Grand Lodge of Iowa of Independent Order of Odd Fellows v. Osceola Lodge No. 18, Independent Order of Odd Fellows

Decision Date23 June 1970
Docket NumberNo. 53646,53646
Citation178 N.W.2d 362
CourtIowa Supreme Court

Nyemaster, Goode, McLaughlin, Emery & O'Brien, Des Moines, for appellant.

White, Stone & Horan, Marion, for appellees.

RAWLINGS, Justice.

By equity action commenced July 29, 1965, plaintiff, Grand Lodge of Iowa. Independent Order of Odd Fellows, seeks benefit of a declaratory decree holding, defendant Osceola Lodge Benevolent Association acquired title to certain real estate conveyed to it by defendant Osceola Lodge No. 18, either as its alter ego or as trustee for the uses and purposes of the Order, and in either event the real estate be held subject to laws of the Order. Noting the conveyance complained of was openly effectuated in 1948, trial court held the action was barred by pleaded limitation statutes. Plaintiff appeals. We affirm.

There is no substantial dispute as to the factual situation involved. All parties are nonprofit corporations organized under the laws of this state. Both defendants have principal offices in Marion.

The Independent Order of Odd Fellows is a fraternal organization with many declared philanthropic purposes. Among other things Iowa Grand Lodge operates a home for elderly persons and children in Mason City.

The Supreme governing body of the Order is the Sovereign Grand Lodge. It is from this Sovereign that all affiliates in the Order gain existence. Each state in the United States is a jurisdiction, the governing head of each being designated a Grand Lodge. Plaintiff herein is the Iowa Grand Lodge, the principal place of business being in Des Moines. Its charter was obtained from the Sovereign which has a constitution recognized as the supreme law of the Order.

Iowa Grand Lodge is the supreme body of Odd Fellows in this jurisdiction. One of the functions of Iowa Grand Lodge is to charter subordinate bodies such as Lodge No. 18. Iowa Grand Lodge is also required, as a part of its supervisory duties, to effect recognition of and compliance with all laws of the Sovereign Lodge, and those of Iowa Grand Lodge, by subordinate lodges in this jurisdiction.

The record discloses, rules of the Order permit all lodges to acquire property which must be used only for dedicated purposes of the Order. These rules also preclude disposition of property by a local lodge for any purpose other than in furtherance of programs and principles of the Order. They also provide a local lodge shall not dispose of its properties for the purpose of defeating reversionary interests held by the Grand Lodge. In this respect, if a local lodge in the State of Iowa at any time ceases to exist, then Iowa Grand Lodge has a reversionary right to all property held by the local body. On reversion, Iowa Grand Lodge must use such property, first to meet obligations of the extinct lodge, and that done, any funds remaining are to be set aside and employed in support of existing programs of the Order sponsored by the local body. Any surplus then goes to the home at Mason City for use in its operation, or for advancement of other purposes to which the Order of Odd Fellows may be committed.

Local lodges, and in turn individual members of each local agree, when chartered, or on joining, to be bound by all the laws, rules and regulations of the Order, including designated charitable uses of property owned by the Lodge, all as expressed in the constitutions of the Sovereign Grand Lodge, Iowa Grand Lodge, and Code of General Laws.

October 20, 1869, defendant Lodge No. 18 was chartered. Defendant 12, 1932, its articles of incorporation were approved by Iowa Grand Lodge and resultantly filed of record December 29, 1932.

The real estate in question is located in Marion. Thereon is a two story building, the first floor being rented to business tenants, the second used as an assembly or meeting hall. This property was acquired by Lodge No. 18 prior to December 1920.

Defendant Osceola Lodge Benevolent Association was incorporated April 20, 1948. The decision to form that organization was made by a vote of Lodge No. 18 members. The purposes and objects of this Association, as set forth in its articles, include general benevolences as well as ownership and management of real estate. Its principal function, however, as revealed by the record before us, Is to operate, manage and improve the real estate here involved, and protect it from any obligations of Lodge No. 18.

May 13, 1948, Lodge No. 18, with no semblance of consideration, and absent consent of the Sovereign, or Iowa Grand Lodge, conveyed the property previously acquired and held by it as aforesaid, to defendant Association, which neither had nor has any affiliation with the Order. The Association has since held open and adverse possession.

Iowa Grand Lodge, admittedly having both actual and constructive notice of the foregoing conveyance, at once directed the Grand Master to investigate and direct a reconveyance to Lodge No. 18. This was done in a letter dated October 29, 1948, in which he warned that section 35 of paragraph 10, constitution of Iowa Grand Lodge, prohibited use and disposition of any lodge property except for charitable causes sponsored by the Order. Shortly thereafter, in November 1948, a delegation from Iowa Grand Lodge met with members of Lodge No. 18 and demanded a reconveyance of the real estate, which was refused. An attempt to remove the charter at that time failed.

November 16, 1948, pursuant to an Association special meeting, its articles of incorporation were amended to provide that property of the Association, in event of dissolution, be distributed to the members thereof in proportion to duration of membership in Lodge No. 18. The foregoing corporate amendment was promptly filed of record, thus imparting constructive notice thereof to Iowa Grand Lodge. Sections 504.1 and 504.19--504.20, Code, 1946; Bristow v. Lange, 221 Iowa 904, 912, 266 N.W. 808; 45 Am.Jur., Records and Recording Laws, sections 85--86, pages 467--469. See also sections 504A.30--504A.38, Code, 1966.

In March of 1965, a delegation from Iowa Grand Lodge again went to Marion and demanded a reconveyance of the property to Lodge No. 18, which was refused. Thereupon the delegation took the Lodge charter and suspended its operation as an adjunct of the Order.

It further appears that anyone who was a member of Lodge No. 18 could, but was not required to be a member of the Association. Both corporations are operated by a board of trustees. Incidentally the trustees of Lodge No. 18 are the same persons who serve as trustees of the Association. However, separate and distinct meetings have been held, and separate records and minutes are maintained for each corporation. Except for a small rental of less than $150 a year which was paid the Association for about the first two years after transfer of the property in 1948, Lodge No. 18 has since remitted no rent for permissive use of the second floor of the building as a meeting place. Members of the Association have never been assessed for dues since its organization. That corporate entity has paid no income taxes, and until three years before trial commenced had filed no returns. Apparently the real estate here involved is unencumbered.

As already disclosed, plaintiff's express purpose in bringing this action is to obtain a declaration of rights of the Order relative to the real estate, establish usage of same, and avoid loss of its reversionary interest. Also as stated by plaintiff, the charter of Lodge No. 18 will be restored if and when the property held by the Association is reconveyed to Lodge No. 18. No other relief is sought.

By answer defendants deny plaintiff's right to any relief, and specifically assert its cause of action is barred by our limitation statutes.

After finding the facts substantially as here related, trial court found no merit in plaintiff's contention that the Association is the alter ego of Lodge No. 18, pointing out, membership of the two organizations can be less than identical; separate meetings are held; any action on the part of the Association is by its members, including amendment of the corporate articles; and Lodge No. 18 has no control over the Association, or vice versa. In essence the court found, any relationship between the two organizations can continue, be modified or dissolved, at the election of the Association, but not by action of Lodge No. 18.

In refusing to accept plaintiff's contention to the effect the Association's title to this real estate is subject to an express trust imposed upon it while owned by Lodge No. 18, the court reviewed Code section 614.1(6), 614.14, 614.17, and 614.24, which are limitation acts. In so doing it recognized the well settled rule that when a trustee violates its trust, denies it, or repudiates it, to the knowledge of the beneficiary, a cause of action against the trustee accrues immediately to the beneficiary, thereby causing these limitation statutes to then commence running. It held plaintiff's right, if any, accrued in 1948 (almost 17 years before commencement of this case) when the Lodge violated its trust by a conveyance to the Association, the action stands barred by applicable statutes of limitation, and because of laches.

Plaintiff relies on these propositions in support of a reversal: (1) the rules and laws of the Independent Order of Odd Fellows are binding upon the various lodges within the Order and upon individual members thereof; (2) the real estate involved was acquired and owned by defendant Lodge No. 18 for purposes and uses of the Order, including the reversionary interest of the Grand Lodge in event the subordinate lodge ceased to exist, and the local lodge cannot avoid its utilization under laws and rules of the Order by an unauthorized disposal; (3) the real estate...

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