People's Bank of City of New York v. St. Anthony's Roman Catholic Church of Brooklyn

• Decision Date: 05 June 1888
• Citation: 109 N.Y. 512,17 N.E. 408
• Parties: PEOPLE'S BANK OF CITY OF NEW YORK v. ST. ANTHONY'S ROMAN CATHOLIC CHURCH OF BROOKLYN.
• Court: New York Court of Appeals Court of Appeals

109 N.Y. 512

17 N.E. 408

PEOPLE'S BANK OF CITY OF NEW YORK

v.ST. ANTHONY'S ROMAN CATHOLIC CHURCH OF BROOKLYN.¹

Court of Appeals of New York.

June 5, 1888.

Appeal from general term, supreme court, First department.

Action by the People's Bank of the City of New York against St. Anthony's Roman Catholic Church of the City of Brooklyn upon a promissory note. Judgment for defendant was entered upon the report of a referee in the supreme court, and plaintiff appeals.

Edward C. Perkins, for appellant.

Roger A. Pryor, for respondent.

ANDREWS, J.

The answer put in issue the allegation in the complaint that the notes sued upon were made by the corporation defendant. It became necessary, therefore, for the plaintiff in the first instance to show, or to give evidence which legitimately raised a presumption, that the notes were the corporate obligations of the defendant. Neither party entered into any investigation of the question whether the execution of the notes was in fact authorized by the corporation. The fact that the defendant was a body corporate was admitted in the pleadings, and it was shown that it was organized under the ‘Act for the incorporation of religious societies,’ passed April 5, 1813, and the amendatory act, chapter 45 of the Laws of 1863. The plaintiff further proved that the notes were signed by the persons whose names are affixed thereto, and that they were, respectively, the president, secretary, and treasurer of the defendant, and constituted three of the five members composing its board of trustees. The plaintiff also proved title to the notes by transfer from the administrators of the payee in consideration of an indebtedness of the estate of the decedent to the plaintiff. The notes were offered and received in evidence, and upon the admissions and proofs thus made the plaintiff rested its case. The defendant, on its part, proved, upon cross-examination of the witnesses for the plaintiff, the single additional fact that the notes were signed by the officers of the defendant acting separately, and not at the same time or place, or while assembled as a board of trustees.

The defendant, for one of its defenses, asserts the incapacity of a religious corporation organized under the act of 1813 to borrow money, and issue negotiable paper therefor, even although the money may have been borrowed for a corporate purpose, and one for which the corporation might lawfully create a debt binding its property and assets, and enforceable in the ordinary course of judicial proceedings. The distinction made is between a debt created directly for a legitimate corporate purpose, as for the purchase of property, the building of a church, salary of minister, etc., and a loaning of money to be applied to the same purpose. We need not enter upon the inquiry so pressed upon our attention, or consider whether the range of incidental powers which appertain to ordinary corporations, giving them a choice of means among those usual and appropriate for carrying out the express powers granted, is so greatly restricted in case of religious corporations as the argument made suggests. We think the case is with the defendant on a much plainer ground, and that is that the plaintiff failed to establish, or to give evidence which raised a presumption, that the notes in question were the authorized obligations of the defendant. The act of 1863, amendatory of the act of 1813, prescribes a different method for the organization of religious societies of the Roman Catholic Church from that provided in the case of other religious societies. In the case of Roman Catholic churches, the first section of the act of 1863 provides that the Roman Catholic bishop or archbishop, the vicar general, and the pastor of a church, together with two other persons to be selected by them, may make and file a certificate of incorporation, and therein designate the title of the church; and declares that the persons signing the certificate and their successors shall be a body corporate, by the name designated therein. The trustees are a self-perpetuating body, and the members of the church or congregation have no voice in their selection, differing in that respect from the general plan provided in the original act of 1813. It was decided in Robertson v. Bullions, 11 N. Y. 243, that the members of the church and congregation of a religious society organized under the act of 1813 were the corporators, and that the trustees were simply the governing body of the corporation. The act of 1863, while it changes, as to Roman Catholic churches, the mode of the selection of trustees, and vests in them exclusive power of management and control, does not constitute the trustees the corporation in place of the congregation. Substantially the same language found in the act of 1863, viz., that the trustees named in the certificate shall be a corporation, is found in the act of 1813, and was relied upon by counsel in Robertson v. Bullions, as indicating that the trustees, and not the congregation, were the constituent body. There is still less ground for this contention in respect to Roman Catholic churches organized under the act of 1863, in view of the explicit provision in the first section, not found in the act of 1813, that, upon making and filing the certificate prescribed, ‘such church or congregation shall be a body corporate by the name and title expressed in such certificate, and said persons signing the same shall be trustees thereof.’

It is elementary that the powers vested in a corporation aggregate having a board of trustees, reside, for all purposes of practical administration, in the board as the governing body. The corporation, being a legal entity merely, can only act through instrumentalities and by delegation. The statute creating it may prescribe its mode of action; and, when the methods and agencies by which it may act are designated, that designation operates as a limitation, and excludes other modes of action. Landers v. Church, 97 N. Y. 119. The general powers of religious corporations are enumerated in the fourth section of the act of 1813. They are in form conferred upon the trustees. The section authorizes and empowers the ‘trustees' to exercise the powers specified, and, by the closing paragraph, empowers them to regulate and order ‘all other matters and things relating to the temporal concerns and revenues of such church.’ The trustees of the defendant were therefore the only legal representatives of the corporation in exercising its corporate franchises and powers. Whatever powers were conferred on the corporation may be exercised in its behalf by the trustees. They, acting as a board, can make or authorize acts binding on the corporation, and they alone. Their sanction or authority is essential to a valid corporate act. The qualification that the collective authority of the trustees, acting as a board, is essential in order to bind the corporation by the action of its trustees, is a recognized doctrine of the law of corporations. The trustees of a corporation have no separate or individual authority to bind the corporation; and this, although the majority or the whole number, acting singly and not collectively as a board, should assent to the particular transaction. Cammeyer v. Churches, 2 Sandf. Ch. 186;D'Arcy v. Railway Co., L. R. 2 Exch. 158; Constant v. Rector, 4 Daly, 305; 1 Wat. Corp. § 70; 1 Mor. Priv. Corp. § 531. This principle is recognized by statute, and expressly applied to the action of trustees of religious corporations by the act of 1813, which declares that ‘a majority of the trustees, being lawfully convened, shall be competent to do and perform all matters and things which such trustees are authorized or required to do or perform; and all questions arising at such meetings shall be determined by a majority of the trustees present, and, in case of an equal...