Brenizer v. Supreme Council, Royal Arcanum

• Decision Date: 16 May 1906
• Citation: Brenizer v. Supreme Council, Royal Arcanum, 141 N.C. 409, 53 S.E. 835 (N.C. 1906)
• Parties: BRENIZER v. SUPREME COUNCIL, ROYAL ARCANUM.
• Court: North Carolina Supreme Court

53 S.E. 835

141 N.C. 409

BRENIZER v. SUPREME COUNCIL, ROYAL ARCANUM.

Supreme Court of North Carolina

May 16, 1906

Appeal from Superior Court, Mecklenburg County; Webb, Judge.

Action by A. G. Brenizer against the Supreme Council of the Royal Arcanum. From an order denying a motion to dissolve an attachment levied on certain funds of the society, it appeals. Reversed.

Clark C.J., dissenting.

In an action against a foreign fraternal insurance order doing business within the state, service of summons on the insurance commissioner conferred jurisdiction of the society.

This was a motion to dissolve an attachment levied upon certain moneys in the hands of D. T. Johnson, collector of Raleigh Council of the Royal Arcanum. The facts appearing upon the record are as follows: Plaintiff, A. G. Brenizer, on the 31st day of October, 1905, instituted an action in the superior court of Mecklenburg county for the purpose of recovering the sum of $1,400, alleged to be due him by the Supreme Council of the Royal Arcanum. Summons was duly served on the insurance commissioner of North Carolina. The warrant of attachment was issued by the clerk of the superior court of said county, directed to the sheriff of Wake county commanding him to attach all the property of the defendant in said county. The said clerk issued an order to the sheriff of Wake county commanding him to summon D. T. Johnson to appear and answer on oath concerning such moneys or property as he had in hand belonging to the defendant, etc. Upon service of the notice, said Johnson, upon oath, made return saying: That he is a collector of Raleigh Council No. 551 of the Royal Arcanum which is a subordinate council under the jurisdiction of the Supreme Council. That as such collector under the charter, constitution, and laws of the Royal Arcanum, as shown in the constitution thereof, it is his duty to receive and collect all moneys due by the members of his council for the widows' and orphans' benefit fund, and to pay the same over to the treasurer of the subordinate council. It is the duty of the treasurer to keep a separate account of the widows' and orphans' benefit fund, and not allow this fund to be used for any other purpose, and to transmit the money to the Supreme Council. As such collector, he had in his possession on November 1, 1905, the day the notice of attachment was served upon him, the sum of $861.34 which is to his credit as collector, in bank. That this money was collected and received from the individual members of the said council, as assessment No. 350, for the widows' and orphans' benefit fund, and when collected should have been paid over to the treasurer of the said council, whose duty it is to transmit the same to the proper officer of the Supreme Council. That he had no other money or property of the Supreme Council; that all the money in his possession or on deposit made by him, was collected for the purpose of paying assessment No. 350 belonging to the general fund of Raleigh Council, not the property of or in any way controlled by, the Supreme Council. This money is a part of the fund which, under the charter, constitution, and laws of the defendant, the Supreme Council, and under the laws of Massachusetts, of which state defendant is a citizen, was raised for, and is held as a trust fund to be paid out solely for death benefits, and neither affiant nor defendant nor any one else can divert the same to any other purposes. That he is advised that such sum is not liable to attachment at the hands of any one who has a supposed claim against the Supreme Council, not arising out of the death benefit. He refers to the provisions of the charter, constitution, and rules of the Royal Arcanum; wherefore he asks that the attachment against him be vacated, etc.

Henry J. Young, treasurer of Raleigh Council, filed an affidavit stating that it was his duty to receive from the collector all the money paid to him for the council and to keep an account of the sum. That it is his duty to keep a separate account of the widows' and orphans' benefit fund and not to permit it to be used for any other purpose. That at the time the notice of attachment was served upon him, he had in his possession $333 which belonged to the subordinate council and that he had no funds belonging to the Supreme Council. E. A. Skinner of the state of New York filed an affidavit stating that he was supreme treasurer of the Supreme Council of the Royal Arcanum; that he is the custodian of the funds of said corporation, etc.; that according to the articles of incorporation of defendant, the laws of Massachusetts, and the constitution and laws of the defendant, the said defendant has created and established a widows' and orphans' benefit fund out of which shall be paid to the wife, children, and relatives of persons entitled thereto, under the amounts of certificates issued to them by said council. The said widows' and orphans' benefit fund is collected and remitted to him as custodian thereof, and payments therefrom made in accordance with the constitution and laws of said order. That none of the moneys contributed and paid to the widows' and orphans' benefit fund by the members of the various subordinate council has ever been used for any other purpose than for the payment of death benefits and to establish what is known as the "Emergency Fund," and that said moneys have been held sacred as a trust created by the articles of incorporation, the laws of Massachusetts and the constitution of the Royal Arcanum; that the funds which have been attached by process in this action were contributed to and paid by certain members to the collectors for the sole purpose of being transmitted before November 15, 1905, to this deponent as custodian of said fund, and to be used only in the payment of death benefits as hereinto-fore stated and that none of such funds under the articles of incorporation, the laws of Massachusetts, etc is liable for the payment of any other debt or debts of the Supreme Council, but is a trust fund as herein provided. There is a separate fund of the Supreme Council from which all expenses of whatever kind are paid. W. O. Robson, of the state of Massachusetts, filed an affidavit stating that he was supreme secretary of the defendant; that he knows of the constitution and laws thereof and of the laws of Massachusetts, under which the defendant is organized. That said defendant was authorized to and has established a widows' and orphans' benefit fund by requiring all the members of the various councils of the defendant corporation, wherever situated, to pay to the collectors of their respective subordinate councils, certain sums of money prescribed in said laws, which after a certain period of time, therein prescribed, become the property of the defendant corporation, and that after the same comes into the possession of the supreme treasurer, it then becomes a part of the widows' and orphans' benefit fund, above referred to, and by the articles of incorporation, the laws of the state of Massachusetts and the constitution and laws aforesaid, are a trust fund to be used only as provided in said laws found in exhibit attached. That according to the laws of Massachusetts and the constitution, etc., the said widows' and orphans' benefit fund is a trust fund created and established solely for the purpose of paying therefrom, "on the satisfactory evidence of the death of a member of the order, who has complied with all its lawful requirements, a sum not exceeding $3,000 to the wife, children, relatives, etc., as he may direct." That said trust funds have not been, nor does he believe they could be used for any other purpose whatsoever. That the funds which were attached in this action were paid by the members of the subordinate councils to the officers of said councils, as assessments due from such members to the widows' and orphans' benefit fund to be transmitted to the supreme treasurer, etc. A copy of the certificate issued to the plaintiff was attached to the record by which it appears that the Supreme Council of the Royal Arcanum promises to pay out of its widows' and orphans' benefit fund to the person named therein the sum of $3,000, etc. Certain portions of the constitution and laws of the said Supreme Council were in evidence in which the objects of the order are stated, among others, to issue a widows' and orphans' benefit fund, from which the sum not exceeding $3,000 shall be paid to the wife, children, etc., of each member upon the conditions therein set out. It is also provided that upon application made and accepted by any person a certificate shall issue entitling the person named therein upon the death of the applicant to be paid from the widows' and orphans' fund the sum named not exceeding $3,000. A schedule of assessments is attached to the record, also certain portions of the statute in force in Massachusetts regulating the management of benefit societies.

The motion was based upon two grounds, the second being that the warrants of attachment and attempted service and levy thereof be adjudged void and vacated, on the ground that the funds attempted to be garnished and attached are not subject to attachment or garnishment for the claim of the plaintiff. The motion being denied, the defendant excepted and appealed.

Tillett & Guthrie and F. H. Busbee & Son, for appellant.

E. T. Cansler and Chas. Brenizer, for appellee.

CONNOR, J. (after stating the case).

Plaintiff's counsel in their well-prepared brief and able argument in this court, raise a question of practice, insisting that under the provisions of the statute (Revisal 1905, § 781) "When any garnishee makes such a statement of facts that the court cannot proceed to give judgment thereon, then the court shall...