Schwartz v. Duss

187 U.S. 8, 23 S. Ct. 4, 47 L. Ed. 53, 1902 U.S. LEXIS 850

• Court: Supreme Court of the United States
• Decided: October 27, 1902
• Docket: 38
• Status: Published

Opinions

MR. Justice McKenNA,

after making the foregoing statement, delivered the opinion of the court.

Two questions were submitted to the master : (1) Have the plaintiffs such a proprietary right or interest as would entitle them upon the dissolution of the society to share all its property or assets, or which entitles them to an accounting ? (2) Has the society been dissolved by consent or by an abandonment of the purposes for which it was formed ? A negative answer to either of the propositions determines the controversy against petitioners, and both were so answered by the master and by the Circuit Court and the Circuit Court of Appeals. The case, therefore, seems not to be as broad or as complex as presented in the argument of counsel. The case is certainty clear from any disputes of fact, and we may dismiss from consideration the accusations against Duss, not only as to his motives in joining the society, but also as to his motives and acts as a member and officer of it. "We áre concerned alone with the legal aspect and. consequences of his acts and those of his associates. They, however, pertain more particularly to the second proposition. This is not the first time that the Harmony Society has been before the courts. Its history has been recited and its principles characterized and defined, not only by the Supreme Court of Pennsylvania, but by this court. Schriber v. Rapp, 5 Watts, 351; Baker et al. v. Nachtrieb, 19 How. 126; Speidel v. Henrici, 120 U. S. 377.

The society was formed by one George Rapp, who, with his son and others, came from the Kingdom of Wurtemberg to the United States in 1803 or 1804, and settled at Harmony, in Butler County, Pennsylvania. In 1814 the society moved to Posey County, Indiana, and later removed to Economy, Pennsylvania, its present abode, in 1825. Its members' “ were associated and combined by the common belief that the government of the patriarchal age, united to the community of property, adopted in the days of the Apostles, would conduce to promote their temporal and eternal happiness.” 19 How. 126.

Their relations, principles of government, personal and property rights were provided for by written contracts ¡executed respectively in 1805,1821, 1827,1836,1847,1890 and 1892. The present discussion is concerned with the- first four.

By article 1 of the contract of 1805 each subscriber to that contract delivered up, renounced and remitted all of his or her property of every kind, “ as a free gift or donation, for the benefit and use of the community,” and bound himself, his heirs and descendants, “ to make free renunciation thereof, and to leave the same at- the disposal of the superintendents of the community,” as if the subscriber “never had nor possessed it.”

In article 2 they pledged obedience and submission to the society, and promised “ to promote the good and interest of the community,” and to that they pledged their children and families. But recognizing a possible weakness and inability to “stand to it in the community,” they promised (article 3) never to demand any reward for themselves or children for “ labor or services,” and declared whatever they should do would be “ as a voluntary service for our brethren.” In consideration, of this renunciation of property and dedication of labor and services, George Rapp and his associates promised to supply the subscribers to the contract with all the necessaries of life, not only in their “ healthful days, but when they should become sick or unfit for labor.” And if after a “ short or long period ” a member should die or otherwise depart from- the community, “ being the father or mother of a family,” such family should “ not be left widows and orphans but partakers of the same rights and maintenance.”

Article 5 was as follows :

“ And if the case should happen, as above stated, that one or more of the subscribers, after a short or long period, should break their promise, and could or would not submit to the laws and regulations of the church or community, and for that or any other cause would leave Harmony, George Rapp and his associates promise to refund him or them the value of his or their property, brought in without interest, in one, two or three annual installments, as the sum may be, large or small; and if one or more of them were poor and brought nothing into the community, they shall, provided they depart openly and orderly, receive a donation of money, according to his or their conduct while a member, or as he or their circumstances and necessities may require, which George Rapp and associates shall determine at his or their departure.”

The society became the owner of about 7000 acres of land at Harmony, which on May 6, 1815, was conveyed by Frederick Rapp, as attorney in fact, to Abraham Ziegler for $100,000. That year, or in 1814, the society removed to Indiana. “There a second agreement was entered into January.20, 1821. This agreement expressed, as that of 1805, the submission of the subscribers to the society, the dedication, of their service and labor, and contained the same promises of support.

The master found that “ in 1826 the society removed from Indiana to Beaver County, Pennsylvania, where they purchased and settled upon a tract of land containing about 3000 acres, now known as ‘ Economy,’ where they have since remained, and which has since become very valuable, and on which they have erected many buildings, including dwellings and factories of. various kinds, and made many valuable improvements.”

In 1827 another agreement was entéred into, the preamble of which was as follows:

“ Whereas by the favor of Divine Providence an association or community has been formed by George Bapp and many others upon.the basis-of Christian fellowship, the principles of which being faithfully derived from the sacred Scriptures, include the government of the patriarchal age, united to the community of property adopted in the days of the apostles, and wherein the single object sought is to approximate, so far as hutrian imperfection will allow, to'the-fulfillment of the will of God by the exercise of those affections and the practice of those virtues which are essential to the happiness of man in time and throughout eternity.

“ And whereas it is necessary to the good order and well being of said associations that the condition of membership should be clearly understood, and that the rights and privileges and duties of every individual therein should be so defined as to prevent mistake or disappointment on the one hand and contention or disagreement on the other.”

This agreement was an amplification of that of 1805. Article 5 of the latter became article 6. This agreement was signe'd by 522 members of the association, and afterwards, and until February 14, 1836, was signed by 144 additional members. In 1832, dissensions having arisen, a large number of themembers withdrew under the leadership of one Count De Leon. They received $110,000, and granted a release unto George Bapp and his associates of all of their right and title in any of the property “ belonging to the society of George Bapp and bis, associates.”

In 1836 another agreement was entered into revoking and annulling the sixth article of the agreement of 1827 — fifth arti-. cle of the agreement of 1805. The agreement recited the sixth article—

■ “ And whereas the-pr.o visions of the said, sixth article, though assented to at the time, manifestly, depart from the great principle of a community of goods and may tend to foster and perpetuate a feeling of inequality at variance with the true-spirit and* objects of the association-; .

“ And whereas the principió of restoration of property, besides its pernicious tendency, is one which cannot now be enforced with uniformity and fairness, inasmuch as the members of the association in the year 1816, under a solemn conviction of the truth of what is above recited, did destroy all record and memorial of the respective contributions up to that time;

“ And whereas continued happiness and prosperity of the association, a more intimate knowledge of each other, have removed from the minds of all members the least apprehension of. injustice and bad faith : ■

“ Now, therefore, be it known by these presents that the undersigned, with a view to carry out fully the great principles of ou.r union, and in consideration of the benefits to be derived therefrom, do hereby solemnly enter into covenants, and agree with each other as follows :

“ 1st. The said sixth article is entirely annulled and made void, as if it had never existed ; all others remain in full force as heretofore.

“ 2d. All the • property of- the society, real, personal and mixed, in law or equity, and howsoever contributed or acquired, shall be deemed now and forever joint and indivisible stock; Each individual is to be considered to have finally and irrevocably parted with all his former contributions, whether in land, goods, money or labor ; and the samó-rule shall apply to all future contributions whatever they may be.

“ 3d. Should any individual withdraw from the society, or depart this life, neither he in the one case nor his représentativés in the other shall be entitled to demahd an account of,said contributions, whether in land, goods, money or labor, or to claim anything from the society as matter of right. But it shall be left .altogether .to the discretion of the superintendent to decide whether any, and if any what, allowance shall be made to such member or his representatives as a donation.”

The agreement was signed by all who were then members, and subsequently by thirty-three others.

Prior to his death, in 1834, Frederick Rapp, a member of the society, had been its business agent, and transacted its external affairs. After his death the members of the society (July 5, 1834) executed a power of attorney to George Rapp, constituting him such general agent, with power to appoint agents and substitutes under him. On the same day he appointed Romulus L. Baker and Jacob. Henrici his substitutes. This power of attorney was signed by 402 members, and recited the death of Frederick Rapp, and the consequent necessity for the appointment of a new agent, so that the temporal affairs of the society would continue to be managed in a mode which had proved convenient and satisfactory, constituted George Rapp such agent with power of substitution, invested him with all necessary powers, including the receipt and the execution of conveyances of real and personal property. George Rapp disclaimed any greater interest in the then resources or future earnings of the society than other members.

George Rapp was the founder of the society, and continued to be its head or superintendent, and to rule and govern it until his death in 1847. After his death another agreement was executed .(August 12, 1847). It was signed by 280 members. The agreement recited the death of Rapp, and expressed the necessity “ to the good order and well being of the association that some plan should be agreed upon to regulate its future affairs, promote its general welfare and preserve and maintain it upon its original basis ; ” it also announced to all immediately concerned that the surviving and remaining members of the Harmony Society, each covenanted with all the others thereof, and with those who should thereafter become members, “ to solemnly recognize, reestablish and continue the articles of our association (the sixth section excepted), entered into at Economy on the 9th day of March, A. D. 1827.”

This agreement created a board of elders of nine members to conduct the internal affairs of the society, and a board of trustees of two members to conduct its external affairs. The trustees disclaimed any greater personal interest in the property of the society than other members. .

These agreements, the master found, “ are the agreements and documents under which, or some of which, the plaintiffs claim' the right to share in the property and assets of the society as heirs of former members.” And as to the relations of the plaintiffs to the society the master found as follows :

“ 1st. That none of the plaintiffs were ever members of the society.

“ 2d. That all of those members of the society through whom Christian Schwartz claims as their heir, signed the agreements of 1836 and 1874, and continued members until their death.

“3d. That Antony Koterba claims as heir of his father, Joseph Koterba, and his half-brother, Andreas Koterba ; that Joseph Koterba joined in the organization of the society, and also signed the agreement of 1827, and afterwards, in 1827, withdrew from the society ; and that Andreas Koterba signed the agreements of 1827, 1836 and 1847, and died a member of the society.

“4th. That the grandparents of David Strohaker, viz., Christian Strohaker and wife, and Matthias Kief and wife, joined the society in 1805, and all remained members until their death— all dying between 1820 and 1825, except Mrs. Rief, who died between 1830 and 1836. That his father, Christopher Stroha-ker, signed the agreement of 1827, and withdrew from the society in 1827. That his aunt, Catharina Strohaker, signed the agreements of 1827, 1836 and 1847, and continued a member of the society until her death.

“5th. That Lawrence Scheel and Jacob Scheel, ancestors of Allen and G-. L. Shale, joined the society in 1805; that Lawrence withdrew in 1824 or 1826; that Jacob Scheel signed the agreement' in 1827 and died a member, about Í837.

“ 6tb. That none of the parties through whom the plaintiffs claim contributed any money or property to the society,”

He divided the persons from whom the plaintiffs claim as follows.:

“First. Those withdrawn from the society before the execution of the agreement of 1836.

“ Second. Those dying in the society before that time.

“ Third.. Those who died members of the society after having joined in the agreements of 1836 and 1847.”

Manifestly the plaintiffs cannot have other rights than their ancestors, and the rights of- the latter depend upon the agreements they signed. The agreements we have recited. The signers of them certainly strove to express their meaning clearly, and, whenever occasion arose, declared their understanding, aims and purposes, and always substantially in the same way.

The cardinal principle of the society was. self-abnegation. It ivas manifested hot only by submission to a religious head, but by-a community instead of individual ownership of property, and the dedication of their labor to the society. The possibility ■of some member or members not being able to “ stand to it,” to use the expressive phrase of the agreements, was • contemplated, and provision was made for that event. But a very significant difference was made between a performance of service and the contribution of property. For the former it was covenanted by the members no reward should be demanded for themselves or their children or those belonging to them. As to the latter, George Rapp and his associates promised to refund the value of the property brought in without interest, in one, two or three annual installments, as the same might be large or small. Ib was, however, provided, as to those who “ were poor and brought nothing to the community,” that they should receive, if they departed openly and orderly, “ a donation in money, according to his or their conduct while a member, or as his or their circumstances might.require,” as “ George Rapp and his associates shall determine ” (agreement of 1805); as “ in the judgment of the superintendents of the association” (agreement of 1827).

Those provisions apply to those who withdrew from the society prior to 1836 — the first class into which the master divided the plaintiffs, and need not much comment. None of the persons who so withdrew contributed property to the association. We are not informed by the record whether their conduct when in the society pr whether their manner of withdrawing from it, entitled them to the consideration that the articles of agreement permitted as an indulgence to withdraw-, ing members. If they could have, exacted anything asa matter of right it would now be presumed that it had been demanded and the demand satisfied.

There was another class, the faithful and- abiding members, but even these, the master found, contributed no property, and the .decision of their rights becomes as easy as the decision of the right of those who “ could not stand to it in the community ” and withdrew. They promised, as we have seen,, to endeavor by the labor of their hands “ to promote the good and interest of the community,” and to hold their “ children and families to do the same.”' And for compensation they received instruction in. church and'school. They received assurance of maintenance “ in healthful days ” and days which might not be such, and assurance when death should come to them, that their families would be taken care of. ■ It may be presumed that as the- members were faithful to -their covenants the society was faithful to its covenants, and there were no undischarged obligations or rights for distant relatives of deceased members to assert or claim against the community or its property. This seems to be conceded by counsel for petitioners, and we are brought to the consideration of the third class into which the master divided the persons from whom some of the petitioners claim to derive, those who died members of the society after having joined in the agreements of 1836 and 1847.

Counsel for petitioners say in their brief: “ The article of ■ 1836 is the only material article, bearing. upon the property rights of the plaintiffs,' while the articles of 1805, 1821, 1827 and 1847 aré material in considering the character of the trust, the purposes and principles of the society.”

In other words, as we understand counsel by the propositions they have submitted and the arguments employed to support them, by the articles executed prior to October 31,. 1836, those who joined the society made “a''free gift and donation of all their property ” to George Rapp and his associates, -[for the use and 'benefit of the community,” upon the condition, however, to have the property returned to them if they should withdraw from, the society. But that “ by the.articles of October 31, 1836, all the members of the society agreed with each other to surrender this right of property restitution which each possessed, and to convey the same to all the members in equal shares.” In other words, the gifts before 1836 'were to the community; after 1836 to “ all the members in equal shares.” This difference in result in 1836 and afterwards was effected, it is claimed, by the following provision of the agreement of 1836:

“ All the property of the society, real, personal and mixed, in law or equity and howsoever constituted or acquired, shall be deemed, now and forever, joint and indivisible stock. Each individual is to be considered to have finally and irrevocably parted with all his former contributions, whether in lands, goods, money or labor, and the same rule shall apply to all future contributions, whatever they may be.”

To the articles of 1836, it is also contended-, that the society as .such was not a party, but nevertheless the property became impressed with a trust for the use of the society, as such, “ by those who then (1836) represented the ownership of this joint and indivisible stock,” and as each new member came in “ he became an owner of an equal share of the property, subject to the trust.” And it is further contended that the members of 1836 and those who came in afterwards became donors of the property, and when the society or the trust failed from any cause the “ corpus of the trust property ” reverted to them “ by way of resulting trust, . . . not to the surviving members as donees, or beneficiaries of the trust.” In other words, the members became at once donees of each other and donors to the society, and the descendants of members who had not ánd' might not bring a dollar to the society excluded from any interest in the-reversion of its great properties the descendants of those from whom those properties came. And this through the doctrine of resulting trusts, whose fundamental principle is to recognize an equity only in them from whom the consideration has proceeded: And this, too, would result from granting the contentions of petitioners — a society whose chief purpose was to establish community of property would come back to the assertion and fact of individual ownership, and whose hope was self-sacrifice and self-abasement would encourage self-interest and self-assertion. Members could go into the society or go out of it, take nothing to it, serve it ever so little, and become ultimate sharers of its property. They might die in the society, or, having withdrawn, die out of it, and will or convey their titles or rights to others. No such right was ever conceived to exist and no such right was intended to be created. This is demonstrated by the quotations which we have made from the articles of agreement. The permanence of the community was provided for in the articles of 1805; it was continued in those of 1821 and 1827; and on account of the secession of Count De Leon and his followers it was asserted with emphasis in 1836. The article of that year, became, and was intended to become, the complete and final consummation of community ownership —did not become and was not intended to become the commencement of individual ownership. That article was but an incident in the life and evolution of the society. It asserted constancy to the principles of the association, and annulled the sixth article of 1825 — fifth article of 1805, because that article manifestly departed “ from the great principle of community of goods,” and it was said that “ with a view to carry out the great principles ” of their union “ and in consideration of the benefits to be derived therefrom,” they entered into this covenant :

“ Should any individual withdraw from the society, or depart this life, neither he in the one case nor his representatives in the other shall be entitled to demand an account of said contributions, whether in land, goods, money or labor, or to claim anything from the society as matter of right. But it shall be left altogether to the discretion of the superintendent to decide whethér any, and if any what, allowance shall be made to such member or his representatives as a donation.”

The purpose was definite and clearly expressed. It was certainly thought .to be clear enough by the men who framed it to declare and accomplish the “sacrifice of all narrow and selfish feelings to the true purposes of the association,” as the articles fervidly declared. And it was provided that the member who withdrew from the society could make no demand against it “as a matter of right.” The member who died left no right to his representatives. It needs no argument to show that as such members had no rights they could transmit none to the petitioners in this case.

No trust having been created by the agreement of 1836 different from that created by the other agreements,, there is no necessity to consider the arguments based on the assumption of its invalidity. That agreement was the affirmation and the continuation of the prior agreements, and they were held not to be offensive to the public policy of. Pennsylvania, by the Supreme Court of that State in Schriber v. Rapp, 5 Watts, 351. The trial court in that case had instructed the jury that “ there is nothing in the articles of association (those of 1805, 1821 and 1827) given in evidence that renders the agreement unlawful or void; nothing in them inconsistent with constitutional rights, moral precepts, or public policy.”

The Supreme Court observed that the point made agaiist the articles as being against public policy was attended with no .difficulty, and Chief Justice G-ibson said for the court: “An association for the purposes expressed is prohibited neither by statute nor the common law.” And it did not occur to this court in Baker et al. v. Nachtrieb, 19 How. 126, to treat them as invalid contracts. See also Goesele v. Bimeler et al., 14 How. 589; Speidel v. Henrici, 120 U. S. 377.

An analysis of the agreements of 1847, Í890 and 1892 is not necessary. They were made to meet particular exigencies, and expressly affirmed the prior agreements, except the sixth section of that of 1827.

The master, and both the Circuit Court and the Circuit Court of Appeals* found that the society had not been dissolved, either by the consent óf its members or by the abandonment of the purposes for which- it was founded. On account of this concur- • rence the disputed facts involved in that finding, under the rules of this court, and the circumstances of the record, we do not. feel disposed to revievv. There is left, therefore, for consideration only the agreements of 1890 and 1892 and the changes in administration effected by them, and the conveyance of the property of the society to the Union Company. So far as those agreements affect the property rights of petitioners we have ex.pressed an opinion of them, but their effect upon the question of the dissolution of .the society, of the effect of the conveyance to the Union Company, we are not called upon to decide. In that question, we haVe seen, the petitioners have no concern.

Judgment affirmed.

■ Mr. Justice Gray and Mr. Justice Shiras took no part in the decision.