Gethsemane Lutheran Church v. Zacho
| Decision Date | 07 November 1958 |
| Docket Number | 37500,Nos. 37473,s. 37473 |
| Court | Minnesota Supreme Court |
| Parties | GETHSEMANE LUTHERAN CHURCH, Respondent, v. Leo J. ZACHO and Alice K. Zacho, Respondents. George T. ZACHO, defendant and third-party-plaintiff, Appellant-Respondent, v. LUTHERAN HIGH SCHOOL ASSOCIATION OF GREATER ST. PAUL and Paul M. Krause, third-party-defendants, Respondents, and Victoria Johnson and June Brasted, Intervenors, Respondents-Appellants. |
Syllabus by the Court
1. In a suit for specific performance of a contract to convey real estate where the owner of the legal title alleged that due to mistake, inadvertence, or misconduct the contract failed to embody the true terms of the agreement between the owner of the real estate and the vendee in the contract and seeks reformation of the contract so as to embody the true terms of the agreement, under the facts in this case, questions of fact are presented which require trial by the court. In such case it is error to grant summary judgment. Questions of fact also exist as to whether the vendee in the contract and its assignee are bona fide purchasers for value without notice of equities existing in favor of the owner of the legal title.
2. Ordinarily, where parties to litigation stipulate as to what the facts are, all parties to the stipulation, as well as the courts, are bound by the stipulation until it is abandoned. In such case, the stipulation takes the place of evidence, but, where the parties at the trial abandon such stipulation and proceed to try the case, they are bound by the results of the trial.
3. Under Rule 15.02 of Rules of Civil Procedure, where issues are litigated by express or implied consent of the parties, they are treated the same as if they had been raised by the pleadings.
4. In this case, the question of whether intervenors had capacity to sue was litigated by consent, and the evidence sustains the court's findings that they did not have such capacity and could not maintain their action.
5. Membership in a church or religious order stands on a somewhat different basis from membership in other voluntary societies formed for business, social, or other nonreligious purposes. The courts should be reluctant to hold that a religious order is estopped to deny the capacity of an individual to maintain an action against it where the evidence is clear that such individual could not claim membership in such religious order.
Thomas Malone, St. Paul, for intervenors, respondents-appellants.
William W. Essling, St. Paul, for third-party plaintiff-appellant-respondent.
Fred N. Peterson, St. Paul, for plaintiff-respondent and third-party defendantants-respondents.
George L. Siegel, St. Paul, for defendants-respondents.
This case originally was commenced as a suit for specific performance of a contract to purchase some 22 acres of land in Ramsey County. Defendant George T. Zacho, by a third-party complaint, brought the Lutheran High School Association of Greater St. Paul, a corporation (which will be referred to hereinafter as the association), and Paul M. Krause into the action and sought reformation of the contract. Thereafter, Victoria Johnson and June Brasted were permitted to intervene in the action. The court granted summary judgment for plaintiff in the action to quiet title on the ground that no genuine issue of fact was in dispute, and, after a trial, intervenors' action was dismissed on the ground that they had no capacity to sue. Separate appeals have been taken by George T. Zacho and intervenors.
To test the propriety of the order granting summary judgment, it must be assumed that the facts alleged by George T. Zacho are true and can be proved upon trial. He alleges that his mother, Margaret Zacho, was the owner of the property involved in this action and other real estate. She was somewhat incapacitated, and it was difficult for her to get around, so on December 4, 1948, she conveyed the property she owned to her son Leo J. Zacho solely for the purpose of facilitating the easy conveyance of such property as parcels thereof were sold. The deed to Leo J. Zacho was absolute on its face and did not show that he was acting as agent or trustee for Margaret Zacho.
Subsequent to this conveyance, negotiations occurred between Margaret Zacho and Paul M. Krause, who was the pastor of plaintiff church, which is affiliated with the Missouri Synod, relative to the purchase of a part of Margaret Zacho's land for the purpose of erecting thereon an all-Lutheran high school. Mrs. Zacho was not a member of the Missouri Synod church, nor are any of the Zachos mentioned in this litigation. Subsequent to these negotiations, the association was incorporated in June 1949. The purpose for which this corporation was organized, as stated in its constitution and bylaws, is as follows:
'The purpose of this Association shall be to own or rent, control, manage and maintain an accredited Junior-Senior High School in the County of Ramsey, State of Minnesota.'
Membership in the association was limited by Article III of its constitution as follows:
'Section 1--Any communicant member, in good standing, of a Lutheran Church which adheres to all the canonical books of the Old and the New Testaments as the inspired Word of God and the following Symbolical Books as a true and sound exposition of the Word of God:
'a) the three Ecumenical Creeds, viz., Apostolic, Nicene, Athanasian
'b) the Unaltered Augsburg Confession
'c) the Apology of the Same
'd) the Smalcald Articles
'f) the Formula of Concord, A.D. 1580 may become a member of this Association by contributing an annual sum as determined by the Association.
'Each member shall have the right to vote and to hold office. Such membership shall cease when the individual loses his communicant status in the Lutheran Church or when such individual fails to make annual contributions to the Association.
Paul M. Krause, who then was the pastor of plaintiff church, was named as a member of the first board of directors and as the first president of the association. The first corporate act of the association was to execute the contract for deed involved in plaintiff's suit for specific performance under which it agreed to purchase about 22 acres of Margaret Zacho's land. The contract was executed by Leo J. Zacho and his wife as vendors, acting as agents for Margaret Zacho. The contract contains the following provisions, among others:
'(2) That no part of said described land shall be used by said party of the second part (the association), its successors or assigns, for any other than religious, educational and recreational purposes in connection therewith, for a period of twenty-five (25) years;
'(3) That whenever any part of said land is set aside by said party of the second part, its successors or assigns, for use exclusively as a field for recreational purposes, such recreational field shall be known, designated and dedicated by said party of the second part, its successors or assigns, as the Zacho Field;
'(4) That during said period of twenty-five years no part of said land shall be used or permitted to be used by said party of the second part, its successors or assigns, for any commercial purposes, except that said party of the second part may, at its option, renew any signboard or root beer stand lease now in force and effect.'
The agreed consideration for the premises was $18,000, payable $400 upon the execution of the contract and the balance, without interest, in monthly installments of not less than $10 per month, commencing November 1, 1949.
It is claimed by George Zacho that the contract failed to include a provision that the land must be used for an all-Lutheran high school, as had been agreed upon between Margaret Zacho and Paul M. Krause, and that Mrs. Zacho had no knowledge of the fact that this provision had been omitted from the contract until some 3 years later when she had the contract examined after she began to wonder why a school had not been commenced on the premises. It is claimed that the land was worth much more than it was sold for and that Mrs. Zacho donated a part of the value of the property to the association in order that an all-Lutheran high school might be built thereon. It is conceded that the land is now worth much more than the purchase price.
Apparently it became impossible for the association to build a high school open to Lutherans of various synods for the reason that dissension arose between those originally interested in such a high school on the question of whether the school should be open to all Lutherans. As a consequence, unsuccessful efforts were made to transfer the land to some other Lutheran body who would build a high school. Thereafter the property was offered to plaintiff under the terms of a letter reading as follows:
'Whereas the Lutheran High School Association has made an offer of its property to congregations of the ALC, which offer was not accepted, and
'Whereas a like offer was made to congregations of the Lutheran Church--Missouri Synod, which offer was withdrawn when the Association failed to receive a reply after a period of eleven months, and
'Whereas it is the desire of the Association to see its present site used for the church and its work as early as possible
'Therefore in meeting on November 29, 1954 the Association resolved to make a similar offer to Gethsemane Lutheran Church and empowered its Board of Directors to formulate the details and conditions which follow:
'1. That the property is to be used for the church and...
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