Clark v. Lehman

Mr. Justice Boggs delivered the opinion op the Court. Whether a member of an association of the character of that represented by the appellant receiver is legally liable to pay assessments for death losses, or whether the only recourse of the association, in the event of his refusal to pay, is to declare his certificate void and cancel his membership, depends upon the contract between the member and the association. In the absence of an express stipulation to pay assessments the contract is unilateral and the member may pay or decline to pay at his option, the only effect of his default in making payment being to relieve the association of its obligation to him. The contract is to be ascertained, not upon consideration alone of the certificate, but the application for membership; the constitution and by-laws of the association form a part thereof and are to be considered together with the certificate as though all were embraced in a single instrument. The appellee, in his application to be received as a member of the association, stipulated he would faithfully abide by all its laws and regulations then in force, and by such changes therein as thereafter might be legally made. His application was accepted and he became a member in the second class. Art. YII, Sec. I, of the constitution of the association, then provided that “ upon the death of a member of the association, satisfactory proof of which has been furnished to the board of directors, each member shall be assessed and shall fay to the secretary of the association according to the class of which he is a member, as follows: * * * members of the second class not to exceed one dollar and ten cents * * * per each $1,000 of membership limits carried.” The constitution of this association is not silent as to obligation of appellee to pay—does not leave it optional with him, but provides he “shall pay” the assessments, and he obligated himself to faithfully abide by and perform its requirements. This construction of the provision of the constitution is supported by the opinion of the Supreme Court of the State of Missouri, in the case of Ellerbe v. Barney, 25 S.W. Rep. 384. The provision in the certificate that a failure to pay should render his membership void, when considered in connection with the stipulation of the application and the provision of the constitution, must be regarded as intended solely for the benefit of the association, to be availed of by it, if such course seemed best for its interest, and not a restriction upon the power possessed under the constitution to require the holder of the certificate to pay assessments. It is, however, contended no valid assessment has been made; the declarations contain following allegation as to the assessment: And plaintiff avers that at the time of the entering of such decree dissolving such incorporated association, there existed against the said association liabilities for death losses accruing to beneficiaries of certificates of membership issued by said association, aggregating the sum of, to wit, $134,0i)0, proper proofs of the death and of interests of beneficiaries to that amount having been filed in the office of the said association at the time of the decree of dissolution, and “ that while defendant was so a member of said association, •there occurred the deaths of members of said association hereinafter mentioned, proper proofs of whose deaths are filed in the office of the association, whereby their certificates of membership became a claim and liability against said association; upon which, defendant became liable to be assessed under and in accordance with said provisions of said constitution, and in pursuance of the order and decree of the court aforesaid. Said members so deceased, with their postoffice addresses at the time of death, date of death, and amount of certificates held by them, are as follows: (Here follow the names of forty deceased members with date of death, amounts of certificate, etc., to each of them.) And plaintiff says that in and by article III, section 1, of the by-laws of said association, adopted and in force during the time of defendant’s membership aforesaid, and at the time of the deaths aforesaid, it was provided : “ Upon the death of a member of the association, the secretary shall send by mail, to the postoffice address of each member of the association, a notice, giving the name of deceased member and postoffice address at the time of death, and the assessment due from each member, etc., which notice shall be deemed and taken as a lawful and sufficient notice for the payment of the assessment so called for and required.” The declaration also avers the court ordered and directed the receiver to make an assessment against the surviving members of the association, in conformity with the by-laws, and give notice thereof in the manner required by the by-laws, and that the receiver had so given notice to the appellee. It appeared from these allegations the beneficiaries of the deceased members had, prior to the appointment of the receiver, performed all that was required to be done by them to entitle them to the indemnity provided for their benefit by the terms and conditions of the certificates held by them, and that it only remained for the association to act, and nothing remained to be done by it except to notify its members of the amount necessary to be paid by each of them, collect same and pay to those entitled thereto. This duty of notification devolved upon the secretary. It required the exercise of ministerial duties only. In this condition of affairs the receiver was appointed. He succeeded to all the rights of action which had accrued to the association, and we think the court had full power to clothe him with the authority possessed in the first instance by the secretary of the association, of notifying the members that they were liable to pay the assessments in question. See 20 Amer. & Eng. Ency. of Law, pp. 286-290. We perceive no ground either of reason or upon authority to support the contention of the appellee, that the beneficiaries should have been required to present their proofs to the court and again make their case there. They had before the appointment of the receiver, by a course of proceedings established by the constitution and by-laws of the association, procured their claims to be adjusted and the liability of the association, at least prima faoie, established, and we think it was proper for the court to take the necessary steps to carry such proceeding to a lawful termination, leaving it to the parties assessed to prefer in the court complaint, if any they have, against the legality or justice of the claims to satisfy which the assessment was made. The power given the court by the provisions of Sec. 19 of the act of 1893, “to render judgment that it (an association) be dissolved and a receiver appointed, an account taken and equitable distribution of its property among its creditors and policy holders be made,” is ample to warrant the action of the court in the case at bar. The word “property” as there used includes debts—choses in action of every kind. Stable v. Webster, 11 Ill. 511. An equitable disposition of property of such an association could only be accomplished by enforcing payment of amounts due from members upon mortuary calls and the appropriation of the sums so collected to the persons entitled thereto, according to the plans, purposes and contracts of the association. The stipulation in the certificate of membership that no suit at law or in equity can be maintained upon the certificate, unless begun within twelve months from the death of the member to whom it was issued, can not be successfully invoked by the appellee. The receiver was appointed April 17, 1894, and the mortuary benefits intended to be discharged by the assessments sought to be enforced against the appellee, are because of the death of members occurring within one year prior to appointment. The effect of the decree that the association be dissolved and a receiver appointed, and his appointment, operated to vest the property of the association in the receiver for the benefit of creditors of the association, and the receiver thereupon became in fact a trustee for the creditors, and the limitation created by the stipulation in the certificate, for that reason ceased to run. Buswell on Limitations, Sec. 132, 329. ¥e are of opinion the demurrer should have been over ruled. The judgment is reversed and the cause remanded, with directions to the court below to overrule the demurrer and require the defendant to plead to the declaration. Reversed and remanded.