Bryan v. Board of Education of Kentucky Annual Conference of Methodist Episcopal Church South

The plaintiffs in error, suing on behalf of themselves and other shareholders of the Board of Education of the Kentucky annual Conference of the Methodist Episcopal Church, South, and of the Millersburg Male & Female Collegiate Institute, brought this suit in equity in the circuit court of Bourbon county, Ky., against the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, South, and others, to obtain a decree perpetually restraining the defendants from selling or disposing of certain lands and buildings of the above-named institute, commonly known as the 'Kentucky Wesleyan College,' located at Millersburg, Ky., or from removing that college, it capital, or property from that place to Winchester, in the same commonwealth, or from using the capital or fund of the institute for any purpose or at any place, except in its conduct and management at Millersburg.

Upon final hearing, the bill was dismissed, and that decree was affirmed by the court of appeals of Kentucky, the highest court of the commonwealth. The present writ of error questions the correctness of the decree of affirmance, upon the ground, among others, that it gives effect to legislative enactments which, it is alleged, impair the obligation of a contract, in which the plaintiffs and those in whose behalf they sue have an interest for the permanent location and maintenance of the college at Millersburg.

The facts relating to the alleged contract, and to the federal question suggested by the legislation referred to, will sufficiently appear in the following statement:

At a meeting of the citizens of Millersburg, held on the 4th day of January, 1858, these resolutions were adopted:

'Whereas, it is proposed to purchase ground and erect buildings for and institution of learning and boarding house, the whole to cost about fifteen thousand dollars; and whereas, it is believed to be indispensable to the success of educational enterprises that they may be under the supervision of some denomination: Therefore,

'Resolved, that we promise and pledge ourselves for the amount subscribed to secure a male and female collegiate institute in Millersburg, or its immediate vicinity, on the following basis, to wit: (1) That it be an institute for the Covington district, Kentucky Conference, and be under the control of the Methodist Episcopal Church, South; (2) the trustees and building committee be appointed by the quarterly conference of the Millersburg station, the former to be subject to the approval of the Kentucky Conference; (3) it shall be upon the joint-stock plan, the shares to be $25 each, and to be subject to sale or transfer, but not to bear interest; (4) in case the said church fail to sustain the institute, and it shall from any cause be discontinued, they the property is to revert to the stockholders pro rata; (5) the stock subscribed shall be paid to the building committee on the following terms: One third when the buildings are put under contract, one-third when they are covered in and floors laid, and one-third six months thereafter.'

For the purpose of accomplishing these objects, the Millersburg Male & Female Collegiate Institute was incorporated by an act of the legislature of Kentucky, approved February 16, 1858, the preamble of which recited that 'divers citizens in and near the town of Millersburg, in the county of Bourbon, have subscribed a considerable sum of money for the purpose of erecting in or near said town a seminary of learning, to be under the control and supervision of the Kentucky Annual Conference of the Methodist Episcopal Church, South, to the extent hereinafter provided.' The act made certain trustees and their successors in office capable of purchasing and holding any lands, tenements, goods, chattels, and money, not exceeding $50,000 in value, that should be purchased, granted, or devised to the use of the institution. It was provided that the trustees might receive additional subscriptions and donations in aid of the seminary, and should be selected, from time to time, by the Kentucky Annual Conference of the Methodist Episcopal Church, South, upon the nomination of the Millersburg station of that church. The fourth section of the act is as follows: 'All persons who shall subscribe twenty-five dollars or more in aid of said institute shall be deemed stockholders therein, said sum to constitute a share. And if the said Methodist Church shall ever relinquish or surrender, or cease to exercise a control over said institute, then, and in that case, its control and management shall revert to and vest in said stockholders, who may, at a meeting for that purpose called, proceed to elect a board of trustees; and if said corporation shall cease to exist, or be dissolved, or its charter surrendered or repealed, all its property of every kind or description shall vest in said stockholders.'

This act, it was declared, should take effect from its passage, 'but the legislature reserves the right to amend or repeal the same.'

At the meeting of the Kentucky Annual Conference held in Millersburg, in September, 1858, the trustees of the institute presented a memorial, stating that it had secured a charter for a collegiate institute of be held and controlled, as in its charter provided, by that conference; had obtained a subscription of $7,500; and had purchased a suitable piece of land, and taken steps to have all necessary buildings erected on it. The conference having been asked to accept the subscription, grounds, etc., upon the terms set forth in the charter of the institute, the memorial was referred to a committee, which reported as follows: '(1) That we accept the institute upon the terms set forth in the charter; (2) that we request the presiding bishop to appoint the preacher of Millersburg station agent to raise the sum of $10,000 for our educational fund; (3) that the sum of $10,000, when secured, be subscribed as the stock of this conference in the institute; (4) that we, the members of this conference, being deeply impressed with the sense of our educational necessities, do hereby pledge ourselves personally to the support of this institution, and we will afford every facility in our power to the agent in raising the above $10,000.'

The conference approved the report of the committee; but, having expressed its belief that harmony of action in that body would be secured if the charter of the institute were amended so as to make it exclusively a male school, with college privileges, a meeting of the stockholders and friends of the institute was held, at which it was resolved: '(1) That we, as stockholders in the institute, will unite in application to the legislature to so amend the charter as to make it a first-class male college; (2) that we will raise our subscription to $10,000, and that we will use our best efforts to advance and sustain the enterprise, upon the condition that the Kentucky Annual Conference of the Methodist Episcopal Church, South, will appoint a special agent to raise an additional sum of $10,000; and, further, that said conference, in good faith, pledges itself to aid in the erection of suitable buildings, and to take the proper steps to endow the college as soon as practicable.' These proceedings were approved by the conference.

On the 30th day of September, 1858, at a meeting in Lexington, Ky., of the Board of Education, which had been constituted by the conference at its meeting in Millersburg, but had not then become incorporated, it was resolved: '(1) That we believe that $200,000 will be ultimately required to establish and sustain in the best manner a first-class college, and that we proceed at once to raise one-half of the amount. (2) That no part of the capital raised for the educational fund shall ever be appropriated to the payment of the salaries of the professors and other teachers, or for any contingent expenses whatever, and that only $10,000 of that fund, as already pledged by the conference, shall be appropriated towards the erection of the college buildings. (3) That no part of the proceeds of the capital shall be used for any purpose whatever until, in the judgment of the Board of Education and the trustees of the college, it is annually sufficient to support three professors. (4) That we issue scholarships of the value of $500 each, to be perpetual and transferable, and to entitle the holder to tuition in either the preparatory department or the college proper, in any studies necessary to graducation. (5) That we issue scholarships of the value of $100 each, to terminate in fifty years from the time of the opening of the college, not to be transferable, and to eititle the holder to tuition only in the college proper, and in such studies only as may be necessary to graducation; in other respects they are to be similar to the scholarships of Ashbury University, of Greencastle, Indiana. (6) That we issue scholarships to the value of $50 each, entitling the holder to five years' tuition at any time within fifty years from the time of the opening of the college, in any of the classes of the college, in the studies necessary to graduation, but not to be transferable. (7) That if the original stockholders of the Millersburg Male & Female Collegiate Institute will raise in Bourbon county, and in that portion of Nicholas county lying in the vicinity of Millersburg, $10,000 in addition to the $10,000 pledged by them, the entire amount of $20,000 thus raised to be invested in the erection of the buildings, we will issue scholarships for the said $20,000 on the same terms as to others, provided that their amount of stock in that case be surrendered in lieu of said issue of scholarships, to the Kentucky Annual Conference of the Methodist Episcopal Church, South, to be held by said conference as part of the educational fund. (8) That the treasurer of the educational fund be instructed to pay over moneys coming into his hands, as they may be needed, so soon as the $10,000 already pledged by the stockholders shall have been secured, provided that he shall, in so doing, be governed by the action of the conference and the other part of these proceedings. (9) That any individual who shall endow a professorship shall have the privilege of naming it.'

The above proposition was acceded to by stockholders at a meeting held in October, 1858, to consider the subject, and scholarships ships were issued to those making subscriptions or donations. A certificate of perpetual scholarship recited that the person to whom it was issued had, by payment of the sum therein named 'to the treasurer of the educational fund of the Kentucky Annual Conference of the Methodist Episcopal Church, South, purchased' the same 'in the college or university to be established by said conference at Millersburg, Kentucky,' under certain specified limitations. The certificate of a 50-year scholarship contained similar recitals, accompanied by numerous conditions, that need not be here repeated. The notes executed for the scholarships were in the following form: '$500. Bourbon County, Kentucky, _____, 18__, ___ year after date, I promise to pay to the order of _____, treasurer of the educational fund of the Kentucky Annual Conference of the Methodist Episcopal Church, South, five hundred dollars, this being the _____ note in _____ payment for a scholarship in the college or university to be established by said conference.' Some of the notes had in them these words: 'In the college or university now established by said conference.' Upon delivery by donors or subscribers of their notes, the agent executed a receipt, in the following form: 'Received of (William M. Miller) five hundred dollars, ($500,) and his note for five hundred dollars, ($500,) payable in one year from the ___ day of ___, 18__, to _____, treasurer of the educational fund of the Kentucky Annual Conference of the Methodist Episcopal Church, South, which, when paid, will entitle him to two perpetual scholarships in the college or university established by said conference. _____ County, Kentucky, _____, 18__.' While certificates of scholarships were being issued, the buildings were in process of erection at Millersburg; and by November 23, 1859, nearly $60,000 had been donated in cash and notes, of which about $20,000 had been expended no the buildings, leaving only a small sum to be applied for their completion.

On the 12th of January, 1860, the legislature of Kentucky passed an act entitled 'An act to incorporate the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, South,' the preamble reciting that 'the Kentucky Conference of the Methodist Episcopal Church, South, have resolved to form an educational fund and establish a college for the promotion of literature, science, morality, and religion within the limits of said conference; and having, in fact, secured the sum of fifty-seven thousand dollars in cash and in good and reliable notes, and located an institution at Millersburg, Bourbon county, which is now ready for occupancy: now, in order to give full and complete legal effect thereto,' etc. This act authorized the board to make by-laws and ordinances for the proper conduct and government of the college, to elect its president and faculty, to establish, change, or abolish professorships, as the exigencies of the college might require, and to perform all acts, not inconsistent with the constitution or statutes of the state, that were necessary or expedient in sustaining the educational fund of the conference, and for the proper conduct of the college. The board was required to meet at the time of the commencement of the college at Millersburg, and at such other times as it might determine. The money paid into the hands of the treasurer, as the educational fund, was directed to be invested in Kentucky state bonds, county bonds, or safe and profitable stocks, as the board might determine, except the amount necessary 'to pay for the present college building.' By the eleventh section the act incorporating the Millersburg Male & Female Collegiate Institute, approved February 16, 1858, was repealed; and by the twelfth section the right to amend or repeal the act of 1860 was reserved.

By an act of the Kentucky legislature, approved September 17, 1861, amendatory of the act incorporating the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, South, it was provided: 'Section 1. That it shall and may be lawful for the trustees of Millersburg Male and Female Collegiate Institute, who were in office on the 12th day of January, 1860, when the act incorporating said institute was repealed, or their survivors, to convey, by deed, to the Board of Education of the Kentucky Annual Conference of the Methodist Episcopal Church, South, the property held by said trustees in and near the town of Millersburg, for the purpose of carrying into effect any contract made by said trustees or stockholders of said institute with said board, and their conveyance, recorded in the proper office, shall be effectual to pass the title of said property to said board and their successors. Sec. 2. Nothing contained in the act of the general assembly incorporating said board, approved January 12th, 1860, shall be construed so as to prevent or hinder said board, or their successors, from removing the seat of the college from Millersburg to any other place in the bounds of the Kentucky annual conference. Sec. 3. That act to be in force from its passage.'

This act was accepted by the Annual Conference by formal action taken September 25, 1861, and on the 4th day of November, 1861, nearly 27 years before this suit was brought, the trustees of the Millersburg Male & Female College conveyed to the Board of Education, and their successors in office, the grounds on which the college buildings were erected, 'for the benefit of the educational fund of the Kentucky Conference of the Methodist Episcopal Church, South, forever, to be held and used and disposed of in such way as the charter of said Board of Education may direct.'

Thos. F. Hargis, for plaintiffs in error.

D. L. Thornton, S. Shellabarger, and J. M. Wilson, for defendants in error.

Mr. Justice HARLAN delivered the opinion of the court.