Court Opinion

ID: 8509748
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:35:54.366505+00
Date Added: 2024-06-11T16:51:03.382560
License: Public Domain

HENRY, J.
The plaintiff company seeks to subject the liability of trustees of the defendant fraternal order, which is insolvent, to the payment of its account against the order. Section 3261 R. S. (See. 8666 G. C.), provides that “the trustees of a corporation created for a purpose other than profit, shall be personally liable for all debts of the corporation by them contracted. ’ ’ The main issue is whether this general provision in the first chapter of Title 2 on Corporations applies to Sees. 3631-11 to 3631-23® R. S. (Secs. 9462 to 9483 G. C.) in the tenth chapter of the same title, where the act respecting fraternal orders (92 O. L. 360, replaced later by 97 O. L. 420) is inserted.
Originally this act (92 O. L. 360) did not purport to stand related to any portion of the Revised Statutes, except that it provided negatively-that fraternal orders should not “be required to make any report under this or any other section of the insurance laws, ’ ’ thereby referring evidently to said chapter 10 of Title 2 aforesaid, entitled “life insurance companies.” It was plainly intended to be an independent act for the government of fraternal beneficiary associations. And though the amended act (97 O. L. 420) refers expressly to the sectional numbers annexed by Bates’ Statutes to the original act, we attach no importance to that circumstance. Any such association was by the act “declared to be a corporation, society or voluntary association, formed or organized and carried on for the sole benefit of its members and their beneficiaries.” It was further *25provided that “Each association shall have a lodge system, with ritualistic form of work and representative form of government, and may make provision for the payment of benefits, ’ ’ etc. For an existing unincorporated association the assumption of a technically corporate character under the act seems to have been optional, and the manner of corporate organization therein provided differs materially from that prescribed by the general corporation laws, though it is akin, at least, to that of non-stock corporations not for profit.
As to any association which should assume this corporate character, the provision of Art. 13, Sec. 3 of the Constitution, both before and since its recent amendment regarding the security to be prescribed by law for dues from corporations, was and is met by the requirement that the payments of benefits and expenses shall be made out of á separate fund “derived from assessments, dues, or other payments collected from its members.” The amended act, it is true, expressly provides that officers shall not as such be personally liable for the payment of the benefits; and from this we are asked to infer that they are liable for expenses under Sec. 3261. While there is force in this argument, it has no application to the original act, and we think there is no sufficient intention manifested in the amended act to enlarge the liability in this behalf. On the contrary, the provision in Sec. 1 of the original act, that “such associations shall be governed by this act” is amplified by Sec. 4 of the amended act so as more clearly to exclude the applicability of other laws by prefixing thereto the words “except as herein provided.”
While the case before us is by no means so clear as Kelley v. Bender, 12 Circ. Dec. 181, 183 (22 R. 147), and Mamifactures’ Fire Ass’n v. Lynchburg Drug Mills, 4 Circ. Dec. 350, (8 R. 112), we nevertheless apply the rule laid down in those eases and hold that Sec. 3261 has no application to fraternal orders incorporated under these statutes. The petition will be dismissed.
Winch and Marvin, JJ., concur.