Miller v. Ahrens

163 F. 870, 1908 U.S. App. LEXIS 5273

• Court: U.S. Circuit Court for the District of Northern West Virginia
• Decided: September 3, 1908
• Docket: No. 583
• Status: Published

Opinion

DAYTON, District Judge

(after stating the facts as above). In my opinion heretofore filed in this case passing upon the demurrer to the original bill (150 Fed. 644) I held that the devise to Woods, trustee, for the benefit of the First Spiritualist Church of Baltimore, a Maryland corporation, assuming it to be a religious organization, was absolutely void as being contrary to the public policy and to express constitutional and statutory provisions of this state; that under express statutory provision, the devise having failed, the legal title to the 350 acres in controversy passed, under the residuary clause of the will, to plaintiff’s mother, Ann R. Miller; that by reason of the relation oí' landlord and tenant existing between plaintiff and defendants under, and by virtue of, the lease for oil and gas executed by Rickey in his lifetime to Ahrens, plaintiff had right to maintain this suit for the purpose of quieting her title thereto' and removing clouds placed thereon by her said tenants, the defendants. By the answer of defendants three defenses are sought to be made: First. That defendants constitute a mining partnership, and are not sued as such. Second. That Ann R. Miller, the mother under whom plaintiff claims as sole devisee and heir at law, ratified the devise to Woods, trustee, for the benefit of the First Spiritualist Church of Baltimore, thereby validating it. Third. That plaintiff’s title has become forfeited and vested in the state by reason of the land being omitted from the land books and not assessed with taxes for five consecutive years since 1898.

The first of these grounds of defense can be quickly disposed of. It is not alleged in the answers that the deed of Woods to Ahrens or those of Ahrens to his codefendants, sought to be set aside, anywhere disclose a partnership relation. It is not alleged that the oil and gas lease of Fickey to Ahrens disclosed such relation. “A joint purchase of the land by two does not constitute a copartnership in respect thereto, nor does an agreement to share the profits and losses on the sale of land create a partnership. The parties are only tenants in common.” Clark v. Sidway, 142 U. S. 682, 12 Sup. Ct. 327, 35 L. Ed. 1157.

In considering the second defense, we must constantly bear in mind the distinction between contracts void for reasons of state, declared so by its laws or by its policy, as defined by its courts as being against the public interests, and contracts not inherently vicious, but void or voidable by reason of the infirmity of the parties, their fraudulent acts, misrepresentations, or misconduct, or by reason of defects in the execution thereof. When the disability to contract is removed, the party who has acted under disability may ratify and confirm the void act not in itself malum prohibitum. The fraudulent act, misrepresentation, or misconduct of one party to a contract can be waived or condoned by the other, and by such waiver or condonation the latter may completely estop himself to defend against the contract on the ground of such fraud, misrepresentation, or misconduct. If the execution of the instrument be defective, such defects may be waived or subsequent ratification in legal form may be made. There never can be by the parties either ratification or confirmation of a contract that is expressly prohibited by law to be made, or which contravenes public policy. The interests of the state and society intervene and are paramount. If the state forbids the doing of an act because to do it is against public good, one cannot accomplish the act by having another confirm it. Both the act and the confirmation are unlawful, and the one can in no way legalize the other. One cannot be estopped from disclaiming a contract prohibited by law or public policy from being made, no matter how hard he may theretofore have tried to ratify and enforce it. In this case I have in my former opinion reached the conclusion that the Constitution and laws of West Virginia expressly prohibit the incorporation of religious organizations; that they proinbit them as voluntary associations from acquiring more than 4 acres of land in an incorporated city, town, or village, and not exceeding 60 acres outside of such city, town, or village; that such limited areas, too, can only be held for use as a place of public worship, a minister’s residence, and a burial place; that all gifts, conveyances, and devises of real estate in larger area and for other uses are absolutely void’ as against a public policy established and enforced, without break, for more than-100 years in the states of Virginia and West Virginia; that no foreign church corporation can, by reason of its being a foreign one, acquire any superior right to exist or take land in this state under our laws than could a domestic one. I can see no reason to change these conclusions. If they be sound, then it must be admitted that Fickey could not by this devise invest this church corporation with title to this land. Neither could his sister, Ann R. Miller, after his death and when she held as residuary devisee, have conveyed it to this organization and given it power to take and hold it. It follows inevitably that no act of hers, therefore, either by deed or by renunciation in any court, could confer the right, expressly prohibited by law, upon this church to take and hold this land. These principles are settled by a long line of decisions, among which may be cited Hall v. Coppell, 7 Wall. 542, 19 L. Ed. 244; Oscanyan v. W. R. Arms Co., 103 U. S. 261, 26 L. Ed. 539; Spare v. Home Mut. Ins. Co. (C. C.) 15 Fed. 707; Armstrong v. Toler, 11 Wheat. 258, 6 L. Ed. 468; In re Comstock, Fed. Cas. No. 3,078; Mayhood, Public Policy, pp. 2, 155. Possibly the law is as forcibly stated as it can be in Hall v. Coppell, supra, where it is said:

“The instruction given to the jury, tljat, if the contract was illegal, the illegality had been waived by the reeonventional demand of the defendants, was founded upon a misconception of the law. In such cases there can be no waiver. The defense is allowed, not for the sake of the defendant, but of the law itself. The principle is indispensable to the purity of its administration. It will not enforce what it has forbidden and denounced. The maxim, ‘Bx dolo malo non oritur actio,’ is limited by no such, qualification. The proposition to the contrary strikes us as hardly worthy of serious refutation. Wherever the illegality appears, whether the evidence comes from one side or the other, the disclosure is fatal to the case. No consent of the defendant can neutralize its effect. A stipulation in the most solemn form to waive the objection would be tainted with the vice of the original contract, and void for the same reasons. Whatever the contamination reaches it destroys. The principle to be extracted from all the cases is that the law will not lend its support to a claim founded upon its violation.”

But, in addition to this, I have no trouble in concluding that the facts set up in the answer and explained and traversed by the allegations of this supplemental bill would be wholly insufficient to create an estoppel against plaintiff or her mother, if the case were one of an ordinary contract. “Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might have perhaps otherwise existed, either of property, of contract, or oi; remedy, as against another person who has in good faith relied upon such conduct, and has been led thereby to change his condition for the worse, and who, on his part, acquires some corresponding right,_ either of property, of contract, or of remedy”' — citing Louisville Banking Co. v. Asher (Ky.) 65 S. W. 831 (quoting 2 Pom. Eq. Jur. § 804); The Alberto (C. C.) 24 Fed. 379, 382; Richardson v. Olivier, 105 Fed. 277, 282, 44 C. C. A. 468, 53 L. R. A. 113; The Ottumwa Belle (D. C.) 78 Fed. 643, 647; First Nat. Bank v. Dean (Super. N. Y.) 17 N. Y. Supp. 375, 377; Nell v. Dayton, 43 Minn. 242, 45 N. W. 229, 230; Griffith v. Rife, 72 Tex. 185, 12 S. W. 168, 172; Whiteselle v. Texas Loan Agency (Tex. Civ. App.) 27 S. W. 309, 315; Miller-Jones Furniture Co. v. Ft. Smith Ice & Cold Storage Co., 66 Ark. 287, 50 S. W. 508, 509; Nash v. Baker, 40 Neb. 294, 58 N. W. 706, 707; Ricketts v. Scothorn, 57 Neb. 51, 77 N. W. 365, 369, 42 L. R. A. 794, 73 Am. St. Rep. 491; 3 Words & Phrases, p. 2498.

According to the allegations of the supplemental bill, Ahrens had purchased from Woods, trustee, paid the purchase money, and taken conveyance for this land long before he knew plaintiff or her mother, and long before she and her mother signed the petition expressing a desire that the devise be upheld, and agreeing to the payment of $17,-500 to Schirm for the benefit of Mrs. Hopkins out of the funds in court. Flow can he or his codefendants come and say that in making this purchase, paying over the purchase price and taking deed for this land, Ahrens “relied in good faith” upon an act which had not at the time been done, and how could he have been led thereby “to change his condition for the worse” ? But again:

“To constitute an estoppel, the following elements are essential: (1) There must be conduct, acts, language, or silence amounting to a representation or a concealment of material facts. (2) These facts must be known to the party estopped at the time of his said conduct, or, at least, the circumstances must be such that knowledge of them is necessarily imputed to him. (3) The truth concerning these facts must be unknown to the other party claiming the benefit of the estoppel at the time such conduct was done, and at the time when it was acted upon by him. (4) The conduct must be done with the intention, or, at least, with the expectation, that it would be acted upon by the other party, or under such circumstances that it is both natural and probable that it will be so acted upon. (5) The conduct must be relied upon by the other party, -and, thus relying, he must be led to act upon it. (6) He must in fact act upon it in such a manner as to change his position for the worse” (citing many cases). 3 Words & Phrases, p. 2498.

Finally:

“The doctrine of estoppel in pais has no application where everything is equally known to both parties, or the party sought to be estopped was ignorant of the facts out of which his rights sprung, or where the other party was influenced by the acts pleaded as an estoppel” (citing authorities). 3 Words & Phrases, p. 2500.

“Acquiescence imports and is founded on knowledge. Acquiescence cannot arise unless the party against whom it is set up is aware of his rights. A party cannot acquiesce unless fully appraised of all his rights and all the material facts and circumstances of the case.” Hermann, Estop. 1191.

“Ratification presumes the existence of knowledge of all the facts, and one not informed of the whole transaction is not in a position to ratify the same” (citing Hommel v. Meserole, 18 App. Div. 106, 45 N. Y. Supp. 407, 409; King v. Mackellar, 109 N Y. 215, 16 N. E. 201, 203; Beck v. Donohue, 27 Misc. Rep. 230, 57 N. Y. Supp. 741, 742). Words & Phrases, p. 5930.

See, also, Mullins v. Shrewsbury, 60 W. Va. 694, 55 S. E. 736, a case very much in point.

If the allegations of this supplemental bill he true, and I must assume them to be so on demurrer, neither Ann R. Miller nor her daughter, the plaintiff, had any knowledge whatever of the illegal character of the devise to the church or of the mother’s rights under the residuary clause of the will to this land; while defendants, if they did not-know these facts at the time they purchased, had certainly much superior opportunities to know them, operating as they were in West Virginia under her laws and in contact with her lawyers. When Ahrens purchased from Woods, trustee, he must have known that Woods was selling only such title as was vested in him, and his business sense would have dictated to him the necessity of having an examination made’to ascertain what the character of such title was.

But it is insisted that this devise of real estate was to Woods, trustee ; that the will directed it to be sold by him and the proceeds- paid to the church, whereby an equitable conversion was made of it as realty into personalty, which, in turn, was taken out of the state and placed in the custody of a Maryland court which then had exclusive jurisdiction over its disposition. This is arguing simply in a circle, and reduces itself to these conclusions: Bickey, it is true, could not devise the land direct to the church, for, if he did, he would be placed in the attitude of doing something against the policy of the law and expressly forbidden by it. He, however, for the purpose of accomplishing this result can simply intervene a trustee, and direct him to sell and give the proceeds to the unlawful purpose. It is not necessary to consider long a proposition having as its basic idea that a court of equity will lend its administration to the accomplishment by indirection of an unlawful act. While it is true that it will enforce its doctrine of equitable conversion, and “consider that as done which is directed to be done” in legitimate cases, it is also true that it will never enforce this doctrine or any other one when its enforcement aids or accomplishes an act against the law or its public policy, an act prohibited. On the contrary, it sweeps away all technicalities, cuts across all cross lots, and opposes with its full power any and all efforts to evade the law and its just and equitable purposes. The weakness of this proposition lies in ignoring the fact that these church organizations are prohibited by law from taking directly or through trustees real estate by gift, conveyance, or devise, except in the amounts and for the purposes set forth by statute. While Woods as an individual could take under devise, Woods, as trustee, as the mere representative of the church, for its sole use and benefit, could no more take than could the church itself. Had the devise been to the church as trustee with direction to sell the land and devote the proceeds to its own use, the condition would not have been one whit changed. Equity never established the doctrine of trusts, never created, suffered, or upheld one, for the purpose of securing the commission of a wrong against society or the violation of an inhibition expressly made by Constitution and statute. It is only necessary to refer to the case of Carskadon v. Torreyson, 17 W. Va. 43, where the real estate by solemn deed was sought to be conveyéd to trustees for the purpose, among others, even allowed and defined by the statute, to wit, that of a residence for the church’s minister, but, because its trust conditions did not as a whole conform to the purposes and requirements of the statute, the conveyance to these trustees was held void.

Touching the third ground of defense — the alleged forfeiture of die land to the state for noiiassessment of taxes — little need be said. Plaintiff’s counsel in his brief has raised the very interesting question whether, under, the Legislative act of 1882, there can be forfeiture for nonassessment of taxes in this state of tracts of less than 1,000 acres since that date; but it is not necessary for me to decide this question, and it is much better that such questions should be determined by the courts of the state. It is enough to say here that it is admitted that Ahrens took possession of this land under the oil and gas lease from Pickey which by its terms has not expired. As such tenant payment of taxes could properly be enforced out of property of his and his co-defendants upon said land. If he and his •codefendants have title or attempted to take title from Woods, trustee, it was Fickey’s title, the same title and source of title, as claimed by plaintiff. IE Ahrens has by a void conveyance caused this title to be transferred on the land book from the name of the true owner to himself and associates, and has paid the taxes on the land, such payment by him inures to the.benefit of the true owner under the well settled law on the subject enunciated in Waldron v. Harvey, 54 W. Va. 608, 46 S. E. 603, 102 Am. St. Rep. 959; Sturm v. Fleming, 26 W. Va. 54; Lynch v. Andrews, 25 W. Va. 751; Hall v. Hall, 27 W. Va. 468. If, on the other hand, they have not had this land transferred to them and paid the taxes, and if it has been forfeited to the state in the name of Pickey or his devisees or heirs, the right of redemption remains in the plaintiff, and the defendants would not be heard in equity to make defense of this forfeiture in their effort to take title before attorning to their landlord. It follows that the demurrer to this supplemental bill must be overruled, and that I must hold that the defendants’ answer, so far as it seeks to set up as defense partnership by defendants in the land, ratification of this devise to the First Spiritualist Church by plaintiff, and her mother and forfeiture of the land, under the facts stated in the supplemental bill and the answer, must be held unavailing.

It is lo be noted, however, that respondents in this answer say:

“They do not know for what purpose said church was incorporated, or whether the creed it sought to inculcate or the rites and practices which it sought to introduce and propagate were religious in their character or not, and on information and belief these respondents deny that tiie denomination so incorporated under the name of the ifirst Spiritualist Church of Baltimore is a religious denomination, and deny that said church seeks to teach and spread the gospel of religion.”

I think this allegation fully sufficient to put in issue the character of the First Spiritualist Church of Baltimore as a corporation and organization, and this is a question of fact to be determined by evidence. Of course, if it be not an organization based upon and for the purpose of teaching and inculcating religion, but, on the contrary, a corporation organized for legitimate wordly pursuits a‘nd ends, then all that I have said in this and my former opinion, assuming the allegations of the bills to the effect that it was such religious organization to be true, as I had to do on demurrer, can have no application to it.