People's Saving Bank & Trust Co. v. Board of Trustees of South Side Baptist Church of Covington
| Decision Date | 17 May 1927 |
| Citation | 220 Ky. 113,294 S.W. 804 |
| Parties | PEOPLE'S SAVING BANK & TRUST CO. v. BOARD OF TRUSTEES OF SOUTH SIDE BAPTIST CHURCH OF COVINGTON. |
| Court | Kentucky Court of Appeals |
Appeal from Circuit Court, Kenton County, Criminal, Common Law, and Equity Division.
Action under Declaratory Judgments Act by the Board of Trustees of the South Side Baptist Church of Covington, Ky. against the People's Saving Bank & Trust Company. Judgment for plaintiff, and defendant appeals. Affirmed.
Stanley Chrisman, of Covington, for appellant.
Jackson & Woodward, of Cincinnati, Ohio, for appellee.
The South Side Baptist Church of Covington was an unincorporated religious society. For the purpose of acquiring a site for a new church it purchased two tracts of land, which were conveyed to its trustees, but the deeds did not confer on them the power to sell or mortgage the property. The third tract composing the site was a portion of Fifteenth street which was closed by action of the city commissioners and a judgment of the Kenton circuit court. In the month of October, 1926, the board of trustees of the South Side Baptist Church of Covington, Ky. was incorporated for the purpose of acquiring and holding the title to the real estate and personal estate of the South Side Baptist Church of Covington. To carry out the purpose of the church in forming the corporation, the church at a regular meeting, and by unanimous vote of all the members present, authorized and directed its trustees to convey the property to the newly created corporation. The trustees of the new corporation have the power to sell and mortgage the property. To raise a portion of the funds with which to build and equip the church the corporation proposes to issue bonds secured by a mortgage on the property. To this end it applied to the People's Savings Bank & Trust Company of Covington to act as trustee in the issuance and sale of the bonds. The bank is willing to act in the matter if the title to the property is good. For the purpose of testing the question this suit was brought under the Declaratory Judgment Act (Laws 1922, c. 83). The chancellor adjudged the title good, and the bank has appealed.
1. The validity of the title now held by the board of trustees of the South Side Baptist Church is challenged on the ground that the trustees of the unincorporated church made the conveyance without taking the steps required by section 324 Kentucky Statutes, which is as follows:
"It shall be competent for the circuit court of the county in which the real estate held in the manner mentioned in this chapter is situate, to adjudge a sale of the same for the purpose of reinvestment in similar property in the same county, and for the same uses, trust and purposes; but such judgment shall only be rendered upon petition in equity made by the proper parties, setting forth the reasons why such sale would be proper and equitable, which may be controverted; and when it shall also appear that such sale will not violate any reserved rights or qualifications or limitations expressed in the dedication or grant."
As we view it, the statute is simply an enabling act designed to provide a method...
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