The English mutual benefit organizations possess the general feature of benefit associations in the United States, and those of both countries may well be called "the mutual assurance societies of the poorer classes, by which they seek to aid each other in the emergencies arising from sickness and death and other causes of distress."1

(b) Forms of Organization of Benefit Societies.-Benefit societies, like other associations, of persons for agreed and lawful purposes may be simply voluntary associations, or they may become incoporated by special act or under general laws. Whether incorporated or not is important only as to determining their relations to third parties and the rights of the latter with respect to obligations growing out of the dealings with such associations. With reference to the contracts of the members with the association and their relative rights with each other, the fact of incorporation is unimportant. If incorporated, the special act or general incorporation law, together with such rules and regulations as they may adopt, enter into and affect the contracts of membership. If unincorporated, such by-laws alone, in connection with their contract of associa

and purposes, as life insurance, legal or illegal. The articles of incorporation, standing alone, are without objection. It is in the conception and execution of benevolent designs that these benefactors of the race cause trouble.

But, granting that their contracts are honestly and impartially carried out, let us ask, as a legal proposition, what privilege is exercised, what advantage enjoyed and what opportunity for profit furnished companies which have complied with the laws by providing the guarantee fund and making annual statements to the State insurance commissioner that are not equally possessed, enjoyed and exercised by the class under consideration? And as the business of life, accident and health insurance is a franchise, a quo warranto proceeding will lie to forfeit the franchise ursurped by this class of companies.

1. In England the law which now regulates friendly societies is that of 38 and 39 Vict., ch. 60, amended in 39 and 40 Vict., ch. 32. By it they are defined as "Societies established to provide by voluntary subscriptions of the members thereof, with or without the aid of donations, for the relief or maintenance of the members, their husbands, wives, children, fathers, mothers, brothers or sisters, nephews or nieces, or wards being orphans, during sickness or other infirmity, whether bodily or mental, in old age, or in widowhood, or for the re

lief or maintenance of the orphan children of members during minority; for insuring money to be paid on the birth of a member's child, or on the death of a member; or, for the funeral expenses of the husband, wife or child of a member, or of the widow of a deceased member; or, as respects persons of the Jewish parish, for the payment of a sum of money during the period of confined mourning; for the relief or maintenance of the members when on travel in search of employment, or when in distressed circumstances, or in case of shipwreck, or loss or damage of or to boats or nets; for the endowment of members or nominees of members at any age; for the insurance against fire, to any amount not exceeding £15, of the tools or implements of the trade or calling of the members."

Mr. Bacon, in his treatise on benefit societies and life insurance, gives comprehensive and valuable information on the subject of benefit insurance by secret societies, and furnishes a list of leading beneficiary orders in the United States, together with their aggregate membership, p. 16. On p. 17, he says: "Closely allied to the beneficiary, or mutual aid life insurance organizations, are the secret ritualistic societies and charitable fraternities, whose characteristic features are good fellowship, social enjoyment and benevolence. The Freemasons, Odd Fellows and Knights of Pythias are examples. These numer

tion, govern their rights and limit their liabilities. A contract of assurance effected with a friendly society unincorporated is generally not less beneficial than a policy effected with an incorporated company.1

While a majority of benefit societies are fraternal and social in their organization and have secret meetings and rituals, many are organized and conducted for the sole purpose of enjoying the benfits of co-operative insurance. Again, societies organized for fraternal and social objects, and having secret meetings and rituals, are composed of several distinct but not entirely disconnected judicatories or assemblies. The constitution and organization of such orders and societies into superior and subordinate lodges and assemblies, according to States and districts, and the enactment of numerous rules and regulations governing their relations to each other, give rise to many complex and difficult questions, for the settlement of which no known rules have been established by the courts, as much depends in each case upon its peculiar facts. However, where the element of property rights of members is the principal matter in dispute, the law makes no distinction between societies which are incorporated and those that are merely voluntary, but it does between questions involving the property rights of members and those concerning discipline only or policy of government.2

ous societies are secret in their organization and work, use a ritual and have initiatory ceremonies, and their members are pledged to secrecy. They are organized on the plan of local assemblies or lodges under the government and control of grand or supreme lodges. Some, like the Masons, make no promise of financial aid to members, but are charitable only, donating when necessity requires. Others, such as the Odd Fellows, expressly agree to pay stated amounts to their members in sickness or disability, and at death a certain sum for funeral expenses, and also to look after the widow and orphan. These societies have no life insurance feature."

1. Courtenay v. Courtenay, 3 Jones & La. T. 519.

Legal incorporation implies conformity with the terms of the charter or general law, as in the case of other corporations. Morawetz on Corp., §§ 27, 28, 641-45, 939.

A society may acquire any rights conferred in the law under which it seeks to become incorporated. Massachusetts Catholic Order of Foresters v. Callaghan, 146 Mass. 391.

They have no implied powers other than those necessary for the purpose of

carrying into effect the powers expressly granted. Ang. & Ames on Corp. 111.

Articles of association are to be considered in the light of an agreement between the members, extending or limiting any general obligation which binds them to each other as members. Protchett v. Schaefer, 11 Phila. 116. See Tyrrell v. Washburn, 6 Allen 466; Hyde v. Woods, 2 Sawyer 655; affirmed 94 U. S. 523; Leech v. Harris, 2 Brewst. 571.

A voluntary association may do any legal act within the scope of its constitution and by-laws. The members are governed by the principles and rules of partnership and agency as respects third parties. Leech υ. Harris, 2 Brewst. (Pa.) 571; Ridgley v. Dobson, 3 W. & S. (Pa.) 118; Bullard v. Kinney, 10 Cal. 60; White v. Brownell, 3 Abb. Pr., N. S. (N. Y.) 318; Gorman v. Russell, 14 Cal. 537; Wells v. Gates, 18 Barb. (N. Y.) 554; Flemyng v. Hector, 2 M. & W. 171; Dow v. Moore, 47 N. H. 419; Robinson v. Robinson, io Me. 240; Protchett v. Schaefer, 11 Phila. (Pa.) 166.

2. In Bauer v. Samson Lodge etc., 102 Ind. 262, the court said: "Claims for money due by virtue of an agreement are unlike mere matters of disci

The result of all the decisions in this country and in England is that, with respect to property rights and contracts affecting property, the courts will apply the same principles to voluntary as to incorporated companies.

But while questions of discipline and government are constantly distinguished from those affecting pecuniary rights growing out of a contractual relation between the members and the organization, the right of property is often dependent on the question of doctrine, discipline, ecclesiastical law, rule, custom, or church government, and, in so far as the provisions of any of these are reasonable and not in conflict with law and the plain principles of justice, they will be allowed to control. A civil court will accept the decision which the members of a corporation or their duly authorized and appointed agents have made as conclusive, and be governed by it in its legitimate application in the case before it, whether involving an insurance or other contract.1

Since a corporation no less than a voluntary association is a mere association of persons for an agreed and lawful purpose, and since the real nature of the corporation depends upon the charter under which it is formed and must be determined by reference

pline, questions of doctrine or of policy, and are not governed by the same rules. . . . One who asserts a claim to money due on a contract occupies an essentially different position from one who presents a question of discipline, of policy or of doctrine of the order or fraternity to which he belongs."

All questions of policy, discipline and internal government and custom, when settled by judicatories of churches, fraternal associations and societies are generally accepted by the courts as final; but the rule is different when property rights are involved. Watson v. Jones, 13 Wall. (U. S.) 679.

In the case of Smith v. Smith, 3 Dessaus, 557, involving the right to a certain fund belonging to the incorporated Grand Lodge of Ancient York Masons, the action was brought in behalf of a voluntary association, claiming to be a successor of the corporation under the name of Grand Lodge of South Carolina. Incidentally, the distinction between certain masonic bodies and doctrines was discussed. The court laid down the rule that the. Grand Lodge of Freemasons cannot make new regulations subversive of fundamental principles and landmarks without the clear consent of the subordinate lodges, and that the officers of the corporation composed of several integral parts

could not dissolve the corporation without the full consent of the great body of the society. See also Goodman v. Jedediah Lodge etc., 67 Md. 117; Court Mount Royal v. Boulton, Q. B. (Quebec) 1881; District Grand Lodge v. Jedediah Lodge, 65 Md. 236. But see Altmann v. Benz, 27 N. J. Eq. 331.

Austin v. Searing, 16 N. Y. 112; s. c., 69 Am. Dec. 675, is a leading case upon the rights growing out of the complex organization of the Odd Fellows' fraternity, where all the constituent bodies were incorporated.

1. Wilson v. John's Island Church, 2 Rich. Eq. (S. Car.) 192; Gibson v. Armstrong, 7 B. Mon. (Ky.) 481; Ferraria v. Vasconcelles, 23 Ill. 403; Watson v. Avery, 2 Bush (Ky.) 332; Harmon v. Dreher, 1 Speer's Eq. (S. Car.) 87; Smith v. Nelson, 18 Vt. 511; Shannon v. Frost, 3 B. Mon. (Ky.) 253; Miller v. Gable, 2 Denio (N. Y.) 492; Chase v. Cheney, 58 Ill. 509; s. c., II Am. Rep. 95; Watson v. Farris, 45 Mo. 183; German Reformed Church v. Seibert, 3 Pa. St. 291; McGinnis v. Watson, 41 Pa. St. 21. See, as to jurisdiction, Watson v. Avery, 2 Bush (Ky.) 332; Watson v. Avery, 3 Bush (Ky.) 635; Altman v. Benz, 27 N. J. Eq. 331; Hendrickson v. Shotwell, 1 N. J. Eq. 577; Lloyd v. Loring, 6 Vesey 773; Cullen v. Duke of Queensborough, 1 Bro. C. C. 101.

thereto, it follows that voluntary associations have many characteristics and rules in common, and all rights of the members and their powers, as well as of the association, are derived from the original compact between them contained in the constitution and by-laws.

Such constitution and by-laws, no less than a charter, regulate the admission of members and define their qualifications. The same rules of construction apply to the one as to the other, and a member may be expelled in accordance with the by-laws and constitution of a voluntary association with like effect as by compliance with those of a corporation.2

(c) Legal Status. It is both unnecessary and foreign to the present purpose to consider the statutory enactments found in most, if not quite all, the States governing the business of insurance, and seeking to exempt from their provisions societies organized for benevolent and charitable purposes, having mutual benefit insurance as an adjunct, from the requirements and restrictions of such laws. The principal requirements of regular insurance companies are the deposit of a guaranty fund with a State officer, usually an insurance commissioner, and the making of periodical reports of the volume of business and financial condition to such officer.3

The courts have often been called upon to determine whether benevolent societies and benefit associations were really such, or came within the requirements intended for insurance companies. It is generally held, where the contract provides for the payment of a specified sum at death, or of benefits periodically, or upon certain contingencies, that it is one of insurance, and that the corporation or voluntary association is amenable to all the provisions and regulations concerning insurance companies.4

1. Morawetz Priv. Corp., §§ 6, 7, 316, 580; Com. v. St. Patrick's Soc., 2 Binn. (Pa.) 441; 4 Am. Dec. 453; Leech v. Harris, 2 Brewst. (Pa.) 571.

2. In Diligent Fire Co. v. Com., 75 Pa. St. 291, the court said: "It is true the power of admitting new members being incidental to a corporation aggregate, it is not necessary that such power be expressly conferred by the statute. Yet when the statute does limit and restrict the power, it erects a barrier beyond which no by-laws can pass."

3. Pub. Stat. Mass. 1880, ch. 115, §§ 8-10; Amended Stat. 1882, ch. 195, § 2; Rev. Stat. Mo. 1879, §§ 972, 973; Rev. Stat. Ohio 1880, § 3630; Ill. Stat. 1885, ch. 32, § 31.

4. State v. Critchett, 37 Minn. 13, following Foster v. Pray, 35 Minn. 458; State v. Trubey, 37 Minn. 97; Com. v. Wetherbee, 105 Mass. 149; Golden

Rule v. People, 118 Ill. 492; State v. Citizens' Ben. Assoc., 6 Mo. App. 163; State v. Vigilant Ins. Co., 30 Kan. 585; State υ. Merchants' Exchange Ben. etc. Soc., 72 Mo. 146; State v. Farmers' etc. Ben. Assoc., 18 Neb. 276; State v. Bankers' & Merchants' Mut. Ben. Assoc., 28 Kan. 499; Bolton v. Bolton, 73 Me. 299; State v. Standard L. Assoc., 38 Ohio St. 281; Farmer v. State, 67 Tex. 561; State v. Miller, 66 Iowa 26.

In State v. Whitmore, 75 Wis. 332, a construction was given to Laws Wis. 1879, ch. 204, § 1, which provides that “the secret, beneficiary, charitable and benevolent orders of Free Masons, Odd Fellows, and Knights of Pythias (naming several), are hereby declared not to be life insurance companies in the sense and meaning of the general laws of this State relating to life insurance and life insurance companies; and such societies, orders and associations are,

The decisive test applied by the courts is the object for which they are organized and the consideration upon which the contracts of membership are based.

It may be important, as a guide for determining whether the object of the company be benevolence or mutual profit of its members, to enquire whether any provision has been made for carrying out the benevolent purposes specified in the charter or articles.1