Opinion
05-27-1909
ST. JOHN THE BAPTIST GREEK CATHOLIC CHURCH v. BARON et al.
William J. Kearns, for complainant. Arthur R. Denman, for defendant First Church in Newark of the Evangelical Association.
Action between St. John the Baptist Greek Catholic Church and Michael Baron and others. Judgment for plaintiff.
William J. Kearns, for complainant.
Arthur R. Denman, for defendant First Church in Newark of the Evangelical Association.
HOWELL, V. C. (orally). This suit is brought by a religious corporation known by the name of the St. John the Baptist Greek Catholic Church for the purpose of enforcing the specific performance of a contract for the purchase of lands. The contract was made on February 23, 1907, and the vendor named therein is the First Church in Newark, N. J., of the Evangelical Association.
I may perhaps begin my judgment by reminding counsel of the equitable character of this proceeding. There is no proceeding, no jurisdiction, no form of remedy that is administered by a court of equity that is quite so much within the purely sound equitable discretion of the court as is the action of specific performance of contracts. I do not mean to say that it rests in the capricious discretion of the court, but in the sound, judicial discretion of the court, whether in any case the decree of specific performance will be awarded or not. It is a purely equitable jurisdiction. It will not be used for the purpose of inflicting hardship upon anybody upon either party to the suit. It will not be used for the purpose of forcing an unmarketable title or a title about which there is any doubt, or, if there is any equitable circumstance which would militate against the decree, the court would consider that equitable circumstance and give judgment accordingly, and it may grant the relief upon such terms and conditions as it may deem to be equitable and just. Now having premised that much about the jurisdiction and its extent and its character, I will get down to the facts in this case.
The consideration money of this contract was $17,500. Seven thousand five hundred dollars was agreed to be paid in installments, beginning at the time of the execution of the contract, and running down to the 2d day of December, 1907, up to which time the contract required that there should be paid $7,500 in cash. The contract also provided that just one month later, on January 2, 1908, the remainder of the purchase money, $10,000, should be paid in cash. It is my opinion that the vendee knew and should therefore be chargeable with knowledge of the fact that the vendor was about to build a new church, and it must be charged, also, with knowledge of the fact that the installments mentioned in this contract were made with reference to its requirements for money to meet its payments to its contractors for its new building. The installment payments were all made, some of them, perhaps most of them, after the time agreed upon; but when it came to January, 1908, and the payment of the $10,000 on the second of that month, the vendee made default. It was testified to that they were late in nearly all the payments of the $7,500 that was to be paid in installments. The day for the performance of the contract was extended from January 2d by four separate and distinct agreements in writing until the 1st day of June. That was the final day on which the final payment was to be made, and beyond that time there has been no extension granted on the part of the vendor, and the reason for the default at that time or a great reason for it at least was the fact that there were dissensions in the church, that there was a faction which was led by Mr. Baron and his friend or his friends who eventually seceded from the church, and formed a church of their own on College Place in this city. Now, I take it to be a fact that the old corporation, namely, the vendee mentioned in this contract, is now a corporation and has been since the date of its organization in 1906. It may be that its existence is not exactly in accordance with the provisions of the law because it was organized under astatute which authorizes the organization of corporations not for pecuniary profit, whereas under the case of Richards v. Dover, 61 N. J. Law, 400, 39 Atl. 705, it might be held in quo warranto proceedings that it was not properly organized under that law, but should have been organized under the religious societies act. However, it is a corporation, and under a long line of cases in New Jersey, of which Vanneman v. Young, 52 N. J. Law, 403, 20 Atl. 83, is one, the corporation if not a de jure corporation is a de facto corporation, and it is well settled that persons dealing with a de facto corporation are barred from questioning the authority of the corporation with which they deal. The corporation is, as I say, in existence. It is affiliated with the Roman Catholic Church. It is supervised by a bishop who is appointed by the Roman See, and in all respects is a constituent part of the Roman Catholic Church; the only difference being, as I understand the testimony, that the members of this church worship according to what is known as the Greek rite, that differing from the Latin rite only in ceremonials, and not in essentials. I likewise find that there has been a regular succession of trustees, and, under the statute under which this corporation is organized, the trustees are the governing body. The congregational committee of 12 concerning which there was some testimony is a mere voluntary committee, and has no right or authority to interfere in the government of the affairs of the corporation. Now, it appears and is explained by counsel for the vendee in his argument that there was a new corporation organized or attempted to be organized, or perhaps I ought not to go so far as that—there was a certificate of incorporation executed under the religious societies act by three of the gentlemen who occupied the position of trustees of this corporation, together with Bishop O'Connor and Bishop Ortynsky, who signed the same as Vicar General. That certificate was filed in the office of the county clerk, but no further proceedings appear to have been taken under it. There does not appear to have been any organization of a corporation, any membership, any place of worship, nor anything in the world that would give it vitality as a religious corporation. As explained by counsel for the vendee in his argument, it was organized for the purpose of curing any possible irregularity that there might have been in the organization of the complainant corporation, so I put the new corporation, which goes by the name of St. John the Baptist Catholic Church according to the Greek rite, of Newark, N. J., out of the case altogether.
Now, we come back to what took place in June or during the months that elapsed between January 2, 1908, and the 1st day of June, 1908. I think that it must have appeared to the vendor that there were rival parties in this church at that time during those various meetings; that there was one party which claimed to be the board of trustees legally elected; and that there were other people who likewise claimed to be the ruling people of the church. I think the vendor was justified in declining to deal with either party until the rights of both parties had been actually settled by some court of competent jurisdiction. I do not see how it would have been safe for the vendor to have mixed in with the situation, as it was on the 1st day of June, 1908, and it was all the fault of the vendee. They permitted Baron and Hrycej to appear as two of the ruling people of the church, permitted them to take the money of the church, permitted Hrycej to be elected treasurer, permitted them to represent themselves to the vendors as people who had the say about what should be done, therefore wholly the fault of the vendee, because I find that Baron was neither a trustee nor an officer of the church. So far as he interfered with the business in band he was a mere intruder. Now, that is one of the reasons, as it appears to me, why the matter was not closed up, and the other reason was because the vendees did not have any money. Now, that was not the fault of the vendor at all. The vendor was always ready to perform. They went so far as to prepare a deed in accordance with the contract, and that deed was shaken in the faces of the vendees a number of times, and finally was made the subject-matter of a formal tender. And still there was no response to it. That was not the fault of the vendors either. Now the complainants say, notwithstanding all these circumstances, "We think that we are entitled to a decree of specific performance"; and by their bill they offer to perform upon such terms and conditions as the court may prescribe, and that offer is repeated by counsel, in the argument to-day. In the bill the complainant says: "Your orator being ready and willing and hereby offering specifically to perform the agreement in all things on its part and behalf." Now, I need not cite to counsel for the vendee the old equitable maxim that he who comes into the court of equity must do equity. He would he bound to do equity whether he made the offer to do it or not. He would not be permitted to take an equitable stand without having superadded to whatever be might say the further statement: "With all my offers I must do equity." On the other hand, I do not think it would be equitable to permit the claim in the answer of the vendors to prevail, namely, that the vendees should forfeit the $7,500 that they have already paid. Equity never favors forfeitures. So we get down to a point finally, which is this: Whether the complainant ought to be allowed to have this contract specifically performed. I think so. I think that contract should be performed specifically; but the complainant in taking a decree for specific performance must take a decree which willmake the other side whole, completely whole. All the expenses incurred by the vendor which can be properly chargeable to the default of the vendee in the payment of this $10,000 must be charged up to the vendee, and the vendee may take a decree for specific performance, subject to all those payments. Now, they are as I recollect them, first, interest. The vendor was obliged to pay interest on loans which they had to have in order to make the payments on their own contract. It was not as if they were a moneyed corporation loaning money, but they bad to have this money on the day for the purpose of meeting their own payments, and it appears they were put to trouble and expense and annoyance about it, and the vendee will have to pay whatever interest was actually paid out by the vendor for loans of money which were necessary for the completion of its contracts up to June 1, 1907, and interest on the whole sum of $10,000 from that date to the day of payment. I fancy that counsel may be able to agree upon that amount. If not, I will endeavor to fix it.
The next item which must be accounted for is the insurance premium, next the water rents. I must also charge up against the vendee the amount of money paid for the attorneys' expenses in the district court and in procuring the loans. Then, I think they also ought to pay all the costs of this suit, together with a counsel fee of $250. Now, if the vendee desires to have a decree of specific performance, it may have a decree upon the payment of those amounts within 30 days from the date of the signing of the decree. Of course, they must pay the $10,000 purchase money also.