Simpson v. James R. Crowe Post No. 27, American Legion

• Decision Date: 09 May 1935
• Docket Number: 8 Div. 634
• Citation: 161 So. 705,230 Ala. 487
• Parties: SIMPSON v. JAMES R. CROWE POST NO. 27, AMERICAN LEGION.
• Court: Alabama Supreme Court

161 So. 705

230 Ala. 487

SIMPSON v. JAMES R. CROWE POST NO. 27, AMERICAN LEGION.

8 Div. 634

Supreme Court of Alabama

May 9, 1935

Rehearing Denied June 6, 1935

Appeal from Circuit Court, Colbert County; J. Fred Johnson, Jr. Judge.

Suit in equity by J.F. Simpson against the James R. Crowe Post No 27, American Legion, and cross-bill by respondent. From a decree for respondent, complainant appeals and applies from mandamus.

Affirmed in part, and in part reversed and rendered.

R.L Polk and Stockton Cooke, Jr., both of Sheffield, and Henry D Jones and Fred S. Parnell, both of Florence, for appellant.

R.T. Simpson, Jr., of Florence, for appellee.

KNIGHT Justice.

Bill by appellant, J.F. Simpson, to perpetually enjoin the appellee, James R. Crowe Post No. 27, American Legion, from foreclosing a mortgage on certain real estate, executed by the appellant to the late Mrs. Susan A. Brabson, to secure a presently contracted indebtedness, money loaned, of $1,250; to "declare the act of respondent in acquiring said note and mortgage ultra vires; to declare the contract usurious, and for a judicial ascertainment of the indebtedness, in the event complainant was adjudged not to be entitled to a perpetual injunction, and for redemption." Complainant offers in his bill to do equity.

In paragraph 4-a of the bill as last amended, it is averred: "Complainant further alleges that a conspiracy existed between the respondent and the said Susan A. Brabson and Lula V. Frazier to have said mortgage transferred and assigned to the respondent for the purpose of instituting foreclosure proceedings and thereby divest title to the property conveyed by the mortgage from the complainant to the respondent in order that the respondent might have a domicile or place of business or home, and complainant further alleges that the respondent accepted the transfer of said mortgage and instituted foreclosure proceedings in furtherance of said conspiracy with the intent to defraud complainant out of said property." The bill contained other averments not necessary to be here detailed.

The respondent, the said James R. Crowe Post No. 27, American Legion, filed its answer to the bill, asserting its ownership of the note and mortgage by transfer from Mrs. Brabson, and averring that after it acquired the same it made demand upon the mortgagor for payment, and that the mortgagor having failed to pay the debt, it had proceeded under the power of sale to advertise and sell the property, and was so proceeding when the injunction was issued.

The respondent denied that the note and mortgage were transferred to it by Mrs. Brabson for the purpose of oppressing the mortgagor, or that they accepted the transfer for any such wrongful or illegal purpose; that it stood ready and willing at all times to accept payment of the indebtedness. At a subsequent time, as the proceedings progressed, the respondent amended its answer by making it a cross-bill, in which it prayed for the ascertainment of the indebtedness, including a reasonable solicitor's fee, and for the foreclosure of the mortgage. To this cross-bill the cross-complainant made the complainant in the original bill, the said J.F. Simpson, the sole defendant thereto. To the cross-bill, the said J.F. Simpson filed a number of grounds of demurrer, but none that presented the question of the nonjoinder of Mrs. Brabson, or the then holder of the legal title to the note and mortgage.

Upon final submission, the court denied injunctive relief to the complainant, and ascertained the amount of the indebtedness secured by the mortgage, and ordered the immediate foreclosure of the mortgage. The register was directed to sell the property in accordance with the terms of the mortgage to the highest bidder for cash in front of the United States Post Office in Sheffield, after advertising the sale for 30 days in some newspaper published in Colbert county, and to report the sale for confirmation.

It is to be noted from the decree that the court found that the respondent, the said James R. Crowe Post No. 27, American Legion, was a voluntary association of persons doing, among other things, charitable and social service in Colbert county.

From the decree granting relief to the cross-respondent, and ordering the foreclosure of the mortgage, the complainant appeals, and upon the record has made many assignments of error, challenging the propriety of many of the interlocutory orders of the court, as well as the final decree denying relief to complainant, and granting relief to the respondent, the said James R. Crowe Post No. 27, American Legion.

The complainant makes no contention in the testimony presented by him, nor in his bill, that he had paid the indebtedness secured by the mortgage in full. His main contention for a permanent injunction was that the American Legion was a nonresident corporation, and had not complied with the laws of Alabama before engaging in business in the state of Alabama, and therefore it had no right to do business in the state, either directly or through a subsidiary; that it is not a business corporation but is a social club, incorporated solely for the benefit of its members and is not authorized to engage in or conduct the business of a private corporation "or to engage in business enterprises as a private corporation." That the said James R. Crowe Post No. 27, American Legion, is a social club, organized for the advancement of its members, and had not complied with the law as such, and could not take and hold the note and mortgage, nor foreclose the same; that it was not "a legal entity with power or authority to acquire and foreclose the mortgage."

We are in full accord with the court below in finding from the evidence that the said James R. Crowe Post No. 27, American Legion, is at least a voluntary association; that it was such at the time Mrs. Brabson assigned to it the note and mortgage; that the purpose, in part, of its organization was and is, as admitted in brief of counsel for appellant, to do welfare work among World War veterans, as well as many other commendable things.

It is insisted that the said James R. Crowe Post No. 27, American Legion, having no legal existence, was incapable, as an organization, of taking or holding the note and mortgage transferred to it by Mrs. Brabson, and that, therefore, the attempted transfer was void.

In 5 Corpus Juris, § 32, page 1343, the author states the rule as to the power of unincorporated associations to take and hold property as follows: "In the absence of any statute empowering it to do so, an unincorporated association having no legal existence independent of the members who compose it, is ordinarily incapable, as an organization, of taking or holding either real or personal property in its associate name; and a conveyance to an unincorporated association ordinarily passes no title. *** However, the members of a voluntary association may take and hold property jointly as individuals, and accordingly a grant to an association by name, if not impressed with any trust or charitable use, vest in the persons composing the society."

In the case of Charles W. Byam et al. v. Daniel W. Bickford, 140 Mass. 31, 2 N.E. 687, 688, where a deed conveyed certain land to a voluntary unincorporated association by name, which was well known, and all the members of which could be ascertained, and which association was not one of the class authorized by statute to take and hold real estate, it was held that the deed may be construed as a grant to those who are properly described by the title used in the deed; and such persons were held to be tenants in common of the land conveyed. The court in that case observed: "But the South Chelmsford Hall Association was a body well known, all the members of which could be ascertained; and, as it could not take as a corporation, the deed may properly be construed as a grant of the estate to those who were properly described by this title, especially as the grant is to the 'associates,' as a term deemed by the grantors to mean the same as 'association.' The persons associated in the society were thus tenants in common of the land conveyed."

This court in the case of Lavretta v. Holcombe, 98 Ala. 503, 12 So. 789, held that an unchartered association of individuals, styling themselves the "Cosmopolitano Social and Literary Club," could own property, and make claim to it, as well as if they had been incorporated.

We have now statutory provisions with reference to unincorporated associations, and which are embraced in sections 5723-5728, of the Code. By section 5723 it is provided: "An action or suit may be maintained by and in the name of any unincorporated organization or association." Section 5724 provides: "Actions or suits may be maintained against and in the name of any unincorporated organization or association for any cause of action for or upon which the plaintiff therein may maintain such an action against the members of such organization or association." Section 5727 provides: "Where a judgment in such action is rendered in favor of the plaintiff against such organization or association the property of such organization or association shall be liable to the satisfaction of such judgment."

These provisions of the Code clearly recognize that voluntary unincorporated associations may acquire and hold property, real and personal, and may be sued in their association name; and in such name may maintain suits.

We are at the conclusion that the assignment by Mrs. Brabson of the note and mortgage to the James R. Crowe Post No. 27, American Legion, if it was only in fact a voluntary, unincorporated association, as the court found it to be, was not void; but vested the equitable interest in the note and...