59 Neb. 677 | Neb. | 1900
This was a suit to foreclose a real estate mortgage executed and delivered by one George W. West to Ward S. Mills to secure the payment of one principal note and coupon notes thereto attached. The principal note was transferred by the payee, Mills, to the First Christian Church of Lincoln, and by two of its trustees sold and indorsed to James Thoihpson, now deceased. A decree of foreclosure was entered, the mortgaged premises were sold and the sale confirmed, and a deficiency existing after the proceeds of sale were applied on the debt, a judgement therefor was asked against said church as an indorser of the paper, which request was denied. Plaintiffs appeal.
The only question raised is whether the court below erred in refusing to render a deficiency judgment against the church. It is disclosed by the record that certain of the trustees of the First Christian Church of Lincoln, and who assumed to act for it, purchased of Mills a number of vacant and unimproved lots situate in Mills’ Second Addition to University Place. The lots were purchased for the purpose of speculation, or with the view of being resold at an advance over the cost price, but the title to the property was permitted to remain in the name of Mills, who, on the trustees making the sale of a lot, at their request executed a deed to the purchaser and the latter gave to Mills a note, secured by a mortgage on the property, for the unpaid purchase money. Mills thereupon indorsed and transferred the note and mortgage to the First Christian Church of Lincoln. One of these lots was sold to West, who executed the note ’and mortgage in suit to Mills for the amount of the purchase price remaining unpaid, and this note was indorsed without recourse by the payee and delivered to said church. Subsequently, the note and mortgage were transferred by certain of the trustees, in the name of the church, to James Thompson, plaintiffs’ decedent.
The defendant church contends that no deficiency judgment could properly be rendered against it for the following reasons:
1. No judgment for a deficiency can be lawfully rendered in this state in a suit to foreclose a mortgage. .
2. The contract relative to the purchase of the lots of Mills for the purpose of speculation was without the power of the First Christian Church of Lincoln, and therefore ultra vires and void.
3. The indorsement of the note and the sale thereof to plaintiffs’ decedent was never authorized or sanctioned by the board of trustees of said church.
These propositions will receive consideration in the order stated. Prior to 1897 the following sections were parts of the Code of Civil Procedure of this state:
“Sec. 847. When a petition shall be filed for the satisfaction of a mortgage, the court shall not only have the power to decree and compel the delivery of the possession of the premises to the purchaser thereof, but on the coming in of the report of the sale, the court shall have the power to decree and direct the payment by the mortgagor of any balance of the mortgage debt that may remain unsatisfied after a sale of the mortgaged premises, in the cases in which such balance is recoverable at law; and for that purpose may issue the necessary execution, as in other cases, against other property of the mortgagor.
“Sec. 849. If the mortgage debt be secured by the obligation or other evidence of debt of any other person besides the mortgagor, the complainant may make such person a party to the petition, and the court may decree payment of the balance of such debt remaining unsatisfied after a sale of the mortgaged premises, as well*683 against such other person as the mortgagor, and may enforce such decree as in other cases.”
It is plain enough that under the quoted sections, and prior to their repeal, it was proper in a foreclosure case, on the coming in of the report of sale, to enter a decree or judgment against the mortgagor and other persons liable for the payment of the mortgage debt. See Davenport Plow Co. v. Mewis, 10 Nebr., 317; Clapp v. Maxwell, 13 Nebr., 542; Cooper v. Foss, 15 Nebr., 515; Grand Island Savings & Loan Ass’n v. Moore, 40 Nebr., 686; Hare v. Murphy, 45 Nebr., 809; Flentham v. Steward, 45 Nebr., 640. But these sections of said Code were repealed by the legislature of 1897 (Laws, 1897, ch. 95), and by reason thereof it is strenuously argued by counsel for the church that the power to enter deficiency judgments is abrogated in all cases without regard to the date the debt was contracted, or whether proceedings may have been taken to enforce the same at the time the repealing statute was adopted. On the other hand, it is argued by counsel for plaintiffs that the repealing act of 1897 had no application to suits then pending, nor to causes of action , then accrued, nor decrees already entered. •
Whether or not a statute which denies the .right to a deficiency judgment as to existing debts is unconstitutional as impairing the obligations of contracts, the court is not at this time called upon to decide, and we refrain from now entering upon a discussion of the question. Section 2, chapter 88, Compiled Statutes, declares that “whenever a statute shall be repealed, such repeal shall in no manner affect pending actions founded thereon, nor causes óf actions not in suit.” If the jurisdiction of the district court to enter deficiency judgments exists independent of statute, as has been argued, it is too plain to require elaboration that it was not taken away'by the repeal of sections 847 and 849 of said Code. On the other hand, if the power to render a deficiency judgment is purely statutory, as was intimated in Devries v. Squires, 55 Nebr., 438, it is equally
“Sec. 42. The trustees or directors who may be appointed under the provisions of this subdivision, and their successors in office, shall have perpetual succession by such name as may be designated, and by such name may be legally capable of contracting and prosecuting and defending suits, and shall have capacity to acquire, hold, enjoy, dispose of, and convey all property, real and personal, which they may' acquire by purchase, donation, or otherwise, for the purpose of carrying out the intentions of such society or association, but they shall not acquire or hold property for any other purpose.”
“Sec. 55. No company or association incorporated under the provisions of this chapter shall employ its stock, me'ans, assets, or other property, directly or indirectly, for any other purpose whatever than to accomplish the legitimate object of its creation.”
The foregoing sections are taken from the chapter of the Compiled Statutes relating to corporations. Section 42 is especially applicable to religious societies, while section 55 is a general provision governing all incorporated companies. In view of these statutory provisions, the conclusion is irresistible that an incorporated
In 7 Am. & Eng. Ency. of Law [2d ed.], 718, the rule is stated thus: “As has already been stated, the power of a corporation to purchase real property is limited by the objects of its creation. Even where thgre are no express restrictions it can not purchase for a purpose foreign to those objects. When a corporation is created for the purpose of dealing in real estate its power to purchase the same is unlimited. But when a corporation is not organized to deal in land, as in case of railroad companies, banking companies, insurance companies, religious and educational corporations, etc., the purchase of land not needed in its business, for the mere purpose of holding and selling it again, is ultra, vires. Nor can such a corporation purchase for any other purpose that does not tend directly to carry out its own legitimate objects.” The text is fully sustained by numerous authorities cited in the notes on the same page. The record before us fails to show that the real estate venture entered into on behalf of the First Christian Church of Lincoln was to forward or promote the legitimate object of the association, but that the lands were bought, held and sold merely as a speculation.
It is argued in the brief of counsel for plaintiffs that
“If the mode of the application of the money is the factor that determines whether it is legitimate for a church to take part in a certain business, then a church corporation could secure a license and run a saloon or a billiard hall, or buy a circus outfit and tour the country, or trade horses, or construct a race track and pocket the receipts, provided only that the money so realized was applied to the payment of church obligations. It is not believed, that counsel for appellants are so unacquainted with the proper functions of a church as to insist upon their argument. It has never been held that. the innumerable avenues of the business world are thrown open to a church board to enter in and glean a profit for the church. The very conception of a church forbids it. It would be against public policy for the churches of the land to enter into the bitter competition of the market place. Religion, as exemplified by ecclesiastical bodies under such a regime, would become a hiss and a by-word, and public and private morals would suffer thereby.”
It is insisted that James Thompson was an innocent holder of the note, and therefore the defense of ultra vires can not be invoked against the plaintiffs. The ultra vires of the transaction being fully established by the evidence, the burden was cast upon the plaintiffs to prove that James Thompson acquired the note and mortgage as an innocent purchaser for value before maturity and without notice. No such evidence having been adduced on the trial, plaintiffs can not claim the protection -with which the law clothes an innocent pur
Complaint is made in the brief of plaintiffs that the articles of incorporation of the defendant church do not comply with the provisions of section 169, chapter 16, Compiled Statutes, in that said articles do not state the limit of indebtedness of the society, nor the manner in which it may enter into contracts, and by reason thereof it is insisted that there are no limitations or restrictions upon the power of the church to contract debts, and that it may enter into contracts, and charge its property to the same extent as an individual might do. A short answer to this argument is that said section 169 was not in force when the First Christian Church was incorporated, but was adopted at a subsequent date, and does not control. The articles conformed to the statute existing at the time they were adopted and the defendant was incorporated. Again, said section 169 has no application to the case at bar, but relates alone, as expressly stated in the preceding section but one, to “churches, parishes, and societies of all religious bodies, sects, and denominations in this state having a central governing body with spiritual jurisdiction extending over the whole state, or a part thereof, being more than six counties.” The First Christian Church of Lincoln does not belong to the class above described, and hence does not come within the provision of said section 169. The uncontradicted evidence shows that the board of trustees, or body which governs the defendant church, never authorized the purchase of the lands already mentioned, nor the sale or indorsement of the note in controversy, but that the lands were bought by two of the trustees who negotiated and indorsed the note, for and on behalf of the church, without having been authorized in that behalf by the board of. trustees, and without any meeting of the said board being called or held to take
In the case at bar there is no ratification for two reasons: First, it is not shown that the proceeds arising from the sale of the note were accepted and retained by the First Christian Church with knowledge of the facts. In the next place, the transaction relating to the real estate speculation carried on by two of the trustees, with which was intimately connected the transfer of the paper in question, it being part of the same transaction, was ultra vires, and without the power of the board of trustees and could not be lawfully ratified by such board. The contract was -incapable of ratification. See Tullock v. Webster County, 46 Nebr., 211; Gutta Percha &
Affirmed.