N. Y. BIBLE SOCIETY v. BUDLONG

N. Y. BIBLE SOCIETY v. BUDLONG. N. Y. Supreme Court, First District, New York Circuit ; February, 1892. Benevolent societies ; right of trustee or director to receive compensatio?i for services as attorney at law.] The provisions of L. 1872, c. 104, prohibiting any trustee or director of “ any charitable or benevolent institution ” from receiving any salary or emolument from said institution, etc., apply only in favor of such societies as establish asylums or homes for benevolent or charitable purposes and which would be entitled to receive the public money, and not such corporations as are private in their character and are organized for literary or religious objects. Trial by the court. This action was brought by the New York Bible Society against Morris M. Budlong, and was, after his death, continued against Julia M. Budlong as his administratrix. The action was tried upon the admissions contained in the pleadings and upon an agreed statement of facts submitted under stipulation of the respective parties. It appeared that the plaintiff was incorporated under L., 1848, c. 319, the objects of the society being stated in the •certificate of incorporation to be as follows: “ The distribution of the sacred Scriptures without note or comment, and in English, those of the commonly received version, in and about the City and Harbor of New York, and the raising of funds for this purpose, and in aid of the American Bible Society also, “ that the business of the society shall be managed by a. board of sixty managers.” The sole business and objects pursued by the society since its incorporation were those specified in the certificate. The distribution of books by the plaintiff was effected through agents employed by it for that purpose, the funds expended for the cost thereof being supplied from church ■collections and other voluntary gifts. The volumes distributed are received by gratuitous grants thereof from the American Bible Society, and are delivered to the recipients thereof without charge. In a very small number of instances, however, where the recipient is able to do so, he is asked to make some payment, such payment, if made, being entirely voluntary and ordinarily- less, but never more than the manufacturing cost of the book. All moneys so received are accounted for to the American Bible Society from which the books are received. The American Bible Society is incorporated under a special charter (Z. 1841, c. 68) for the purposes as stated therein of publishing and promoting a general circulation of the Holy Scriptures without note or comment. The original defendant was an attorney and counselor-at-law and from 1867 until May, 1889, was one of the managers of the plaintiff. Between 1882 and May, 1889, he rendered services to the plaintiff as its attorney and counsel in various proceedings and actions in the courts of this State involving and affecting the right of the plaintiff to a legacy under the will of one Sarah Burr, for which services he rendered a bill to the plaintiff on or about May 20, 1889. He had a few days previously delivered a letter to the secretary of the plaintiff in which he resigned his membership and his office of manager, which resignation was on or about the 21st day of May, 1889, accepted at a meeting of the board of managers. In July, 1889, he received from the executors of said Sarah Burr a check for $20,000 drawn to his order as attorney for the plaintiff, on account of their legacy, and after deducting therefrom the amount of the bill which he had rendered, he remitted the balance to the plaintiff with a receipted duplicate of the bill which he had previously rendered. A letter was subsequently written to Mr. Budlong on behalf of the plaintiff, acknowledging the receipt of the money so paid and requesting a check for the balance retained, for which sum, payment being refused, this action was subsequently brought. It was admitted that the charge made was a reasonable one for the services rendered and that said services were performed with the knowledge and approval of the plaintiff. Edward C. Perkins, for plaintiff contended that defendant was prevented from receiving any compensation for his services by the provisions of chapter 104 of the Laws of 1872. Joseph P. Osborne, for defendant. I. The attorney is. entitled to have a clear case made out against him (Matter of Knapp, 85 N. Y. 285). At common law directors of corporations could recover for services outside their duties as such ( Woods Field on Corp. 2 ed. § 162 ; Angell & Ames on Corp. § 317 ; Hall v. Vermont R. R. Co., 23 Vt. 401 ; Henry v. Rutland R. R. Co., 27 Id. 435 ; Chandler v. Prest, etc., I Green (N. J.) 255 ; Gridley v. Lafayette R. R. Co., 71 Ills. 201 ; Rogers v. Hastings, etc. R. R. Co., 22 Minn. 28). II. The act of 1872, c. 104, does not apply to the plaintiff society (DeWolf v. Lawson, 61 Wisc. 469). III. The contract is entire and the court cannot determine how much service was rendered before Mr. Budlong’s resignation (Tenny v. Beyer, 93 N. Y. 529; Bathgate v. Haskin, 59 Id. 533). Since Mr. Budlong at the time when he received his compensation was not a ■manager, the statute does not apply. [MAJORITY — INGRAHAM, J.] INGRAHAM, J. The sole question in this case is whether a corporation organized under the act of 1848 for the distribution of Bibles and Testaments without note or comment and to raise funds in aid of the American Bible Society, is a charitable or benevolent “ institution ” within the provisions of chapter 104 of the Laws of 1872. The act of 1872 is entitled : “ An act in relation to trustees and directors of charitable and benevolent institutions,” and the act prohibits any trustee or director of any charitable or benevolent institution from receiving any salary or emolument from said institution and prohibits the directors or trustees of any institution organized for charitable or benevolent purposes from voting or allowing any salary or compensation for services either as trustee or director, or in any other capacity. The prohibition contained in the act applies not to corporations, but to institutions, and while a corporation may be organized under the act of 1848 for the purpose of establishing an institution for benevolent or charitable purposes, it is not every corporation that is organized under the act that is organized for such purpose. The act of 1848 provides for the incorporation of societies for literary, historical, scientific or missionary purposes, for the furtherance of religious opinion and for Sunday school purposes and for mutual improvement in religious knowledge, and under its provisions the plaintiff was organized as a corporation to distribute the Sacred Scriptures and for the raising of funds for such purposes and in aid of the American Bible Society. From the very nature of the work it was to do, no institution was contemplated within the ordinary meaning of that word, and the legislature by its adoption of the word “ institution ” instead of “ corporation ” apparently intended to distinguish between such corporations or societies as established asylums or homes for benevolent or charitable purposes and -which would be entitled to receive the public money, and such corporations as were private in their character and were organized for literary or religious objects. It is clear that a religious corporation or a library . would not come within the provision of the act in question, •and this distinction is, I think, recognized by the legislature in other statutes that have been passed, and which have been referred to by counsel for the defendant. The provisions of the Revised Statutes regulating charities clearly distinguish between benevolent institu-" tions and corporations formed under the law of 1848 for benevolent, charitable and other purposes, and I think that the act of 1872 does not apply to corporations organized for the purpose specified in the certificate of incorporation. I think, therefore, the defendant is entitled to judgment. If plaintiff desires to appeal, however, I will direct that all proceedings after the entry of judgment be stayed until the determination of such appeal. No appeal was taken.