Babb v. Reed

• Decision Date: 14 February 1835
• Citation: 5 Rawle 151,28 Am.Dec. 650
• Court: Pennsylvania Supreme Court
• Parties: Babb v. Reed and Others, Trustees, & c.

5 Rawle 151

28 Am.Dec. 650

Babb v. Reed and Others, Trustees, & c.

Supreme Court of Pennsylvania.

February 14, 1835

APPEAL.

An association for the purpose of mutual benevolence among its members only, is not an association for charitable uses.

Its members, if not incorporated, are considered as partners in their relations to third persons, and the property of the association must be appropriated to pay the debts of creditors, not members of the association, before it can be applied to the payment of the claims of those who are members.

A mechanic's lien filed by a member of such an association against a building erected by it, is not available as against the liens of others not members.

APPEAL from the decree of the Court of Common Pleas of Chester county, distributing money arising from sheriff's sale.

The material facts were as follows:

About the beginning of the year 1832, a number of individuals in and about West Chester associated under the name of the West Chester Lodge, No. 42, of the Independent Order of Odd Fellows.

On the 28th day of March, 1832, Babb and wife, by a deed of that date, conveyed a lot of ground in West Chester to the defendants Reed and others, who are styled therein trustees on behalf of West Chester Lodge, No. 42, of the Independent Order of Odd Fellows, for the consideration of fifteen hundred and thirty-seven dollars and fifty cents, the whole of which was secured by a mortgage immediately given by the trustees to the vendor. The objects of this purchase are declared by the trusts contained in the deed, which are substantially these. For the use of West Chester Lodge, No 42, of the Independent Order of Odd Fellows, then established as long as it should exist, and after its dissolution (if it should be dissolved before the property should be disposed of) for the use of any other subsequent Lodge of Odd Fellows which should at any time thereafter be established in West Chester as long as such subsequently established Lodge should continue to exist; provided, that in all vacancies of time between the dissolution of one lodge and the establishment of another, the lot, hall, and appurtenances should be for the use of the burgesses and inhabitants of the borough of West Chester for public purposes, they keeping the premises in repair; and provided also, that the trustees should, under the direction of the Lodge No. 42, pledge and mortgage the lot and premises for the payment of debts, or sell and convey the whole of it, and apply the proceeds to the payment of the debts of the institution, after which the surplus to be disposed of as the said Lodge No. 42 should direct, so that the burgesses and inhabitants of the borough of West Chester should have no part of the proceeds of such sale, but only the use and rents of the premises during the intervals which might happen before a sale was directed, and in which there might be no Lodge of Odd Fellows in existence.

The society of Odd Fellows, of which Robert Smith, Wm. Apple John T. Haines, Wm. Adle, John Burns, and Angus M'Kay were members, immediately set about erecting a building. They appointed a building committee of five members, to wit Abraham Marshall, Robert Ferguson, John T. Haines, Lewis W Williams, and William Adle, who, under the direction of the Lodge, contracted with workmen, builders, and material men most of whom were members of the lodge, though some of them were not. Some of the contracts were in writing, others were verbal. Neither William Everhart nor either of the members of the firm of Jones & Davis was a member of the society. The building was finished; a part of it was occupied by the Odd Fellows as a place of meeting, and several rooms were rented out for some time, the rents being paid into the treasury of the Lodge.

The enterprise was not prosperous. The interest upon the mortgage was not paid. The mortgagee proceeded by scire facias, and to the term of February, 1834, a levari facias was issued, by virtue of which the lot, hall, and appurtenances were sold for the satisfaction of the debt for the purchase of the lot and interest, after satisfying which and the charges, there remained subject to distribution the sum of nine hundred and twenty-seven dollars and ninety-two cents, that being the whole sum which the hall, building, materials, and everything erected on the lot produced at sheriff's sale beyond the original price of the lot and interest.

The claims upon this fund for materials furnished and work done, were made by William Everhart, Jones & Davis, John Rutter, Wm. Adle, John Burns, Angus M'Kay, John T. Haines, and Wm. Apple.

The auditor appointed to report upon the claims of the different lien creditors, made a pro rata distribution of the money among the several claimants.

The court below confirmed the report of the auditor, and decreed distribution accordingly.

From this decree and adjudication an appeal was taken to this court, and the question was whether, under the circumstances above stated, Smith, Apple, Haines, Adle, Burns, and M'Kay, members of the institution, and owners of the property against which the aforesaid claims were filed, should take a share of the proceeds of the sale of that property to the prejudice of the claims of Wm. Everhart and Jones & Davis, who were not members of, nor in any way connected with the society of Odd Fellows.

Lewis for appellants.

The lodge of Odd Fellows, from whose property the money in court has been derived by means of a sheriff's sale, is a voluntary association of individuals, for purposes of mutual advantage, and cannot claim the consideration of a charity, or the attributes and privileges of a corporation. A charity, properly so called, is of a public nature. It reaches from itself to others--goes beyond its own doors into the world of misery, and selects its objects from the general mass. The lodge of Odd Fellows had no higher or more extended aim than that of reciprocal aid amongst its members in sickness or misfortune.

The law respecting such unincorporated companies is the same as in common partnerships. Watson on Part. 3; Gow on Part. 2, 4, 6, 7. In order to contract the relation of private partnership, nothing more is necessary than the consent of the members constituting the firm: and this consent may be either express, or implied from the acts of the parties. Gow on Part. 5. A mutual interest in the profits and loss of any lawful adventure makes the persons engaged in it partners, and liable to all the responsibilities of that relation, at least, as respects third persons, without regard to the nature of their business or the character of the contract between themselves. There may be a partnership to trade in land. Brady v. Colhoun, 1 Penn. Rep. 140. Also in the transportation of goods. Witmer v. Schlatter, 2 Rawle, 359. A partnership may exist between attorneys or farmers. Coope v. Eyre, 1 Hen. Bl. 37. A company formed for banking purposes contract the liabilities of partners. Hess v. Werts, 4 Serg. & Rawle, 356. If two persons, who are not partners in trade, draw a bill of exchange payable to themselves or their order, they are partners as to the transaction of the bill, though in every other respect, they are perfectly distinct. Gow on Part. 8; Carvick v. Vickerey, Doug. 653, n. Then, why may not a partnership exist between persons, who associate either to make a display, or to help each other in extremity, and in their society character build a hall, and make a profit by renting out rooms. It has, indeed, been decided, that a society for mutual relief in sickness, by means of a fund raised by subscription among its members, is a partnership, it having no corporate character. Beaumont v. Meredith, 3 Ves. & Bea. 180.

The society of Odd Fellows being partners, the members must submit to be ruled by the law applicable to all other partnerships. The joint effects are the property of the firm. and not of the partners, and are liable, in the first instance, to the payment of the partnership debts. The partners are entitled only to a share of the surplus remaining after those debts shall have been discharged.

The debts due to Everhart and Jones & Davis, are the debts of the firm. They must be first paid. The other claimants being members of the lodge are not entitled to come in till all the creditors are satisfied. A partner to whom the partnership is indebted can have no satisfaction but out of what may remain after all the joint debts are paid. Watson on Part. 329; 1 Atk. 227.

The building, from the sale of which the money in court proceeded, and upon which the claims of the appellants attached as liens, under the mechanic's lien law, constituted the whole tangible property belonging to the partnership. The deed by which this property was held, was made to trustees, in trust for the use of the lodge, without naming the cestui que trust. Can there be any doubt that the ownership of this property resided in the members of the lodge?

In equity the cestui que trust is always considered the actual owner of the land. Here, although the persons who were intended to take are not named, they are sufficiently described. Had the trustees refused to accept the trust their places might have been supplied under our acts of assembly to prevent the failure of trusts: and had they taken and held the property adversely to the association ejectment might without question, have been sustained against them; that action in Pennsylvania being substituted for the English remedy by a bill in chancery. The circumstance of the cestui que trust being a body of unnamed and unincorporated persons can make no difference as to their capacity to take. See Beatty v. Kurtz, 2 Peters, 578-85; Witman v. Lex, 17 Serg. & Rawle, 91; Case of Sarah Zane's Will, 24,...