Associate Alumni v. General Theological Seminary

1. Creation of Trust. A fund of money tendered by one and accepted by another under certain conditions creates a valid trust, and the trustee is obliged to apply the fund according to the conditions. 8. Estoppel of Trustee. One receiving a fund as trustee is estopped from denying the donor’s title or interest therein. 3. Agency. The fact that the alumni association of a college, which had passed resolutions to raise a fund to establish a professorship, applied to such college for its sanction, which was granted by resolution of the board of trustees that “this board * * hereby recognizes them as agents accordingly, and earnestly commends their agency to the confidence and liberality of the church,” would not entitle the college to the fund as principal. 4. Voluntary Association—Transfer of Rights to Corporation. A resolution passed unanimously at an annual meeting of a voluntary association in favor of incorporation, and the appointment of a committee to take the necessary proceedings for that purpose, and which finally resulted in incorporation, is sufficient to transfer all the rights of the voluntary association to the corporation.

Action by the Associate Alumni of the General Theological Seminary of the Protestant Episcopal Church of the United States of America against the General Theological Seminary of the Protestant Episcopal Church of the United States to recover possession of a fund held by defendant as trustee for plaintiff. Submitted upon facts admitted! under the provisions of Code Civ. Proc. § 1279. The defendant is an educational institution devoted particularly to preparing students for the ministry. It received a charter from the legislature of this state in 1882, which was amended in 1868. Its government under the charter, as amended, is vested in a board of trustees, whose authority in turn is, during a recess of the board, delegated to a standing committee. In 1832, certain of the alumni of the defendant organized a voluntary unincorporated association under the name of the Associate Alumni of the General Theological Seminary of the Protestant Episcopal Ohurch of the United States, the object of which was “to cherish a spirit of mutual interest and union among its members, to advance the cause of theological learning and evangelical truth and piety, and to promote the advantage of "the institution” from which its members had graduated. It adopted a constitution, which recited the object of its creation, and provided that all graduates of the defendant should be eligible as members, and that the funds of the association, among other things, should be “appropriated to the support of one or more scholarships in the seminary.” In 1836 it appointed a committee to take into consideration the expediency of attempting to establish a permanent fund for one of the professorships in the seminary, not then endowed, and at a meeting held the following year it passed a resolution pledging itself to the work of establishing, “as soon as the times will permit,” a professorship of pastoral theology and pulpit eloquence. Shortly thereafter the first contribution to the fund which is the subject-matter of this controversy was made by a subscriber paying $250 into the treasury of the association. In 1839, the association passed a resolution reciting that, in its opinion, it was highly important that the professorship in question should be endowed forthwith, and that, as it had expressed a readiness to assume the responsibility of making an effort in that direction, it requested the approval of the defendant’s trustees of its work “for the endowment of the above-mentioned professorship.” This action of the association was communicated to defendant’s board of trustees, and such board immediately passed a resolution expressing its pleasure at the continued disposition of the association to engage as agents for the purpose of raising the fund, and declaring that it recognized them “as agents accordingly, and earnestly commends their agency to the confidence and liberality of the church.” The association then applied itself actively to the work of raising the requisite sum. Contributions were made to it from time to time until 1883, when the total amount which it had received, together with the interest thereon, amounted to upwards of $25,000. In the meantime the professorship first considered had been endowed by an individual, and that professorship, with the consent of both parties, was abandoned, and another, “to be known as the ‘Alumni Professorship of the Evidences of Revealed Religion,’ ” substituted in its place. In 1883 the fund held by the association was deemed sufficient by both parties to accomplish the desired object, and at its annual meeting held in May of that year the association offered the fund to the trustees of the defendant upon certain prescribed conditions, which the defendant agreed to. A few days later the Alumni Association transferred the fund, then amounting to $25,476.85, to the defendant, which the defendant formally accepted upon the terms offered, and amended its statutes to provide for the professorship thus created. The following are the terms and conditions upon which this fund was offered and accepted by the defendant: “(1) That the professorship be designated as the ‘Alumni Professorship of the Evidences of Revealed Religion.’ (2) That such professorship shall be tenable for a period of three years, at or before the expiration of which term, or upon any other avoidance of the office, some other person than the retiring professor shall be nominated and elected. (3) That the duties of the professorship shall be limited to the delivery of lectures extending over a period of three months in each year, the professor not being required to be resident, and not to be a memher of the faculty. (4) That the right of nomination on the expiration of the term of the professor, or other occurrence of a vacancy, shall forever belong to the Associate Alumni, and be exercised by them according to such rules as may be from time to time adopted by them. (5) That the entire income of the endowment, and of such additions as may in future be made to it, shall be paid to the professor, or, in case of a vacancy, be added to the endowment, provided that, in case of a vacancy, the standing committee may, with the consent of the Associate Alumni, or of their executive committee, appoint an acting professor, and assign to him the whole or a part of the income of the endowment as a compensation for his services. (6) That a statement of the amount of the fund, its investments, and disposition of its income, be annually furnished to the Associate Alumni by the standing committee of the seminary. (7) That these conditions may at any time be altered by the joint action of the trustees of the seminary and of the Associate Alumni.” In May, 1884, Dr. Dean was nominated by the association to he the first incumbent of the professorship thus endowed, and he was unanimously elected by the defendant for a term of three years. During Dr. Dean’s term, however, the conditions imposed by the association became irksome to the defendant, and it thereupon entered into negotiations with the association to secure, if possible, its consent to the modification of the conditions. For this purpose a committee was appointed by the defendant, and a committee also appointed by the association. Various conferences took place between the committees, but finally they agreed upon a modification, which they submitted to the respective bodies they represented, in the form of a joint report. The modification recommended was that at the expiration of the term of the then incumbent the professorship should 'become a regular professorship. The report also urged the association to resume its work of soliciting further subscriptions, to the end that the fund might be increased to the siim of 850,000, which would be sufficient to maintain a regular professorship. This report was satisfactory to the defendant, but-not to the association, and it never adopted or approved of it. It directed that the consideration of it be ‘‘postponed until the next meeting of the Alumni Association.” This disposition of the report was due to the fact that no action had been taken, by the defendant on the nomination made by the association, the year before, of Dr. Hopkins, to succeed Dr. Dean. Shortly thereafter the defendant acted upon the nomination of Dr. Hopkins, and he was rejected, and the association then nominated Dr. Cady, and in October, 1890, he was elected by the trustees of the defendant. At its annual meeting in 1891 the Alumni Association passed a resolution modifying, if the defendant concurred, the conditions attached to the professorship fund, to the extent of making the incumbent eligible for reelection. This action of the association was communicated to the defendant, but it took no action in the matter except to refer the consideration of the resolution to its standing committee. The year following, the association nominated for the professorship Dr. Cady, if the defendant consented to the modification of the conditions attached to the office proposed by the association the year before, and. if it did not consent to such modification, then it nominated Dr. Dix. The defendant then, for the first time, refused to act upon the nomination of a temporary professor, upon the ground that the conditions attached to the office were modified in 1888, so as to create a permanent professorship. It then requested the association to nominate some person for permanent professor, which the association declined to do. The defendant then directed that the income from the fund be accumulated, and added to the principal until the association should nominate a permanent professor. This is the situation at the present time. The Alumni Association, at its annual meeting in June, 1889, directed a committee then appointed for the purpose to take the necessary steps to incorporate the Alumni Association, and, in obedience to that direction, the plaintiff was incorporated in November following, under the same name that the association had theretofore borne. Immediately following the incorporation, the trustees named in ihe certificate of incorporation met and organized by the election of officers, and then proceeded formally to elect to membership in the corporation, by name and individually, every member of the Alumni Association who was in good standing at the time of the incorporation; and the following year all persons who were members of the Alumni Association at the time of the filing of the articles ■of incorporation were formally declared members of the plaintiff. The plaintiff has instituted these proceedings to procure a judgment and a decree o£ this court (1) declaring the defendant’s conduct with reference to the tenure of this professorship to he a breach o% trust; and (2) directing the defendant to take action upon a nomination made by plaintiff, now pending, and, if it fails to do so within the time fixed, that it ¡surrender and deliver to the plaintiff the trust fund. The proceeding is resisted by the defendant mainly upon three grounds: (1) That there has been no breach of trust, because the condition imposed by the Alumni Association as to the election of a professor for only three-years was modified in 1888, and in place thereof a regular professorship substituted, and the delay in filling that position is due entirely to the failure of the plaintiff to make a nomination; (2) that the plaintiff has no interest in the fund; (3) that the plaintiff did not succeed to the rights of the unincorporated association, and therefore is not the real party in interest.