Foster v. Moulton

• Decision Date: 17 July 1886
• Citation: 35 Minn. 458
• Parties: P. A. FOSTER <I>vs.</I> E. H. MOULTON, impleaded, etc.
• Court: Minnesota Supreme Court

35 Minn. 458

P. A. FOSTERvs.

E. H. MOULTON, impleaded, etc.

Supreme Court of Minnesota.

July 17, 1886.

Appeal by defendant E. H. Moulton from an order of the district court for Blue Earth county, Severance, J., presiding, overruling his separate demurrer to the complaint.

Rea, Kitchel & Shaw, for appellant.

P. A. Foster, respondent, pro se.

BERRY, J.

The complaint in this action sets out what purport to be the articles of incorporation of a mutual benefit association, which appears to have been intended to be a sort of mutual insurance company, and alleges that said articles were duly executed by defendants, and duly recorded with the register of deeds and secretary of state; that one McCarthy became a member of the association, paid his dues, and received a certificate of membership; that he sustained bodily injury entitling him, as such member, to pecuniary benefit; that the amount due him under the terms of his membership has not been paid; and that he has duly assigned his right to such benefit to the plaintiff.

The association did not comply with the statute so as to become an insurance corporation de jure. The appellant (one of the defendants) contends that it was duly incorporated as a benevolent society under Gen. St. 1878, c. 34, title 3. This cannot be so, for it is no more a benevolent society than any mutual insurance company, or other mutual company, or any partnership of which one member undertakes to do something for the pecuniary advantage of another member, in consideration of the undertaking of the latter to do a like thing for him. The undertaking is not in any proper sense benevolent, but it is for a quid pro quo; it is paid for. People v. Nelson, 46 N. Y. 477. The association involved in the case at bar is, in substance, for purposes of mutual insurance. State v. Merchants' Exch. Mut. Benev. Soc., 72 Mo. 146; State v. Benefit Ass'n, 6 Mo. App. 163; Com. v. Wetherbee, 105 Mass. 149; May, Ins. § 550a.

But notwithstanding it is not a corporation de jure, we think it must, at least, as between its members, be regarded as a corporation de facto. It is manifest that the understanding between the members, and the basis upon which certificates of membership were issued, was that the association was a corporation in fact as it was in form. Morawetz, Priv. Corp. § 139. It never could have been intended or expected that the members of the association, whether original founders, — members like defendants, — or those who should become members by joining at any time, should or would be liable as individuals, either jointly or severally, to any particular member who should, by virtue of and under the terms of his membership, become entitled to pecuniary relief or benefit. On the contrary, the intention and the real contract was that the association, as a corporation in the contemplation of the...