Pain v. Sample , 158 Pa. 428 ( 1893 )

Opinion by

Mb,. Justice Thompson,

The ground upon which the court below based the liability of appellants was that the contract sued on was beyond the legitimate scope of the purposes of the organization represented by them. When the appellees made this contract they made it with the post as such. It is admitted of record “ that said contract was entered into by said Thomas G. Sample, acting as chairman of a committee of said James M. Lysle Post, No. 128, pursuant to a resolution adopted at a meeting of certain members of said post, which resolution authorized a committee, composed of Thomas G. Sample, A. E. Dawson, John Dietz and D. M. Morrison, defendants in this case, to enter into said contract in behalf of said post. That the defendants present at said meeting, were Sample, Dietz and Morrison, who voted in favor of said resolution; and that afterwards all the defendants took part in the execution of said contract and endeavoring to make the performance given b3r plaintiffs, under said contract, a success.”

The proofs show that subsequently, at a meeting of the post, after a full report made, the contract was duty ratified by it. Appellees, having full knowledge that the, contract was to be ■made by the post, which by resolution ratified it, and having executed it with a committee representing it, chose to assume that it was within the legitimate scope of the purposes of the association.

It is difficult to discover upon what principle they can sue upon this contract and at the same time successfully assert it to be ultra vires. The post has not denied its liability, upon that ground, but, on the contrary, after its execution, ratified it. It is admitted of record, “that the plaintiff and Thomas G. Sample, one of the defendants, the latter acting as chairman of a committee of Lieutenant James A. Lysle Post, No. 128, Grand Army of the Eepublic, on September 4th entered into the contract set forth in the plaintiff’s statement.”

Thus the appellees admit the execution of the contract with the post, and the proofs show clearly its subsequent ratification. Such being the ease there is nothing in the evidence to warrant the assumption that it was beyond the scope of the powers of the corporation. It therefore stands as a contract with the post.

The post was an unincorporated beneficial society, but nothing is shown as to the extent and character of its powers. As to its want of power to make a contract for an exhibition to raise money for its beneficial purposes there is an absolute failure of proof. The ohty evidence in regard to the association is contained in a by-law offered in evidence, which b3r-law was as follows:

“ Upon the death of a comrade who shall not be indebted to the post at the date of his death for more than one quarter’s dues and shall have been a member for six months, the sum of one hundred dollars shall be paid to his heirs as a funeral benefit, the same to be drawn from the funds of the post.”

This by-law indicates it to be a beneficial society, but goes no further.

In Ash v. Guie, 97 Pa. 500, members of an unincorporated association to the number of about one hundred were sued as partners and held by the court below to be such. Mr. Justice Trunktsy in reversing says: “ Here there is no evidence to warrant the inference that when a person joined the lodge he bound himself as a partner in the business of purchasing real estate and erecting buildings, or as a partner, so that other members could borrow money on his credit. The proofs fail to show that the officers, or a committee, or any number of 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 engage in the enterprise are liable for the debts they contract, and all are included in such liabilities who assent to the undertaking or subsequently ratify 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 a ratification of the agent’s act. We are of opinion that it was error to rule that all the members were liable as partners in their relations to third persons in the same manner as individuals associated for the purpose of carrying on a trade.”

In the present case, the purpose was to raise money for the beneficial purposes of the post; and the agreement to accomplish this was duly ratified by the lodge. Under such circumstances the appellees who dealt with appellants as agents of the post, representing it, and made their contract with them as such, cannot maintain successfully a suit against them, as partners, who made the contract.

Appellants further contend that they are protected from individual liability by the act of April 28,1876, entitled “An act relieving members of beneficial societies from individual liability for lodge indebtedness,” which provides : “ that members of lodges of the order of Odd Fellows, Knights of Pythias and other organizations, paying periodical or funeral benefits, shall not be individually liable for the payment of periodical or funeral benefits, or other liabilities of the lodge or other organizations, and that the same shall be payable out of the treasury of such lodges or organization.”

As beneficial societies have for their purpose the help and aid of large numbers of individuals at times of great pressure and distress, a purpose that naturally appeals to the best instincts of manhood, it is clear that the membership should not be associated with the perils of individual liability. The scope of the legislative intent in this act was to reach this result. Its language is not restrictive, and its “ members shall not be individually liable for the payment of periodical or funeral benefits or other liabilities of the association, and the same shall be payable out of the treasury.” After thus specifying a class, it uses the words “ other liabilities,” and clearly means all liabilities which are made payable out of the treasury of the association, and contemplates liabilities in addition to those which relate to funeral expenses or death benefits. Under the provision of this act the members of the post in this ease are protected from any individual liability arising from the contract upon which this suit was brought.

Judgment reversed.