Schwartz v. Duss
Opinion of the Court
after making the foregoing statement, delivered the opinion of the court.
Two questions were submitted to the master : (1) Have the plaintiffs such a proprietary right or interest as would entitle them upon the dissolution of the society to share all its property or assets, or which entitles them to an accounting ? (2) Has the society been dissolved by consent or by an abandonment of the purposes for which it was formed ? A negative answer to either of the propositions determines the controversy against
The society was formed by one George Rapp, who, with his son and others, came from the Kingdom of Wurtemberg to the United States in 1803 or 1804, and settled at Harmony, in Butler County, Pennsylvania. In 1814 the society moved to Posey County, Indiana, and later removed to Economy, Pennsylvania, its present abode, in 1825. Its members' “ were associated and combined by the common belief that the government of the patriarchal age, united to the community of property, adopted in the days of the Apostles, would conduce to promote their temporal and eternal happiness.” 19 How. 126.
Their relations, principles of government, personal and property rights were provided for by written contracts ¡executed respectively in 1805,1821, 1827,1836,1847,1890 and 1892. The present discussion is concerned with the- first four.
By article 1 of the contract of 1805 each subscriber to that contract delivered up, renounced and remitted all of his or her property of every kind, “ as a free gift or donation, for the benefit and use of the community,” and bound himself, his heirs and descendants, “ to make free renunciation thereof, and to leave the same at- the disposal of the superintendents of the community,” as if the subscriber “never had nor possessed it.”
Article 5 was as follows :
“ And if the case should happen, as above stated, that one or more of the subscribers, after a short or long period, should break their promise, and could or would not submit to the laws and regulations of the church or community, and for that or any other cause would leave Harmony, George Rapp and his associates promise to refund him or them the value of his or their property, brought in without interest, in one, two or three annual installments, as the sum may be, large or small; and if one or more of them were poor and brought nothing into the community, they shall, provided they depart openly and orderly, receive a donation of money, according to his or their conduct while a member, or as he or their circumstances and necessities may require, which George Rapp and associates shall determine at his or their departure.”
The society became the owner of about 7000 acres of land at Harmony, which on May 6, 1815, was conveyed by Frederick Rapp, as attorney in fact, to Abraham Ziegler for $100,000. That year, or in 1814, the society removed to Indiana. “There a second agreement was entered into January.20, 1821. This agreement expressed, as that of 1805, the submission of the sub
The master found that “ in 1826 the society removed from Indiana to Beaver County, Pennsylvania, where they purchased and settled upon a tract of land containing about 3000 acres, now known as ‘ Economy,’ where they have since remained, and which has since become very valuable, and on which they have erected many buildings, including dwellings and factories of. various kinds, and made many valuable improvements.”
In 1827 another agreement was entéred into, the preamble of which was as follows:
“ Whereas by the favor of Divine Providence an association or community has been formed by George Bapp and many others upon.the basis-of Christian fellowship, the principles of which being faithfully derived from the sacred Scriptures, include the government of the patriarchal age, united to the community of property adopted in the days of the apostles, and wherein the single object sought is to approximate, so far as hutrian imperfection will allow, to'the-fulfillment of the will of God by the exercise of those affections and the practice of those virtues which are essential to the happiness of man in time and throughout eternity.
“ And whereas it is necessary to the good order and well being of said associations that the condition of membership should be clearly understood, and that the rights and privileges and duties of every individual therein should be so defined as to prevent mistake or disappointment on the one hand and contention or disagreement on the other.”
This agreement was an amplification of that of 1805. Article 5 of the latter became article 6. This agreement was signe'd by 522 members of the association, and afterwards, and until February 14, 1836, was signed by 144 additional members. In 1832, dissensions having arisen, a large number of themembers withdrew under the leadership of one Count De Leon. They received $110,000, and granted a release unto George Bapp and his associates of all of their right and title in any of the property “ belonging to the society of George Bapp and bis, associates.”
■ “ And whereas the-pr.o visions of the said, sixth article, though assented to at the time, manifestly, depart from the great principle of a community of goods and may tend to foster and perpetuate a feeling of inequality at variance with the true-spirit and* objects of the association-; .
“ And whereas the principió of restoration of property, besides its pernicious tendency, is one which cannot now be enforced with uniformity and fairness, inasmuch as the members of the association in the year 1816, under a solemn conviction of the truth of what is above recited, did destroy all record and memorial of the respective contributions up to that time;
“ And whereas continued happiness and prosperity of the association, a more intimate knowledge of each other, have removed from the minds of all members the least apprehension of. injustice and bad faith : ■
“ Now, therefore, be it known by these presents that the undersigned, with a view to carry out fully the great principles of ou.r union, and in consideration of the benefits to be derived therefrom, do hereby solemnly enter into covenants, and agree with each other as follows :
“ 1st. The said sixth article is entirely annulled and made void, as if it had never existed ; all others remain in full force as heretofore.
“ 2d. All the • property of- the society, real, personal and mixed, in law or equity, and howsoever contributed or acquired, shall be deemed now and forever joint and indivisible stock; Each individual is to be considered to have finally and irrevocably parted with all his former contributions, whether in land, goods, money or labor ; and the samó-rule shall apply to all future contributions whatever they may be.
“ 3d. Should any individual withdraw from the society, or depart this life, neither he in the one case nor his représentativés in the other shall be entitled to demahd an account of,said*20 contributions, whether in land, goods, money or labor, or to claim anything from the society as matter of right. But it shall be left .altogether .to the discretion of the superintendent to decide whether any, and if any what, allowance shall be made to such member or his representatives as a donation.”
The agreement was signed by all who were then members, and subsequently by thirty-three others.
Prior to his death, in 1834, Frederick Rapp, a member of the society, had been its business agent, and transacted its external affairs. After his death the members of the society (July 5, 1834) executed a power of attorney to George Rapp, constituting him such general agent, with power to appoint agents and substitutes under him. On the same day he appointed Romulus L. Baker and Jacob. Henrici his substitutes. This power of attorney was signed by 402 members, and recited the death of Frederick Rapp, and the consequent necessity for the appointment of a new agent, so that the temporal affairs of the society would continue to be managed in a mode which had proved convenient and satisfactory, constituted George Rapp such agent with power of substitution, invested him with all necessary powers, including the receipt and the execution of conveyances of real and personal property. George Rapp disclaimed any greater interest in the then resources or future earnings of the society than other members.
George Rapp was the founder of the society, and continued to be its head or superintendent, and to rule and govern it until his death in 1847. After his death another agreement was executed .(August 12, 1847). It was signed by 280 members. The agreement recited the death of Rapp, and expressed the necessity “ to the good order and well being of the association that some plan should be agreed upon to regulate its future affairs, promote its general welfare and preserve and maintain it upon its original basis ; ” it also announced to all immediately concerned that the surviving and remaining members of the Harmony Society, each covenanted with all the others thereof, and with those who should thereafter become members, “ to solemnly recognize, reestablish and continue the articles of our
This agreement created a board of elders of nine members to conduct the internal affairs of the society, and a board of trustees of two members to conduct its external affairs. The trustees disclaimed any greater personal interest in the property of the society than other members. .
These agreements, the master found, “ are the agreements and documents under which, or some of which, the plaintiffs claim' the right to share in the property and assets of the society as heirs of former members.” And as to the relations of the plaintiffs to the society the master found as follows :
“ 1st. That none of the plaintiffs were ever members of the society.
“ 2d. That all of those members of the society through whom Christian Schwartz claims as their heir, signed the agreements of 1836 and 1874, and continued members until their death.
“3d. That Antony Koterba claims as heir of his father, Joseph Koterba, and his half-brother, Andreas Koterba ; that Joseph Koterba joined in the organization of the society, and also signed the agreement of 1827, and afterwards, in 1827, withdrew from the society ; and that Andreas Koterba signed the agreements of 1827, 1836 and 1847, and died a member of the society.
“4th. That the grandparents of David Strohaker, viz., Christian Strohaker and wife, and Matthias Kief and wife, joined the society in 1805, and all remained members until their death— all dying between 1820 and 1825, except Mrs. Rief, who died between 1830 and 1836. That his father, Christopher Stroha-ker, signed the agreement of 1827, and withdrew from the society in 1827. That his aunt, Catharina Strohaker, signed the agreements of 1827, 1836 and 1847, and continued a member of the society until her death.
“5th. That Lawrence Scheel and Jacob Scheel, ancestors of Allen and G-. L. Shale, joined the society in 1805; that Lawrence withdrew in 1824 or 1826; that Jacob Scheel signed the agreement' in 1827 and died a member, about Í837.
*22 “ 6tb. That none of the parties through whom the plaintiffs claim contributed any money or property to the society,”
He divided the persons from whom the plaintiffs claim as follows.:
“First. Those withdrawn from the society before the execution of the agreement of 1836.
“ Second. Those dying in the society before that time.
“ Third.. Those who died members of the society after having joined in the agreements of 1836 and 1847.”
Manifestly the plaintiffs cannot have other rights than their ancestors, and the rights of- the latter depend upon the agreements they signed. The agreements we have recited. The signers of them certainly strove to express their meaning clearly, and, whenever occasion arose, declared their understanding, aims and purposes, and always substantially in the same way.
The cardinal principle of the society was. self-abnegation. It ivas manifested hot only by submission to a religious head, but by-a community instead of individual ownership of property, and the dedication of their labor to the society. The possibility ■of some member or members not being able to “ stand to it,” to use the expressive phrase of the agreements, was • contemplated, and provision was made for that event. But a very significant difference was made between a performance of service and the contribution of property. For the former it was covenanted by the members no reward should be demanded for themselves or their children or those belonging to them. As to the latter, George Rapp and his associates promised to refund the value of the property brought in without interest, in one, two or three annual installments, as the same might be large or small. Ib was, however, provided, as to those who “ were poor and brought nothing to the community,” that they should receive, if they departed openly and orderly, “ a donation in money, according to his or their conduct while a member, or as his or their circumstances might.require,” as “ George Rapp and his associates shall determine ” (agreement of 1805); as “ in the judgment of the superintendents of the association” (agreement of 1827).
There was another class, the faithful and- abiding members, but even these, the master found, contributed no property, and the .decision of their rights becomes as easy as the decision of the right of those who “ could not stand to it in the community ” and withdrew. They promised, as we have seen,, to endeavor by the labor of their hands “ to promote the good and interest of the community,” and to hold their “ children and families to do the same.”' And for compensation they received instruction in. church and'school. They received assurance of maintenance “ in healthful days ” and days which might not be such, and assurance when death should come to them, that their families would be taken care of. ■ It may be presumed that as the- members were faithful to -their covenants the society was faithful to its covenants, and there were no undischarged obligations or rights for distant relatives of deceased members to assert or claim against the community or its property. This seems to be conceded by counsel for petitioners, and we are brought to the consideration of the third class into which the master divided the persons from whom some of the petitioners claim to derive, those who died members of the society after having joined in the agreements of 1836 and 1847.
Counsel for petitioners say in their brief: “ The article of ■ 1836 is the only material article, bearing. upon the property rights of the plaintiffs,' while the articles of 1805, 1821, 1827 and 1847 aré material in considering the character of the trust, the purposes and principles of the society.”
In other words, as we understand counsel by the propositions
“ All the property of the society, real, personal and mixed, in law or equity and howsoever constituted or acquired, shall be deemed, now and forever, joint and indivisible stock. Each individual is to be considered to have finally and irrevocably parted with all his former contributions, whether in lands, goods, money or labor, and the same rule shall apply to all future contributions, whatever they may be.”
To the articles of 1836, it is also contended-, that the society as .such was not a party, but nevertheless the property became impressed with a trust for the use of the society, as such, “ by those who then (1836) represented the ownership of this joint and indivisible stock,” and as each new member came in “ he became an owner of an equal share of the property, subject to the trust.” And it is further contended that the members of 1836 and those who came in afterwards became donors of the property, and when the society or the trust failed from any cause the “ corpus of the trust property ” reverted to them “ by way of resulting trust, . . . not to the surviving members as donees, or beneficiaries of the trust.” In other words, the members became at once donees of each other and donors to the society, and the descendants of members who had not ánd' might not bring a dollar to the society excluded from any interest in the-reversion of its great properties the descendants of those
“ Should any individual withdraw from the society, or depart this life, neither he in the one case nor his representatives in the other shall be entitled to demand an account of said contributions, whether in land, goods, money or labor, or to claim anything from the society as matter of right. But it shall be left altogether to the discretion of the superintendent to decide
The purpose was definite and clearly expressed. It was certainly thought .to be clear enough by the men who framed it to declare and accomplish the “sacrifice of all narrow and selfish feelings to the true purposes of the association,” as the articles fervidly declared. And it was provided that the member who withdrew from the society could make no demand against it “as a matter of right.” The member who died left no right to his representatives. It needs no argument to show that as such members had no rights they could transmit none to the petitioners in this case.
No trust having been created by the agreement of 1836 different from that created by the other agreements,, there is no necessity to consider the arguments based on the assumption of its invalidity. That agreement was the affirmation and the continuation of the prior agreements, and they were held not to be offensive to the public policy of. Pennsylvania, by the Supreme Court of that State in Schriber v. Rapp, 5 Watts, 351. The trial court in that case had instructed the jury that “ there is nothing in the articles of association (those of 1805, 1821 and 1827) given in evidence that renders the agreement unlawful or void; nothing in them inconsistent with constitutional rights, moral precepts, or public policy.”
The Supreme Court observed that the point made agaiist the articles as being against public policy was attended with no .difficulty, and Chief Justice G-ibson said for the court: “An association for the purposes expressed is prohibited neither by statute nor the common law.” And it did not occur to this court in Baker et al. v. Nachtrieb, 19 How. 126, to treat them as invalid contracts. See also Goesele v. Bimeler et al., 14 How. 589; Speidel v. Henrici, 120 U. S. 377.
An analysis of the agreements of 1847, Í890 and 1892 is not necessary. They were made to meet particular exigencies, and expressly affirmed the prior agreements, except the sixth section of that of 1827.
The master, and both the Circuit Court and the Circuit Court of Appeals* found that the society had not been dissolved, either
Judgment affirmed.
Dissenting Opinion
dissenting.
Assuming, the validity of the trusts, the questions appear to be, whether the -condition of things has resulted in failure to carry out, and of ability to carry outothe .principles and purposes of the society, and the defeat of. the trusts; and, if so, whether the destination of the corpus of the- trust property has, thereupon, become such'that complainants or some of them have a locus standi to ask relief in a court of equity. ■
The courts below held that the society still existed in law and in fact, and that this case was not. one of “.dealing with the assets of a defunct or dissolved association or in other words, that the trusts had not been defeated ; and th'e'decrees rested on this conclusion. If erroneous, the inquiry then arises, to whom does the corpus of the trust property go in the. event of thede-feat of the trusts. ...
A brief recapitulation of the facts is necessary to indicate the grounds of my inability to concur in the Opinion and judgmént of the court.
“ The members of the said society who had brought with them from Wurtemburg, money, combined their funds and all their property in common, they lived as members of a common household and each member enjoying, alike Avith every other, the fruits of their common labor in equality and brotherhood. The occupation or business of the said society was agriculture, except in so far as it was necessary to manufacture shoes, clothing and other necessaries for the community. The members of the said society obeyed George Rapp as their spiritual and temporal leader and ruler. About the year 1807, the community pro-mulgatéd the doctrine of celibacy as being necessary for the success of a communistic society.”
Although styled “George Rapp and his associates,” Rapp was, from the beginning to his death in 1847, the absolute and exclusive ruler in whom all power was vested. Members were admitted by adoption and on adoption conveyed and transferred all their property, real and personal, to “ George Rapp and his associates,” an&) after 1836, to the Harmony Society, for the use and benefit of the community.
By article 5 of a written agreement of February 5,. 1805, if for any cause one or more of the subscribers should leave Harmony,. “ George. Rapp and his associates ” promised to refund the value of his or their property brought in, while those who brought nothing in might receive a donatio l.
The second agreement was dated January 20, 1821, and the third, March 9, 1827.
The first branch of the preamble of this agreement of 1827, read: “ Whereas, By the favor of Divine Providence, an association, or community, has. been formed by George Rapp and many others, upon the basis of Christian Fellowship, the principles of 'which being faithfully derived from the sacred Scriptures, include the government of the patriarchal age, united to
By the first article the subscribers gave, granted and forever conveyed “ to the said George Rapp and his associates, their heirs and assigns, all our property, real, personal and mixed, whether it be lands and tenements, goods and .chattels, money or debts due to us, jointly or severally, in possession or in remainder or in reversion, or in expectancy, whatsoever or wheresoever, without evasion, or qualification, or reserve, as a free gift or donation, for the benefit and use of said association or community.”
Members were to be obedient to superintendents, were bound to promote the interests and welfare of the community, and were to receive support and instruction.
The sixth article (almost identical with article 5 of 1805), was as follows: “ And if it should happen as above mentioned, that any of the undersigned should violate his or her agreement, and would or could not submit to the laws and regulations of the church or community, and for that or any other reason, should withdraw from the association, then the-said George Rapp and his associates agree to refund to. him or them the value of all such property, without interest, as he or they may have brought into the community in compliance with the first article of this agreement, and the said value to be refunded in one,, two or three annual installments, as the said George Rapp and his associates shall determine. And if the person or persons so withdrawing themselves were poor, and brought nothing into the community, yet if they depart openty and regularly, the}r shall receive a donation in money, according to the length of their stay and to their conduct, and to such an amount as their necessities may require, in the judgment of thé superintendents of the association.”
The master found, among other things, as follows :
“Prior to his death in 1884, Frederick Rapp, a member of*30 the society, had been the business agent of the society, transacting its external business. After his death the members of the society on July 5, 1834, executed a power of attorney to George Rapp — Exhibit No. 85 in evidence — constituting him general agent of the society in all its temporal affairs, with power, to appoint agents and substitutes under him. Under this power, he on the same day appointed Romulus L. Baker and Jacob Henrici his substitutes. This power of attorney was signed by four hundred and two members of the association, and with the substitution and not including the signatures, is as follows :•'
“‘ Know aH men by these presents: Whereas, Frederick Rapp, of Economy, in Beaver County, State- of Pennsylvania, recently deceased, was for a series of years the agent in.temporal affairs of the Harmonie Society, carrying on in his own name all the extérnai business of said society and taking to himself the titles to real estate as well as the evidence of claims arising out. of the various transactions of-said society ;
•“ ‘And Whereas,/By an instrument dated the 20th of July, 1825, under the hand and seal of said Frederick, he solemnly and irrevocably declared that all the property, real, personal and mixed, which then was or hereafter .might be in his possession or enjoyment, or the title to which he then held or might hereafter ■ hold, was and should be considered the property of the said society, in which he the said Frederick had no absolute interest whatsoever;
' “ ‘ And Whereas, The lamented death of the said Frederick Rapp renders it indispensable that a new agent should be appointed by whom the temporal affairs of the society may continue to be managed in a mode which has proved convenient and satisfactory; . .
“‘Now, Therefore, Be it known, that we the undersigned, constituting said Harmonie Society, do hereby nominate and appoint George Rapp, of Economy, in the County of Beaver, the general agent of said society in all its temporal affairs. •
“ ‘ The • powers intended to be conferred on the said George Rapp are hereby declared to be as follows, that is to say: •
“ ‘ 1. To ask for, demand and receive from each and every*31 bank or other incorporated company, partnership, or individual person' or persons, the amount which may be due therefrom, in the way of principal, interest or dividend to the said Harmonio Society, or to Frederick Eapp, whether the same be evidenced by judgment, mortgage, bond, certificate of stock, note, bill of exchange, deposit of money, book account, verbal promise, sale or - barter, loan or money, or arise in any other manner whatsoever, the check, order, receipt, acquittance- or release of the said George Eapp to be as effectual as if executed by all and each of us, or as if it had been executed by the said Frederick Eapp in his lifetime..
“ ‘ 2. To execute and receive all deeds and conveyances, in fee simple or otherwise,.on behalf of the society, whether the title thereto stand in the name of the society or of Frederick Eapp or of George Eapp and associates., The act of the said George Eapp relative thereto to be as valid and sufficient as if executed by us or by the said Frederick Eapp in his lifetime.
“ ‘ 3. To carry on, by himself or through the agents whom he is hereinafter authorized to appoint, all the dealings and traffic of said society of every description.
• “ ‘ 4. To constitute and appoint an agent or agents under him ás he may deem advisable, imparting to such substitute or substitutes, should he think fit the' whole- or any portion of the authority hereby conferred on himself. He may also at his pleasure revoke such instrument of substitution whenever he .may think such revocation called, for by the interests of the society.
. “ ‘ 5. It is distinctly understood that in accepting and acting under this power the said George Rapp disclaims all personal 'interest other than that of a member of said society-in the present resources or future earnings of the society, in conformity with the principles and terms upon which the Harmonie Society was orginally founded, as fully and. effectually as was done by the late Frederick Rapp in the instrument already adverted to, dated 20th July, 1825, the terms of which instrument the said George Eapp hereby adopts for himself and repeats in every particular.
“ In witness whereof the undersigned members of the Har-*32 monie Society who constitute said society, have hereunto set their hands and seals at Economy, in Beaver County, this fifth day of July, in the year of our Lord, eighteen hundred and thirty-four.’
(Signatures.)
(Acknowledgment.)
“ ‘ By virtue of the authority expressed in the fourth article of the foregoing power of attorney, I do appoint and substitute in my place and stead, Bomulus L. Baker and Jacob Henrici, of Economy, Beaver County, Pennsylvania, to act as general agents of the Harmonie Society aforesaid, jointly or severally in my name, and for the use of the said society, to do and perform all, acts and things which as the general agent of said society, I am authorized to do. It being distinctly understood, however, that in accepting and performing the office and business of general agents of the said society, the said R,.. L. Baker and Jacob Henrici shall neither acquire nor claim any personal interest in the present resources or future earnings of the said society other than that of a member of the said society, agreeably to the plans and terms of association, but shall be considered as exercising the same trust mentioned in a declaration of trust signed by Frederick Lapp on the 20th day of July, 1825, and referred to in the foregoing power of attorney to George Rapp.’ ”
Signed, sealed and delivered by George Rapp.
October 3.1, 1836, the following agreement was executed by-391 members, of the society and afterwards accepted and adopted by 33 others:
“Whereas, The Harmonie Society, consisting of George Rapp and many Others, now established in the town of Economy, in Beaver County, Pennsylvania, did on the 9th of March, 1827, enter into certain articles of association, of which the 6th in number is as follows, viz. [here follows that article] :
“ And whereas, The provisions of the said 6th article, though assented to at the time, manifestly depart from the great principle of a community of goods and-may tend to foster and perpetuate a feeling .of inequality, at variance with the true spirit and objects of the association;
*33 '“ And whereas, The principle of restoration of property, besides its pernicious tendency, is one which cannot now be enforced with uniformity and fairness, inasmuch as the members of the association in the year 1816, under a solemn conviction of the truth of what is above recited, did destroy all record and memorial of the respective contributions up to that time;
“ And whereas, Continued happiness and prosperity of the association, and a more intimate knowledge of each other, have removed from the minds of all members the least apprehension ' of injustice and bad faith;
“Now therefore, Be it known by these presents that the undersigned, with a view to carry out fully the great principles of our union, and in consideration of the benefits to be derived' therefrom, do hereby solemnly enter into covenants, and agree with each other as follows:
“ 1st. The said 6th article is entirely annulled and made void, as if it had never- existed; all others remain in full force as heretofore. ' ■
“ 2d. All the property of the society, real, personal and mixed, in law or equity, and howsoever contributed or acquired shall be deemed now and forever joint and indivisible stock. Each individual is to be considered to have finally and irrevocably parted with all his former contributions, whether in land, goods, money or labor; and the same rule shall apply to all future contributions whatever they may be.
“ 3d. Should any individual withdraw from the society, or depart this life, neither he in the one . case nor his representatives in the other, shall-be entitled to demand an account of. said.contributions, whether in land, goods, money or labor, or to claim anything from the society as a matter of right. But it shall be left altogether to the discretion of. the superintendent to decide whether any, and if any, what allowance shall be made to such member or his representatives as a donation.
“ Invoking the blessing of G-od on this sacrifice of all narrow and selfish feelings to the true purposes of the association and to the advancement of our own permanent prosperity and happiness, we have signed the foregoing instrument, arid affixed*34 thereunto, our respective seals, at Economy, this 31st day of October, 1836.”
George Bapp, sole patriarch and ruler, died in 1847, and thereupon, in that year certain articles were subscribed by two hundred and eighty-eight persons as the “ surviving and remaining members of the Harmonie Society, and constituting the same.” These articles created and nominated a Board of Elders of nine members, with the power of filling vacancies, and a Board of Trustees, consisting of two members of the Board of Elders, which had power to fill vacancies in the trusteeship. Instead of a single patriarch, a dual patriarchy was substituted, and those boards alone had the power over and control of the property.
The eighth article was as follows :
“ It is hereby distinctly and absolutely declared and provided that all the property, real, personal and; mixed, which now or hereafter shall be held or acquired by any trustee or trustees, or person under them, is and shall be deemed the common property of said society, and each trustee now or hereafter appointed hereby disclaims all personal interest in the present resources and future earnings of the society, other than that of a member thereof, according to the articles of association hereby established and continued, and according to the present government.”
From these documents it appears that prior to October 31, 1836, all contributions of property were for the use and benefit of the community on the condition that any member withdrawing was to receive back the value of his contributions.
But that by the contract of 1836, the property then held in trust was no longer held subject to reclamation on the basis of original contribution, but the whole aggregate was made a common fund in which each member was equally interested, subject to the previously existing trust for the use and benefit of the society ; that the corpus of the trust property included all future contributions, accretions and accumulations; and that the then and subsequently admitted members occupied the relation of donors and the society, as a society, of donee.
The joint and indivisible stock embraced all present and fu
If then the trusts are. defeated I concur in the view that the. trust property must go either to the owners or donors livings and to the heirs and legal representatives of those who are dead, by way of resulting trust; or to the surviving members of the society as joint tenants with right of survivorship, or by way of tontine.
It is -true that the third clause of the agreement of 1836, provided that on withdrawal, or death, no member, or his representatives, should be entitled to an account or “to claim anything from the society as matter of right.” But .that clause referred to the society as a going concern, and this bill is not filed against the society, but proceeds on the ground of the termination of the trusts and the existence of a condition of things demanding the winding up of the society’s affairs.
And if the system of patriarchal government has been abandoned; if for the communistic'scheme,A capitalistic scheme has been substituted; if the society has become a trading community and lost all its distinctive attributes; if it is undergoing the process of liquidation ; if all its property and assets have passed to a trading corporation and the power of carrying out its original principles has departed; if • its membership has' become practically incapable of perpetuation; it follows that the trusts have been defeated and the society ended to all intents and purposes.
Early in 1890, John S. Duss and two others, employés but not -members of the society were elected to fill vacancies in the Board ofcElders.
In April, 1890, certain articles were executed, the number of members being stated to be 45.
The Junior Trustee having died, John S. Duss was elected to fill the vacancy, and soon after, with his wife and children,
In February,.1893, certain members of the society filed a bill for its dissolution, the winding up of its affairs and the distribution of its assets.
While the bill was pending, seventeen members received . from the assets money and property to the amount of something over one hundred thousand dollars, and gave quitclaims and acknowledgments, of full-satisfaction of their interest or share in the property of' the society. The grantors in nearly all of.these instruments acknowledged in consideration of the • money paid or land conveyed, that he or she does “ hereby release, cancel and discharge any and all claims whatsoever, which I, my heirs, assigns or lawful representatives, may or could ever have against said society or its trustees, its property or assets, or any part thereof, I hereby declaring all such claims to be fully compensated, settled,- released and discharged; ” and, after reciting the various properties and assets, “ I am entirely satisfied to accept as my full share and interest therein,” etc. .
'Two of the deeds contained this paragraph : “ While it may be that said society may have and be the possessor of several hundred thousand dollars worth of property after paying all-debts, I am entirely satisfied to accept as my full share therein the sum of-thousand dollars.”
■ After these settlements began the bill was dismissed by con-' sent.
In January, 1894, a corporation styled the Union Company was organized, under the state statute, “ for the purpose of the purchase ánd sale of real estate, or for holding, leasing and selling real estate,” its business “ to be transacted in the borough of Beaver, county of Beaver, State of Pennsylvania.”
On April 11, 1894, sevénteen persons purporting to be all ■ the then members of the society, executed a paper stating: “We the members of said Harmonio Society, do each hereby
“ The capital stock of said incorporated company, however, to' be owned and held by the said trustees for the benefit of the society, in accordance with,' and on the terms and conditions of the articles of association of said society and the ratifications and modifications thereof, as the same now exists, to the extent of three hundred and ninety-seven thousand five hundred ($397,500) dollars, out of a total capital of four hundred thousand ($400,000) dollars.”
The vast property of the society was conveyed to the Union Company, and the stock of that corporation assigned to the trustees.
Since April 11, 1894, nine of the seventeen subscribers have died, leaving eight, consisting óf John S. Duss and his wife, one Gillman, 77 years of age, and unable to read or speak English; and five women of the ages of'80, 77, 58, 54, and 47, respectively.
Duss and Gillman became the sole remaining male members of the society and the women, with the exception of Mrs. Duss, were mostly old, infirm or ignorant.
No new member has been admitted since 1893. It is suggested that this was because none desired admission. This may be so, and this would explain the diminishing of over five,.hundred members in 1827 to two hundred and eighty-eight in 1847, arid .forty-five in 1890. But the result is the same. The eight remaining cannot reasonably be held to represent the great
As the membership diminished the wealth increased, but not from contributions by new members, and operations were carried on by hired labor.
Not one of the eight contributed to the three or four millions of property accumulated. It is conceded that Duss alone is the active member; But he is not the society, nor does the society in respect of its avowed principles any longer exist.
Moreover the transactions by which seventeen members of the society, not old and infirm, but vigorous and capable, were bought out, were in themselves acts of liquidation. It is idle to say that these payments were “ donations ” to withdrawing inembers. They were purchases, in terms, and in effect. They were settlements by agreement instead of through litigation.
Finally, substantially the entire property of the society and its affairs have been turned over to a corporation created under the laws of Pennsylvania, authorized to purchase and sell land. This corporation has none of the powers confided by the articles óf 1847, to the Board of Elders and. the Board of Trustees. It has no power to feed, lodge, maintain and support, or to care for the spiritual welfare of members of the society, or to perform -any of the duties imposed upon the boards. The trustees have no distinct title to the society’s property, but only the rights pertaining to the stock of the Union Company. All the industries carried on in Economy are carried on by tenants and lessees of the Union Company, and the society has ceased to possess the power to carry out the purposes for which its property was accumulated.
The affairs of the Union Company must be wound up under
The master found, as matter of law, that the society continued to exist because the surviving members had not formally declared it to be dissolved, and that the purposes and principles of the society could not be held to have-been abandoned unless by the formal action of all its members. But this could only be so on the assumption that the scheme of the trust created a joint tenancy with the right of survivorship, or a system of tontine; and that a single surviving member might' be the society although to the integrity of a community, numbers are essential. By the articles neither the members, nor the Board of Elders, nor the Board of Trustees, nor all together, possessed the power voluntarily to formally dissolve the association, and it is for a court of equity to adjudge whether a condition of dissolution or a condition requiring winding up is or is not created by acts done or permitted.
Such being, in my opinion, the condition here, the trust property must go, as.I have said, either to the surviving members as joint tenants with right of survivorship, ór by way of ton-tine ; or to the owners or donors living, and to the heirs and legal representatives of those who are dead by way of resulting trust.
Appellees contend for the first of these propositions. Their counsel says in his brief: “ It is the society, as a society, which owns this property. It is the entire body as one-whole. If at any time the society did dissolve, its property would go to the persons who then were its members. No one else has any legal or equitable claim to it except' those members. To them, and to them alone, it would belong, and among them it would be divided.”
It is inconceivable that the creators of the trust contemplated any such result, when they sought to perpetuate Christian fellowship by the renunciation of their property.
Joint tenancy with survivorship or tontine excluding all but living members and casting accumulations on the survivor, are neither of them to be presumed. They are the result of express agreement and there is- none such in these documents.
On the contrary, this property was held in trust for the use and benefit of the society as a society, and not for the individual members. The trust was for the use and benefit of the society in the maintenance of its principles as declared by its constitution and laws. When the purposes of the society were abandoned, or could not be accomplished, or the society ceased to exist, the trust failed, and the property reverted by wav of resulting trust to the owners, who subjected it to the trust, living, and to the heirs and legal representatives of those of them who are dead.
This conclusion does not involve the assertion of a reversion secured by the express terms of the contracts, but rests on the familiar principle of equity jurisprudence that when the trust clearly created by the documents terminated a resulting trust arose to the grantors or donors or their heirs. The distinction is thoroughly elucidated by Mr. Justice Gray in Hopkins v. Grimshaw, 165 U. S. 342. It was there said, among other things:
• “ But the trust was restricted, in plain and unequivocal terms, to the particular society to be benefited, as well as to the purpose of a burial ground, adding (as if to put the matter beyond doubt) and for no other purpose whatever.’ The trust would end, therefore, at the latest, when the land ceased to be used as a burial ground and the society was dissolved. . . .
“ In the case at bar, the trust created by the deed having*41 been terminated, according to its express provisions, by the land ceasing to be used as a burial ground, and the dissolution and extinction of the society for whose benefit the grant was made, there arises, by a familiar principle of equity jurisprudence, a- resulting trust to the grantor and his heirs, whether his conveyance was by way of gift, or for valuable consideration.”
The titles held by the trustees in this case were held for the benefit and use of the society in the maintenance of its principles. "When the purposes of the trusts failed the property reverted, not because of special provision to that effect, but because that was the result of the termination of the trusts.
Complainants, or some of them, are the heirs and next of kin of members who signed the articles of 1836 and 1847, and who died in fellowship. The service of one of these families is said to aggregate three, hundred years of unrequited toil. They are entitled to invoke the aid of the court in the winding up of this concern, and these decrees ought to be reversed.
I am. authorized to state that Me. Justice Beewee concurs in this dissent.
Reference
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- . In an action brought for tlio distribution of the property and assets of the Harmony Society on the ground that it bad ceased to exist and that its assets should revert to the heirs of the original contributors some of whom were ancestors- of the plaintiffs in error (complainants below), and that the defendants now in control of the property should he enjoined from transferring the same to a corporation or otherwise dealing with the same, the hill contained allegations of fraud and conspiracy on the part of the defendants. The' ancestors of the complainants had long since retired from the society and signed releases. The effect of several agreements between the members and founders of the society was involved in the action; it had been held by the master, whose conclusions of law and fact were approved by.the Circuit Court and the judgment thereon affirmed by the Circuit Court of Appeals, that none of the plaintiffs had such a proprietary right or interest in the property and assets of the Harmony Society as entitled them upon the dissolution of the society to any part.of, or share therein, as prayed for in the bill, and also that the society had not been dissolved by the common consent of the members or by an abandonment of the purposes for which it was formed. In affirming this judgment dismissing the bill, it is stated: “ The Harmony Society, the history whereof has been recited and its principles characterized and defined by the Supreme Court of Pennsylvania and by this Court” (Sehriberv. Rapp, 5 Watts, 351; Baker v. Naclitrieb, 19 How. 126; Speidel v. Henrici, 120 U. S. 377), was founded by Ceorge Iiapp, and its members “ were associated and combined by the common belief that the government of thfe patriarchal age, united to the community of property, adopted in the days of the Apostles, would conduce to promote their temporal and eternal happiness.” The relations of. the society, precepts of government, personal and property rights, were provided for.by several written contracts executed in 1805, and thereafter. By one of these agreements some of the members who contributed property to the society renounced individual ownership, but by the same agreement George Rapp and his associates promised to refund to any members retiring the value of the property so brought in, and if any members who had brought nothing into the community retired, they should, provided they departed openly and orderly, receive a donation of money to be determined by George Rapp and associates. By a subsequent agreement made in 1836, it yas provided that each individual was to be considered as having finally and irrevocably parted with . all his former contributions, and on withdrawing should not be entitled to demand an account thereof as a matter of right, but it should be left altogether to the discretion of the superintendent to decide whether any, and if any, what, allowance, should be made to such member or his representatives as a donation. The membership of the society having greatly diminished, many of the members retired leaving only the defendant in this action and a few others, who had determined to transfer the property to a corporation, when complainants filed a bill claiming that the society was dissolved and that the assets were lield by the remaining members and officers in trust and should be distributed between former members and their descendants including complainants: Held that the facts did not show that there was any dissolution of the society; that the relations of the members and the society were fixed by contract; .that the plaintiffs could not have other rights than their ancestors had; that no trust was created by the agreement of 1836, and under its terms when the plaintiffs’'ancestors (who had not contributed any property) died or withdrew from the society their rights were fixed by the terms of that agreement; the members who died left no rights to their representatives, and had no rights which they could transmit to the plaintiffs. The Supreme Court of Pennsylvania has decided in other cases involving these contracts that they were not offensive to the public policy of Pennsylvania. The master, the Circuit Court and the Circuit Court of Appeals, having found that the society had not been dissolved, either by consent of its members or by the abandonment of the purposes for which it was founded, this court will not, on account of such concurrence and under the rules of the court, review the disputed facts involved in that finding.