McBride v. Murphy

• Decision Date: 04 June 1924
• Citation: 124 A. 798,14 Del.Ch. 242
• Parties: MARY E. MCBRIDE, CATHERINE MCBRIDE, CATHERINE MORLEY, JULIA O'CONNELL, MARGARET LIBBEY, ELIZABETH FERRIER and FRANK H. GILLEN, v. MATTHEW D. MURPHY, personally, as Executor of the Last Will and Testament of Michael McCartney, deceased, and as Executor of the Last Will and Testament of Adaline M. McCartney, deceased, SISTERS OF CHARITY OF ST. PETER'S SCHOOL, INCORPORATED, a corporation existing under the laws of the State of Delaware, and JANE LORGAN
• Court: Court of Chancery of Delaware

124 A. 798

14 Del.Ch. 242

MARY E. MCBRIDE, CATHERINE MCBRIDE, CATHERINE MORLEY, JULIA O'CONNELL, MARGARET LIBBEY, ELIZABETH FERRIER and FRANK H. GILLEN, v. MATTHEW D. MURPHY, personally, as Executor of the Last Will and Testament of Michael McCartney, deceased, and as Executor of the Last Will and Testament of Adaline M. McCartney, deceased, SISTERS OF CHARITY OF ST. PETER'S SCHOOL, INCORPORATED, a corporation existing under the laws of the State of Delaware, and JANE LORGAN

Court of Chancery of Delaware, New Castle

June 4, 1924

BILL FOR AN ACCOUNTING. The complainants are heirs at law of Michael McCartney, deceased, upon the construction of whose last will and testament the nature of the decree to be entered will be determined. The will in question is dated January 6, 1897. The testator died in the month of December 1903, seised and possessed of real and personal property. After directing the payment of his just debts and funeral expenses, and devising to his wife in fee simple a dwelling house and lot in the City of Wilmington, he provided in a residuary clause, as follows:

"I give and bequeath unto my said wife, Adaline M. T. McCartney the use, income and improvement of all my property that may remain after paying my debts and funeral and other expenses and not hereinbefore disposed of, consisting of real and personal of whatsoever nature or kind the same may be, and wheresoever situated at the time of my death for and during the term of her natural life, and from and immediately after the death of my said wife, Adaline T. McCartney, I give devise and bequeath all of said property, real and personal of every nature and kind, and wheresoever situated at the time of the death of my said wife, Adaline T. McCartney, unto the Sisters of Charity of St. Peter's School of Wilmington, a corporation existing under the laws of the State of Delaware, and to its successors and assigns forever, to be used by said corporation for the support and maintenance of the orphan girls under its care and charge."

With the exception of a paragraph appointing Matthew D. Murphy as executor, the foregoing is descriptive of the entire will.

The General Assembly of Delaware by special act passed on February 5, 1841, created a corporation by the name of "The Sisters of Charity of St. Peters" to continue for the period of twenty years from the date of the act. By Section 1 of this act the incorporators were constituted a body corporate. By Section 2 it was provided:

"That said corporation shall during its continuance be able and capable in law to purchase, receive and hold any real or personal property whatsoever, which may be given, conveyed or devised to them, and also to give, grant, let, sell or assign the same; and to do all other matters touching the same which a corporation may legally do with its real or personal property; that the said corporation shall have a common seal, may sue and be sued, plead and be impleaded in any court of law or equity in this state according to law."

It is admitted that by acts of the General Assembly passed in 1861 (12 Del. Laws, c. 39) and in 1881 this corporation had its corporate life extended to April 1, 1901. Though there is some variance between the name of the corporation mentioned in the McCartney will and the name of the corporation thus created and extended by the General Assembly, it is agreed by the parties that the corporate beneficiary described in the will is the same corporation which was originally incorporated in 1841 and whose charter expired by limitation on April 1, 1901.

From the foregoing it will be observed the corporation named by the testator was in existence at the time of the execution of his will, but that the period of existence named in its charter had expired something like two years and eight months before the testators' death.

By the General Corporation Law of this State it is provided as follows:

"Sec. 40. All corporations, whether they expire by their own limitation, or are otherwise dissolved, shall nevertheless be continued for the term of three years from said expiration or dissolution bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, and to divide their capital stock, but not for the purpose of continuing the business for which said corporation shall have been established." Revised Code 1915, § 1954.

About seven days before the expiration of the statutory period mentioned in the foregoing section, viz., on March 24, 1904, "The Sisters of Charity of St. Peter's" executed and delivered a deed of bargain and sale and assignment for the consideration of $ 10 to a new corporation which had been formed on March 4, 1904. This corporation is one of the defendants named in the bill and is known as "Sisters of Charity of St. Peter's School, Incorporated." The deed referred to conveyed to the grantee, its successors and assigns, title to a certain piece of real estate (not of importance in this suit) and--

"All the property, rights, titles and interests of every kind and wherever situate, whether in possession or in expectancy, whether held in a fiduciary relation or otherwise, of it, the said party of the first part. "

Adaline M. T. McCartney, the widow and life tenant named in the residuary clause of her husband's will, is now dead, and the question arises: What, under the circumstances above set forth, is the proper disposition to make of the real and personal property embraced within the residuary clause?

The complainants contend that because of the expiration of the period defined by the special act incorporating "The Sisters of Charity of St. Peter's," the gift to it has failed and lapsed; wherefore it belongs to them as heirs at law of the testator. The defendant, the new corporation known as "Sisters of Charity of St. Peter's School, Incorporated," contends that it is entitled to receive the gift by virtue of the said conveyance made to it on March 24, 1904.

The prayers are that the complainants be decree to be entitled to the residuary estate as heirs at law of the testator and his legal representatives under the intestacy statute; that the defendant, Matthew D. Murphy, personally and as executor of Michael McCartney and Adaline M. T. McCartney account to the complainants; and that certain relief not necessary at this time to mention be afforded against the defendant, Jane Lorgan.

Complainants entitled to receive the property as heirs at law or distributees of the testator.

William S. Hilles, for the complianants.

Charles F. Curley, for the defendants.

OPINION

THE CHANCELLOR

The real controversy in this case is between the heirs at law of Michael McCartney on the one side, and the corporation known as Sisters of Charity of St. Peters School, Incorporated created March 4, 1904, under the General Corporation Law of this State, on the other side. Throughout this opinion this corporation will be referred to as the new corporation, and the corporation which was named as Mr. McCartney's residuary devisee and legatee in remainder will be referred to as the old corporation. This will obviate any confusion that may arise from similarity of names.

First. The claim of the new corporation is founded on the deed of March 24, 1904, made to it by the old corporation. The legal sufficiency of this deed to confer any rights on the new corporation is assailed by the complainants because of the expiration of the life of the old corporation before the death of the testator and its consequent impotency to take the gift made to it by him. If the gift was inoperative because of the non-existence of the named beneficiary, then it is contended that it lapsed and that the heirs at law became entitled and that no estate or interest was vested in the old corporation which was capable of transfer or assignment to the new corporation.

(a) Against this contention the defendants urge that the complainants are not competent to press it, the State of Delaware alone being the only party that can question the right of the old corporation to take and hold under the will. On this point the solicitor for the defendants cites the following cases: Jones v. Habersham, 107 U.S. 174, 2 S.Ct. 336, 27 L.Ed. 401; Brigham v. Brigham Hospital, 134 F. 513, 67 C. C. A. 393; Hamsher v. Hamsher, 132 Ill. 273, 23 N.E. 1123, 8 L. R. A. 556; Alexander v. Tolleston Club, 110 Ill. 65; Farrington v. Putman, 90 Me. 405, 37 A. 652, 38 L. R. A. 339; Hanson v. Little Sisters of the Poor, 79 Md. 434, 32 A. 1052, 34 L. R. A. 293; Hubbard v. Worcester Art Museum, 194 Mass. 280, 80 N.E. 490, 9 L. R. A. (N.S.) 689, 10 Ann. Cas. 1025; Mansfield v. Neff, 43 Utah 258, 134 P. 1160. These cases are all to the point that when a corporation is given the power to acquire property not in excess of a specified value, no one but the State can be heard to complain if the corporation acquires property which exceeds in value the limit named. Authorities cited by the solicitor for the complainants to the contrary on this proposition are the following: Chamberlain v. Chamberlain, 43 N.Y. 424; In re McGraw, 111 N.Y. 66, 19 N.E. 233, 2 L. R. A. 387; Wood v. Hammond, 16 R. I. 98, 17 A. 324: Davidson College v. Chambers' Ex'rs., 56 N.C. 253; Kennett v. Kidd, 87 Kan. 652, 125 Pac. 36, 44 L. R. A. (N.S.) 544, Ann. Cas. 1914A, 592; and Compton v. Moore, 156 Ky. 544, 161 S.W. 540.

The instant case does not call for a selection between the opposing theories advanced by these two groups of cases. If it did, I incline to the opinion that those first cited express the sounder and better considered views. The case now before the court, however, is quite dissimilar in principle to those cases....