Society of Shakers v. Watson

• Decision Date: 04 June 1895
• Docket Number: 272.
• Citation: 68 F. 730
• Parties: SOCIETY OF SHAKERS AT PLEASANT HILL et al. v. WATSON et al.
• Court: U.S. Court of Appeals — Sixth Circuit

68 F. 730

SOCIETY OF SHAKERS AT PLEASANT HILL et al. v. WATSON et al.

No. 272.

United States Court of Appeals, Sixth Circuit.

June 4, 1895

The original bill in this case was filed on the 11th day of May 1891, in the names of Oliver Watson and Henry Souther, as complainants, against the defendants above named, for the purpose of subjecting the property of the said Society of Shakers, one of the above-named defendants, to an equitable charge for the payment of a promissory note alleged to have been executed by the said society on the 18th day of October 1882, and given to one M. M. Mays, of which the following is a copy: '$9,985.

October 18, 1882.

'Seven years after date, we promise to pay to the order of M. M Mays, or bearer, the sum of nine thousand nine hundred and eighty-five dollars-- /100 dollars, value received, with interest at the rate of 6 per cent. per annum from date until paid. Negotiable and payable at the Fourth National Bank Cincinnati. If not paid when due, to bring 8 per cent. from date.

'Dunlavy & Scott,

'Trustees of the Society of Shakers at Pleasant Hill, Kentucky.'

At the time of the bringing of this suit, the defendants Brown, Shelton, and Sutton were the trustees of the society, and were made parties as such, and also in their individual capacities as members thereof. Dunlavy and Scott and one Boisseau were, at the time of making the note, trustees of the society. This note was sold and indorsed by Mays to the complainant Watson on or about July 2, 1889, in part payment for a farm known as 'Chatham,' near Fredericksburg, Va. In August, 1889, Watson borrowed from the complainant Souther the sum of $5,000, and, as collateral security for the payment of that sum, pledged the above-mentioned note to Souther, and delivered it to him, but did not indorse it. The original bill was prepared and signed and sworn to by Watson in New York on the 13th day of March, 1891, and by Souther in Virginia on the same day, and was thereafter transmitted to their attorneys in Kentucky, to be filed in the proper court. It was not filed, however, until May 11th following. In the meantime said Souther died, leaving a will, which was probated on April 17, 1891; and his wife, Letitia Souther, was appointed and qualified as the executrix thereof. On the 7th day of September, 1891, Letitia Souther, as executrix, filed what is termed in the record a 'supplemental bill,' setting out the circumstances above stated relating to the preparation of and swearing to the original bill of complaint and the filing thereof, the death of said Henry Souther, his leaving a will, the probate thereof, and her appointment as executrix. In this supplemental bill she adopted and reaffirmed the statements and allegations of the original bill, and prayed to be substituted as complainant in the place of the said Henry Souther.

The defendants appeared, and on the 2d day of November, 1891, filed their demurrer to the original bill and supplemental bill, in which they set out as special grounds thereof: 'First. That it appeareth on the plaintiffs' own showing by the said bill that their only cause of action, if any, is for money due upon the alleged note exhibited with the bill, for which they have an adequate and complete remedy at law. Second. That it appeareth on the face of the note sued upon and exhibited with the bill that the same is not the obligation of the Society of Shakers at Pleasant Hill, Ky., and is not binding upon the defendants or either of them. Third. That it appears from the bill and exhibits filed that the said Dunlavy and Scott had no power or authority to bind the Society of Shakers at Pleasant Hill, Ky., by the alleged obligation sued on.'

After a hearing upon the demurrer, it was overruled by the court; and, upon the suggestion of the court, the bill was amended, but no new fact material to the questions presented was set out in the amendment. Thereupon the defendants answered, setting out the following grounds of defense: First. (a) That the society never executed the note. (b) That the society never by the note promised to pay according to the tenor of the note or otherwise. (c) That the note was not signed in a proper manner to bind the society or its estate, nor in accordance with the custom and usage of the society or its trustees. (d) That the alleged note or contract was not authorized by or consented to or approved by said society, or the ministry or elders thereof. Second. That the note is not the act and deed of Dunlavy & Scott, nor of said Dunlavy, Scott & Boisseau, or either of them. Third. That the note was not signed, executed or delivered, or its execution or delivery authorized or consented to, by all or any or either of said trustees. Fourth. That the note is without any good or valuable consideration. Fifth. That neither said trustees, nor any or either of them, had any power or authority to bind the said society or its estate or property by the execution of the note. Sixth. That the alleged holders or owners of the note were not innocent purchasers thereof, but took the same with notice, and fully protected themselves in the transaction. Seventh. That neither Dunlavy & Scott, nor either of them, as trustees of said Shakers at Pleasant Hill, Ky., or otherwise, had any authority to make or use the paper sued upon, or to bind the society thereby.

Replication having been filed, proofs were taken upon the issues presented by the answer. The defendants the Society of Shakers at Pleasant Hill are a community of people living in Mercer county, in the state of Kentucky, and are commonly known and described by the name last mentioned; and the defendants Brown, Shelton, and Sutton are members of the community, and at the time of the commencement of this suit were its duly appointed and authorized trustees or agents selected in pursuance of the articles of covenant of the community, and, as such trustees, hold all the property of the society. The society has an actual membership of more than 100 people, and the membership is constantly changing by additions, withdrawals, and deaths. Upon the coming together of the community, the several members of it subscribed to certain articles of covenant, a copy of which is attached as an exhibit to the bill. The articles were duly recorded in the register's office of the proper county. All their property, both personal and real, is held in a mass in common; no one of the members claiming any specific interest therein, everything being devoted to the joint interest of the church. The articles of covenant state that it is 'fit and proper that certain individuals should be intrusted with the care of the temporal interest of the church as trustees or agents'; and then it is therein covenanted that the said trustees or agents and their successors shall be duly invested with the said office of trustees or agents, and 'empowered to exercise all the duties thereof,' and 'that it shall be the duty of the trustees or agents to take the general charge and oversight of all and singular the property, estate, and interest dedicated, devoted, and given up as aforesaid to the joint interest of the church, with all gifts, grants, and donations that may at any time be given or devoted for the benefit of the church or for the relief of the poor or any such charitable use or purpose; and the said joint interest, estate, gifts, grants, and donations shall be held by them in the capacity of trustees or agents, and shall be and remain forever inviolably under the care and oversight and at the disposal of the trustees and agentship of the church in a continual line of succession.' The said articles of covenant contain this further provision or covenant, to wit: 'And we do by these presents covenant, promise, and agree that all the transactions of the trustees or agents in the use or disposal of the joint interest of the church shall be for the mutual benefit of the church, and in behalf of the whole body, and to no personal end or purpose whatever; but the trustees or agents shall be at liberty, in union with the body, to make, present, and bestow deeds of charity upon such as they may consider the proper objects, that are without; and when, by death or other means, any trustee or agent shall cease to act in his office as aforesaid, then all and singular the power invested in or duties incumbent upon him shall be transferred and devolved upon his successor, who shall be appointed to fill his place in said office and trust, so that each individual appointed to the office of trustee or agent of the church shall be vested with the power and authority of managing and disposing of the property and interest of the church as aforesaid, and of making all lawful defense for the security and protection of the joint interest and privileges of the church, and all the transactions of such members shall be valid so long as they act in the official capacity of trustee or agents in union with the body according to the tenor of the covenant, and no longer.' The said articles contain this further provision or covenant, to wit: 'And we further covenant and agree that it shall be the duty of the trustees to keep or cause to be kept in a book or books provided for that purpose a true copy of this covenant, together with all other records or matters of a public nature that may be necessary for the information and satisfaction of all concerned, and for the security of the joint interest of the church committed to their care; and, further, that the trustees shall make application to the proper authority for the covenant to be duly recorded in the county office of this county, together with the names of all the subscribers who previously shall have subscribed to it; and in all deeds, wills, grants, etc., which may...