Patricia Crosby v. Southern Regional Corporation ( 2003 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2003-CA-00219-SCT
THE CITY OF PICAYUNE, A MISSISSIPPI
MUNICIPAL CORPORATION; PATRICIA CROSBY,
WOODY SPIERS, AHMAD HAIDAR, M.D., JOHN R.
PIGOTT, MARIA G. BEVERAGE, CROSBY HOSPITAL
AUXILIARY, AN UNINCORPORATED ASSOCIATION,
THROUGH ITS PRESIDENT MARTHA J. SHEPPARD
v.
SOUTHERN REGIONAL CORPORATION f/k/a
LUCIUS O. CROSBY MEMORIAL HOSPITAL, A
MISSISSIPPI NON-PROFIT CORPORATION, AND
SIDNEY L. WHITLEY, TED J. ALEXANDER,
STANLEY JACK WATSON, CLYDE DEASE, JO
WOODS, CHARLOTTE ODOM, THOMAS M. CASEY
AND LOWER PEARL RIVER VALLEY FOUNDATION,
A MISSISSIPPI NON-PROFIT CORPORATION
DATE OF JUDGMENT: 01/08/2003
TRIAL JUDGE: HON. JAMES H. C. THOMAS, JR.
COURT FROM WHICH APPEALED: PEARL RIVER COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS: G. GERALD CRUTHIRD
GLENN LOUIS WHITE
STEPHEN SHEPPARD
ATTORNEYS FOR APPELLEES: SCOTT W. PEDIGO
JAMES LAWRENCE JONES
NATURE OF THE CASE: CIVIL - WILLS, TRUSTS, AND ESTATES
DISPOSITION: ON DIRECT APPEAL: AFFIRMED. ON CROSS-
APPEAL: REVERSED AND RENDERED -
12/08/2005
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE WALLER, P.J., CARLSON, AND RANDOLPH, JJ.
CARLSON, JUSTICE, FOR THE COURT:
¶1. This case is before us on appeal from a judgment handed down by the Pearl River
County Chancery Court wherein the chancellor ruled to dismiss all claims asserted by
representative citizens of the City of Picayune against the Southern Regional Corporation, the
Lower Pearl River Valley Foundation and the common board of directors known to each.
Additionally, this case is before us on cross-appeal, as the named defendants challenge a
collateral determination made by the chancellor wherein he recognized that the representative
citizens of Picayune had standing to bring this action. Focusing on the threshold issue
presented on cross-appeal, we affirm the chancery court’s judgment on direct appeal, but for
reasons different than those stated by the chancellor. Finding that the representative citizens
lacked the requisite standing to bring this suit, we reverse the chancellor’s judgment finding
that the representative citizens of the City of Picayune had standing to bring this action, and
render judgment here in favor of the appellees/cross-appellants.
FACTS AND THE PROCEEDINGS IN THE CHANCERY COURT
A. The history and incorporation of the Crosby Memorial Hospital
Corporation:
¶2. In 1949, the City of Picayune (“the City”) began to consider building a hospital for the
benefit of its residents. The December 12, 1949, minutes of the Mayor and Board of
Alderman evidence this intention and reflect that the Ethel Crosby Foundation donated money
to the City for the stated purpose of purchasing land on which to build a new hospital. While
it is unclear who was originally responsible for the hospital initiative, it is clear that in 1950
the City issued hospital bonds in the amount of $90,000 and approved a contract for an
2
architect to draw up the plans for its proposed municipal hospital, only to release the architect
the very next year when it was unable to secure a grant of federal funds.
¶3. In 1951, the Crosby family, who had a sincere interest in providing their community
with a functional medical center, incorporated the Lucius O. Crosby Memorial Hospital
(heretofore referred to as the “Crosby Memorial Hospital Corporation” or “CMHC”).1 Clearly
a corporate expression of the Crosby family’s desire to give back to their community, the
Crosby Memorial Hospital Corporation was incorporated as a Mississippi nonprofit with a
strictly charitable purpose. The incorporators are listed on the charter as: R.H. Crosby; R.H.
Crosby, Jr.; L.O. Crosby, Jr.; Richard C. Crosby; and T.L. Crosby and for corporate purposes
are considered the original “members.”2
¶4. The charitable purpose of the Crosby family’s corporation was “to acquire real estate
for and to construct, purchase and otherwise acquire, equip, operate and maintain one or more
hospitals...” Pursuant to the corporation’s newly specified bylaws, the already-named
corporate “members” were empowered to and did elect the Crosby Memorial Hospital
Corporation’s Board of Trustees.3 Accordingly, they appointed five officers to this board for
one year terms and charged each of them with the duty of managing the day-to-day business of
1
The Lucius O. Crosby Memorial Hospital is the original corporate entity initiated by the Crosby
family to aid in providing the Picayune community with a hospital. This corporation would eventually become
known as the Southern Regional Corporation.
2
Member, as defined by Miss. Code Ann. § 79-11-127(v) means any person who on one or more
occasion pursuant to a provision of a corporation’s articles or bylaws has the right to vote for the election of
a director or directors.
3
For the purpose of this case and as determined by Chancellor Thomas, the term “Trustees” is of no
real legal significance other than its use as a term of reference for a governing body within the Crosby
Memorial Hospital Corporation.
3
the corporation. At different times, and up until 1977, Crosby family members held a majority
of the management positions within CMHC and, in this way, served the corporation as
“Members”, Trustees and managing corporate officers.
¶5. On October 2, 1951, after the City withdrew its application for a license to operate a
hospital and sold the donated land where the hospital was to have been built, CMCH proceeded
in the City’s stead and oversaw the construction of what became the Crosby Memorial
Hospital(“CMH”). Raising funds from grants-in-aid which came from the State of Mississippi
in the amount of $184,590, from the Ethel Crosby Foundation in the amount of $92,395, and
from Crosby Chemical, Inc. in the amount of $675,298, the Crosbys utilized CMHC as their
vehicle to erect CMH for a total cost of $952,284. Upon completion, CMH was then leased
to the City for token consideration.
¶6. From 1954 to October 27, 1964, CMHC entered into three successive lease
agreements with the City. After the final lease term terminated, the City assigned all of its
rights relating to CMH back to CMHC, which planned to manage CMH as a nonprofit facility
for the next ten years. Coordinate to this assignment, CMCH amended its bylaws.
Accordingly, the Crosby family amended the corporate charter to allow for the expansion of
membership “at any time by consent of a majority of members present at any meeting,” to
expand the Board of Trustees from five (5) to seven (7) trustees and to create an additional
Board of Governors, which was charged with overseeing the operations of the hospital and
related facilities. Specifically, the bylaws required that the new Board of Governors be elected
by CMHC’s Board of Trustees.
4
¶7. After the 1964 assignment, no significant changes occurred until 1977. Up until this
time, the management positions of CMHC had been predominantly held by members of the
Crosby family; however, in August 1977, the Crosby family members effectuated a major
change in their closely held corporation by officially resigning their positions with CMHC’s
management. To this end, the participant “members” of the Crosby family turned in their
resignations after unanimously electing seven new “members” pursuant to the enumerated
corporate structure. The newly elected, non-Crosby family “members” were: S.G. Thigpen,
Jr., Dr. D.L. Bolton, Dr. C.G. Blackburn, Ms. Trinity Williams, Ms. R.B. Vaughn, R.T.
McRaney and C.J. Chatman. In turning over the reins of their non-profit corporation to the new
members, the Crosbys imposed no restrictions on the corporation’s assets.4
¶8. The front office and organizational changes made within CMHC were accompanied by
improvements to CMH’s facilities. City records show that the City council worked with CMH
to improve the facility, either by providing additional city services, or waiving fees for building
permits or other municipal costs incurred by CMH.
¶9. In 1987, CMHC, with the secretary of state’s approval, again amended and restated its
charter and corporate mission.5 The revised charter expanded the corporate purpose, and the
corporation officially became “a nonprofit, non-share corporation for charitable, medical,
scientific and educational purposes.” The broad purposes included in the charter focused on
4
By virtue of their positions with Crosby Memorial Hospital prior to their resignation, the Crosbys
could have added specific provisions within the corporate charter imposing a trust, or otherwise restricting
corporate assets; however, in the process of removing themselves from corporate management, they included
no such provisions.
5
A restated charter allows a corporation to bring all of its amendments forward into one new
document and to simply add only the newest amendments. In today’s case, without restatement there would
be a charter in 1951 with thirty six years of amendments.
5
“participating, so far as circumstances may warrant, in any activity designed and carried on to
promote the general health of the community.” Additionally, the 1987 amendments allowed
for Communicare Systems, Inc. to be included in the CMHC membership and streamlined
corporate management down to a singular Board of Governors elected directly by the
corporate members. The 1987 amendments included important language concerning the
dissolution of the corporation. Paragraph 10 of the amendments provided:
Upon the dissolution of the corporation, the Board of Governors shall, after
paying or making provision for the payment of all the liabilities of the
corporation, dispose of all assets of the corporation exclusively for the
purposes of the corporation in such manner, or to such organization or
organizations organized and operated exclusively for charitable, educational,
religious, or scientific purposes as shall at the time qualified as an exempt
organization or organizations under section 501(c)(3) of the Internal Revenue
Code of 1954 (or the corresponding provision of any further United States
Internal Revenue Law), as the Board of Governors shall determine. Any such
assets not disposed of shall be disposed of by the Chancery Court of the county
in which the principal office of the corporation is then located, exclusively for
such purposes or to such organization or organizations, as said Court shall
determine, which are organized and operated exclusively for such purposes.
¶10. After the adoption of the 1987 amended charter, four years passed until more changes
were implemented, and, in 1992, CMHC was again streamlined. According to the newly revised
Articles of Incorporation, there was to be one governing body, the Board of Governors,
comprised of nine individuals serving both roles of “member” and “governor.” Importantly,
this new corporate structure, with a single governing board, has remained in place ever since.
Another major change resulting from the 1992 amendments was the merger of Crosby Health
Foundation, CMH, and Communicare Systems. Moreover, Articles of Merger were filed with
the Secretary of State and the bylaws of CMHC became the bylaws of the new unified
corporation.
6
B. The Crosby Memorial Hospital Corporation’s decision to sell and
lease CMH, and to incorporate a new charitable foundation with
the proceeds:
¶11. In 1995, the Crosby Memorial Hospital Corporation began to assess alternatives to
confront the many challenges it faced as a small nonprofit community hospital. Faced with a
dilemma typical to the age and the nature of its facility, the Board of Governors was forced to
evaluate glaring and evolving problems associated with both its physical plant and the new
dynamics of a competitive health care market. Thus, the Board of Governors began discussing
the practicability of renovating its facility and the long term financial viability of undertaking
such a project.
¶12. In pursuit of a comprehensive financial review, the Board of Governors initiated several
surveys, studies, and assessments, including a facility survey and evaluation, a debt capacity
study, and a community needs survey. After three years of review, the Board of Governors
determined that it would be imprudent and impractical to finance the significant needed
renovations to the hospital, or in the alternative, to build a new facility. Accordingly, CMHC
began actively pursuing buyers for CMH and, in August 1998, it issued a letter of intent
confirming a proposed sale of the facility to New American Healthcare Corporation
(“NAHC”). The letter of intent contained material terms of the parties’ agreement.6 In
addition to standard buyout terms, NAHC agreed to become contractually obligated to spend
6
Specifically, the terms provided that NAHC, or its affiliate NAHC of Mississippi, would lease and
purchase all of the CMHC assets; CMH (the physical plant and its surrounding real estate) would be leased
for a $15 million advance lease payment; and, the other non-cash assets would be purchased, except that the
Southern Regional Corporation (SRC) would retain its community fitness center (the Cornerstone).
Additionally, NAHC agreed to contribute $500,000 to a private foundation (LPRVF) to be established by
SRC.
7
at least $18 million in constructing a new hospital facility within 30 months and in the interim
to: (a) spend an average of at least $600,000 per annum for up to three years on repair and
maintenance of the existing facility; and, (b) operate a 24-hour emergency room and provide
obstetrical services for at least five years.
¶13. In preparation of the sale to NAHC, and in order to accommodate the impending liquid
nature of corporate assets, the CMHC Board of Governors restated its articles of
incorporation and renamed its company the Southern Regional Corporation (“SRC”).7 The
corporate nature of SRC was reflected by its stated purpose, which was “to participate, so far
as circumstances may warrant, in any activity designed and carried on to promote the general
health of the community” and “to make grants to other 501(c)(3) entities organized exclusively
for charitable, religious, educational, and scientific purposes, including but not limited to the
Lower Pearl River Valley Foundation.” Of note, the statement of purpose to operate a hospital
was removed due to the inclusion of contractual language that forbade SRC from operating a
hospital in NAHC of Mississippi’s market area, and the name change was accomplished to
avoid confusion between CMHC and CMH, which was now being operated by NAHC of
Mississippi. These corporate amendments were filed with the Mississippi Secretary of State’s
office in February of 1999.
¶14. The primary, post-sale corporation was to become the Lower Pearl River Valley
Foundation (LPRVF), which was officially incorporated in 1998. The registered agent at the
time of incorporation was Ted Alexander, who was concurrently serving on the Board of
Governors of SRC. Specifically, Ted Alexander, Sidney Whitley, Stanley Watson, Clyde
7
See supra, footnote 5.
8
Dease, Thomas Casey and Calvin Green all served on the LPRVF Board. Notably, all board
members except Calvin Green, who was the acting administrator of CMH, served on the SRC
Board. The Board of Governors of SRC incorporated LPRVF in order to serve the community
with charitable grants and, like SRC, also incorporated LPRVF as a Mississippi non-profit
corporation, exempt from federal and state taxes. Unlike SRC, however, LPRVF was classified
as a private foundation under the Internal Revenue Code. Consistent with their corporate, non-
profit charter and their tax-exempt status, SRC and LPRVF were prohibited from providing
financial support to for-profit entities as all monies associated with either corporation were
designated for charitable use. While both corporations existed concurrently, SRC’s continued
existence was primarily to finalize the sale of CMH to NAHC, close out pension plans, and
deal with pending lawsuits.
¶15. Proceeds from the sale and lease of the CMH facility were transferred to LPRVF and
SRC. Specifically, per the NAHC-SRC transaction, NAHC of Mississippi paid $500,000
directly to LPRVF, $1,500,000 to SRC for operational expenses, and ultimately paid out the
balance of the purchase price, approximately $15,520,000, to LPRVF via SRC to be passed on
after the transaction was completed.8 Both SRC and LPRVF presidents signed the assumption
and waiver agreement with NAHC of Mississippi and its parent company NAHC, and the
transfer was unanimously approved by SRC’s Board members.
¶16. Pursuant to its status as a Code 501(c)(3) entity, LPRVF through its written investment,
grant making, conflict of interest, and financial disclosure policies, ensured that its assets
8
According to the minutes of the LPRVF meeting held on February 5, 1999, the funds given to
LPRVF by SRC from the sale of CMH (a.k.a. the Crosby Memorial Hospital facility) were to be transferred
to LPRVF from the CMH account after the completion of the sale.
9
would be administered for the benefit of the community and not enure for the benefit of private
individuals.9
¶17. After the purchase of CMH from SRC, NAHC filed for Chapter 11 bankruptcy. In
August of 2000, Picayune Clinic leased the CMH facility from NAHC through negotiations
which were approved by SRC, which still retained legal ownership of the hospital facility. At
the time of the chancery court ruling in this case, Picayune Clinic was operating CMH as a for-
profit hospital. As part of its contract with NAHC and SRC, the Picayune Clinic was required
to make annual capital improvements to the hospital facility in the amount of $600,000 and to
provide acute care services at the same level as previously provided by CMH, including
obstetrical and emergency services. Additionally, Picayune Clinic agreed not to pursue any of
the proceeds from the NAHC transaction, so as not to imperil the tax exempt status of LPRVF.
C. Proceedings in Chancery Court:
¶18. Soon after the NAHC bankruptcy, the City filed suit in the Chancery Court of Pearl
River County on behalf of the citizens of Picayune and surrounding areas naming SRC, LPRVF,
and the seven directors of two corporate entities as defendants.10 In its complaint, the City
alleged, inter alia, that the assets of SRC and LPRVF were held in trust for the benefit of the
citizens of Picayune by way of an implied trust; that the City was entitled to damages for
restitution due to the defendants’ negligent entrustment of trust properties; and, that the City
9
LPRVF’s financial disclosure policy provides for annual reporting to the Attorney General, disclosure
of information to the public in response to requests and on a yearly basis, and the public announcement of all
grants. Moreover, LPRVF is required by federal law to award grants of at least five percent of its funds
each year, which may be paid from investment income on the funds.
10
The named directors were Sidney L. Whitely, Ted J. Alexander, Stanley Jack Watson, Clyde
Dease, Jo Woods, Charlotte Odom, and Thomas M. Casey (collectively, the “defendants”).
10
was entitled to an equitable accounting, appointment of a master and receiver, and other
appropriate relief.
¶19. The defendants responded by initially removing the case to the United States District
Court for the Southern District of Mississippi and then, subsequently, to the United States
Bankruptcy Court for the Middle District of Tennessee. When both removals resulted in
remand to state court, the defendants proceeded in chancery court and filed a motion
requesting dismissal, asserting that the City lacked the requisite standing to pursue its claims
and had failed to state a claim upon which relief could be granted. Specifically, the defendants
argued that the City was unable to assert a claim on behalf of its citizens and the residents of
the surrounding area. In response to this motion, Chancellor James H.C. Thomas, Jr., entered
an order dismissing all of the City’s claims asserted on behalf of its citizens, but authorizing
the City to pursue claims asserted through its corporate capacity.
¶20. In response to the dismissal order, Patricia Crosby, Woody Spiers, Ahmad Haidar, John
R. Pigott, Maria Beverage and Martha Sheppard (collectively “the Intervenors”) intervened and
re-asserted the legal positions and adopted the discovery responses submitted by the City.
However, the City subsequently dismissed all of its claims with prejudice, thus leaving the
Intervenors to pursue their representative claims. In addition to the City’s original claims, the
Intervenors added allegations that they, “as individual citizens could show that they were
victims of fraud, duress or other unconscionable conduct on the part of the Defendants
resulting in the defendants’ obtaining and holding title to the proceeds and other assets derived
from the lease and sale [of CMH] so that a constructive trust has arisen for their benefit.” By
way of direct response to the Intervenors’ presence in the suit and their allegations, the
11
defendants filed motions with the chancery court to dismiss the Intervenors’ claims for lack
of standing. In an order handed down on December 26, 2001, Chancellor Thomas denied the
defendants’ motion pending consideration of evidence at trial.
¶21. After a four day trial in July, 2002, the chancellor, despite recognizing standing,
dismissed the Intervenors’ claims. In so ruling, Chancellor Thomas made note of SRC’s
prominent charitable role in the City of Picayune and the mutually beneficial relationship
which the two entities had maintained over the previous five decades. Aggrieved by the ruling
of the chancery court, the Intervenors timely filed their notice of appeal from the chancellor’s
final judgment. In turn, the defendants filed a cross-appeal with this Court challenging both the
chancellor’s order granting the Intervenors’ motion to intervene and the chancellor’s opinion
concluding that the Intervenors had standing to bring suit. Both appeals are now properly
before this Court for disposition.
STANDARD OF REVIEW
¶22. The standard of review for findings of fact by the chancellor is that such findings will
not be disturbed on appeal unless they are manifestly wrong, clearly erroneous, or not
supported by substantial credible evidence. Brown v. Mississippi Dept. of Human Services,
806 So. 2d 1004, 1005 (Miss. 2000) (citing Sandlin v. Sandlin, 699 So. 2d 1198, 1202 (Miss.
1997). Where there is substantial evidence to support the chancellor’s findings, this Court is
without the authority to disturb the chancellor’s conclusions, although we might have found
otherwise as an original matter. In re Guardianship of Savell, 876 So. 2d 308, 312 (Miss.
2004) (citing In re Estate of Harris, 539 So. 2d 1040, 1043 (Miss. 1989)). Additionally,
where the chancellor has made no specific findings, we will proceed on the assumption that
12
the chancellor resolved all such fact issues in favor of the appellee. Newsom v. Newsom, 557
So. 2d 511, 514 (Miss. 1990).
¶23. While we give deference to a chancellor’s determination of fact, we review the
chancellor’s determinations of law de novo. Importantly, questions regarding the applicability
of a constructive trust, or whether a party has legal standing to sue require us to examine both
case law and any appropriate statutory law in order to determine whether the relevant law was
properly applied in the trial court. In Davidson v. Davidson, 667 So. 2d 616 (Miss. 1995), we
specified that this Court retains a de novo review of all questions of law, including those
regarding the applicability of a constructive trust. Id. at 620 (citing Seymour v. Brunswick,
655 So. 2d 892 (Miss. 1995) and Harrison County v. City of Gulfport, 557 So. 2d 780, 784
(Miss. 1990)). Additionally, in Brown v. Mississippi Dep’t of Human Servs., 806 So. 2d 1004
(Miss. 2000), we considered the standard of review regarding standing. At issue in Brown was
whether Brown had legal standing to bring an action against the Department of Human Services
under the applicable statute after having assigned her rights in order to receive delinquent child
support payments from the Aid to Families with Dependent Children program. Id. at 1005. In
reconciling this issue and interpreting statute, we recognized that “[t]hese are questions of law
reviewed under the de novo standard.” Id. at 1006 (citing Dep’t of Human Servs. v. Gaddis,
730 So. 2d 1116, 1117 (Miss. 1998); Miss. State Dep't of Human Servs. v. Barnett, 633
So. 2d 430, 434 (Miss. 1993)).
DISCUSSION
13
¶24. The Intervenors present several issues on appeal. Specifically, the Intervenors argue
that the proceeds realized from SRC’s sale and lease of CMH should be reserved by way of
either a constructive trust or an implied resulting trust. Furthermore, they argue that one of
these equitable trust remedies should have been imposed on the proceeds of the CMH
sale/lease and that the chancellor failed to declare that the assets held by SRC, as a charitable
corporation, should be dedicated to the corporation’s original purpose per application of the
cy-pres doctrine.11 Alternatively, under more common equitable principles, the Intervenors
ask this Court to find unjust enrichment, detrimental reliance, and breach of fiduciary duties
on the part of the defendant corporations and their board of governors.
¶25. Before addressing the Intervenors’ arguments, however, this Court must first consider
the threshold issue of standing, as raised on cross-appeal by the defendants. Accordingly, we
must determine whether the Intervenors had the right to participate in this cause of action and
to ultimately bring the defendants before the chancery court. Fundamental to this review is
whether SRC is a non-profit corporation whose purpose was to make charitable grants to the
City of Picayune and its surrounding community, or to hold its assets as a charitable trust
created for the benefit of the indefinite class of individuals who reside in the City of Picayune
and it surrounding areas. Once the appropriate characterization of SRC is established and the
body of law by which SRC is governed is determined, we must ultimately decide whether a
citizen, as a representative of the public’s interest, can legally challenge the authority, statutory
or otherwise, of a Mississippi non-profit corporation to manage its corporate assets. Finding
11
The cy-pres doctrine, whic h means as near as possible, is a rule of construction of instruments in
equity by which the intention of the party is carried out as near as may be, when it would be impossible or
illegal to afford the instrument its literal effect. Black’s Law Dictionary 387 (6th ed. 1990).
14
the standing issue presented on cross-appeal dispositive of this case, we find that the
chancellor erred in allowing the Intervenors to intervene in this action, since the Intervenors
failed to establish a substantive legal right on which to base their claims for relief. Similarly,
on direct appeal, we affirm the chancery court’s dismissal of the Intervenors’ claims, but for
reasons different than those stated by the chancellor.
I. WHETHER SRC, f/k/a LUCIOUS O. CROSBY MEMORIAL
HOSPITAL, IS GOVERNED BY THE MISSISSIPPI NON-PROFIT
CORPORATION ACT.
¶26. A determination of whether the defendants’ actions are governed by trust law or
corporate law is important to our review of the issue of the Intervenors’ standing. While
distinguishing the bodies of law is quite simple when made in the context of distinguishing
between a for-profit corporation and a private trust, it becomes more difficult when these legal
vehicles were created to accomplish a purely charitable purpose. Moreover, both mechanisms
are favored by our tax laws, can be tailored by its creator to achieve specific charitable
purposes and can be monitored by the state which, in the interest of the public, can ensure
accomplishment of such charitable purposes. Both are distinguishable and the equitable, as
well as statutory, jurisprudence applying to each is unique.
¶27. Our decision in Children’s Home Society v. City of Jackson, 230 Miss. 546, 93 So. 2d
483 (1957) lends to confusion in resolving the issues of this case. Children’s Home Society
remains one of the rare cases where we previously discussed the two comparable bodies of law
invoked by the parties today. In analyzing Children’s Home Society, the law of the case can
15
be interpreted as stating that some principles of charitable trust law are interchangeable with
those of charitable corporate law. In Children’s Home Society, we stated:
Most of the principles applicable to charitable trusts are applicable to charitable
corporations. The restrictions in the deed are valid and enforceable, as they
would be if the property were given to individual trustees for charitable
purposes. In each case the question is whether the rule which is applicable to
trustees is applicable to the particular charitable corporation with respect to the
restricted use of the property. The Gale deed warrants their application to the
appellant. This is in accord with the stated purposes of the grantor and the
general rule. 4 Scott, Trusts (2d ed. 1956) Sec. 348.1; Annotation 1941, 130
A.L.R. 1101, 1121; Old Ladies' Home Ass'n v. Grubbs' Estate, 1939, 191
Miss. 250, 199 So. 287, 2 So. 2d 593.
230 Miss. at 554, 93 So. 2d at 486.
¶28. In his opinion dismissing the claims of the Intervenors and re-asserting his finding of
standing, Chancellor Thomas cited to and interpreted the above language correctly, and noted
that a corporation can be held as a holder of trust property. Applying this language to the case
at bar, the chancellor reconciled that there was no evidence of restrictions and no evidence of
trust language contained in the corporate documents of SRC or the documents relating to the
purchase of the land by CMH. In his opinion, the chancellor invited this Court to review this
area of the law and noted that “the Supreme Court has given little guidance over which rules
applicable to trustees [are] applicable to charitable corporations.”
¶29. Children’s Home Society dealt with a charitable trust in which the donor expressly
delineated how trust property was to be passed in the event that the charitable use for which he
intended his trust property terminated. Id. at 484. Since the gift was originally given in trust
to a non-profit, charitable corporation, the question before this Court was whether the non-
profit corporation should (1) be permitted to sell or lease the donated property and dedicate
16
the proceeds to its charitable purpose, or (2) be required to follow the express terms of the
instrument which created the charitable trust. In ruling that the gift must follow the express
terms of the trust, this Court noted that the equitable doctrine of approximation was inoperable
where a settlor had made an express provision for an alternative disposition of his property. 12
Id. at 488. Stressing the importance of the donor’s intent, this Court paid homage to the
settlor’s manifest intent and ruled that permitting the non-profit corporation to sell the trust
property in this case would emasculate the purpose of his gift. Id.
¶30. Children’s Home Society is easily distinguishable from the case at bar. The language
found in Children’s Home Society and the very resolution of the case were solely dependent
on principles of trust law. Moreover, in that case there was a gift, albeit made to a non-profit
corporation, in which disposition, as properly determined by this Court, was strictly subject
to the express terms set forth by the trust instrument. It follows that in such cases, non-profit
corporations are placed in the exact same position as a trustee would be for purposes of
executing a trust instrument and, thus, are similarly subject to the restrictions placed on the
use of the property as a trustee would be. In this unique way, charitable trusts and charitable
corporations are bound by the same restriction – donor intent. Accordingly, the express intent
of the donor and the charitable purpose for which that donor created the trust maintain their
sanctity no matter in whose care the trust is placed or what kind of entity is benefitted by or
controls the trust res.
12
The Doctrine of Approximation allows a court to substitute another charitable object which it
believes approaches the original purpose of a trust when compliance with the original purpose becomes
impracticable.
17
¶31. As noted, Children’s Home Society is the rare case wherein we discern the common
ground shared by trust and corporate law with respect to charities. With that in mind and for
purposes of comparison, we look to another jurisdiction in order to examine its similar
approach to this issue in a case involving a parallel factual scenario. In so doing, we make
initial note of Kansas State District Court Judge Stephen D. Hill’s unique appraisal of the
arguments presented before him at trial and we agree with his assessment of the case in which
he likened the two contrasting arguments, and the different bodies of law presented, to “ships,
on two completely separate courses, passing in the night.” Kansas East Conference of United
Methodist Church, Inc. v. Bethany Medical Center, Inc., 266 Kan. 366, 370, 969 P.2d 859,
862, (Kan. 1998).13 In United Methodist Church, the Kansas Supreme Court, applying
reasoning similar to that which we use today, had to decide whether trust or corporate law
governed the resolution of its case. Moreover, the Kansas Supreme Court had to determine
whether the $40 million dollar sale of assets by the Bethany Medical Center, a not-for-profit
charitable corporation pursuant to the Charitable Organizations and Solicitations Act [COSA],
was governed by trust law or corporate law. Id. at 860-61. Bethany’s Board was originally
controlled by another interested party but, based on amendments to Bethany’s articles of
incorporation instituted by that interested party, it became wholly independent. Id. In arguing
that it was entitled to Bethany’s assets, the interested party sought to resolve the case under
principles of trust law and to restrict Bethany’s assets by having them declared as held in trust
for the corporate purpose originally designated at the time of incorporation. Id. at 863. The
13
The quoted language from Judge Hill is found in this cited opinion of the Supreme Court of Kansas.
18
interested party predicated its theory on the Restatement (Second) of Trusts 348, comment
f (1957), and cited to language coordinate to the language used in Children’s Home Society,
which could be construed as recommending the application of the rules governing charitable
trusts to the rules governing charitable corporations. Id. In deciphering the language contained
in the Restatement, the Kansas Supreme Court stated:
[T]he Comment has little or no relation to the circumstances of the present case
because the Comment (and the Restatement section) contemplates a settlor or
donor manifesting an intention to create a charitable trust and devoting
property to accomplish the charitable purpose. Bethany’s history is replete
with charitable giving, but it does not include the particular elements of a
charitable trust, as defined in 348.
Id. (Emphasis added). The Kansas Court appropriately distinguished its case from a trust case,
stating that:
This is not a case in which a donor put money in a trust to be used for the
creation and financial support of a hospital. Instead, it is a case where five
Methodists incorporated in 1892 for the purpose of providing medical care in
Wyandotte County, solicited charitable contributions, formed a foundation to
solicit contributions, and accepted contributions from the Methodist church.
Over the years, the Conference has been closely associated with Bethany and has
been a significant benefactor, but there is no evidence of its acting as a trust
settlor. Because Bethany is a corporate entity and held the title, Galen purchased
the hospital from and paid Bethany for it. The theory which the Conference has
formulated for its entitlement to the sale proceeds, therefore, involves
disqualifying the Bethany corporation. The Conference seeks to do so on the
ground that Bethany can no longer fulfill its purpose, which in the Conference's
construct is synonymous with the donor's intent.
Id. at 863 - 64. The Kansas Supreme Court ultimately concluded that the sale of the hospital
to a for-profit corporation was a corporate law matter. The Court found that Bethany’s alleged
abandonment of its corporate purpose was not determinative of which body of law to apply and
stated: “In the present case, Bethany’s primary purpose was operating a hospital, but operating
19
a hospital was not its sole activity. Even if it had been...the effect of the sale on Bethany is
governed by the corporation code.” Id. at 864.
¶32. There is a key distinction to be made here. A charitable trust is a fiduciary relationship
with respect to property arising as a result of a manifestation of an intention to create it, and
it subjects the person by whom the property is held to equitable duties and mandates that the
property be dedicated to a charitable purpose. Restatement (Second) Trusts § 348 (2005). A
charitable trust is strictly guided by its charitable purpose and the specific intentions of its
settlor. To this end, principles of equity act to ensure that the settlor’s intentions, whatever
they may be, are accomplished or are accomplished as nearly as possible. In this way, the
doctrine of cy-pres or of approximation can be applicable to gifts made in trust to charitable
corporations as well as to such gifts made to an individual trustee to be dedicated to a
charitable purpose. Restatement (Second) Trusts § 348.
¶33. In slight contrast, a charitable corporation is any corporation or organization founded
upon donations and engaged without profit in charitable activities and in no other activity of
a commercial or gainful nature. 15 Am. Jur. 2d § 171 (2000). Moreover, the basic
requirement of a nonprofit, public benefit entity is that it be operated exclusively for a
charitable purpose, that it serve the public rather than a private interest and that its income or
assets not be distributed to individuals in control of the entity. 18 Am. Jur. 2d § 34 (2004).
Like a charitable trust, a charitable corporation is predicated on a charitable purpose.
However, unlike a trust, a charitable corporation is spawned as an independent entity
possessing free will to the extent provided by its own articles of incorporation, bylaws and the
laws of the state in which it is incorporated. While these corporate entities are directed by a
20
charitable purpose, they remain autonomous unto themselves in maintaining and perpetuating
the nature and classification of this purpose. Specifically, a corporation acquires its existence
and authority to act from the state and, as such, is a creature of statute. 18 Am. Jur.2d § 14
(2004). As a general rule, the courts refrain from interfering with the internal management of
a corporation and do not interfere in the affairs of a private corporation in the absence of proof
of bad faith or fraud on the part of those entrusted with its management. 18 Am. Jur.2d § 8
(2004). In United Methodist Church, the Kansas Supreme Court made note of this well-
accepted precept of corporate jurisprudence:
It is well settled that the directors of a corporation are charged with the duty of
managing its affairs and only in cases of the greatest emergency are courts
warranted in interfering with the internal operation of its affairs. It has been said
that the fundamental principle of a corporation is that a majority of its
stockholders have the right to manage its affairs so long as they keep within
their charter and no principle of law is more firmly fixed in our jurisprudence
than the one which declares that courts will not interfere in matters involving
merely the judgment of the majority in exercising control over corporate
affairs. (Feess v. Bank, 84 Kan. 828, 115 P. 563, LRA 1915A, 606; 866
Beard v. Achenbach Memorial Hospital Ass'n, 170 Fed.2d 859.) 171 Kan. at
62, 229 P.2d 1008.
266 Kan. at 375-76 , 969 P.2d at 865-66 (quoting from Cron v. Tanner, 171 Kan. 57, 62, 229
P.2d 1008 (1951)).
¶34. In today’s case, we have a non-profit charitable corporation incorporated under the laws
of Mississippi in 1951 for the charitable purpose of building a hospital. Just as in United
Methodist Church, this is not a case in which a donor put money in a trust to be used for the
creation and financial support of a hospital. Instead, we have a corporation which was founded
by five members who were then authorized to elect a Board of Directors and who ultimately
21
drafted the corporation’s original bylaws.14 Of note, item seven of the original corporate
charter indicates the Crosbys’ original intentions by way of corporate form as well as
charitable purpose:
(a) To acquire real estate for, and to construct, purchase, and otherwise acquire,
equip, operate and maintain one or more hospitals, to be used entirely for
hospital purposes, and Nurses’ Homes and Nurses’ Training Schools in
connection therewith, and related facilities and to establish and maintain one or
more charity wards that are for charity patients, provided that all the income
from said hospitals, Nurses’ Homes and Nurses’ Training Schools, shall be used
entirely and exclusively for the purposes thereof and not part of the same for
profit, and provided further, that no dividends, or profits derived from the
operation of said Hospitals, Nursing Homes , and/or Nurses’ Training Schools,
shall be divided between the members of this corporations; and provided further,
that expulsion shall be the only remedy for the nonpayment of dues, with the
right, however vested in each member while a member of this corporation to
cast one vote in the election of all officers; and provided further, that the loss
of membership by death or otherwise shall terminate the interest of such
member in the corporate assets of this corporation; and provided further, that
there shall be no individual liabilities against the members of this corporation
for its corporate debts but the entire corporate property shall be liable for the
claims of creditors.
(b) In addition to the rights and powers herein above described and expressed,
the corporation may exercise such additional powers as are conferred by
Chapter 4, Title 21, Code of Mississippi of 1942, as amended by Chapter
308, General Laws of Mississippi of 1950.
(Emphasis added).
¶35. In Allgood v. Bradford, 473 So. 2d 402 (Miss. 1985), we examined charitable
corporations and characterized what defines a charitable corporation under Mississippi law.
To this end, we stated:
Palmer came into existence under the Mississippi corporation law as an
independent legal entity with the usual rights to hold property in its own name,
manage its own business, and alter or repeal its charter provisions in order to
14
Member, for the purposes of our case, is the equivalent of a shareholder.
22
carry out its charitable purposes. Title to all Palmer property has remained in the
name of the corporation itself, and since 1950 the charters have recognized that
the corporation is owned by the board of trustees.
Id. at 412.
¶36. A factual parallel to the corporate entity alluded to in Allgood, SRC was incorporated
under Chapter 4, Title 21, Miss. Code Ann. (1942), and brought into being as a Mississippi
corporation. Moreover, pursuant to our code, which now includes the Mississippi Non-Profit
Corporation Act, SRC came into existence as an independent legal entity with the usual rights
to hold property in its own name, to manage its own business, and to alter or repeal its charter
provisions in order to carry out its charitable purposes. To this end, SRC has consistently
acted pursuant to the laws enumerated within the corporate code and should thus be governed
accordingly. For these reasons, we conclude that the issue of standing in this case should be
determined under the applicable non-profit corporate provisions found in the Mississippi
Code.
II. WHETHER THE INTERVENORS HAVE LEGAL STANDING TO
SUE SRC.
¶37. Having determined that SRC, as a non-profit charitable corporation, is subject to our
corporate statutes, we now address the issue of whether the Intervenors had standing to request
the chancery court for relief. Specifically, we consider Chancellor Thomas’s determination
that, due to SRC’s fifty-year history of operating for the benefit of its surrounding community,
the citizen Intervenors, as beneficiaries, had a “colorable” interest in the proceeds obtained by
SRC from its sale and lease of CMH.
23
¶38. Before moving forward with this issue and for the purpose of clarity, we must first
examine our general law of standing. In Harrison County v. City of Gulfport, 557 So. 2d 780,
782 (Miss. 1990), we addressed a standing issue and stated, “[p]arties may sue or intervene
where they assert a colorable interest in the subject matter of the litigation or experience an
adverse effect from the conduct of the defendant.” Id. at 782 (see Dye v. State ex rel. Hale,
507 So. 2d 332, 338 (Miss. 1987); Frazier v. State of Mississippi, 504 So. 2d 675, 691-92
(Miss.1987); Belhaven Improvement Association, Inc. v. City of Jackson, 507 So. 2d 41, 45-
47 (Miss. 1987)). Parties may also sue or intervene as otherwise authorized by law. See, e.g.,
Canton Farm Equipment Co. v. Richardson, 501 So. 2d 1098, 1105-09 (Miss. 1987); City
of Pascagoula v. Scheffler, 487 So. 2d 196, 198 (Miss. 1986). Importantly, while we alluded
to our general standing rule and noted its incorporation into statute, our ultimate focus in
Harrison County was on the statute itself. Moreover, we recognized that a plaintiff’s standing
concerning annexation confirmation procedures depended solely on the language contained
within the Mississippi Code, and we interpreted Miss. Code Ann. § 21-1-31, which specifically
authorizes intervention by any party “interested in, affected by or aggrieved by a proposed
annexation,” in order to determine whether there was a colorable basis in fact for the
intervening counties’ claim. Id.
¶39. In State of Mississippi v. Quitman County, 807 So. 2d 401 (Miss. 2001), we again
highlighted our general rule that “[i]n Mississippi parties have standing to sue ‘when they assert
a colorable interest in the subject matter of the litigation or experience an adverse effect from
the conduct of the defendant, or as otherwise provided by law.’” Id. at 405. (citing Fordice v.
24
Bryan, 651 So. 2d 998, 1003 (Miss. 1995); State ex rel. Moore v. Molpus, 578 So. 2d 624,
632 (Miss. 1991)). In Quitman County, however, as with a staggering majority of our cases
involving standing, we sought to interpret Mississippi standing law under the guise of state
governmental action. Thus, we had a government entity named as a defendant to a suit and had
to determine whether the plaintiff had the right to seek judicial enforcement of a legal duty
owed by this governmental entity. Quitman County brought suit in its own name and on behalf
of its taxpayers against the state of Mississippi. In determining standing and answering the
legal query presented by our general rule on standing, we interpreted “colorable interest” and
“adverse affect” pursuant to our constitutional mandate and case precedent:
It is well settled that “Mississippi’s standing requirements are quite liberal.”
Dunn v. Miss. State Dep't of Health, 708 So. 2d 67, 70 (Miss. 1998); see also
Miss. Gaming Comm'n v. Bd. of Educ., 691 So. 2d 452-460 (Miss. 1997). This
Court has explained that while federal courts adhere to a stringent definition of
standing, limited by Art. 3, § 2 of the United States Constitution to a review of
actual cases and controversies, the Mississippi Constitution contains no such
restrictive language. Van Slyke v. Bd. of Trustees of State Institutions of
Higher Learning, 613 So. 2d 872, 880 (Miss. 1993) (citing Sosna v. Iowa, 419
U.S. 393, 397-403, 95 S. Ct. 553, 42 L. Ed. 2d 532 (1975)). Therefore, this Court
has been “more permissive in granting standing to parties who seek review of
governmental actions.” Van Slyke, 613 So. 2d at 875. See also Dye v. State ex
rel. Hale, 507 So. 2d 332, 338 (Miss. 1987) (holding state senators had standing
to sue Lieutenant Governor on charges that their legislative power had been
impinged by his power).
807 So. 2d at 405
¶40. Our general standing requirement is important to our review of standing issues because
it appropriately focuses judicial review on a plaintiff’s legal interest and a defendant’s legal
duty. However, it must be recognized that different standing requirements are accorded to
different areas of the law, and an individual’s legal interest or entitlement to assert a claim
25
against a defendant must be grounded in some legal right recognized by law, whether by statute
or by common law. Quite simply, the issue adjudicated in a standing case is whether the
particular plaintiff had a right to judicial enforcement of a legal duty of the defendant or, as
stated in American Book Co. v. Vandiver, 181 Miss. 518, 178 So. 598 (1938), whether a party
plaintiff in an action for legal relief can show in himself a present, existent actionable title or
interest, and demonstrate that this right was complete at the time of the institution of the
action. Id. at 599. “Such is the general rule.” Id.
¶41. In today’s case, we are guided by statute, and, as was the case in Harrison County, we
must focus on the “or otherwise provided by law” language of our general standing requirement
and interpret the statutory language provided for us in the Mississippi code. Accordingly, we
are expressly directed to Miss. Code Ann. § 79-11-155, which governs the ability of a party
to challenge a corporation’s power to act:
(1) Except as provided in subsection (2) of this section, the validity of corporate
action may not be challenged on the ground that the corporation lacks or lacked
power to act.
(2) A corporation’s power to act may be challenged in a proceeding against the
corporation to enjoin an act where a third party has not acquired rights. The
proceeding may be brought by the Attorney General, a director or by a member
or members in a derivative proceeding.
(3) A corporation’s power to act may be challenged in a proceeding against an
incumbent or former director, officer, employee or agent of the corporation.
The proceeding may be brought by a director, the corporation, directly,
derivatively, or through a receiver or by a trustee or other legal representative.
Miss. Code Ann. § 79-11-155 (2001).
¶42. This statutory language is straightforward and the legislative intent behind it is easily
recognized. Moreover, pursuant to Miss. Code Ann. § 79-11-155, a suit of the nature as
26
before us today may be brought against a corporate entity in the State of Mississippi only “by
the Attorney General, a director or by a member or members in a derivative proceeding.”
Limiting the ability of the public to ask for judicial interference with a corporation’s ability
to act is logical when one considers that “no principle of law is more firmly fixed in our
jurisprudence than the one which declares that courts will not interfere in matters involving
merely the judgment of the majority in exercising control over corporate affairs.” United
Methodist Church, 266 Kan. at 375-76, 969 P.2d at 865-66 (quoting from Cron v. Tanner,
171 Kan. 57, 62, 229 P.2d 1008 (1951)).
¶43. In today’s case, Chancellor Thomas concluded that the Intervenors had proper standing
and cited to precedent in support of his conclusion. Relying on our holding in Allgood v.
Bradford, 473 So. 2d 402 (Miss. 1985), the chancellor attempted to define “membership.”
Reasoning that the charitable purpose of a charitable non-profit corporation changes its
character for the purposes of membership, Chancellor Thomas cited to Allgood for the
proposition that “[c]haritable corporations... have as their goal the improvement of the welfare
of others, so that membership in this sort of corporation manifests freedom from selfishness.”
Id. at 412. The chancellor focused on the use of membership in this context and ultimately
concluded that, as beneficiaries of the Crosby Memorial Hospital Corporation, the Intervenors
were interested in, affected by, and aggrieved by, the lease and sale of the hospital asset.15
15
The chancellor used language from Harrison County v. City of Gulfport, 557 So. 2d 780, 782
(Miss.1990), where we interpreted Miss. Code Ann. § 21-1-31, which specifically authorizes intervention by
any party “interested in, affected by or aggrieved by a proposed annexation.”
27
¶44. While the above cited language from Allgood was important to that case for the purpose
of defining what constitutes a charitable, non-profit corporation, this language does little by
way of contributing to a working definition of corporate membership. Moreover, in Allgood,
this Court went on to specifically examine the indicia of membership concerning our non-
profit corporation statutes and stated: “From these statutes, several indicia of membership are
evident. The members are those who bring the corporation into being, vote for corporate
officers, vote to dissolve the corporation, and on dissolution receive the assets of the
corporation.”16 Allgood, 473 So. 2d at 412. While the statutes relied on in Allgood have since
been amended, the basic tenor remains the same – a member is a stakeholder in the corporation
and has the power to effectuate change in corporate management.
¶45. Additionally, and in line with our determination in Allgood, the Mississippi Nonprofit
Corporations Act, defines a “member” as follows:
“Member” means (without regard to what a person is called in the articles or
bylaws) any person or persons who on more than one (1) occasion, pursuant to
a provision of a corporation's articles or bylaws, have the right to vote for the
election of a director or directors. A person is not a member by virtue of any
of the following: (I) Any rights such person has as a delegate; (ii) Any rights
such person has to designate a director or directors; or (iii) Any rights such
person has as a director.
Miss. Code Ann. § 79-11-127.
¶46. Consistent with precedent and pursuant to Miss. Code Ann. §§ 79-11-127, a member
has a defined legal interest in a corporation inasmuch as the member brings that corporate
entity into being, votes for its corporate management, votes to dissolve its corporate being, or,
16
The non-profit statutory scheme set forth by our non-profit corporation act has been amended but
for the purposes of this case remains substantively appropriate.
28
upon such dissolution, has a right to share in the disposition of corporate assets. In today’s
case, under these well-stated indicia of membership, it becomes clear that none of the
Intervenors were qualified to bring suit as corporate members, having demonstrated only a
limited tenuous public interest in the benefits provided by the hospital’s charitable ownership.
Furthermore, according to Miss. Code Ann. § 79-11-155, the Intervenors have failed to
establish standing as, in addition to their failure to evidence corporate membership, they do
not assert this action directly, as a current corporate director, or in the name of this state
through its Attorney General. In no uncertain terms, the relief sought by the Intervenors, as
mere putative beneficiaries of a charitable corporation’s corporate acts, falls well outside of
any legal interest in SRC. The Intervenors have no right to judicial enforcement of alleged
legal duties claimed by them vis-a-vis the defendants.
¶47. The Intervenors are attempting to assert claims grounded in equity against a corporation
and board of directors to which they have no confidential ties, from which they can expect no
fiduciary duties and in which they have no proprietary interest. To presume standing under
these facts and permit the Intervenors to challenge the business judgment of a properly elected
board of governors of a corporation would be to say that an indefinite class of plaintiffs, who
simply might receive benefit from acts of a charitable corporation, should have a legal voice
in how the corporation is to be run, and further permit individuals from the benefitted public
to improperly be deemed members of non-profit corporations, capable of instituting derivative
suits against the corporate board of directors and causing the various courts of this state to
dictate to charitable corporate officers how to manage their charitable corporations. This
result offends the fundamental tenets of corporate law and the express intent of our state
29
legislature. We thus conclude that the Intervenors never possessed the requisite legal standing
to assert claims against the defendants and that this case should have been dismissed before
trial based on this want of legal or statutory ground to proceed.
CONCLUSION
¶48. In clear terms, the Intervenors have failed to establish the legal grounds necessary to
institute this suit against the defendants. Moreover, they have shown no colorable interest in
the corporate entity from which they seek relief and have demonstrated no adverse effect or
injury caused by the defendants’ failure to perform a legal duty owed to them. Under our
statutory scheme, a proper party with a colorable interest in SRC must assert a direct action
as a corporate director, a derivative action as a member, or, on behalf of the citizens of
Mississippi, as this state’s Attorney General. To the extent that they fail to qualify in any of
these express capacities and have failed to establish a substantive legal ground on which to base
their claims for relief, the Intervenors had no standing to pursue their claims against the
defendants. Thus, the trial court erred in finding that the Intervenors had standing to pursue
their claims in this case. Because this issue presented on cross-appeal is dispositive of this
case, we need not address the Intervenors’ issues raised on their direct appeal. Accordingly,
we affirm the chancellor’s dismissal of the Intervenors’ claims on direct appeal, but for
reasons different than those stated by the chancellor. As to the cross-appeal, we reverse the
chancellor’s judgment granting the Intervenors standing to proceed in this litigation, and render
judgment here in favor of Southern Regional Corporation and the Lower Pearl River Valley
Foundation.
30
¶49. ON DIRECT APPEAL: AFFIRMED; ON CROSS-APPEAL: REVERSED AND
RENDERED.
SMITH, C.J., WALLER , P.J., DICKINSON AND RANDOLPH, JJ., CONCUR.
EASLEY, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. COBB, P.J., DIAZ
AND GRAVES, JJ., NOT PARTICIPATING.
31