Hansel v. Purnell

• Decision Date: 16 July 1924
• Docket Number: No. 4010.,4010.
• Citation: 1 F.2d 266
• Parties: HANSEL et al. v. PURNELL et al.
• Court: U.S. Court of Appeals — Sixth Circuit

1 F.2d 266 (1924)

HANSEL et al. v. PURNELL et al.^*

No. 4010.

Circuit Court of Appeals, Sixth Circuit.

July 16, 1924.

W. J. Barnard, of Paw Paw, Mich., for appellants.

Walter M. Nelson, of Detroit, Mich. (Dilley, Souter & Dilley, of Grand Rapids, Mich., on the brief), for appellees.

Before DENISON and DONAHUE, Circuit Judges, and TUTTLE, District Judge.

DONAHUE, Circuit Judge.

In 1902-03, Benjamin Franklin Purnell, commonly known and generally referred to as "Benjamin," caused to be copyrighted, printed, and published certain of his writings, consisting of four volumes, called "The Star of Bethlehem," "Seven Books of Wisdom," addressed on the cover page "To the Twelve Tribes of Israel Scattered Abroad," and a great number of pamphlets, among which were "The Little Book," "The Key of the House of David," "The True Light," "What is the Soul?" "Where Did Cain Get His Wife?" These publications proclaimed Benjamin as the "Seventh Angel Messenger, the second child of the son of man who comes with the Seventh Key to unlock the mysteries of godliness — God manifest in the flesh, through whom are revealed the sealed scriptures and Israel, the elect, are to be gathered together and their bodies prepared to receive the Kingdom of God."

The "ingathering," which proposed to include Israel's 144,000, began in 1903, on a tract of land near Benton Harbor, Mich., secured for that purpose by Benjamin and his wife, Mary. In 1903 the Israelite House of David was organized as an ecclesiastical corporation under the laws of the state of Michigan. In 1907, upon objection by the state of Michigan that the corporation was more of a business enterprise than a religious organization, this corporation was dissolved and the Israelite House of David was organized as a voluntary religious association. At the time of the trial of this cause there were approximately 800 members and the association had accumulated a large amount of property, the title to which is in Benjamin and Mary.

The faith of the Israelite House of David is based upon the publications above mentioned, all of which purport to be Benjamin's interpretation of the Christian Bible. A number of pamphlets were published from time to time, and there is also published a monthly paper, called "Shiloh's Messenger of Wisdom." All of these publications contain further explanations of the faith and rules governing the conduct of members in matters both temporal and spiritual. All persons becoming members of this association are required to sign its articles of faith and membership agreement, to deliver and transfer to Benjamin and Mary the title to all of their property and effects and to perform labor for the benefit of the community without compensation.

About 1909, John and Margaret Hansel obtained from interested persons some of this literature of the House of David and afterwards entered into correspondence with its home office. They continued to read this literature for several years, and in April of 1912 they went to the House of David with five of their children, one of their sons being already there. Three of these children were of the age of eight and under. After they were in the House of David for about three weeks, they accepted the faith, signed the membership agreement, and transferred to Benjamin and Mary title to all of their property and effects, amounting in the aggregate to about $5,610.27. One lot in Oklahoma so transferred by the Hansels was estimated to be of the value of $792.81, but the title thereto had previously been forfeited for nonpayment of taxes. After they became members, John and Margaret Hansel and their minor children were required to perform, and did perform, services for the benefit of the community for which they received no compensation other than food, shelter, and clothing. Their children were also educated in the schools maintained by the House of David. The Hansels continued as members of this community until December 28, 1920.

In October, 1921, John and Margaret Hansel filed in the District Court their bill of complaint, and later an amended bill, in which they averred that they had been induced to become members of this association through fraud and fraudulent representations, and that they were wrongfully expelled therefrom, and asked that all instruments in writing executed by them be canceled, set aside, and held for naught, and that they recover the value of the property transferred by them to Benjamin and Mary, and the value of their services and the services of their minor children during the time they were members of this colony.

The defendants, Benjamin Franklin Purnell, Mary Purnell, his wife, the Israelite House of David, and all of the members of the association represented by them filed an answer and cross-bill, and an amendment thereto, denying all allegations of fraud and fraudulent representations and that plaintiffs were wrongfully expelled from the society. The defendants further aver that at the time the Hansels left this community and for and in consideration of $100, transportation for their entire family to Nashville, Tenn., and the return of John Hansel's carpenter tools, the plaintiffs executed in writing a release of all of their rights and interests in and to the community property or compensation for labor performed by them, or either of them, or their minor children, and that plaintiffs, by their conduct and contracts, are estopped from claiming any rights or interest in said property. It is further averred that shortly before the plaintiffs left the House of David they entered into a conspiracy against these defendants, and that this action was brought by plaintiffs in furtherance of that conspiracy. The defendants pray for a decree upon their cross-bill, quieting their title to the property and for an order and decree enjoining plaintiffs from committing any depredations, from molesting defendants in the peaceable possession thereof, and from further circulating defamatory statements and falsehoods of and concerning them. The defendants also filed a motion to dismiss for want of federal jurisdiction and for want of equity, which motion was overruled by the trial court and exceptions noted.

The plaintiffs, by reply, deny all averments of misconduct on their part, and further aver that the paper purporting to be a release was not signed by Margaret Hansel, and that John Hansel was compelled to sign the same by threats of personal violence and malicious prosecution.

On the trial of this case the District Court found upon the issues so joined for the plaintiffs and entered a decree canceling all of the instruments in writing executed by the Hansels to or with the House of David, and upon accounting assessed the amount due to the plaintiffs from the defendants in the sum of $24,078.08, from which decree the defendants have appealed.

The bill of complaint and the amendment thereto aver diversity of citizenship and that the suit involves claims and property rights in excess of $3,000, exclusive of interest and costs. For this reason the motion to dismiss for want of federal jurisdiction was properly overruled.

Even if it appeared, as claimed by defendants, that the plaintiffs have an adequate remedy at law, the cause should not be dismissed for that reason, but, on the contrary, transferred to the law side of the court. In this case, however, the defendants, in their cross-bill, invoke the equity jurisdiction of the court in relation to the same transactions to which the plaintiffs' bill of complaint is directed, and pray for equitable relief. The defendants, having invoked the equity jurisdiction of the court, cannot now be heard to deny its jurisdiction.

Nor does it appear that the plaintiffs have a full and adequate remedy at law. The plaintiffs' action is based upon fraud and fraudulent representation. These subjects are peculiarly within the jurisdiction of equity. Not only that, but it further appears from the pleadings and the evidence that a confidential and fiduciary relation existed between the Hansels on the one part, and Benjamin and the House of David on the other, which required each to make full disclosure, and in such case equity will intervene for the protection of one who has been wronged by failure of the other to make such disclosure. Wright v. Hake, 38 Mich. 525; Wyckoff v. Sewing Machine Co., 43 Mich. 309, 5 N. W. 405.

It also appears from the pleadings and the evidence that the Israelite House of David claims to be a voluntary religious association. If this claim be true, it holds this property in trust. It is the peculiar province of a court of equity to protect such trust funds and prevent their diversion from uses other than the purposes of the trust, either by the trustee or some other person seeking to divert it to his own use. Hundley v. Collins, 131 Ala. 234, 32 South. 575, 90 Am. St. Rep. 33.

Aside from these considerations, the plaintiffs had the right to invoke the aid of a court of equity to cancel and set aside the written contract of membership, which they aver they were induced and procured to sign through fraud and misrepresentation, not only for the purposes of this case, but also as a protection to plaintiffs from creditors of the voluntary association. Where the jurisdiction of a court of equity is properly invoked, it will, to avoid a multiplicity of suits, proceed to an accounting and final adjudication.

The Israelite House of David is a voluntary association. As such it is a distinct entity, and may sue or be sued in the federal court. United Mine Workers et al. v. Coronada Coal Co. et al., 259 U. S. 344, 42 Sup. Ct. 570, 66 L. Ed. 975, 27 A. L. R. 762. The Israelite House of David, as such separate entity, joined in the answer and cross-bill with the other defendants, and this pleading was verified by Francis Thorpe, trustee. For this reason the Israelite House of David was properly in court and subject to its jurisdiction in this action.

The bill...