Timberlake v. Supreme Commandery, United Order of the Golden Cross of the World
| Decision Date | 03 April 1911 |
| Citation | 94 N.E. 685,208 Mass. 411 |
| Parties | TIMBERLAKE et al. v. SUPREME COMMANDERY, UNITED ORDER OF THE GOLDEN CROSS OF THE WORLD. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Appeal from Superior Court, Suffolk County; George A. Sanderson, Judge.
Action by Grace M. Timberlake and others against the Supreme Commandery, United Order of the Golden Cross of the World. Judgment for plaintiffs, and defendant appeals. Affirmed.
Wilbur H. Powers and Powers, Folsom & Powers, for appellant.
Brown Field & Murray (H. Larue Brown, of counsel), for respondents.
The plaintiffs were not parties or privies to the action brought by Knapp and others against the defendant in Tennessee, and are in no way bound by the decision made therein. Rothrock v. Dwelling House Ins. Co., 161 Mass. 423 37 N.E. 206, 23 L.R.A. 863, 42 Am.St.Rep. 418; Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565. We need not consider whether, if the Supreme Order of the Home Circle (hereinafter called simply the Home Circle) had become subject to the jurisdiction Francis v. Hazlett,
192 Mass. 137, 78 N.E. 405, 116 Am.St.Rep. 230, and Howarth v. Lombard, 175 Mass. 570, 56 N.E. 888, 49 L.R.A. 301, in which it was held that under the circumstances there stated the domestic stockholders of an insolvent foreign corporation were bound by the action of the foreign courts in suits to which the corporation was a party.
Here the Home Circle, though named as a party defendant in the Tennessee suit, never was served personally with process and did not appear, so that its rights were in no way affected by the decision rendered. Of course it could not be, as it has not been, contended that the subsequent intervention of its receiver in the matter of the accounting had the effect of a prior appearance by the Home Circle itself.
But the decision rendered in Tennessee and affirmed in the highest court of that state is fully set out in the agreed facts upon which the case at bar was heard. That statement of facts agreed was not a case stated, strictly so called, but it was stipulated that the court might draw all proper inferences from the facts agreed. This decision was the only evidence before the court as to the law of Tennessee (R. L. c. 175, § 76), and no other inference could be drawn from it than that by the law of Tennessee the defendant had not the power to unite or consolidate with the Home Circle, and that, as to the defendant at any rate, the attempted consolidation was ultra vires and void. But this consideration is not necessarily fatal to the maintenance of the present action.
The agreed facts, as we have seen, constituted merely the evidence upon which the case was tried. Cunningham v. Connecticut Ins. Co., 200 Mass. 333, 335, 86 N.E. 787, and cases cited. Accordingly the question before us is whether, upon those facts and any inferences which the judge at the trial was warranted in drawing therefrom, his finding for the plaintiff can be sustained. Vahey v. Bigelow, 208 Mass. 89, 94 N.E. 249.
There is no dispute that the defendant attempted to assume the contract of insurance which had existed between Mrs. Timberlake
and the Home Circle. She became a member of a commandery which was organized as one of the defendant's subordinate commanderies or lodges. She was allowed and enjoyed all the privileges of membership in the defendant's organization, and was subjected to and bore all the burdens incident thereto. Her right to have a death benefit paid to her beneficiaries as stipulated in her certificate from the Hom Circle was recognized by the defendant. Assessments were paid by her to the proper officers of her commandery, and were received from them by the defendant. It properly could be inferred, if indeed any other inference was possible, that these assessments were levied upon her by the defendant itself. This continued for nearly two years, during which time her payments, so made to and received by the defendant, amounted to a considerable sum, mainly if not wholly paid for the very insurance or death benefit which is now sought to be recovered. How the defendant kept these payments and what application it of the parties. What were these positions? known to her, nor is she chargeable with any laches or neglect for having failed to inquire. The facts that have been stated must be construed with reference to the relative positions of the parties. What wre these positions?
She had been a member of a fraternal beneficiary association incorporated under R. L. c. 119, and held a certificate therefrom by which it was promised that upon her death there should be paid to her beneficiaries, the present plaintiffs, a certain sum of money, provided among other things that she should duly pay such assessments as should be properly levied upon her. The defendant was a Tennessee corporation, organized for purposes substantially similar to those of the corporation of which she was a member, one of whose principal objects was to make contracts of fraternal insurance with its members. In substance, by its negotiations and final attempted agreement with the Home Circle, and by the notices which it could be found came to her with the consent and by the authority of the defendant, the defendant invited her to join its membership, to pay to it the assessments which it should thereafter levy for her insurance, and to comply as one of its members with its proper and lawful requirements; and in consideration thereof it promised to pay the amount named in her certificate to her beneficiaries,
subject to the contingencies therein stipulated for. It the judge found, as manifestly he could find, that these facts were established, this was none the less an offer to her individually that it was made also to many other persons in the same situation as herself. It could be found that she accepted this offer by joining the defendant's commandery and paying regularly and promptly to the defendant through subordinate officers the requisite assessments in accordance with its table of rates. It is evident that upon these facts the judge could find that the contract relied upon by the plaintiffs was made between the defendant and Mrs. Timberlake.
But it is claimed that this contract was beyond the power of the defendant to make, and so that this action thereon cannot be maintained.
It is said that Mrs. Timberlake could not have become a member of the defendant's organization, and so that no valid contract of insurance could have been made between her and the defendant, because the formal prerequisites to her admission as a member and to the making of a contract of insurance were not complied with. Most of these requirements are stated in the defendant's law XI. She made no application for membership. No ballot was taken upon the question of her admission. She paid no admission fee, and did not present a recommendation from two members of the order. She underwent no medical examination, and her application was not approved by the defendant's supreme medical director.
It is to be observed that the question is not whether the attempted consolidation of the defendant and the Home Circle was void. That may be assumed. Knapp v. Golden Cross, 121 Tenn. 212, 118 S.W. 390; New Orleans, Jackson & Great Northern R. R. v. Harris, 27 Miss. 517; Bankers' Union v. Crawford, 67 Kan. 449, 73 P. 79, 100 Am.St.Rep. 465; Whaley v. Bankers' Union, 39 Tex.Civ.App. 385, 88 S.W. 259; Pearce v. Madison & Indianapolis R. R., 21 How. 441, 16 L.Ed. 184. The present question is whether the corporation itself, having made such a contract as this, knowing it to have been made without compliance with the provisions of its own regulations, and having received the full consideration for which it stipulated, can afterwards avoid its contract as ultra vires by reason of such noncompliance.
The general rule governing such cases was stated in Davis v Old Colony R. R., 131 Mass. 258, 41 Am.Rep. 221: 'A corporation has power to do such business only as it is authorized by its act of incorporation to do, and no other. It is not held out by the government, nor by the stockholders, as authorized to make contracts which are beyond the purposes and scope of its charter. * * * If it makes a contract manifestly beyond the powers conferred by its charter, and therefore unlawful, a court of chancery, on the application of a stockholder, will restrain the corporation from carrying out the contract; and a court of common law will sustain no action on the contract against the corporation. * * * There is a clear distinction, as was pointed out by Mr. Justice Campbell in Zabriskie v. Cleveland, Columbus & Cincinnati R. R., 23 How. 381, 398, 16 L.Ed. 488, by Mr. Justice Hoar in Monument Bank v. Globe Works, 101 Mass. 57, 58, 3 Am.Rep. 322, and by Lord Chancellor Cairns and Lord Hatherley in Ashbury Railway...
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