Liggett v. Ladd

31 P. 81, 23 Or. 26, 1892 Ore. LEXIS 100

• Court: Oregon Supreme Court
• Decided: October 5, 1892
• Status: Published

Opinion

Moore, J.

(after stating the facts as above). — The first objection raised by the appellants is to the amendment of the complaint. When the suit was commenced, Corvallis College was made a party defendant. In the amended complaint Corvallis College was made a party plaintiff. The original complaint alleged that “Corvallis College is unwilling to execute said trust without a judicial determination that said deed has no force or effect.” The amended complaint struck out this allegation and inserted the following in lieu thereof, to wit: “Said Corvallis College, on account of said deed, is prevented by said pretended board of regents from exercising and performing its rights, duties, and powers as the agricultural college of the state of Oregon.” And the amended complaint also, in addition to the original, prayed as follows: “And restoring to said Corvallis College as the agricultural college of the state of Oregon, its right to possess and use said agricultural farm.” Appellants claim that these amendments substantially change the cause of suit. The court may allow an amendment of the pleading, to strike out and also to add the name of a party: Hill’s Code, § 101. Hence there was no error in allowing a change of Corvallis College from a party defendant to a party plaintiff. Did the change of the original allegations substitute another cause of suit in the amended complaint ? In the original complaint the allegation is that Corvallis College is unwilling to execute the trust without a judicial determination that said deed has nd force or effect; that is, Corvallis College is willing to execute the trust as soon as it can be adjudicated that said deed is void. In the amended complaint it is alleged that Corvallis College is prevented, on account of said deed, from executing the trust.

“If the same evidence will support both complaints, and the same measure of damages will apply to both, the change is an amendment and not a substitution of another cause.” — Lumpkin v. Collier, 69 Mo. 170. Applying this rule to these complaints, we find that the same evidence would support both. Testimony showing that Corvallis College is willing to execute the trust would support both complaints. It was on account of the said deed, by the allegations of the original and amended complaint, that the college was prevented from executing the trust. The prayer for relief asks for more in the amended than in the original complaint; but the prayer upon the original complaint might have asked under the allegations of the bill that said farm be restored to Corvallis College. The amendment, then, did not add or substitute another cause of suit, and was not a substantial change of the pleading.

Corvallis College was incorporated to hold property-in trust for the Methodist Episcopal Church South in the state of Oregon, “for the support and spread of the Christian religion,” and to endow, build up, and maintain a strictly literary institution for educational purposes. The state said to this college, if you will add to your course of studies and teach such branches as are required by act of congress of July 2, 1862, the agricultural college shall be permanently located at Corvallis and under the control of said college. The college agreed to this proposition, enlarged its course of studies, and began to teach the branches required. No college by the name of the agricultural college was in fact established. Corvallis College remained the same after as before the adoption, except its course of studies was enlarged. This was the condition of the college at the time the deed from Roberts and wife was made to it, April 17, 1871. When the fund was raised with which the property was purchased, the subscription list declared it to be “for the purpose of purchasing an agricultural farm for the use of Corvallis College.” What was the intention of the donors with reference to the title, and whom did they expect would be benefited thereby when the deed was made? Was it the college or the church? The intention of the donors ought to have great weight in determining who was the real owner, or the party to be benefited by the conveyance of this property: Perry on Trusts, § 727.

Plaintiffs claim that inasmuch as the articles of incorporation provide that this college was incorporated for the purpose of holding property in trust for the church, any conveyance made to the college was in trust for the church, and that it could not take or hold property in any other manner than in trust for this object. The object of the corporation, as stated in its articles, was not only to hold property in trust for the church, but also “to endow, build up, and maintain a strictly literary institution for educational purposes. ”

The law of the state in force at the time this college was incorporated provided that the corporation should have power “to purchase, receive, possess, and dispose of such real and personal property as may be necessary or convenient to carry out the object of said corporation”: 2 Hill’s Code, § 3299. This college could take and hold property in trust for the church, but did this specification in its articles of* incorporation limit the power of the college in holding property? Could it take and hold property in no other manner than in trust for the church? In Liggett et al. v. Ladd et al. 17 Or. 89 (21 Pac. Rep. 133), Judge Lord, in the dissenting opinion, defines an endowment, and holds that this college could take and hold property, real and personal, for the purpose of an endowment, independent of that which it might hold in trust for the church. We think there can be no question as to this conclusion. The articles of incorporation did not prohibit the college from holding property in its own right and for its own use and benefit. The object for which the college was created was as much for the purpose of endowing and building up a literary institution as it was for holding property in trust for the church. In order to endow, build up, and maintain a literary institution it became necessary to take and hold property in its own right. The articles of incorporation being silent upon this question, Corvallis College had the power to make all such contracts, and to purchase and hold all such real property as was necessary and usual in the course of business, as a means to enable it to attain the object for which it was created: Ang. & A. Corp. § 271.

The subscribers to this fund, when they made this donation to purchase this farm, understood it to be for the use of the agricultural college. They knew that Corvallis College could hold property in trust for the church, but when this property was conveyed to the college no provision was made for holding it in trust. May it not be then safely said that the subscribers to this fund also knew that this college could hold property independent of the church* and that these subscriptions were made and the money obtained because the title was to be in the college? These donations were not made for the nse or benefit of the church. The testimony goes to show that the subscribers so understood this, and the Roberts’ deed by not naming the church as the cestui que trust confirms this theory. The church has not now and never had any possible interest in this property except the right to appoint trustees. The agricultural college farm was the property of its creature, the Corvallis College, and the church could govern it only so far as its influence might be felt through the trustees appointed by the conference. The deed conveyed this property to Corvallis College upon conditions, to be used in connec tion and for the purpose of the agricultural college of the state of Oregon. At the time this conveyance was made, the donors understood Corvallis College to be the agricultural college of the state of Oregon. It is true no such corporation existed eo nomine, but all parties treated the donations, purchase, and conveyance of the Roberts’ tract as if it did in fact exist. The beneficial interest then was for that part of Corvallis College then known or understood to be the agricultural college of the state of Oregon. The church never claimed to own this farm. It said so at the Dayton conference. It realized the title was in Corvallis College, and that there was no trust in favor of the church. At this conference the church adopted resolutions instructing the trustees to convey this property to the state of Oregon if the sum of $25,000 could not be raised to erect suitable buildings before the next meeting of the legislature of the state. These resolutions were the solemn, deliberate acts of the conference, presented and adopted in good faith. This conference said: ;‘¥e endorse the action of the board of trustees in tendering the agricultural college farm to the state. ” This conference also instructed these trustees to ask the legislature to dissolve the compact then existing between the college and the state. The church had nothing to do with this compact in the first place, it was made between the state and the college, not between the state and the church. This college, under its articles of incorporation, “to endow, build up, and maintain a strictly literary institution,” had a will of hs own, which it could exercise at any and all times with reference to its own property whenever it was for the best interest of the college. These trustees, in the abundance of caution, asked the advice of the church upon this question, and the church, in conference, said, dissolve the compact and convey the property to the state. The church gave its advice and the trustees acted in accordance therewith. The compact was, by the act of the legislature of Oregon upon the petition of the college acting under the advice of the highest legislative power of the church, dissolved forever How then could the church or any of its members complain when every thing done was in accordance with théir will and wish

It is urged by plaintiffs that as the Dayton resolutions authorized a dissolution of this compact by the state ana college, to take effect at the close of the scholastic year, June, 1885, and the legislature by the act of February 11, 1885, prescribed another and different time, to take effect when the citizens of Benton County had erected upon the college farm brick buildings, provided the same were completed on or before January 1, 1887, and free from all liens and incumbrances, there was never what tbe law calls the aggregatio mentium between the parties necessary to dissolve the compact, and this acceptance by the state was never accepted or adopted by the church or by the college. The acceptance by the state may never have been adopted by the church, but the church never had any interest in the agricultural department of Corvallis College, except so far as it could influence the same by the appointment of trustees. This compact having been made between the state and college, and not between the state and the church, the college approved the conditions imposed by the state and agreed to them; and as this branch of the college was in its sole custody as an endowment under its articles of incorporation, it follows that there was an aggregatio mentium between the parties to the contract, and such an agreement and meeting of the minds of the parties at interest as the law contemplates.

February 11, 1885, this compact was dissolved. The state agreed to accept the farm. It attached a condition to the acceptance, which required brick buildings to be erected thereon; and the citizens of Benton County, who would not aid in the building up of a religious institution to draw money from the state treasury in violation of the plain provisions of the state constitution, were ready and willing to aid the measure. It mattered not when the deed was executed conveying this property to the state. In equity and good conscience it was made February 11, 1885, at the time the parties agreed to this proposition, and from that time on the college stood there under its agreement day by day, tendering this deed to the governor of the state, who was authorized to accept the same when the conditions were complied with on the part of the citizens of Benton County. The citizens commenced at once to comply with the requirements, and they had rights as citizens of the state which attached, subject to being defeated if the buildings were not completed within the time; and when the buildings were so erected the college was obliged to convey the property to the state, or to the board of regents named in the act.

The Albany conference of this church, September 10, 1885, seven months after the state and college had entered into this new contract, and after the citizens of Benton County had acted in the matter, passed resolutions rescinding the Dayton resolutions of the year before. Was this new contract entered into between the state and college of any advantage or benefit to the latter, and was it such a contract as it could make ? The Columbia conference of this church, held at Dayton, Washington, September 3, 1884, adopted the following: “In order to furnish additional room for the professors and students, and meet the growing demands of the state, we find it to be imperatively necessary that a new building be erected, to cost, say, twenty-five thousand dollars. Longer delay in this matter will imperil the very existence of the institution. Moreover, the church is unable to erect such a building without the hearty cooperation of the citizens of Benton County.” The college then attempted to raise the necessary means from the citizens of Benton County, but they refused; and when the college found it could not erect the buildings, and that for lack of room it would be obliged to ask a dissolution of its compact with the state and a surrender of the agricultural department, and thus forfeit this land to the original donors of the fund, it said to the state: “This agricultural department has become a burden to the college. It can no longer comply with the terms of the compact by reason of the failure to erect the necessary buildings. The church cannot aid us, and the citizens of Benton County will not. If it surrenders this department and fails to use the college farm in connection and for the purpose of the agricultural college of the state of Oregon, the title will revert to the donors of the fund. If you will take this property and maintain an agricultural college and release us so that this college can return to a strictly literary institution, the college farm shall be transferred to the state, or to such board as the state may select to manage the same.” To this the state agreed. The church had no cause to complain since it had recommended this course; the college had no cause to complain because it was to the advantage of the same. It was incorporated as a strictly literary .institution. It had attempted to conduct an institution the leading object of which was military tactics, and such studies as related to agriculture and the mechanic arts —studies foreign to its articles of incorporation. It was necessary for this college to return to its original object — a strictly literary institution — when it could no longer furnish the necessary accommodations for the pupils sent it by the state, or who desired to attend that department known as agricultural, and as a means to this end it must surrender the agricultural department. It was such a contract as the college could make, as it was for its benefit. “A corporation can make no contract forbidden by its articles of incorporation, nor any contract which is not necessary, either directly or indirectly, to enable it to answer that purpose. ” — Ang. & A. Corp. § 256. The college was not prohibited from making such a contract, and it was directly necessary that it should do so-in order to return to its original object.

The question is raised whether the board of regents of the agricultural college of the state of Oregon was such a body as was capable of taking and holding the title to real property. This court in Dunn v. University of Oregon, 9 Or. 357, held that the board of directors of the University of Oregon, created by the act of October 19, 1872, of the legislature, entitled * ‘An act to create, organ ize, and locate the University of the state of Oregon,” was a corporation. This board of directors of the state university was created by the legislature of the state in the same manner as the act creating the board of regents of the agricultural college. The board of regents of the agricultural college of the state of Oregon, then, was and is such a corporation, and it is capable of taking and holding the title to real property.

Corvallis College being, then, a proper party, the property belonging to the college, the board of regents being capable of taking and holding the title to real property, the conveyance being in the interest and for the benefit of the college, to pass the title, the only question remaining, then, is, was the conveyance executed in the manner prescribed by law? It is claimed by plaintiff that the action of the trustees of January 29, 1885, at which the resolution was adopted recommending that ‘ ‘ the mandate of the conference be complied with, ” was a nullity and had no effect upon the corporation because it was not concurred in by an alleged majority of the trustees. It appears by the record of the meetings of the board of trustees of this college that at the annual meeting of said board, held June 8, 1885, the minutes of the special meeting at which the resolution was adopted were approved, thus ratifying and correcting any and all errors if any existed. It is claimed by plaintiffs that the order from the president of the board of trustees to the secretary of said board, directing him to call a meeting of the trustees on February 5, 1886, did not specify the object of the meeting, and that the words “The object of the meeting is to consider the transfer of the college farm,” written with a pencil, is a different handwriting from the original. At the meeting held February 5, 1886, a resolution was adopted authorizing the president and secretary of the board of trustees to execute the conveyance of the college farm to the board of regents of the state agricultural college. There is no evidence that this statement of the object of the meeting was not made in the presence of the president and with his knowledge and consent, even if it were made by a different person. At the meeting held February 5,1886, when these officers were instructed to execute the deed, it was only carrying out the contract entered into between the state and the college; and the conveyance by these officers was ministerial only, as they derived their authority from the contract of February 11,1885, made between the state and college. This deed was one which the college ought in equity and good conscience to have made under its contract with the state, and having done what it ought to do, the college has no cause for complaint. It follows, then, that the decree should be reversed and the complaint dismissed, and it is so ordered.

Bean, J.,

having participated in the trial below did not sit in this case.