Venus Lodge No. 62 v. Acme Benevolent Ass'n

58 S.E.2d 109 (1950)

231 N.C. 522

VENUS LODGE NO. 62, F. & A. M. et al. v. ACME BENEVOLENT ASS'N, Inc.

No. 90.

Supreme Court of North Carolina.

March 8, 1950.

*112 James S. Howell and Oscar Stanton, Asheville, for plaintiffs, appellants.

J. A. Patla, Burgin Pennell, and J. M. Horner, Asheville, for defendant, appellee.

ERVIN, Justice.

The chief inquiry presented by the appeal is whether the evidence of the plaintiffs is legally sufficient to take the case to the jury and to support a verdict in their favor. Ballard v. Ballard, 230 N.C. 629, 55 S.E.2d 316.

Since the code of the Grand Lodge did not undertake to impose any restraint upon the alienability of the property of Venus Lodge or its members so long as Venus Lodge was an active subordinate lodge, and since there has never been any "suspension or demise" of Venus Lodge, the Grand Lodge has never had any semblance of claim to the property in suit, and is without standing to question the validity of the conveyance to the defendant. It follows that its action was properly dismissed upon a compulsory nonsuit. In consequence, there is no occasion for the expression of any opinion on our part as to the legality of the provision of the code specifying that the property of a subordinate lodge vests in the Grand Lodge "in the case of suspension or demise" of the subordinate lodge. Divergent authories relating to this problem have been collected in these annotations: 94 A.L.R. 646; 15 L.R.A.,N.S., 336; 2 L.R.A. 841; 12 Ann. Cas. 873.

This brings us to the question of the propriety of the compulsory nonsuit as to the plaintiff, Venus Lodge. This phase of the litigation becomes much simplified if the judicial gaze is focused on the all-important fact that Venus Lodge was an unincorporated association when the transactions under scrutiny were consummated. At that time the rules of the common law relating to such associations had not been modified in North Carolina except in respect to religious bodies and organizations issuing certificates or policies of insurance.

An unincorporated association is merely a body of individuals acting together, without a corporate charter, but upon the methods and forms used by incorporated bodies, for the prosecution of some common enterprise. Hecht v. Malley, 265 U.S. 144, 44 S. Ct. 462, 68 L. Ed. 949. At common law such an association is not an entity, and has no existence independent of its members. Tucker v. Eatough, 186 N.C. 505, 120 S.E. 57; Nelson v. Atlantic Coast Line R. Co. Relief Department, 147 N.C. 103, 60 S.E. 724. This being true, an unincorporated association has no capacity at common law to contract. Nelson v. Atlantic Coast Line R. Co. Relief Department, supra; or to take, hold, or transfer property, 7 C.J.S., Associations, § 14; or to sue or be sued. Hallman v. Wood, Wire & Metal Lathers' International Union, 219 N.C. 798, 15 S.E.2d 361; Citizens' Co. v. Asheville Typographical Union, 187 N.C. 42, 121 S.E. 31; Tucker v. Eatough, supra; Nelson v. Atlantic Coast Line R. Co. Relief Department, supra.

Notwithstanding these principles, a conveyance to an unincorporated association is not void at common law in this jurisdiction. Since it looks at substance rather than form, the common law construes such a conveyance to be a grant to the members of the association, and adjudges that it vests the title to the property embraced by the conveyance in such members as individuals. Robinson v. Daughtry, 171 N.C. 200, 88 S.E. 252, Ann.Cas.1918E, 1186; Daniels v. Roanoke Railroad & Lumber Co., 158 N.C. 418, 74 S.E. 331; Walker v. Miller, 139 N.C. 448, 52 S.E. 125, 1 L.R.A.,N.S., 157, 111 Am.St.Rep. 805, 4 Ann.Cas. 601; Simmons v. Allison, 118 N. C. 763, 24 S.E. 716; Murray v. Blackledge, 71 N.C. 492. See, also, in this connection: Byam v. Bickford, 140 Mass. 31, 2 N.E. 687; Beaman v. Whitney, 20 Me. 413. Moreover, it is well settled that a conveyance may be made to trustees for the benefit of an unincorporated association, and that in such case the legal title vests in the trustees, who hold the same in trust for the persons composing the association. 7 C.J.S., Associations, § 14.

The task of applying these principles to the testimony must now be performed. *113 When Venus Lodge purchased the premises in controversy, the trustees took legal title to the same; but they held that title in trust for the individuals having membership in the Lodge under the common law rule that property ostensibly acquired or held by an unincorporated association belongs jointly to its members, who have the right to manage, control, and dispose of such property at their joint pleasure. 4 Am.Jur., Associations, and Clubs, section 35; 7 C.J.S., Associations, § 27; Idaho Apple Growers' Ass'n v. Brown, 50 Idaho 34, 293 P. 320; Ahlendorf v. Barkous, 20 Ind.App. 656, 50 N.E. 887; Duke v. Fuller, 9 N.H. 536, 32 Am. Dec. 392; Branagan v. Buckman, 67 Misc. 242, 122 N.Y.S. 610; Parks v. Knickerbocker Trust Co., 137 App.Div. 719, 122 N.Y.S. 521; U. S. Royalty Ass'n v. Stiles, Tex.Civ.App., 131 S.W.2d 1060.

Inasmuch as they acted unanimously, the members of Venus Lodge had a clear legal right to cause the trustees to convey the premises to the defendant, even though the conveyance was not calculated to promote the objects of the Lodge. 7 C.J.S., Associations, § 14. When all is said, they were merely doing as they pleased with their own. Hope of Alabama Lodge of Odd Fellows v. Chambless, 212 Ala. 444, 103 So. 54; Brown v. Stoerkel, 74 Mich. 269, 41 N.W. 921, 3 L.R.A. 430; Pullis v. Robison, 73 Mo. 201, 39 Am.Rep. 497. As the deed of the trustees to the defendant was made in the exercise of an undoubted legal right belonging to the contemporary members of Venus Lodge, it did not become illegal merely because its execution was prompted by a mischievous motive on their part. "While mischievous motives may make a bad case worse, they cannot make that wrong which in its own essence is lawful." In re Sharpe's Land, 230 N.C. 412, 53 S.E.2d 302, 305.

Certainly Venus Lodge has no cause of action against the defendant in its own right as an association even if it be taken for granted that it has acquired the capacity to sue in its own name under statutes enacted subsequent to the occurrences resulting in this litigation. When these events took place, Venus Lodge was, in the eye of the law, an "airy nothing." Nelson v. Atlantic Coast Line R. Co. Relief Department, supra. A cause of action cannot arise to a non-existent legal ghost having no capacity to enjoy legal rights or to suffer legal wrongs. The suggestion that Venus Lodge can maintain the action for the benefit of persons who were initiated into membership in it after the execution of the deed to the defendant is without merit. These persons have no legal or equitable rights of their own in the property. Moreover, they cannot claim any such rights as successors of Venus Lodge, or of the individuals who were members of it when the deed was made; for Venus Lodge, as an unincorporated association, never had any rights in the property, and all of its contemporary members participated in the making of the conveyance. 65 C.J., Trusts, section 886.

What has been said compels the conclusion that the defendants acquired complete title to the premises in controversy under the deed of September 16, 1937. For this reason, we refrain from any observations upon the several statutes of limitation invoked by the defendant.

Although no occasion arises on the present record for us to express any opinion as to how far they have altered the common law rules relating to unincorporated associations, we deem it proper to call the attention of the bench and bar to certain statutes enacted subsequent to the events giving rise to this action. Chapter 133 of the Public Laws of 1939, which is now codified as Article 4 of Chapter 39 of the General Statutes, provides that "voluntary organizations and associations of individuals organized for charitable, fraternal, religious, or patriotic purposes" may acquire, hold, and convey real estate "in their common or corporate names." Chapter 478 of the 1943 Session Laws, which is now embodied in G.S. § 1-97(6), prescribes a method for serving process upon "any unincorporated association or organization" and declares that "any judgment recovered in any action commenced by service of process, as provided in this subsection, shall be valid and may be collected out of *114 any real or personal property belonging to the association or organization." A thoughtful note in the North Carolina Law Review suggests that the last cited statute must be interpreted to render all unincorporated associations capable of suing or being sued in their own names in North Carolina courts. 25 N.C.L.R. 319.

The judgment dismissing the action upon a compulsory nonsuit is

Affirmed.