Allgood v. Bradford

• Decision Date: 10 July 1985
• Docket Number: No. 54810,54810
• Citation: 473 So.2d 402
• Parties: Grover ALLGOOD, et al., .
• Court: Mississippi Supreme Court

Page 402

473 So.2d 402

Grover ALLGOOD, et al., [Presbyterian Church of America, of Columbus, MS.] v. Mrs. Irwin BRADFORD, et al., [Palmer Home for Children].

No. 54810.

Supreme Court of Mississippi.

July 10, 1985.

L.F. Sams, Jr., Mitchell, McNutt, Bush, Lagrone & Sams, Tupelo, for appellants.

Roy D. Campbell, Jr., Campbell & DeLong, Greenville, for appellees.

Before ROY NOBLE LEE, P.J., and HAWKINS and SULLIVAN, JJ.

SULLIVAN, Justice, for the Court:

I.

The estrangement in the early 1980's between a Columbus, Mississippi, church and an orphanage presents this Court with the task of reviewing their 90-year relationship to determine who are the "members" of the orphanage, a non-profit corporation, who must approve amendments to the corporate charter--the officers of the church, or the board of trustees of the orphanage. Our decision is guided by the statutes, the charters, by fundamental legal differences between business, non-profit and charitable corporations and the exercise of the rights of membership thereof. It should not be read as an endorsement of the prevailing parties', or disparagement of the non-prevailing parties', ability and commitment to fulfill the admirable charitable goals of the orphanage which until recently both have cooperated to achieve.

This action originated when appellees, trustees of Palmer Home for Children, a non-profit corporation, filed suit for declaratory and injunctive relief to determine which of two amendments to the Palmer corporate charter was valid.

In 1981, appellees, Trustees of Palmer Home for Children, a Mississippi non-profit corporation, amended the Palmer charter to take out a provision granting to appellants, Officers of the Presbyterian Church of Columbus, the right to elect the Palmer trustees. Also taken out was a provision that the trustees held the Palmer assets in trust for the benefit of the Columbus church. In response, appellants, the governing body of the church, amended the Palmer charter in 1982 to reinstate the election and trust provisions. Appellants elected a new board of trustees and took steps to oust the appellees and take over management and control of Palmer Home for Children.

Appellees then filed an action in the Chancery Court of Lowndes County to declare the 1981 charter valid and the 1982 charter void, and to enjoin the appellants from interfering with the operation of Palmer Home. Appellants' answer asserted that the 1981 charter unlawfully revoked the trust relationship and right to elect trustees that had been recognized in all pre-1981 Palmer charters. Appellants asked the court to declare valid the 1982 charter which restored these provisions, and to rule that the appellants were the lawful trustees of Palmer.

After a two-day trial, the court rendered an opinion in favor of the appellees. The chancellor ruled that the appellees, as members of the Palmer Board of Trustees, possessed the authority to amend the corporate charter. The chancellor also found that the appellees were such members as contemplated by statute who must certify a resolution for an amendment to the corporate charter. The chancellor ruled that the 1981 charter was valid and the appellees were the lawful trustees of Palmer. The 1982 charter was held to be void and the appellants not the legal trustees. The chancellor enjoined the defendants from interfering in any way with the appellees' performance of their duties to Palmer. The appellants' counterclaim was dismissed.

On appeal, the appellants assert the chancellor erred in:

A. Ruling that they were not the members of the Palmer corporation as contemplated by statute;

B. Upholding the 1981 charter which divested appellants of voting rights without their consent;

C. Upholding the 1981 charter although it divests the church of an equitable interest as a beneficiary of an express trust;

D. Failing to sustain appellants' counterclaim for breach of contract;

E. Failure to estop the appellees from denying the appellants' authority to elect trustees; and

F. Refusing to admit into evidence a written history under the "ancient document" exception to the hearsay rule.

II.

FACTS

a. Parties

The First Presbyterian Church of Columbus, Mississippi, was incorporated by act of February 8, 1838 (1838 Miss.Laws at 107-08). After the Civil War, the church became part of the Presbyterian Church in the United States (PCUS). The organization of the Presbyterian Church consists of a series of hierarchical church courts. The four echelons are (1) the Session at the local church level; (2) the Presbytery covering a designated geographical area and a number of local churches; (3) the Synod, including a larger geographical area, and a number of Presbyteries; and (4) the General Assembly, embracing all Synods.

Doctrinal differences which arose in 1970 within PCUS resulted in a permanent division of what had been "the First Presbyterian Church in Columbus", affiliated with PCUS. In a compromise agreement, the dissident majority retained the legal entity incorporated by act of the legislature in 1838, and became affiliated with the Presbyterian Church in America (PCA). The minority, loyal to PCUS, conveyed its interest in certain real and personal property to the majority, and took the name "First Presbyterian Church U.S. of Columbus." The appellants are the members of the Session of the First Presbyterian Church of Columbus (PCA).

By a charter dated 1895, the Palmer Orphanage, renamed Palmer Home for Children in 1977, was brought into being as a corporation whose original purpose was "to support, rear, train, discipline, maintain and educate white orphans, or children of reputable parents, one of whom is dead." Palmer Home is located on the southern edge of Columbus on a 120-acre tract, with six cottages, a large administration building, a director's residence, a gymnasium, and other outbuildings. In 1982, Palmer Home took in over $650,000 in contributions from churches and individuals. The appellees are the trustees of Palmer Home for Children, all of whom have been elected and serving as trustees prior to 1981.

b. Origin of Palmer Home

On July 17, 1894, the Session of the Columbus church approved the suggestion of their pastor to establish an orphanage within the bounds of the Synod and resolved to aid in promoting the enterprise. The next day, the elders and deacons agreed to cooperate.

The preliminary minutes for August 31, 1894, showed that the following resolution was adopted:

RESOLVED: That we, the elders, deacons, and trustees of the Columbus Presbyterian Church whose names are hereunto signed hereby organize ourselves into a board of trustees to found an orphanage in the city of Columbus, Mississippi.

The preliminary minutes reflect the solicitation of community wide efforts to raise funds involving committees of other local churches, including Cumberland Presbyterian, Methodist, Baptist, Christian, Episcopal, and Catholic churches, the Jewish Synagogue, and persons who were not members of any church.

The Palmer Orphanage charter of incorporation approved March 12, 1895, contains in section 1 the above-quoted purpose for creation. Section two names eighteen persons as the incorporators. Section three is a general powers provision granting rulemaking power and the power to acquire or dispose of rights in the corporation. No provision defines who are the members of the corporation or how trustees are to be elected.

In 1897, the first of fifteen conveyances of land to the Palmer Home was made. The grantee in each instance is the corporation Palmer Orphanage, except in two 1961 deeds where the grantees are listed as certain named trustees for Palmer Orphanage, and their successors in office.

c. Expansion

By 1902, Palmer Orphanage was in financial straits. The minutes of May 19, 1902, reflect that the Palmer trustees resolved to tender the orphanage to the Synod of Mississippi, upon condition that it not be removed from Columbus as long as it is an orphanage. A committee was appointed to meet with the Synod and report to the trustees after the meeting.

The November, 1902, minutes of the Synod of Mississippi, held in Columbus, report that the Palmer board of trustees submitted and the Synod accepted the following proposal:

The Palmer Orphanage agrees, in consideration that the Synod of Mississippi will assume the responsibility incident to the support, maintenance and perpetuity of the Palmer Orphanage in all the purposes aims and hopes of said Orphanage to sell; transfer and convey to the Synod of Mississippi an undivided two-thirds interest in and to all the real and personal property owned by said Palmer Orphanage, with the real and personal property owned by said Palmer Orphanage, with the right on the part of the Synod to elect six Trustees; the officers of the First Presbyterian Church of Columbus, Miss. (Elders, Deacons and Trustees), in joint session shall elect three Trustees; these creating a Board of nine Trustees, in whom will be vested all the necessary powers for controlling, managing, guiding and governing the said Orphanage, its properties, real and personal, and its officers, and internal affairs in all its ramification and detail.

The First Presbyterian Church of Columbus, Miss., is to retain the remaining undivided one-third interest, together with the right to elect as aforesaid one-third of said Board of Trustees; with the further reservation and restriction accompanying the grant of said two-thirds interest that the site of the Palmer Orphanage shall not be removed from the city of Columbus, unless it shall be with the unanimous consent of the three Trustees who may be on the Board of Trustees representing the said church who may be chosen as aforesaid, if the number of Trustees shall hereafter be increased above the number nine as specified.

The November 24, 1902, minutes of the Palmer board of trustees reflect that an amended charter was read and adopted by vote. Three trustees were...