Harrill v. Penn

• Decision Date: 20 December 1927
• Docket Number: Case Number: 17056
• Parties: HARRILL et al. v. PENN et al.
• Court: Oklahoma Supreme Court

1927 OK 492

273 P. 235

134 Okla. 259

HARRILL et al. v. PENN et al.

Case Number: 17056

Supreme Court of Oklahoma

Decided: December 20, 1927

Syllabus

¶0 1. Associations--Unincorporated Fraternal Society--Members not Partners--Liability for Debts.

Members of an unincorporated fraternal society, not organized for trade or profit, are not partners; and those of such society or organization who are actually instrumental in incurring indebtedness or liabilities for it are liable as either principals or agents having no legal principal behind them. Members of the society who either authorize or ratify the transaction or assent thereto are liable, while those who do not are exempt from liability.

2. Evidence--Presumptions--Effect of Destroying or Suppressing Documents.

The willful destruction or suppression of documentary evidence properly gives rise to the presumption that the documents, if produced, would be injurious to the one who has thus hindered the investigation of the facts.

Commissioners' Opinion, Division No. 2.

Error from District Court, Wagoner County; Hal Johnson, Judge.

Action by T. C. Harrill et al. against C. H. Penn et al. Judgment for defendants, and plaintiffs bring error. Reversed and remanded for new trial

Watts & Broaddus and John C. Graves, for plaintiffs in error.

Furry & Donovan, Malcolm D. Rosser, Joseph C. Stone, Charles A. Moon, and Francis Stewart, for defendants in error.

HALL, C.

¶1 This was an action for equitable contribution, by T. C. Harrill and James A. Harris, as plaintiffs, against C. H. Penn and numerous other persons named, as defendants, the basis of the action being that plaintiffs paid a surety obligation which they claim was a joint liability as to plaintiffs and all defendants. The expression "history of the transaction" may be appropriately used in this case. These transactions commenced about 17 years ago, and this particular cause was tried by the district court in the year of 1925. Briefly, the facts are as follows: A number of persons, including plaintiffs and defendants, in the year of 1911, in the town of Wagoner, organized an unincorporated "camp" or "lodge" of a fraternal association known as the "Modern Woodmen of America." The lodge or camp was without a satisfactory building or hall in which to meet and assemble for its usual business. After due notice to all its members, and at a regular meeting of the lodge, it was decided by the attending members that the lodge should construct or build a building suited to its purposes. At one of the meetings it appears from the recorded minutes that 41 members were present, and resolutions were voted and adopted by a majority of 40 to one in favor of purchasing a lot and the erection of a building hereon. At various subsequent meetings the lodge as a body took action towards appointing committees, receiving the reports of committees and in general taking vigilant action towards the commencement and completion of the enterprise. Committees were appointed to purchase a lot, and a lot was purchased. A building committee was appointed. A resolution was adopted appointing a committee for a term of six years to handle the real estate, with full authority to mortgage the same to accomplish the intended purpose, the construction and financing of the enterprise. Certain persons were named on these numerous committees, and after the cost of the building was estimated, a lender of the necessary funds was secured, and notes and a mortgage were executed by a committee known as the "trustees" of the lodge. But due to the fact that just a small sum was paid on the lot, or building site, and for many other reasons sufficient to an investor or any other person with any degree of business prudence, the lender or mortgagee would not advance the money until the lodge or the persons interested could secure the signatures of at least two persons with a satisfactory financial rating as sureties or indorsers of the notes. This building committee timely interviewed plaintiffs, and secured their signatures to the promissory notes as indorsers thereof. The building was constructed, and it appears that it was in use for several years; but the ultimate result was that the mortgage thereon was foreclosed, the property sold at a foreclosure sale, and a deficiency judgment rendered against plaintiffs, which judgment they paid; the deficiency being the sum of $ 6,220.57. By agreement among plaintiffs, this sum was jointly paid, each paying one-half thereof. The plaintiffs then filed this action asking for an equitable decree of contribution among the defendants, alleging that the members of the lodge at the time of the transaction, who were not named as defendants, were dead, or beyond the jurisdiction of the court, or insolvent, or had made voluntary contributions.

¶2 The recorded transactions of the lodge, the transactions commencing immediately after the notes and mortgage were executed, and ending about one year thereafter, and after the completion of the building, were destroyed after this action was filed. This record book was in the custody of the secretary of the lodge, who was a defendant in this action. Pages 60 to 103, inclusive, were torn from the book. The secretary testified that if the spoliated minutes in the record book could be produced, they would show some transaction or action by the lodge at each meeting during this period of time with reference to this enterprise.

¶3 It is elementary that there can be no liability because of the mere membership in this lodge or association. The liability or nonliability of each defendant is to be determined by the position he, as an individual, took during the entire transaction, or some part of the transaction in which he either aided in the creation of the obligation or enterprise, or, later, assented to or ratified the action of those who did put the enterprise in motion or consummate the transaction.

¶4 This case is controlled by the principles of law applied, and the holding in the case of Ash v. Guie, 97 Pa. 493, 39 Am. Rep. 818, in which case it was said:

"The proof fails to show that the officers, or a committee, or any number of the members, had a right to contract debts for the building of a temple, which would be valid against every member from the mere fact that he was a member of the lodge. But those who engaged in the enterprise are liable for the debts they contracted, and all are included in such liability who assented to the undertaking or subsequently ratified it. Those who participated in the erection of the building, by voting for and advising it, are bound the same as the committee who had it in charge. And so with reference to borrowing money. A member who subsequently approved the erection or borrowing could be held on the ground of ratification of the agent's acts. We are of the opinion that it was error to rule that all the members were liable as partners in their relation to third persons in the same manner as individuals associated for the purpose of carrying on a trade."

¶5 This same principle was announced in the case of Clark v. O'Rourke (Mich.) 111 Mich. 108, 69 N.W. 147. See, also, the case of Robbins Company v. Cook (S. Dak.) 173 N.W. 445, 7 A.L.R. 218, and note appended thereto.

¶6 Plaintiffs in error next contend that they were deprived of the benefit of the presumption which followed the destruction or spoliation of the instruments, the records disclosing the proceedings of the lodge during the time the building was in process of construction and its completion. The contention is well taken.

¶7 While it is difficult to define to what extent this presumption must be indulged, in order to fasten liability to all the members of the lodge, it is clear that in a case of this particular nature, where the transactions of an assembly are sought to be proved, the minutes or journals thereof constitute evidence of the highest degree of importance. Testimony of witnesses as to what definitely occurred in large assemblies of men is very unsatisfactory. Therefore, the destruction or spoliation of these records invokes the rule that:

"It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced and in the power of the other to have contradicted." Section 19, Jones on Evidence, (2nd Ed.).

¶8 And the destruction of this evidence, while it was in the custody of one of the defendants, together with the other evidence in this case, raises a presumption that all the defendants assented to or participated in or ratified the acts of the lodge and building committee in incurring this indebtedness. The...