Boyd v. Southern Mut. Aid Ass'n

• Citation: 145 Ala. 167,41 So. 164
• Parties: BOYD ET AL. v. SOUTHERN MUT. AID ASS'N ET AL.
• Decision Date: 09 May 1906
• Court: Supreme Court of Alabama

41 So. 164

145 Ala. 167

BOYD ET AL. v. SOUTHERN MUT. AID ASS'N ET AL.

Supreme Court of Alabama

May 9, 1906

Appeal from Chancery Court, Jefferson County; A. H. Benners Chancellor.

"To be officially reported."

Suit by Lula Boyd and others against the Southern Mutual Aid Association and others. From the decree granting complainants partial relief, all parties appeal. Affirmed in part, and in part reversed and rendered.

The bill in this case was filed by two persons, holders of ordinary benefit certificates, for themselves and on behalf of such other holders of like ordinary benefit certificates who would come in and make themselves parties. The allegations made by the bill are: That the respondent, the Southern Mutual Aid Association, and its president and secretary were incorporated under and derived their powers from part 2, tit. 1, c. 3, §§ 1547-1552, of the Code of 1886 brought into the Code of 1896 as chapter 28, art. 3, §§ 1116-1121. That on October 25, 1901, respondent corporation procured an amendment to its original charter, and in the amendatory declaration claimed and sought to obtain additional powers: "To purchase, own and convey real estate necessary for officers, not to exceed $100,000; to receive conveyances of real estate in payment of debts due to the corporation; to issue certificates to or agreements with the members of the association upon the birth of any child or upon decease, sickness, or physical disability of such member, whether by accident or otherwise, to pay money or render aid to him or those dependent upon him, or any beneficiary designated by him, and to receive and collect from said members dues or assessments at stated intervals for such agreements or certificates; to accumulate a fund for meeting and providing for the payment of such certificates and to invest the money thus accumulated in bonds or other securities, or to lend the same on notes or notes secured by mortgage." The original purpose of the corporation, before amendment of its charter, was to comfort and assist all who may become members of said association, morally, socially and financially; to furnish financial aid to sick and destitute members of this association in the form of a stated weekly indemnity in case of sickness and a stated funeral benefit in case of death, graduated and determined by the amount of endowment secured and carried by each member upon his admission into the association. That pursuant to its powers the association has issued a large number of certificates for sick benefit, birth of child, or decease, sickness, or physical disability of its members, upon the payment of the weekly dues assessed, about 18,000 in all. That it has gone beyond its powers and issued certificates providing for the repayment to the holder of such certificate at the end of 10 years from the issuance thereof all the dues paid in during the 10 years by the holder, less such weekly indemnity, sick benefit, etc., received by the member holding the certificate. That the association has no funds other than a weekly assessment or dues paid by the holder of the certificates, and that this fund is no more than enough to pay the expenses of the association and provide money to meet the sick, funeral, and other benefit arising under the ordinary certificate; and that, in order to provide sufficient funds to meet the requirement of the 10-year certificates which are alleged to be about due, all the members of the association will be heavily assessed without receiving any benefit therefrom. The prayer is for an injunction prohibiting the association or its officers or agents from paying out of the fund of said association any money or sums of money to the holders of said 10-year policies, or any of them, and from levying or collecting any special or additional assessment upon the policy holders for the purpose of paying said 10-year policies, and to declare the action of the association in issuing said 10-year policies ultra vires and void.

Caldwell & Carmichael, for appellants.

Garrett & Dickinson, for appellees.

TYSON J.

The Southern Mutual Aid Association is strictly a mutual aid association under section 1116 et seq. of the Code. The scope of the business of the corporation in the way of the payment of money, except for debts contracted in the usual and ordinary conduct of its business, as defined in its original charter is "to furnish financial aid to sick and destitute members * * * in the form of a weekly indemnity in case of sickness and a stated funeral benefit in case of death," and by an amendment to its charter, "to issue certificates to or agreements with the members * * * upon the birth of any child, upon decease, sickness or physical disability of such member, * * * to pay money or to render aid to him or those dependent upon him, or any beneficiary designated by him, and to receive and collect from said members, dues or assessments at stated intervals for such agreements or certificates," etc.; "to accumulate a fund for meeting and providing for the payment of such certificates and to invest the money thus accumulated," etc. The association, besides its ordinary business in issuing and providing for the certificates and agreements indicated in the quotations from its charter above mentioned, and which were clearly within its...