Virginian-pilot. (Norfolk, Va.) 1898-1911, 1899-12-01
COURT DECISIONS.
Notes Of Cases Recently Decided,
Which are Of Interest to
Our People.
DIGESTED BY ". B. MARTIN.
Exclusively for virElnian-PIlot)
HOWARD v. NJ. r. FUND LIFE
ASSN.
Supreme Court OF North Carolina.
October IT. 1899,

ASSN.
Supreme Court OF North Carolina.
October II, 1899.
THE COURTS OF THIS STATE
HAVE JURISDICTION OF A FOR
E1GN INSURANCE CORPORA
TION TO ENFORCE INDIVIDUAL
RIGHTS AGAINST 1T, BUT NOT
TO RESTRAIN THE CoLLEC-
TON OF ILLEGAL ASSESSMENTS
MADE UPON ITS MEMBERS.
A MEMBER CANNOT RECOVER
SUCH ILLEGAL ASSESSMENTS 1T
PAID BY HIM WITH FULL
KNOWLEDGE OF THE FACTS.
This was an action against the Mu-
tual Reserve Fund Life Association.
There was IL demurrer to the complaint
which was sustained and plaintiff ap-
pealed..
The points decided appear from the
opinion of the court.
The court says:
The first and third grounds under the
second head OF the demurrer are based
upon the legal view that the courts OF
one State cannot interfere with, or ex-
ercise Jurisdiction over, the internal
management of corporation formed
ana resident In another State; and es-
pecially upon the view that the courts
of one State cannot, by injunction, af-
ford equitable relief, even to one of
It's residents, who Is a member of a
foreign corpora ton, by an order COM
handing and requiring such corpora
ton to do or not to do certain specified
acts connected with the internal man
agement of it's corporate affairs. 1t
seems that that part of the demurrer
Is well taken; for the authorities APP
pear TO be both numerous and respect
oh
one State will not interfere with the
internal management of the business
matters of foreign corporations, by in
junction or otherwise. 1t is considered
best that such matters should fall UNI
der the exclusive jurisdiction OF that
state under the laws OF which such
foreign corporations were organized
and where, they are resident.
The reasons for such a rule are ap-
parent. Only the courts of the State
In which the CORPORATION has its resi-
dence can enforce their judgment and
orders against them; only those courts
nave power TO remove the officers of
such corporation for derelction OF duty
or to declare n forfeiture or their char
ters.
1t seems clear to us that the matters
complained of by the plaintiffs affect
j. j. Howard only as q member OF the
defendant company, that they relate to
the internal management of the COM
rnny, and that, if the courts of one
State were to undertake to grant to the
plaintiff the relief he seeks,-an injunc-
tion forbdding it to collect or levy and
further assessments on their present
Dlan-they would be required to inves-
tiGate and control that management.
The defendant company was incor-
Gorated on the assessment plan. and
every certificate member Ohcre being
no capital stoclS) becomes an insurer as
of the corporation, and what he COM
plains OF Is his trea tmcnt as n member
OF the company. The plaintiff does not
allege fraud. His complaint is the
Illegal increasing of his assessments.
and his prayer is for an injunctio to
prevent the collecting of such in the
future. There is no alleged fraud
against the defendant in procuring the
plaintiff to become a member, by which
he has suffered loss and damage; and
the only question was whether the
violation Of his rights Hffects him iTIdt=
vidually or as member, of the corpora
ton. We have determined how that
was.
1t is to be remembered, however, not
withstandng what has been said in
this case. that our courts would have
jurisdiction over foreign corporations
where individual rights would be con-
cerned. If the defendant had~perpe-
trated an actual fraud on the plaintiff
J. 7. Howard, in inducing him to be-
come member OF the corporation, by
which he was subjected to pecuniary
loss, or If an actual fraud had been
perpetrated against him in the levying
and collecting of assessments. based, for
instance, on the re9orted losses by
death, which were knowingly false to
the directors. in such cases our courts
would be open to the plaintiff. So. too
If this suit was for recovery of the
amount due on the policy by the bene-
ficiary if the defendant had declared
the policy forfeited because of n failure
to pay the increased assessments, the
matter would be In the jurisdiction Of
our court. In such suit the courts
would be compelled to pass upon the
question as to whether the assessments
were Illegal and fraudulent, to interpret
the policy. and to determine whether
the amount of the policy could be re-
covered. In such a suit the courts of
North Carolina would not be required
to regulate, by injunction. the internal
management of a foreign corporation,
but would be called upon simply to en-
force the contract of insurance between
the parties, or to assess and adjudge
damages for It's breach. But the sub
ject matter and the officers of the de-
PENDANT corporation are beyond the
jurisdiction Of our courts in this case,
and the remedy sought Is not in our
power to grant.