Court Opinion

ID: 8193935
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:04.392471+00
Date Added: 2024-06-11T16:40:42.011348
License: Public Domain

Owen, J.
In disposing of this case the trial judge relied on German Corporation v. Negaunee German Aid Society, 172 Mich. 650, 138 N. W. 343, or at least upon the principles which ruled the decision. In that case the defendant Negaunee German Aid Society was a corporation organized to provide for the relief of distressed members, the visitation of the sick, the burial of the dead, and for such other benevolent and worthy objects as affected the members of the corporation. One Charles L. Werner was a member of the aid society. He died leaving a will devising and bequeathing all his property to the society. Subsequently .the aid society sold and conveyed the surface of *490certain lands so devised, reserving to itself, its successors and assigns forever, all ores and minerals therein, with the usual rights of exploration and mining. Thereafter, pursuant to resolutions passed by themselves, and in form authorizing the transaction, the mineral rights of the Werner lands were deeded by the aid society to its members, share and share alike, for an expressed consideration of one dollar. These grantees then conveyed the mineral rights to a corporation organized for mining purposes. After-acquired members of the society denied the validity of this transaction and embarrassed the mining company in dealing with the property so conveyed. The mining company brought action to .quiet title. It was held that the aid society was a benevolent corporation and that it held the devise in trust for benevolent purposes and that the disposition made in conveying the property to its own members was not a disposition for benevolent purposes. The transaction was therefore, set aside.
It is very doubtful if the plaintiff camp can be said to be a benevolent corporation. It is a subordinate branch of the head camp of the Modern Woodmen of America, organized principally for the conduct of a mutual insurance business, and is by our statute (sec. 1956) termed “a fraternal benefit society.” It is said that the local camp is a benevolent corporation because it is organized under ch. 92 of the Statutes. That chapter simply provides that certain lodges, such as Free Masons, Odd Fellows, etc., may elect trustees and that the trustees shall be a body corporate, and that all property conveyed by devise, gift, grant, purchase, or otherwise to any such society shall vest in such trustees and their successors in office. Ch. 92 does not undertake to give character to the corporations thereby established. It simply authorizes the organizations therein described to constitute themselves a body corporate in the manner stated. The character of each organization depends upon the purposes *491for which it is organized. The statute does no more than give to such an organization a legal status which enables it to hold and convey property in a definite and orderly manner.
The dominant purpose of the Modern Woodmen of America is to furnish insurance to its members. The so-called lodge system is part of its plan. The local or subordinate branches are called camps. According to the regulations of the society the camps must hold meetings. In order to do this they must have a meeting place. The meeting place may be either rented or purchased. In the instant case the local camp purchased a building for such purpose. The title to the building was conveyed not to the camp nor to the trustees of the camp, but to three individuals, one of whom, being a lady, presumably was not a member of the camp, in trust for the camp. It is rather apparent that the camp did not want to take the legal title to the property owing to its altercation with the head camp over the raising of rates. Almost immediately after the .conveyance of the property to these three persons in trust for the camp, the camp authorized said persons as its trustees to convey the property to a corporation the organization of which it had itself planned and consummated. This conveyance was made without a dissenting vote or a protest from any member of the camp. Each and every member of the camp either expressly consented to or acquiesced in the conveyance. Each and every member of the camp accepted shares of stock in the defendant corporation commensurate with the amount which he had contributed through his assessment to the purchase of the property. Every person having the remotest interest in or title to the property was a party to the transaction. There was no donor whose bounty was diverted, no creditor to suffer, by this transaction. It appears by stipulation of the parties that the head camp had no interest in the property. We can conceive *492of no person having any interest in the subject matter which clothed him with any right' to challenge the transaction. The situation is not at all comparable to that involved in German Corporation v. Negaunee German Aid Society, 172 Mich. 650, 138 N. W. 343, relied upon by the trial court. In that case the property of the donor, which he had contributed for benevolent purposes, was diverted from such púrposes and appropriated by the individual members of the society.
Objection is made because the stockholders of the Modern Woodmen Hall Association were identical with the members of the plaintiff camp and that the principal officers of the two organizations were for the most part identical. This, however, presents no insuperable obstacle to the transaction. These circumstances do not prevent the corporations from dealing with each other. 14 Corp. Jur. 873; Bergenthal v. Boynton A. C. Co., ante, p. 42, 190 N. W. 901; 2 Fletcher, Corporations, § 913. Although such dealings are subject to careful scrutiny by the courts where the rights of minority stockholders or others are affected, we can see nothing illegal about this transaction, and we hold that the defendant Modern Woodmen Hall Association acquired an indefeasible title in the premises. The only interest thereafter retained in the property by the plaintiff camp was the 200 shares of stock which long before the commencement of this action it surrendered to the defendant association for a valuable consideration, since which time it has recognized the title of the defendant by paying it an annual rental of $50 for the use of the building. Upon no aspect of the case can we discover any interest of the plaintiff camp in the property which authorizes it to maintain this action or to interfere in any manner with any disposition which the defendant may see fit to make thereof.
By the Court. — Judgment reversed, and causé remanded with directions to dismiss plaintiff’s complaint.