- Any features of of these mon interests. educational benefit, not for primarily intended for their own izations are although nonmembers general public the benefit organ- improve knowledge through the efforts of the their however, general purely incidental, is ization. benefit Such organization. I primary purpose to am convinced Stoltenberg’s here. is the situation we have Mrs. to gifts Pioneer, member, she was a were first which organization building a purchase enable the which meetings by will, attended; gift, she her last hold its which her and friends continue their was to enable fellow-members interesting His- meetings events. It to note that and social is an trustee, was torical, organization appointed to aсt as during organization existing at same time as Stoltenberg’s desired Historical Mrs. lifetime. Had she gifts, undoubtedly her she knew of its have the benefit of therein; had she and could have interested herself existence through the only people of this state desired to benefit the relics, undoubtedly she would data and collection of historical organizations. my mind, her gifts To have made to both gifts organization, membership in and her to that point clearly of Pioneer. Another support the social character organization clearly social character of the supporting the general public nor members of the that neither outsiders society. organiza- If meetings of the an were admitted to the surely gen- public, general benefit the tion is intended to meetings for its benefit. public eral should be admitted to Cal.App. Center, Inc., In Abalian v. Townsend Social a center whose 965], it held that social 2d 441 was purpose was incorporation articles of disclose that building of its members and acquire for thе convenience a club age pension old movement persons other interested members, of its nonprofit corporation for the benefit public charged holding assets a charitable *16 (a 1039], 64 P. case Dol, 186 In Estate Cal. trust. [198 of organization) pointed a charitable it was holding Pioneer organization cultivate “only” object were to if the of an it would friendship among members, its social intercourse not be a and would for benefit of the members alone be organization agree an I organization. cannot a common organized for social not be being classified program in an educational without interest
871
organization.
159,
Dol,
as a charitable
In Estate
182 Cal.
of
(involving
Hospital
French
in
An
163
P.
[187
428]
geles),
held that “One of
essential features of a
benefit,
public
it shall
for the
either
charitable use is that
be
particular
public
persons,
the entire
or for
some
class
number,
part
public.
indefinite
who constitute
persons
general public
benefited
consist of
to be
must
‘thе
general
or some
public
class of
indefinite as to names and
’ (Estate
Colemam,,
[212],
numbers.
167 Cal.
214 [Ann.Cas.
1915C, 682,138
992,
;
Pac.
152
Lennon,
Estate
Cal. 327
993]
”
58, 14
Am.St.Rep.
1024,
870].)
92 Pac.
Ann.Cas.
Here
[125
Here,
members of Pioneer were definite and known.
Dol, supra,
159,
Estate
182
no
Cal.
one was entitled to the
society except
benefits of the
those who became admitted as
paid
members and
their
It was there
held,
dues.
line with
Assn.,
Stewart v.
Medical Etc.
178
418,
Cal.
419
California
46],
P.
that “the declaration
alone
articles
are
[176
insufficient to establish the character of the
Helena
St.
Hos
pital
public charity,
as a
and the evidence of the manner in
which it was conducted shows
it was
not” and “the
determined,
character of
institution
is to
not alone
by
powers
as defined in
charter
but
conducting
hospital.”
also
manner
That state
pertinent
ment is
I
here.
have heretofore shown that
this
organization was conducted for the benefit of the members
alone;
meetings
open
public;
were not
to the
that its
primary purpose
was the social benefit to be derived
members from their association with each
In
other.
Estate of
Henderson,
17
857
P.2d 605],
Cal.2d
court
said
[112
bequest
“A
charitable if:
It
(1)
is made for a charitable
purpose;
accomplishments
its aims
are of religious, edu
cational, political
general
social
interest
to mankind.
(People Cogswell,
v.
872 promote through life to the social of its members com- their (2) mon The history; recipients interest California ultimate organization to from the benefits be derived were the good organization, standing members in not com- the munity portion as a wholе an unascertainable and or indefinite thereof. nonprofit corporation existing private
In a for the benefit members, upon among of its dissolution assets are distributed (Corp. Code, 9801; the Brown v. La Societe Fran members 516]; 477 Mutuelle, caise Etc. 138 Cal. Abolian v. Center, Cal.App.2d 112 449 Inc., Townsend Social 956). I This, believe, result A.L.R. the quite apparent be seems which should reached here. It that organization existing private nonprofit the Pioneer was upon should, dissolution, its who receive a of members benefit by Pioneer. distributive share of the assets only following Assuming, however, for the argument organization, is a I see no that Pioneer charitable why its valid reason should not be able to correct deviation it incorporation. words, In why from articles of other should its society permitted operate to not be to continue as a petition corporation! to the and to revoke its former dissolve majority opinion, that Pioneer’s “aban- It is admitted the brought light was to the dissolution donment of its trust prо- Corporations Code proceeding.” Section is a or “if action matter act which vides the cause that do can be or to corrected has done omitted by corporate action, other such of its articles or amendment Attorney (a) be Gen- maintained unless suit shall suit, given has eral, days prior to the institution least at or of the matter act done notice corporation written failed, neg- (b) corporation has done, omitted to be correct it within proceedings institute lected, or refused pro- such 30-day period prosecute fails or thereafter calls added.) majority attention ceedings.” (Emphasis intervening after during the inter- the time the fact that affirm- appealed order from judgment, locutory Appeal, Pioneer’s attention Court ance District organization. called to status repeatedly still be made the fact that there was is made of mention No court In the event by this court. a determination organization, a charitable Pioneer was decided that had not distribute its assets right to dissolve and had the would have given Why be notice then, should it not among members. made, after final determination has been it must ap- conform its articles or a successor will trustee pointed? interesting It is to note that title section precedent: opportunity 4691 is Notice affording “Conditions majority for corrective action." The states that under section Corporations Code, attorney 10207 of the general has *18 power appointment to obtain the of a successor trustee nothing is limiting power that “there therein At- the the torney to cases where the General assets the charitable ’’ been corporation have distributed. The assets involved here not impounded pending have been distributed have but been the final determination the issues involved. Section 10207 provides corporation that “Bach such shall be [charitable] subject by Attorney all times to General, at examination the State, on behalf to ascertain the conditiоn of its affairs extent, all, and to if may comply what at it fail to with trusts may depart which or general it has assumed from purpose the it any for which is formed. In ease of such de- failure or parture Attorney institute, the shall General in the name of State, proceedings necessary to correct the noncom- pliance departure. or Except as specially approved by the Attorney such a General shall accumulate not period longer for a years." income than five (Emphasis added.) provides The section for “correction" of a non- compliance or departure; prohibit it does not a self-correction by corporation. erring If Pioneer terminates its dissolu- proceedings, tion past, continues as it has done in the then, majority under the view court, taken of this it carrying will be on its charitable and there is no rea- why son appointed a successor trustee should be to administer authority Pioneer’s funds. No is proposition cited permitted not be to correct its deviation from its withdrawing revoking articles pro- or its dissolution ceedings any authority. nor have I found such The Bestate- (§ provides ment of 392) (comment a) Trusts “A suit equity Attorney can be maintained by the com- General to pel the trustees of a perform charitable trust to their duties trustees, enjoin or committing to them from a breach trust, or compel them to redress breach of trust, or to appoint possession a receiver to take property; of the trust appoint to remove the trustees and other trustees." There are, thus, appointment several remedies other than the of a successor trustee. voting part bad faith on of Pioneer
There no declaratory- filed an action in corporation. dissolve the It no judgment trust relief and effect obtained assets; it impressed upon voted dissolve kind was judicial super- petitioned superior court for then attorney agreed general dissolution; that the vision circumstances might petition file a in interventiоn. Under the applicable presented fact that the statutes and in view of the why appears do be no reason prevent it, there sound permitted pro- revoke dissolution not be should carry imposed by trust ceedings its articles since organization. finally adjudged a charitable it. to be judgment. therefore, I reverse would, Schauer, J., concurred. rehearing May 28, denied were petitions for a
Appellants’ opinion Schauer, J., were J., and Carter, 1953. granted. petitions should filed. following opinions were then *19 denying appellant’s from the order CARTER, J. dissent I appel- of rehearing, of the contention petition for and view of the decision of this the effect petition lant in said process property due of of without deprive court is to it its this law, I comment on contention. am constrained to outrageous most presents one of the The record in this case my larceny has under legalized which come examples observation. Society organized unincorporated Pioneer was an
The clearly, and contra- association; the evidence shows without purely a diction, be, was, that was intended to and social it organization. unincorporated such association As an organization, right, upon dissolution, to it had social among its its members. distribute assets utmost record that Pioneer has acted discloses sought good throughout. instance, In the first faith judicial charitable, social, a of its or status. determination judicial nonprofit, determination that it was a The first was judicial A organization. non later determination charitable by organization. it to be a charitable the same court held sought proceedings abandon its dissolution Pioneer then to carry judicial determination, with the last and, in accordance organization. permitted has on a This it not been as charitable majority A that Pioneer to do. this court has declared may permitted organization and not be is a charitable that it incorpora- to from correct its so-called dеviation its articles tion that its assets must be turned over a successor trustee— to Society. my dissenting pointed the Historical As I opinion, statutory provisions this is a violation of clear involved, organ- permit by which action a charitable corrective which Even ization has deviated from articles. if Pioneer its (which organization firmly is a charitable I it am convinced not) right proceedings is it has the to abandon its dissolution incorporation. and correct from deviation its articles refuse, permit To my to such is, opinion, corrective action deprive property to process its due without law under both the federal and state Constitutions. respect
With corporations, empowered only this court apply statutory law of the state as it was written Legislature; empowered ignore statutory it is not provisions relating corporations and effect a distribution corporate assets as its collective whim dictate.
For the herein, my dissenting reasons stated opinion, and in T grant wоuld a rehearing judgment. and reverse the
SCHAUER, J. generally reasoning I concur Particularly I justi- of Justice Carter. do find no conclusion refusing permit fication whatsoever for Pioneer to take corrective know it action which it could not should take rely prior until court had ruled that it could not on the judgment or charter from final the state.
Pioneer, incorporation articles the laws of corporation; California not a charitable it never intended corporation; paid to be a charitable pretended taxes as corporation; adjudicated a noneharitable it was corporation. With background it instituted proceeding right every as it dissolution had a to do. Its good shows the composing act faith the fine citizens it. Now this court rules that it is a charitable *20 judgment punishes in the same instituting Pioneer for proceeding lawful dissolution stripping it of its assets and giving another; them to permit refuses Pioneer, even despite statute, authorization of the to discontinue the dissolution proceeding carry out the trust which the adjudges court to exist. my action in contrary
Such view is fact, justice, law, guarantees. and to reason constitutional