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Constitution--Beneficiary.--A clause in the constitution of an incorporated life insurance company operating on the co-operative plan (A. O. U. W.), prescribing the manner in which the right to dispose of the insurance money may be exercised, merely directory in its character, and whose sole object is to protect the association, can not be taken advantage of by one who claims to be a beneficiary, on the ground that there has not been strict compliance with the clause in changing the direction of the benefit. Such clause is for the protection of the association alone, and can only be used by it.

Same--Same--Change.--A clause in the constitution of such an association that provides that upon the death of a member in good standing, who has complied with all its rules and regulations, such person or persons as such member may have directed while living shall receive, of the beneficiary fund of the order, a certain sum of money, and prescribes the manner in which a member desiring at any time to make a new direction of its payment may do so, does not vest in the beneficiary first named an irrevocable interest in the certificate, but the member has the absolute right to change the beneficiary at his pleasure.

Titsworth v. Titsworth (Kansas S. C.), 20 Pacific Reporter (Feb. 14, 1889), p. 213.

Change of Beneficiary-Evidence.-The by-laws provided that no change of a beneficiary by a member should be effectual "unless the certificate thereof should have been filed, examined, and found correct, and the necessary change made in the records of the association, before the receipt of notice of the death of the member." A certificate of change of beneficiaries executed by a member in plaintiff's favor complied with all the requirements of the by-law except that it did not give the name of the beneficiary to be superseded. No objection was made by the association on account of such omission, and the secretary in a letter to the plaintiff acknowledging the receipt of same, spoke of it as "substituting your name as beneficiary." Held, that such declaration was evidence against the association, warranting a verdict that a change of beneficiary had been duly effected, there being no evidence that the act required of the association to effect the change had not been done.

Mayer v. Equitable Reserve Fund Life Ass'n (N. Y. S. C.), 2 New York Supplement, p. 79.

Appeal-Review-Failure to Reserve Exceptions.-The defendant moved for arrest of judgment, alleging variance between the declaration and the certificate and application. Held, the certificate and application not having been made part of the pleading by profert, the motion in arrest of judgment was properly overruled.

Instruction.-The defendant prayed the following instruction: "If

the jury shall find for the plaintiff, their verdict can be for such sum only as they shall find would have resulted from an assessment at the time of the death of Mrs. McGinty, and the division of the proceeds among all the beneficiaries entitled pro rata according to the face of their policies, after deducting from the sum collected such sums as they shall find the company entitled to deduct for the expense fund according to the terms of the policy." The court refused the instruction. Held, that there being no evidence, and nothing in the pleading upon which to base the prayer, it was properly refused.

Oriental Ins. Co. v. Glancy (Md. C. A.), 16 Atlantic Reporter (Feb. 13, 1889), p. 391.

Expulsion of Member-Absence of Accused.-Appellee's husband was expelled from his lodge during his absence. The evidence tended to show that he said that he ought to be expelled, expected it, and knew of it immediately and of his right to appeal, and said he was satisfied. Held, that the expulsion without notice or appearance was void.

Appearance to Action-Admission by.-The appearance by the appellants by names importing corporations are admissions by them severally that they are corporations.

Certificate-Parties.-The objection of the appellants that the appellee had cause of action only against the Grand Lodge of the state, is answered by the beneficiary certificate, which is an instrument in writing of all the appellants, and there was no denial of the execution of it by plea verified by affidavit.

Supreme Lodge A O. U. W. et al. v. Zulk (Ill. Ap. Ct.), 10 Legal Adviser (Feb. 19, 1889), p. 84.

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Improper Use of Funds - Injunction. A benevolent society, formed for the promotion of the interests of the theatrical profession, the constitution of which provides rules applicable to the admission of actors "in any part of the world" as members, will be enjoined pendente lite from expending money to be used in defraying the expenses of a committee to present to Congress a memorial, recommending that the contract labor law be so amended as to prevent the importation of foreign actors under contract for a term of service in the United States, the purpose of the expenditure being foreign to the objects of the order.

Flockton v. Aldrich (S. C., N. Y. City), 4 New York Supplement (March 14, 1889), p. 7.

Statute-Proceedings for Dissolution-State Auditor-AttorneyGeneral.-1 Starr & C. St. Ill. 1348, provides that whenever any association organized on the assessment plan, for the benefit of the representatives of deceased members, neglects or refuses to make the annual statement required by the statute, or whenever the auditor shall find upon examination that any willful, false, or untrue statement in any material

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respect has been made, or that the business of the association has been conducted fraudulently, or in willful violation of any of the provisions of the statute, or that it has conducted business different from that authorized by its certificate of incorporation, "he shall communicate the fact to the attorney-general, whose duty it shall be to apply to the circuit court * for an order requiring the officers or directors, trustees or managers, of such corporation to show cause why they should not be removed from office, or its business closed; and the court shall," if the proof shows fraud, or material irregularity or violation of law, remove the offending officers and appoint others; "or, if it shall appear to said court that the interest of the members or the general public shall so require, the court may decree a dissolution of such corporation," etc. Held, that the power of the attorney-general to institute the proceedings does not depend upon the communication made to him by the auditor,. but is inherent in his office; and it is not essential to the institution of proceedings by the attorney general that the auditor shall lay before him his findings and conclusions. It is sufficient that the result of an examiner's investigation, containing all the data from which such findings could be drawn, are laid before him.

Equity Jurisdiction-Decree of Dissolution.-A court of equity has jurisdiction of the proceedings, and may decree a dissolution of the offending corporation.

Nature of Proceeding.-The suit is not in the nature of a criminal prosecution, required by Const. Ill., art. 6, sec. 33, to be carried on "in the name and by the authority of the people of the state of Illinois." It is not a quo warranto, but is a special civil proceeding brought to protect and enforce property rights.

Statute-Constitutional Law-Jury Trial.-Act of July 1, 1883 (Starr & C. St. 1348), is not unconstitutional, as depriving corporations of the right of trial by jury, in that it transfers the jurisdiction of suits to dissolve corporations from courts of law to courts of equity. Following Ward v. Farwell, 97 Ill. 593.

Admission of Minors to Membership.-In the absence of statutory restrictions, minors are not ineligible to membership in such associations. The objection that an infant can avoid his contract is not important, as adult members may do the like without incurring any liability. Nor is the objection important that minors could not act as trustees because of their immaturity of judgment; the same objection would hold against many adult members, yet their lack of intelligence or business experience would be no reason for excluding them from membership.

Misapplication of Assessments-Statute.-The statute under which defendant association was organized provides that “no part of the funds collected for the payment of death benefits shall be applied for any other

purpose." It not being denied that the "advance mortuary assessments" required of new members are funds designed for the payment of death benefits, the use of such assessments for the payment of current expenses is a violation of law, justifying dissolution.

Misapplication of Reserve Fund-Statute.-The statute also provides that associations organized thereunder may provide for an accumulation of a surplus or guarantee fund, which shall belong to the association, and not to the officers, "and shall be used only for mortuary benefits, without assessment, or applied in payment of future assessments, or otherwise used for the promotion of the object for which such funds are specially provided and set apart, and such use shall not be deemed or construed to mean a profit received by members." Defendant created a tontine reserve fund, by reserving 25 per cent. of the assessments for death benefits, for the apportionment of which fund the members were divided in classes, the surviving persistent members of each class to receive a distribution at the end of ten years. Held, that such disposition of the reserve fund was a direct violation of the statute, justifying dissolution.

Statute-Election of Officers-Proxies-Fraud.-The statute provides that the affairs of such association shall be managed by not less than five directors, trustees or managers, elected from and by the members. Defendant's certificate of association provided for a board of eight trustees, to be elected annually. At first the manager and secretary were appointed by the trustees, but in 1886 a resolution was adopted that the manager and secretary should thereafter be elected annually by the members. Blank applications for membership then in use by the association had printed upon them a blank proxy, authorizing the person whose name should be inserted to act and vote for the member at all meetings, and underneath it was a request for the applicant to sign it in blank, to be filled up by the secretary. In accordance with this request a great number of these proxies were so signed and sent to the secretary. The resolution above mentioned was adopted mainly by the use of these proxies. From that time on the board of trustees ceased to control, the real governing authority being the manager and secretary, who held a sufficient number of these proxies to perpetuate themselves in office, and conducted the business of the association as they saw fit. Held, a violation of law, and a fraud on the members, justifying dissolution.

False Numbering of Certificates-Fraud.-The officers of the association were also guilty of fraud on the members in issuing certificates of membership numbered higher than the total number of certificates issued up to that date; and it was no excuse that such false numbering was done, not to deceive new members, but merely to prevent rival associations from ascertaining the state of the business. No attempt having been made to apprise applicants of the truth, the effect was fraud.

Condition of books. It is sufficient ground for dissolving the asso

ciation that the books containing the account of the receipts and expenditures were so confused and unsystematic as to make it almost impossible, even by the aid of experts, to derive therefrom any certain information as to the financial affairs of the association.

Chicago Mutual Life Indemnity Ass'n v. Hunt, Attorney-General (Ill. S. C.), 20 Northeastern Reporter (March 15, 1889), p. 55; 21 Chicago Legal News (Feb. 16, 1889), p. 206.

Certificates Statute-Ultra Vires.-Rev. St. Ill, 1874, c. 32, relating to corporations not for pecuniary profit, provides (sec. 31) that “ associations and societies which are intended to benefit the widow, orphans, heirs, and devisees of the deceased members thereof, and where no annual dues or premiums are required, and where the member shall receive no money as profit or otherwise, shall not be deemed insurance companies." Defendant organized under this chapter, and by the certificate filed with the secretary of state declared the object for which it was formed to be "to give financial aid and benefit to the widows, orphans, and heirs or devisees of deceased members." Held, that a clause in a certificate issued to a member agreeing to pay him on his arriving at a certain age a sum equal to the number of members in his division, was ultra vires, but it did not invalidate the certificate as one to pay the widow, etc., a benefit.

Defense of Ultra Vires--Estoppel.--Defendant is not estopped to invoke the doctrine of ultra vires because plaintiff had from time to time, after receiving his certificate, paid assessments, which were turned over by defendant to the persons entitled thereto under beneficial certificates.

Rockhold v. Canton Masonic Mut. Ben. Ass'n (Ill. S. C.), 19 Northeastern Reporter (March 1, 1889), p. 710; 10 Legal Advertiser (Feb. 12, 1889), p. 74; 21 Chicago Legal News (Feb. 2, 1889), p. 190.

Pleading--Departure.--The complaint alleged that the assessments had been paid according to an agreement between the assured and the association that they might be paid any time within 60 days after notice, although the certificate provided that they should be paid within 10 days after notice. The answer denied such agreement and alleged that the assessments had not been paid according to the terms of the certificate. The reply averred that the association had waived the terms of the certificate by permitting the certificate to stand uncancelled, and by receiving payment within 60 days after notice. Held, not a departure.

Payment of Assessments--Waiver--Estoppel.-Where the certificate provides that it shall be void unless the assessments are paid within 10 days after receiving notice, but it appears that it was the habit of the association to receive payments from the assured if made within 60 days after time of notice of assessments, and the certificate remained uncanceled at time of the death of the insured, the association is estopped to

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