E. Henry Wemme Co. v. Selling

• Decision Date: 29 December 1927
• Citation: 262 P. 833,123 Or. 406
• Parties: E. HENRY WEMME CO. v. SELLING ET AL.
• Court: Oregon Supreme Court

262 P. 833

123 Or. 406

E. HENRY WEMME CO. v. SELLING ET AL.

Supreme Court of Oregon

December 29, 1927

In Bank.

Appeal from Circuit Court, Multnomah County; Louis P. Hewitt, Judge.

Action by the E. Henry Wemme Company against Ben Selling and others as trustees of E. Henry Wemme Endowment Fund, and others. From a decree denying relief, plaintiff appeals. Affirmed.

McBride J., dissenting.

Thomas Mannix, Thomas G. Greene, and Martin L. Pipes, all of Portland, for appellant.

E. V. Littlefield of Portland (Joseph, Haney &amp Littlefield and John C. Veatch, all of Portland, on the brief), for respondents.

BROWN J.

This suit is prosecuted by E. Henry Wemme Company, a corporation, for the purpose of acquiring possession and title to the property of a charitable trust created by the will of E. Henry Wemme and declared as such by this court. See Wemme v. First Church of Christ, Scientist, of Portland, 110 Or. 179, 219 P. 618, 223 P. 250.

The history of the litigation involving the construction of the will of E. Henry Wemme is substantially as follows:

On June 13, 1922, August Wemme, Julius Wemme, Paulina Grohmann, Anna Schubert, and Johann Wemme brought suit in the circuit court of Multnomah county, Or., against the First Church of Christ, Scientist, of Portland, Or., and five other Scientist churches of Portland, in which they prayed for an accounting for all moneys and properties coming into their hands by virtue of their control of the stock of the E. Henry Wemme Endowment Fund, a corporation, and that the defendants be required to turn over all property of the E. Henry Wemme Endowment Fund, including the stock thereof, to plaintiffs; for the appointment of a receiver pending the suit; and for further relief as the facts might admit. On July 10, 1922, the plaintiffs filed an amended complaint against the First Church of Christ, Scientist, of Portland, Or., and four other Scientist churches of Portland, and made the E. Henry Wemme Endowment Fund of Portland, Or., a party defendant. On October 19, 1922, the plaintiffs filed a second amended complaint, naming as parties defendant the six Scientist churches of Portland, the E. Henry Wemme Endowment Fund, and the Attorney General of Oregon. The defendant churches and the E. Henry Wemme Endowment Fund filed a joint answer. The Attorney General, answering, intervened and asked that the trust created under the Wemme will be declared to be a public charity, and that the testator's bequest and declaration be carried into effect and the charity perpetuated. From the decision denying the relief prayed for, an appeal was taken by the Attorney General, August Wemme, Julius Wemme, Paulina Grohmann, Anna Schubert, and Johann Wemme, and E. Henry Wemme Company, of Portland, Or., upon all questions arising from the transcript. On October 23, 1923, this court, by its opinion, decided and determined the nature and character of the charity created by the will of E. Henry Wemme, and ascertained and declared the then present and visitorial authority for administering that trust, and by the mandate issued out of this court as a result of the decision, it was ordered and directed:

"That the purpose for which the testator devised his property was to have the E. Henry Wemme Endowment Fund carry on the particular charity designated as a maternity home or lying-in hospital; that the testator, E. Henry Wemme, intended to impose an absolute liability upon the defendant churches to maintain such maternity home, until some time when that form of charity would be less beneficial to humanity than some other form; that the contingency has not yet arisen. * * *

"It is therefore considered, ordered, and decreed that this cause be remanded to the court below, from which this appeal was taken, with directions to appoint not less than three nor more than five competent and qualified trustees, to take over all of the property of the E. Henry Wemme Endowment Fund, and to administer the trust, and to require the defendant churches to account for all moneys and properties belonging to the E. Henry Wemme Endowment Fund that have come into their hands or possession."

It was further directed that the lower court "ascertain and determine the reasonable compensation which should be paid to the attorneys, * * * and to cause the same to be paid from the trust estate."

For the opinion in the case, which contains a copy of the will, see Wemme v. First Church of Christ, Scientist, of Portland, 110 Or. 179, 219 P. 618, 223 P. 250. For later decisions of the court, treating the fund in question as a charitable trust, and awarding compensation for its salvage, see Wemme v. First Church of Christ, Scientist, 111 Or. 386, 227 P. 277, and Wemme v. First Church of Christ, Scientist, 115 Or. 281, 237 P. 674. This plaintiff's interest arises from paragraph 8 of the will of E. Henry Wemme, wherein it is made residuary legatee. The plaintiff company was incorporated for $100,000 during Wemme's lifetime, and its stock divided into 100 shares, of the par value of $1,000 each. This stock was originally owned by Wemme, who died in 1914, and left 92 per cent. thereof to his relatives, then residing in Germany. Under the will, August Wemme received 22 shares, Julius Wemme 20 shares, Paulina Grohmann 20 shares, Anna Schubert 22 shares, and Johann Wemme 8 shares. Following the entry of the United States into the World War, this stock was seized by the Alien Property Custodian under the provisions of the "Trading with the Enemy Act (U. S. Comp. St. §§ 3115 1/2a-3115 1/2j)."

Being dissatisfied with the decision of this court holding that the above-described property, known as the E. Henry Wemme Endowment Fund, constituted a charitable trust, Howard Sutherland, as Alien Property Custodian for the United States of America, and this plaintiff, E. Henry Wemme Company, a corporation, instituted a suit in the federal court against Ben Selling, Dr. Allen F. Noyes, Edgar H. Sensenich, Irene Gerlinger, and Oscar C. Bortzmeyer, as trustees of the E. Henry Wemme Endowment Fund created by the terms of the will of E. Henry Wemme, praying for a decree against the trustees, and requiring them to account for all the property received by them under the decree of this court hereinbefore referred to; for injunctive relief against the trustees; that a trust be declared in favor of the plaintiffs, on the ground of a lapsed devise; and "that the judgment of the state court of Oregon and all acts by the public trustees appointed in its behalf thereunder by the court be declared, in so far as it divests the E. Henry Wemme Company of the assets of the E. Henry Wemme Endowment Fund under clause 8 of the will, null and void and in contravention of the Fourteenth Amendment to the Federal Constitution and the due process of law clause thereof." The defendants moved to dismiss the plaintiffs' bill of complaint, upon the ground that it failed to state facts sufficient to constitute a cause of suit, and that the federal court was without jurisdiction to hear the case. The motion was overruled by that court, and the late Judge Chas. E. Wolverton, before whom the motion was heard, set forth his reasons therefor in the following language, clear and understandable:

"If the bequest to charity is valid, as was declared by the Supreme Court, there was no occasion for taking it over (by the Alien Property Custodian), because it was not alien enemy property. But if the charity clause is void, as plaintiffs claim, the property goes to the E. Henry Wemme Company, and, of course, will enhance the value of the stock of that company. So that it depends upon whether the devise to charity is a valid gift, and upon this question depends the further standing for insisting upon a recovery of the property in question. If the devise to charity is valid, then of course he has no standing. But the pleadings present the issue, and the mere fact that the claim is there, whether maintainable or not, involves, by the contentions growing out of it, the federal questions previously suggested."

The case was heard in the federal District Court, and Judge Wolverton dismissed the bill of complaint upon the ground: First, that the decision of the Supreme Court of the state of Oregon construing the law was binding on the federal courts sitting in this state; and on the further ground that, whether binding or not, the decision of the Supreme Court of this state was correct.

The Alien Property Custodian and the E. Henry Wemme Company, a corporation, dissatisfied with the decision of Judge Wolverton, appealed the case to the United States Circuit Court of Appeals. In that connection, see 16 F. (2d) 865, for the opinion of Judge Rudkin, who, speaking for that court, said:

"This is but another illustration of attempts so often made to circumvent the judgments and decrees of state courts of competent jurisdiction by appealing to the federal courts on some fancied constitutional ground. Here the testator had his domicile in the state of Oregon, his will was made and probated there, his property was there, the trustees named in his will were there, as were the objects of his bounty. The Supreme Court of the state had full and complete jurisdiction over the subject-matter of the action, with competent parties before it; the Attorney General of the state upholding, and the churches opposing, the charitable trust created by the will. Thus vested with jurisdiction, the highest court of the state has construed the will and the laws of the state, and that construction is binding on a federal court sitting in the same state, regardless of any question of parties or of res adjudicata. The decision not only fixed the rights of the parties to that litigation, but it likewise established the law of charitable trusts

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