Stork v. Schmidt

• Decision Date: 14 June 1935
• Docket Number: 29094.
• Citation: 261 N.W. 552,129 Neb. 311
• Parties: STORK ET AL. v. SCHMIDT ET AL.
• Court: Nebraska Supreme Court

261 N.W. 552

129 Neb. 311

STORK ET AL. v. SCHMIDT ET AL.

No. 29094.

Supreme Court of Nebraska.

June 14, 1935

Syllabus by the Court.

1. Under section 76-502, Comp. St. 1929, corporations not incorporated under the law of Nebraska are prohibited from taking or holding any real estate in this state in trust for the use and benefit of another.

2. The will under consideration devised real estate to the Evangelical Lutheran Synod of Ohio, a nonresident corporation, to be used as follows: " One third of this gift shall be used for the education of students of theology at its schools, who have no money to pay for their attendance at school; one third for the repairs of its schools and the other third for foreign missionary work." Held, that the will created a valid charitable trust.

3. A court of equity will not permit a religious or charitable trust, created by will, to fail because the trustee named is incompetent to take title to real estate in this state, but will appoint a competent trustee to administer the trust.

Appeal from District Court, Washington County; Sears, Judge.

Action by Louis C. D. Stork and others against Henry Schmidt and others, impleaded with the Evangelical Lutheran Synod of Missouri, Ohio, and other states. From an adverse judgment the Evangelical Lutheran Synod appeals.

Judgment reversed, and cause remanded, with instructions.

Fradenburg, Stalmaster & Beber. Oscar T. Doerr, and P. M Klutznick, all of Omaha, for appellant.

Courtright, Sidner, Lee & Gunderson, of Fremont, for appellees.

Heard before GOSS, C. J., ROSE, GOOD, EBERLY, DAY, and PAINE, JJ., and MUNDAY, District Judge.

MUNDAY, District Judge.

Frederic W. Smith died testate in 1931, leaving a widow, Emma M. C. N. Smith, and brothers, sisters, nieces and nephews, as his heirs. He owned a considerable estate, and the title to his real estate is in dispute in this action. The widow died intestate in 1932, leaving as her heirs her brothers and sisters, who are plaintiffs in this action. The will of Frederic W. Smith has been duly probated and all debts, allowances and expenses of administration of his estate have been paid, and the estate is now ready for distribution and for partition.

The will of Frederic W. Smith provided in part as follows:

" All the residue of my estate, real, personal and mixed property, wherever it may be found, and of whatsoever it may consist, I give, devise and bequeath unto the German Evangelical Lutheran Synod of St. Louis, Ohio, and other states, and its heirs, to be used by said society as follows: One-third of this gift shall be used for the education of students of theology at its schools, who have no money to pay for their attendance at school; one-third for the repairs to its schools and the other third for foreign missionary work."

The plaintiffs bring this action to quiet title to said real estate in them and the heirs of Frederic W. Smith and ask for an accounting and partition of said real estate and for general equitable relief. The plaintiffs allege in their petition that said Synod was at the time the will was made and at all times a foreign corporation and not incorporated under the laws of Nebraska, and is incompetent to take the title or the beneficial interest in said real estate, and that said attempted devise is a nullity and the title to said real estate belongs to plaintiffs and the heirs of Frederic W. Smith as an undevised estate.

For answer to the petition, the appellant Synod alleges that said Frederic W. Smith devised in said will his real estate in trust for certain religious and charitable purposes, and that it is a corporation not incorporated under the laws of Nebraska, and that it is organized for religious purposes to carry on a religious work, including the maintaining of schools for the education of candidates to the ministry and students of theology, and that some of such students are indigent and that the expense of their education must be paid by the defendant or persons interested in the work of the Synod, and that said defendant maintains schools for the education of teachers of parochial schools, and to carry out this purpose that defendant erects, maintains and operates schools, and that said defendant supervises and conducts a missionary work in this country and in foreign countries and carries on generally the work of church organizations, and that the beneficiaries of the service and the work of said Synod are an uncertain and indefinite class until they have been selected by the board in charge of such work or services, or by the triennial meeting of the Synod, to be such beneficiaries. The defendant prays that the court find and decree that said will established a charitable trust for the above purpose, and that the court find and decree that the Synod is incompetent to take as a trustee for said purposes and trust, and that the court name a trustee to carry out said purposes and trust.

Trial was had to the court and evidence was introduced showing the amount of funds in the hands of the executor, and the articles of incorporation, constitution and by-laws of the Synod.

The objects of the Synod are stated in article 2 of the articles of incorporation filed in the state of Missouri as follows:

" The object of this association shall be to unite in a corporate body the members of the Evangelical Lutheran Church who remain true to, and acknowledge as a true exhibition of sound Christian doctrine, the Book of Concord of the year of our Lord fifteen hundred and eighty; to receive, acquire, hold, manage, and control the real and personal property and franchises which may hereafter be acquired by this corporation and such as have heretofore been obtained and are now held by different educational corporations, under its direction and for its advancement, and to continue and perpetuate the good work of disseminating the Gospel throughout the world."

In the constitution of the Synod the objects are stated as follows:

" 1. The conservation and promotion of the unity of the true faith (Eph. 4, 3-6; 1 Cor. 1, 10) and a united defense against schism and sectarianism (Rom. 16, 17);

2. The joint extension of the Kingdom of God;

3. The training of ministers and teachers for service in the Evangelical Lutheran Church;

4. The publication and distribution of Bibles, church-books, school-books, religious periodicals, and other books and literature;

5. The endeavor to bring about the largest possible uniformity in church-practice, church-customs, and, in general, in congregational affairs;

6. The furtherance of Christian parochial schools, and of a thorough instruction for confirmation;

7. The supervision of the ministers and teachers of the Synod with regard to the performance of their official duties;

8. The protection of pastors, teachers, and congregations in the performance of their duties and the maintenance of their rights."

The trial court found that the appellant Synod had no interest in the real estate and quieted the title of the same against the appellant and in the plaintiff and appointed a referee to sell the real estate. This appeal was taken by the Synod from said decree.

It is an established principle of the courts of this state to carry out the intent and purpose of the testator where the same are within the rules of law. In this case the intention of the testator is plain and undisputed and ought to be carried out, unless to do so would violate some positive rule of law.

The appellant Synod contends:

1. That the will establishes a religious and charitable trust.

2. That, if the trustee is incompetent to take such a trust, a court of equity will appoint a trustee to carry out the purposes of the trust.

3. That the beneficiary of the trust is not the Synod, but those mentioned in the will who are ultimately to recover the benefits, and that section 76-502, Comp. St. 1929, has no effect on such a beneficiary of a charitable devise.

The appellees contend:

1. That under the will the Synod is the title holder and beneficiary, and that said statute prohibits it from receiving the devise, and that the heirs take the same.

2. That, when a devise is devised to a corporation for the objects for which the corporation is organized, it is then a devise to the corporation itself, and that there is in such a case no separation of the legal from the beneficial enjoyment of the estate, and that such a separation is necessary in a public or charitable trust in order that the beneficiary may demand its performance.

In the instant case a charitable or religious trust is established. 5 R.C.L. 291, § 2, defines such trust:

" But it is certain that in legal parlance the word ‘ charity' has a much wider significance than in common speech. Probably the most comprehensive and carefully drawn definition of a charity that has ever been formulated is that it is a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their heirs under the influence of education or religion, by relieving their bodies from disease, suffering, or constraint, by assisting them to establish themselves for life, or by erecting or maintaining public buildings or works or otherwise lessening the burdens of government. It is immaterial whether the purpose is called charitable in the gift itself, if it is so described as to show that it is charitable in its nature."

At 11 C. J. 316, is the following language:

" Gifts for schools and scholars, * * * and gifts for the advancement of learning and science * * * are regarded as charities. Gifts of this nature * * * have been regarded by the courts of this country with special favor."

Also at page 320: " Both before and since the enactment of the statute of 43 Elizabeth,...