Ionic Lodge No. 72, F. & A. A. M. v. Ionic Lodge Free Ancient & Accepted Masons No. 72 Co., 750

• Decision Date: 09 June 1950
• Docket Number: No. 750,750
• Citation: 59 S.E.2d 829,232 N.C. 252
• Court: North Carolina Supreme Court
• Parties: IONIC LODGE NO. 72, F. & A. A. M., v. IONIC LODGE FREE ANCIENT & ACCEPTED MASONS NO. 72 CO. et al.

Page 829

59 S.E.2d 829

232 N.C. 252

IONIC LODGE NO. 72, F. & A. A. M., v. IONIC LODGE FREE ANCIENT & ACCEPTED MASONS NO. 72 CO. et al.

No. 750

Supreme Court of North Carolina.

June 9, 1950

Elledge & Browder, Eugene H. Phillips, Winston-Salem, for plaintiff-appellant.

Ingle, Rucker & Ingle, Winston-Salem, for defendants-appellees.

SEAWELL, Justice.

The grounds on which Judge Clement acted in reversing the Clerk of the Superior Court were sufficiently made clear in the premises to his judgment and those grounds were: (a) That the unincorporated fraternal society has no capacity to sue or be sued, and having no standing in a court of law and equity, the judgment rendered in its behalf was null and void; and (b) that the defendant corporation with the remarkable appellation, 'Ionic Lodge Free Ancient & Accepted Masons No. 72 Company,' having had its charter suspended by the Secretary of State for nonpayment of revenue tax was thereby deprived of its power to 'function,' was, during the suspension, in no better position than a dissolved corporation,--barred from all activities, particularly the capacity to sue or defend in the courts.

Of these in order.

1. Of the capacity of the plaintiff to sue in its common name, the demurrer ore temus to the complaint and the motion to dismiss the action. The appellant contends that the demurrer to the complaint and motion to dismiss based on the incapacity of the plaintiff to sue in the manner attempted came too late after a year of quiescence since answering. We may dispose of the critical analyses and niceties of distinction which occupy many pages of the briefs by supposing the objections to have been timely made and considering them on their merits. Ball-Thrash & Co. v. McCormick, 162 N.S. 471, 78 S.E. 303; Brewer & Co. v. Abernathy, 159 N.C. 283, 285, 74 S.E. 1025; Tucker v. Eatough, 186 N.C. 505, 120 S.E. 57. If the plaintiff had the legal capacity to sue with respect to its property and the incident property rights, both the motion and the demurrer grounded on the contrary theory are ineffective.

Following the strict rule of the common law our courts have uniformly held that unless given that capacity by some pertinent statute an unincorporated association has not the capacity to sue. Tucker v. Eatough, supra; Kerr v. Hicks, 154 N.C. 265, 266, 268, 70 S.E. 468, 33 L.R.A.,N.S., 529.

Tucker v. Eatough cites United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 42 S.Ct. 570, 66 L.Ed. 975, 27 A.L.R. 762, and quotes % AD186 N.C. 505, 120 S.E. 59]: 'Undoubtedly at common law an unincorporated association of persons was not recognized as having any other character than a partnership in whatever was done, and it could only sue or be sued in the names of its members, and their liability had to be enforced against each member.'

The appellants contend, and we think correctly so, that the plaintiff comes within the pale of recently enacted statutes vesting them with that capacity.

Chapter 133 of the Public Laws of 1939, incorporated in the General Statutes as Sec. 39-24 to Sec. 39-27, inclusive, relates to voluntary organizations and associations. G.S. § 39-24 provides as follows: 'Voluntary organizations and associations of individuals organized for charitable, fraternal, religious, or partiotic purposes, when organized for the purposes which are not prohibited by law, are hereby authorized and empowered to acquire real estate and to hold the same in their common or corporate names.'

Sec. 39-25 authorizes conveyance in the common name.

It is strongly persuasive that having been given the power to acquire, hold and convey property under its common name there must go with it the capacity to sue and be sued in respect to it.

In arguendo the capacity of the plaintiff to sue in United Mine Workers v. Coronado Coal Co., supra, was based largely on this principle; and the case of Taff-Vale R. Co. v. Amalgamated Soc. of Railway Servants, A.C. 426, 1 B.R.C. 832, quoted in the Coronado Case was decided altogether on that principle. The Coronado case quotes from the Taff-Vale case as follows:

'Mr. Justice Farwell, meeting the objection that the union was not a corporation and could not be sued as an artificial person, said: 'If the contention of the defendant society were well founded, the Legislature has authorized the creation of numerous bodies of men capable of owning great wealth and of action by agents with absolutely no responsibility for the wrongs that they may do to other persons by the use of that wealth and the employment of those agents.'

'He therefore gave judgment against the union. This was affirmed by the House of Lords. The legislation in question in that case did not create trade unions, but simply recognized their existence and regulated them in certain ways, but neither conferred on them general power to sue, nor imposed liability to be sued.' [259 U.S. 344, 42 S.Ct. 576.]

In 1943 the General Assembly, by enacting Chapter 478, amended G.S. § 1-97 by adding to it paragraph 6 as follows:

'Any unincorporated association or organization, whether resident or nonresident, desiring to do business in this state by performing any of the acts for which it was formed, shall, before any such acts are performed, appoint an agent in this state upon whom all processes and precepts may be served, and certify to the clerk of the superior court of each county in which said association or organization desires to perform any of the acts for which it was organized the name and address of such process agent. If said unincorporated association or organization shall fail to appoint the process agent pursuant to this subsection, all precepts and processes may be served upon the secretary of state of the state of North Carolina. Upon such service, the secretary of state shall forward a copy of the process or precept to the last known address of such unincorporated association or organization. Service upon the process agent appointed pursuant to this subsection or upon the secretary of state, if no process agent is appointed, shall be legal and binding on said association or organization, and any judgment recovered in any action commenced by service of process, as provided in this subsection, shall be valid and may be collected out of any real or personal property belonging to the association or organization.'

It is contended by the appellees that this subsection still refers to 'unincorporated, fraternal, beneficial organization, fraternal benefit order, association and/or society issuing certificates and/or policies', etc., mentioned in Sec. 4. There is no internal reference to section 4 or sec. 6, and no similarity of content; and there is no reason why it should be so...