St. Lawrence University v. Trustees of the Theological School of St. Lawrence University

27 A.D.2d 106, 276 N.Y.S.2d 151, 1966 N.Y. App. Div. LEXIS 2696

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 30, 1966
• Status: Published

Opinions

Herlihy, J.

This is an appeal hy the defendant from a judgment of Special Term which denied the defendant’s motion for dismissal of the complaint for failure to state a cause of action and granted summary judgment for the plaintiff.

The complaint alleged that on June 30, 1965 the Trustees of the Theological School of St. Lawrence University (hereinafter referred to as Trustees) discontinued the operation of the theological school and since such time the Trustees have not operated or maintained such school anywhere. It further alleges that certain cash, securities and real property had in the past been transferred to the Trustees by the plaintiff and that the real property was subject to a reversion of title when it was no longer used for a theological school. After alleging these facts and incorporating by reference the present charter of the plaintiff, the complaint demands that it be declared that the plaintiff owns all of the assets of the theological school and that the Trustees be directed to convey such assets forthwith.

The issue presented by the motion was whether or not the complaint states a cause of action.

The plaintiff argues that the theological school was no more than a department of itself and therefore when the school ceased to operate, all of the assets in the hands of the Trustees became those of the plaintiff. The Trustees argue that they are either a corporation de jure or de facto and accordingly, the only way their assets can be distributed is in accordance with sections 219 and 220 of the Education Law.

The charter of the plaintiff (1964) provides in section 2 that “ The corporation shall have power to establish a theological ■school * * * as a separate department of [itself] * * * and, when so established, shall thereafter maintain the same; such theological school shall have power to take and receive separate property, to hold the same for its maintenance and to conduct and administer the same for the purposes of theological education. The property * * * of such theological school shall be administered by a separate board of 1.2 trustees * * * All separate property heretofore or hereafter received by said university for the uses, purposes and maintenance of theological education, shall forthwith be turned over by the trustees of said university to said separate board of 12 trustees

A reading of the charter makes it plain that all property which the plaintiff might receive for “ the uses, purposes and maintenance of theological education ” shall be held by such Trustees. The charter provides that the plaintiff does not have the power to hold property for the purpose of theological education.

The amendment of the charter by chapter 40 of the Laws of 19-10 and by the act of the Board of Regents, dated October 23, 1964, which struck out all prior legislative acts and amendments made by the Board of Regents seems, first, to have constituted .the separate board of trustees of the -theological seminary a new and separate corporation with every essential attribute of corporate existence including the capacity of perpetual succession, the right to take and hold property and the right to sue and be sued in the corf orate name, and, -second, to have vested in the new corporation all the existing assets devoted to theological education; but whether or not these conclusions are correct, neither the complaint, the statutes nor the documentary evidence demonstrates the plaintiff’s right to the assets. The -Special Term’s opinion seems erroneously to assume that because the school remains a department of the university -it cannot simultaneously enjoy a separate existence, corporate or otherwise, sufficient to entitle it to hold and retain the assets in question. On the present appeal it is not necessary to finally determine the corporate issue.

Since the plaintiff is not entitled to hold the assets involved in thi-s proceeding, it is not entitled to the relief requested in the complaint.

In regard to the reversion contained in the deed as set forth in the complaint, the rights of the parties may be determined in a proceeding pursuant to the Real Property Actions and Proceedings Law.

Both parties correctly assert that the action and the motion involve only questions of law and neither party disputes the authenticity of the official documents submitted on the motion.

The judgment should be reversed, on the law and the facts, and the complaint dismissed for failure to state a cause of action, without prejudice to such further proceedings as the plaintiff may be so advised.