Meyer v. Bishop

TEMPLE, J. This case seems to be on all fours with Perkins v. Fish, 121 Cal. 317. Plaintiff held a certificate of membership in the Mutual Endowment Association, which assumed to be and was doing business in the style of a corporation. The association went through the form of incorporation, and the defendants, who were its directors, still contend that it was a corporation de jure and de facto. Articles of incorporation were executed in due form and were filed in the clerk’s office of the county and in the office of the secretary of state. A board of directors was elected and elaborate by-laws adopted. They provided, for its members only, endowment, insurance, and disability benefits, and also for assessments, with elaborate and minute provision for the disposition and management of the funds of the association. This action is not based upon any charge that the moneys have been wasted or misappropriated, but solely upon the proposition that there was a complete failure to incorporate, and the association was not even a corporation de facto, and, therefore, there was no authority on the. part of defendants, claiming to act as trustees or directors of a corporation, to receive the money. But the payments were voluntary and made with full knowledge as to the disposition authorized and required by the by-laws. To quote from Perkins v. Fish, supra: “It [the money] was paid in and *207 out under articles of association and rules and regulations framed by plaintiff and other members, or assented to by them in advance of any payment by them, and they must be held to be bound by their own acts.” The members, therefore, who have continued for years to pay their chosen agents money, to be expended in a specified way, cannot after the failure of the scheme sue their agents, in an action for money had and received, to recover back the sums so paid. They are in pari delicto and must share the loss. As to persons who were not members different questions would be presented. Conceding all that plaintiff contends for, the purposes of the association were not improper, but the mode adopted for their attainment was unauthorized. They were all in it together, and it is difficult to see why, after failure, one set of members should recover from another set, payments which they have made in the futile attempt. Counsel for appellant in his oral argument attempted to differentiate this case from the case of Perkins v. Fish, supra, but we are unable to see any distinction affecting the vital point. It is suggested that the defendants discontinued the business without sufficient cause. The proposition sounds very strange coming from the plaintiff, but this action is not for damages for the improper discharge of the duties of their trust on the part of defendants. If it can be said that defendants are sued as ■trustees, it is an involuntary trust which is being forced upon them. There are eighty-two counts in the complaint, stating as many different causes of action, accruing to plaintiff and eighty-one others who had assigned their claims to plaintiff. They are all alike. Each assignor was a member of the association, and the demand of each is for money paid out upon a contract which it is alleged was void because the association was not a corporation de jure or de facto, and the business which the association attempted was unauthorized. The judgment is affirmed. McFarland, J., and Henshaw, J., concurred. Hearing in Bank denied.