taxpayer's view, as charitable associations are taxed less than others
or perhaps entirely relieved. An Indiana court has decided that a
corporation which promises to pay a fixed sum as a benefit during a
member's illness--he of course paying his dues--is not a purely
benevolent organization, and therefore not exempt from taxation.
Masonic lodges on the other hand, are generally regarded as charitable
institutions. "The true test," says a judicial tribunal, "is to be
found in the objects of the institution."
Again, a voluntary association may conduct in such a way as to create
the impression or belief that it is a corporation, and is forbidden
from denying its corporate liability for an injury or loss to a third
person. It is a familiar rule that a person who transacts business
with a partnership in the partnership name may hold all the members
liable as partners, though he did not know all their names. This rule
has sometimes been applied to a voluntary association, making it
responsible as a corporation.
The articles of association regulate the admission of members. A
physician who applied for membership in a medical society was rejected
because of unprofessional conduct. A code of medical ethics adopted by
the society was declared to be binding only on the members, and
therefore did not touch the conduct of one prior to his becoming a
member of the society. If the membership of a society is confined to
persons having the same occupation, a false representation concerning
one's occupation would be a good reason for his expulsion. In
admitting a member, if no form of election has been prescribed, each
candidate must be elected separately. This must also be done at a
regular meeting or at one properly called for that purpose. A call
therefore to transact any business that may be legally presented is
not sufficient.
If a society requires a ceremony of initiation, is the election of a
member so complete that he is entitled to benefits without proper
initiation? In one of the cases the court said: "The entire system,
its existence and objects, are based upon initiation. We think, there
can be no membership without it, and no benefit, pecuniary or
otherwise, without it."
Controversies concerning property rights of religious societies are
generally decided by one of three rules: (1) "was the property a fund
which is in question devoted to the express terms of the gift, grant
or sale by which it was acquired, to the support of any specific
religious doctrine or belief or was it acquired for the general use of
the society for religious purposes with no other limitation; (2) is
the society which owned it of the strictly independent or
congregational form of church government, owing no submission to any
organization outside of the congregation; (3) or is it one of a number
of such societies, united to form a more general body of churches,
with ecclesiastical control in the general association over the
members and societies of which it is composed."
Many benefit societies provide for the payment of money to their sick
members. The rules providing for the payment of these may be changed
at any time as the constitution or articles of association of a
society may prescribe. Consequently an amendment may be made
diminishing the weekly allowance to a member who is sick, and also the
time of allowing it. Of course in applying for the benefits a member
must follow the modes prescribed.
The power to expel members is incident to every society or association
unless organized primarily for gain. Gainful corporations have no such
power unless it has been granted by their charter or by statute. The
revision of the list of members by dropping names is equivalent to the
expulsion of those whose names are dropped, and by a majority vote or
larger one as the rules of the society may require. Nor can the power
of expulsion be transferred from the general body to a committee or
officer. The power to expel must be exercised in good faith, not
arbitrarily or maliciously, and its sentence is conclusive like that
of a judicial tribunal. Nor will a court interfere with the decision
of a society except: first, when the decision was contrary to natural
justice and the member had no opportunity to explain the charge
against him; secondly, when the rules of the association expelling him
were not observed; thirdly, when its action against him was malicious.
Nor will a court interfere because there have been irregularities in
the proceedings, unless these were of a grave character.
The charges must be serious, a violation of a reasonable by-law is a
sufficient charge. To obtain, by feigning a qualification which did
not exist, membership in a trades-union is sufficient cause for
expulsion; so is fraud in representing one's self in his application
for membership when in fact he has an incurable disease. On the other
hand, the following charges are not sufficient to justify expulsion or
suspension: slander against the society, illegally drawing aid in
time of sickness, defrauding the society out of a small sum of money,
villifying a member, disrespectful and contemptuous language to
associates, saying the lodge would not pay and never intended to pay,
ungentlemanly conduct. In harmony with a fundamental rule of law, a
member who has once been acquitted cannot be tried again for the same
offense.
As subordinate lodges of a benefit society are constituent parts of
the superior governing body, there may be an expulsion from membership
in a subordinate lodge for violating laws which generally caused
expulsion from the society itself, and there may be a conditional
expulsion or suspension. If an assessment is not paid at the fixed
time, its non-payment, by the laws of the order, works a suspension,
though a member may be restored by complying with the laws of the
order.
An appeal by a member of a subordinate lodge from a vote of expulsion
does not abate by his death while the appeal is pending. If,
therefore, the judgment of the lodge is reversed, the beneficiary of
the member is entitled to the benefits due on the member's death. A
member who has been wrongfully expelled may be restored by a mandamus
proceeding issued by a court. Before making the order the court will
inquire into the facts and satisfy itself whether in expelling the
applicant the society has properly acted in accord with its rules.
Unless some rule or statute forbids, a member of a voluntary
association may withdraw at any time. When doing so, however, he
cannot avoid any obligations incurred by him to the association. On
the other hand, it cannot, after his withdrawal, impose any other
obligations on him.
It has often been attempted to hold the members of an association
liable personally for a promised benefit in time of sickness. Says
Bacon: "It may be a question of construction in each particular case
whether the members are personally liable or not. The better rule
seems to be that the members are not held personally liable."
An association cannot by its constitution or by-laws confer judicial
powers on its officers to adjudge a forfeiture of property rights, or
to deprive lodges or members of their property and give it to another,
or to other members. To allow associations to do this is contrary to
public policy. For the same reason an agreement to refer future
controversies to arbitration cannot be enforced; it in effect deprives
a party of his rights under the law. He may do this in a known case,
this indeed is constantly done, but one cannot bar himself in advance
from a resort to the courts for some future controversy of which he
has no knowledge at the time of the agreement. This is a rule of law
of the widest application.
=Broker.=--A broker, unlike an auctioneer, usually has no special
property in the goods he is authorized to sell. Ordinarily also he
must sell them in the name of the principal, and his sales are
private. He receives a commission usually called brokerage. He can act
only as the agent of the other party when the terms of the contract
are settled and he is instructed to finish it. Brokers are of many
kinds. They relate to bills and notes, stocks, shipping, insurance,
real estate, pawned goods, merchandise, etc. A bill and note broker
who does not disclose the principal's name is liable like other agents
as a principal. He is also held to an implied authority, not only to
sell, but that the signatures of all the parties thereon are genuine.
Unless he indorses it he does not warrant their solvency.
An insurance broker is ordinarily employed by the person seeking
insurance, and is therefore unlike an insurance agent, who is a
representative of an insurance company, and usually has the authority
of a general agent. A delivery of a policy therefore, to an insurance
broker, would be a delivery to his principal. He is a special agent.
Unless employed generally to keep up his principal's insurance, he has
no implied authority to return a policy to be cancelled, and notice to
him that a policy had ceased, would not be notice to his principal.
An insurance broker must exercise reasonable care and diligence in
selecting none but reliable companies, and in securing proper and
sufficient policies to cover the risks placed to be covered by
insurance; and if he selects companies which are then in good standing
he would not be liable should they afterward become insolvent.
Merchandise brokers, unless factors, negotiate for the sale of
merchandise without having possession or control of it. Like other
agents they must serve faithfully and cannot act for both parties,
seller and buyer, in the same transaction, without the knowledge and
consent of both. In many transactions he does thus represent both by
their express or implied authority, and therefore binding both when
signing for them.
A real estate broker in the employ of his principal is bound to act
for his principal alone, using his utmost good faith in his behalf.
And a promise by one of the principals in an exchange of real estate,
after the completion of the negotiations, to pay a commission to the
other party's broker, to whom he owed nothing, is void for lack of a
consideration.
To gain his commission a broker must produce a person who was ready,
able and willing both to accept and live up to the terms offered by
the owner of the property. Nor can a property owner escape payment of
a broker's commission by selling the land himself and at a price less
than the limit put on the broker.
The business of a pawnbroker is legally regulated by statute, and the
states usually require him to get a license. As the business may be
prohibited, a municipality or other power may regulate and control his
business. The rate of interest that he may charge is fixed by statute.
The pawnee may lose his right by exacting unlawful interest. Nor has
the pawnee the right to retain possession against the true owner of
any article that has been pawned without his consent or authority. If
the true owner has entrusted it to someone to sell, who, instead of
selling, pawns it, the pawner is protected in taking it as security.
The sale of pawned goods is usually regulated by statute. If none
exists, and there is no agreement between the parties, the sale must
be public after due notice of the time and place of sale. If there is
any surplus, arising from the sale, he must pay it to the pawner, and
not apply it on another debt that he may owe the pawnee. The pawner,
or an assignee or purchaser of the pawn ticket may redeem it within
the time fixed by law or agreement, or even beyond the agreed time if
the pawnee has not exercised his right of sale. Subject to the
pawnee's claim, the pawner has the same right over the article pawned
as he had after pawning it, and may therefore sell and transfer his
interest as before. Lastly the pawner is liable for any deficiency
after the sale of the thing pawned, unless released by statute. See
_Agency_.
=Carrier.=--Carriers are of two kinds, private and public. A private
carrier may contract orally or in writing, and must use such care in
carrying the goods entrusted to him as a man of ordinary intelligence
would of his own property. If he carries these gratuitously his
obligation is still less, nevertheless he must even then take some
care of them. Suppose he agreed to carry a package for another to the
latter's home, and on the way, being weary or sleepy, should sit down
by the wayside where people often pass and fall asleep and on
awakening should find the package missing, would he be responsible?
Authorities differ. Suppose the package was a very valuable one. A
court might hold that the man who gave it to him was a fool for
entrusting such a package voluntarily with him. Suppose however that
he was a highly trustworthy man, well known throughout the
neighborhood, then no fault could be imputed to either, and the owner
would be obliged to bear the loss.
Common carriers are far more numerous and important. Receiving a
reward they are required to exercise more care in the business. The
old rule of the common law was very strict, but this has been greatly
modified. A carrier may modify the rule by contract, and the bill of
lading received by the shipper is regarded as one, and sets forth his
liability. In a general way he can relieve himself from all liability
except from his own negligence, and there are cases which hold that he
can relieve himself even from that if the shipper, for the sake of
having his goods carried at a lower price, is willing to relieve him,
in other words is willing to assume all the risk himself.
A carrier can limit his liability for the loss of baggage entrusted to
his care and when one receives a receipt describing the amount of the
carrier's liability in the event of loss. Nor can he hold the company
on the plea of ignorance by declaring he has not read it, for it is
his duty to read the receipt. Again, a carrier is thus liable only
when a traveler's baggage is entrusted to his care; if therefore he
keeps his grip or umbrella and on looking around makes the painful
discovery that he has been relieved of them, he cannot look to the
carrier for compensation.
The law requires carriers to carry all who pay their fare, and are in
a sufficiently intelligent condition to take care of themselves. In
like manner the law requires them to take all freight that may be
offered, though it may make reasonable rules with regard to the time
of receiving it, mode of packing, etc. A regulation therefore that
furniture must be crated is reasonable, and a carrier may refuse to
take it unless it is thus prepared for shipment. So also is a rule
requiring glass to be boxed though the distance may be short for
carrying it. A carrier may also object to carrying things out of
season, potatoes or fruit for example in the winter in the northern
states where there is great danger of freezing, unless the shipper
assumes the risk. Vast quantities of perishable goods are carried, but
usually under definite regulations and contracts. So, too, the shipper
must declare the nature of the thing carried. Should he put diamonds
in his trunk, he could not recover for their loss, for he has no
business to carry such a valuable thing in that way. He must make
known the contents for the carrier's protection. He cannot carry an
explosive in secrecy. To attempt to do such a thing is a manifest
wrong to the carrier.
A carrier has a lien or right to hold the freight until the charge
for transporting it is paid, but if it is delivered, the lien ceases
and cannot be restored. If the carrier keeps it until the freight
charge is paid discretion must be used, and unnecessary and
unreasonable expense must not be incurred in so doing.
A different rule applies to carrying passengers than applies to
freight, because the latter is under its complete control, while
passengers are not. Nevertheless the law requires a high degree of
care in carrying passengers, and is responsible in money damages
should injury occur through the carrier's negligence. In many states
statutes exist limiting the amount that a carrier must pay when life
is lost through its negligence to five thousand dollars or other sum,
while a much larger sum is often recovered for an injury, loss of a
leg, arm or the like. From the carrier's point of view therefore it is
often obliged to pay less for killing than for injuring people; this
is one of the strange anomalies of the law.
When a passenger is injured and no agreement can be made with the
carrier for compensation, a suit is the result and the chief question
is one of fact, the extent of the injury, and the degree of negligence
of the carrier. If, on the other hand, the passenger was in fault
himself and contributed to the injury then the more general rule is he
can recover nothing. In some states the courts attempt to ascertain
the negligence of both parties, when both are at fault, and then award
a verdict in favor of the one least in fault. This is a difficult rule
to apply however just it may seem to be.
A passenger who stands on a platform or on the steps of a street car,
when there is room inside, assumes all the risks himself. But if there
is no room within and the conductor knows he is outside, and permits
him to ride, he is under the same protection as other passengers. An
interurban car had stopped and A who was carrying two valises
attempted to board it. The act of the conductor, who was on the rear
platform, in reaching down and taking one of the valises amounted to
an invitation to A to board the car. In signaling to the motorman to
start the car when A was stepping to the vestibule from the lower
step, thus causing the injury to him, was negligence for which the
company was liable.
A sleeping car company operating in connection with ordinary trains is
not a common carrier, nor an innkeeper as to the baggage of a
passenger. Yet it is liable for ordinary negligence in protecting
passengers from loss by theft. In a well-considered case the judge
said: "Where a passenger does not deliver his property to a carrier,
but retains the exclusive possession and control of it himself, the
carrier is not liable in case of a loss, as for instance, where a
passenger's pocket is picked, or his overcoat taken. A person asleep
cannot retain manual possession or control of anything. The invitation
to make use of the bed carries with it an invitation to sleep, and an
implied agreement to take reasonable care of the guest's effects while
he is in such a state that care upon his own part is impossible. I
think it should keep a watch during the night, see to it that no
unauthorized persons intrude themselves into the car, and take
reasonable care to prevent thefts by occupants."
There is a distinction between the great express companies of the
country and local express companies receiving baggage from travelers
for transportation to their immediate destination. In the latter case
there is nothing in the nature of the transaction or the custom of the
trade which should naturally lead the shipper to suppose that he was
receiving and accepting the written evidence of a contract, and
therefore he is not bound by the terms of the receipt received, unless
there is other evidence that he assented thereto.
Though the United States is a common carrier for carrying mails, it
cannot be held liable because it is a branch of the government. Mail
matter may be carried by private persons, but this is limited to
special trips. By statute no person can establish any private express
for carrying letters or packets by regular trips or at stated periods
over any post route, or between towns, cities or other places where
the mail is regularly carried.
A public officer in performing his duties is exempt from all
liability. But a postmaster is liable to a person injured by his
negligence or misconduct and for the acts of a clerk or deputy
authorized by him. The assistant unless thus shielded must answer for
his own misconduct. A rider or driver employed by a contractor for
carrying the mails is an assistant in the business of the government.
Although employed and paid, and liable to be discharged at pleasure by
the contractor, the rider or driver is not engaged in his private
service; he is employed in the public service and therefore the
contractor is not liable for his conduct.
=Chattel Mortgage.=--A chattel mortgage is a conveyance of personal
property, as distinguished from real property, to secure the debt of
the lender or mortgagor. The essence of the agreement is, if the
mortgagor does not repay the money as he has agreed to do, the
mortgagee becomes the owner of the property. Until the mortgagor
fails to execute his part of the agreement, he retains possession of
the property. By statutes that have been enacted everywhere, the
mortgagee's interest, or conditional title in the property conveyed to
him, is secure by recording the deed even though the mortgagor still
retains possession.
The usual form of a chattel mortgage is a bill of sale with a
conditional clause, stating the terms of the loan and that, on the
mortgagor's failure to pay, the mortgagee may take possession of the
property. Any persons who are competent to make a contract may make a
chattel mortgage, and an agent may act for another as in many other
cases. When thus acting his authority may be either verbal, or
written, or may be shown by ratification. Persons also who have a
common ownership in chattels, tenants in common or partners for
example, may mortgage either their common or individual interests. A
husband may give a chattel mortgage to his wife, and she in turn can
give one to him. Likewise a corporation may make such a mortgage.
The law is broader in the way of permitting a minor, married woman, or
corporation to be mortgagees when they cannot act as mortgagors of
their property. Two or more creditors may join in such a mortgage to
secure their separate debts. If the debt of one of them is fraudulent,
his fraud, while rendering the mortgage fraudulent as to him, will not
affect its validity as to the other.
How must the mortgaged property be described? With sufficient
clearness to enable third persons to identify the property. The
description must contain reasonable details and suggest inquiries
which if followed will result in ascertaining the precise thing
conveyed. A description of a baker's stock "stock on hand," would be
too meager, so would be a description of "our books of account, and
accounts due and to become due," but cattle described by their age,
sex and location will satisfy the law, though the cattle of other
owners should form part of the same herd, when they can be ascertained
by following out the inquiries suggested by the mortgage. Again, a
description that is wholly false avoids the mortgage, but if it is
false only in part, this may be rejected and the mortgage remain valid
for the remainder.
More generally the nature of the chattels conveyed determine largely
the character of the description. Thus animals may be described by
weight, age, height, color and breed; vehicles by their style and
manufacturer's name; furniture by piece or set; crops growing or to be
grown by their location and year. A general claim of "all" articles in
a stated place is regarded as sufficient. Oral evidence is admissible
to aid the description in identifying the subject-matter of the
mortgage, and to explain the meaning and extent of the terms of the
description.
A mortgage may be given for a future advance of money. Nor need the
mortgage state that it is thus given; and the fact may be proved
orally. But when the right of third parties are affected, such a
mortgage is not valid against them unless the specific sum that is to
be secured is set forth. Likewise to render a mortgage secure against
attaching creditors of the mortgagor, there must be a distinct
statement of the condition or terms of the mortgage; in other words
the creditors have a right to know what interest the mortgagee really
has in the property that secures to him rights superior to their own.
The rule should also be stated that where the rights of third parties
are in issue, it must appear that the mortgagee acquired the mortgage
before they had any rights to the property.
The statutes require that chattel mortgages should be acknowledged and
recorded. In some states the requirements are strict in respect to the
disinterestedness of the official who takes the acknowledgment. An
affidavit is another requirement. This must state several things,
especially that the mortgage was given in good faith, and the nature
and amount of the consideration.