Reising v. The Fraternal Aid Union
| Decision Date | 03 May 1930 |
| Docket Number | 29,294 |
| Parties | FRANK REISING, Appellant, v. THE FRATERNAL AID UNION, JOSEPH N. DOLLEY, WILLIAM C. HARTRAY, SAMUEL S. BATY, MARTIN MILLER, THOMAS J. SWEENEY, SAMUEL L. KERN and JOHN HASSELBERGER, Appellees |
| Court | Kansas Supreme Court |
Decided January, 1930.
Appeal from Douglas district court; HUGH MEANS, judge.
Judgment affirmed.
SYLLABUS BY THE COURT.
MUTUAL BENEFIT INSURANCE -- Unauthorized Acts -- Authority of Individual Member to Interfere. An individual member of a fraternal benefit society does not have capacity to maintain an action against the society and its officers on the ground that the society or its officers have exceeded its powers, or conducted its business fraudulently, or failed to comply with any of the provisions of the statute relating to such society. The authority to correct abuses of this character is, by statute, vested in the commissioner of insurance and the attorney-general.
A. B. Mitchell, of Lawrence, J. H. Brady, of Kansas City, and H. M. Waring, of Omaha, Neb., for the appellant.
George R. Allen, Richard F. Allen, both of Topeka, and F. M. Pearl, of Hiawatha, for the appellees.
This is an action by a member of a fraternal insurance society alleging mismanagement, abuse and actions by the directors and officers of the society beyond the authority conferred upon them by law, or the charter, causing and calculated to result in serious injury to the society, and alleging that the board of directors and acting managers and officers were acting in their own interests in misappropriation of corporate funds. It was specifically charged that throughout the years from 1914 to July, 1925, certain officers and members of the advisory board were paid salaries, or per diem, without such salaries having been fixed by the governing body of the association, as provided by chapter 231 of the Laws of 1927, § 40-705. The plaintiff seeks an accounting of the money alleged to have been wrongfully and illegally paid to the individual defendants named and for judgment that they pay and return the same to the society. The trial court sustained a demurrer to plaintiff's petition, and he has appealed.
Our statute relating to fraternal benefit societies (R. S 40-716, chapter 231 of the Laws of 1927, § 40-713) provides, in substance, that when such a society, or its officers, shall exceed its powers, or conduct its business fraudulently, or fail to comply with any of the provisions of the statute relating to such society, and such acts come to the knowledge of the commissioner of insurance, he may investigate the society and exclude it from doing business in the state if defects found to exist are not corrected, and on his request an appropriate action shall be brought by the attorney-general, and that no injunction will be granted or receiver appointed by any court against such society except on application of the attorney-general at the request of the commissioner of insurance. The...
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