Babb v. Reed

The opinion of the court was delivered by

Sergeant J.

The association, from whose property the moneys in court proceeded, was formed and conducted without incorporation. Its objects are stated to be, the employment of its funds in purposes of mutual benevolence, amongst its members and their families; but these cannot be deemed charitable uses under the common law of Pennsylvania or the statute 43 Elizabeth. The twenty-one cases enumerated in the statute, and the others constructively within it, are of a public nature, tending to the benefit or relief, in some shape or other, of the community at large, not i’estricted to the mutual aid of a few. And if the objects of the association were within the class of charitable uses, it does not follow, as has been contended, that it is clothed with the character of a corporation, without a charter obtained under the act of 1791, or by virtue of a' special act of assembly. Equity finds ways to sustain charitable trusts or uses, without necessarily creating corporations for that purpose — the objects and purposes of the society are of a beneficial kind, and as such might perhaps be embraced by the act of 8th April, 1833, extending to beneficial societies and associations the provisions of the act of 1791. In the absence of any actual charter, it is a voluntary association of individuals, and the members, in their relations to third persons, are to be considered as partners, in the same.manner as individuals associated for the purpose of banldng; Hess v. Wertz, 4 Serg. & Rawle, 356; or joint stock companies, at one time so frequent in England, for commercial and speculating purposes.

'That being the case, the claimants must be divided into two-classes: First, those who never were members of the association, second, those who were members at the time these claims, originated. The latter class, considered in the light of partners, are with the other members of the association jointly and severally liable, for the payment of the debts of the first class; and are, moreover, seeking to enforce a lien on their own property, by which the former class will be deprived of a portion of their debts. It is possible that persons jointly owning lots of ground, and erecting buildings upon' them, to which they furnish work and materials, may file liens under the acts of assembly, and maintain them among themselves, on the ground that they are in equali jure, and to be considered as mutually waiving objections. But that a person can enforce a lien on his own building, at the expense of third persons who hold similar liens on it for debts contracted by the former to the latter, is not reconcileable with law or equity. At law the lien of the owner would merge in the property, since no man can be both debtor and creditor: and equity would not uphold .it in order to place in the hands of the owner himself, a portion of that fund which ought to go to his creditor, whose debt was contracted on the faith of the fund. .

We are, therefore, of opinion that the debts of Everhart, and of the firm of Davis & Jones who were not members of the association, ought to be first paid out of the fund, before any part of it can be appropriated to the claimants who were members: and as there is not money sufficient to pay Everhart and Davis & Jones in full, it must be distributed between them, in proportion to their respective debts.

Decree reversed; and decree that it be distributed accoi’dingly.