Sumner Lodge v. Odd Fellows Home

77 A. 36, 77 N.J. Eq. 386, 1910 N.J. Ch. LEXIS 44
CourtNew Jersey Court of Chancery
DecidedJune 23, 1910
StatusPublished
Cited by1 cases

This text of 77 A. 36 (Sumner Lodge v. Odd Fellows Home) is published on Counsel Stack Legal Research, covering New Jersey Court of Chancery primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sumner Lodge v. Odd Fellows Home, 77 A. 36, 77 N.J. Eq. 386, 1910 N.J. Ch. LEXIS 44 (N.J. Ct. App. 1910).

Opinion

Garrison, V. C.

From the foregoing statement of facts it will appear that the defendant the Odd Fellows Home of New Jersey has undertaken the proceedings for voluntary dissolution, and, incident thereto, has provided for the distribution of its assets.

The first question requiring consideration is whether there is any statutory authority for such proceedings. If there is not, it is quite clear that such corporation has no power, by the action of its stockholders and directors, or either, to voluntarily dissolve itself. Benedict v. Columbus Construction Co. (Chancellor McGill., 1891), 49 N. J. Eq. (4 Dick.) 23.

The act under which this corporation became incorporated was entitled “An act to incorporate benevolent and charitable associations.” Rev. 1875; Gen. Si,at. p. 149. By a supplement approved on the 12th of March, 1878 (Gen. Stat. p. 151 § 12), provision was made for proceedings for dissolving such associations. This act and this specific supplement were included among acts repealed by an act entitled “An act to repeal sundry acts relating to associations not for pecuniary profit,” which was approved on the 22d of March, 1899. P. L. .1899 p. 190 § 8. Whether this attempted repeal is efficacious in view of the title of the act is, I think, a very grave question. Montclair Military Academy v. State Board of Assessors (Supreme Court, 1900), 65 N. J. Law (36 Vr.) 518.

Furthermore, in the act of 1899 (at p. 197), there is a section reading as follows:

“Nothing herein contained shall impair or annul any vested rights, privileges, or powers heretofore obtained and used under authority of said acts or any of them, and all corporations which have heretofore availed themselves of the provisions of said acts may continue to enjoy the rights and advantages which they now enjoy and exercise by virtue thereof.”

The intention of the legislature is quite plain. By an act entitled “An act to incorporate associations not for pecuniary profit,” approved April 21st, 1898, they made provision for the incorporation (and by the fifth section for the reincorporation) of all corporations of a fraternal, religious, beneficent and charitable kind, evidently intending thereby to bring them all under the [395]*395provisions of one general statutory rule; and therefore, in the next year, by the act of 1899 (at p. 189), they repealed all existing legislation under which societies or associations of this kind had previously been incorporated.

Since, however, these previously incorporated bodies had been provided for by acts of various titles, the doubt, heretofore expressed by me and by the supreme court in the cited case, exists as to whether the repealing act is effective, its title being perhaps not constitutionally adequate. The act of 1898, just referred to, also provides for dissolution, but only of corporations incorporated (or reincorporated) under it ; and therefore that provision does not apply to the defendant corporation now being dealt with. If, however, it should be determined that the title of the repealing act was adequate, and that by force of such act the act under which the defendant corporation was incorporated was repealed, we still have to deal with the provision in the act of 1899, which has been quoted in full, and which reserves to existing corporations vested rights, privileges or powers.

I incline to the opinion that since one of the rights, privileges or powers (or, perhaps, in the language of the section, it might be proper to call it an “advantage”) was the right to dissolve itself by voluntary action. The question therefore to be considered (assuming that the law will be decided in favor of this corporation having the right to voluntarily dissolve' itself) is whether it may, upon dissolution, distribute its assets among its members. The specific thing- before the court, under the bill and answers, is whether it may distribute them in accordance with the resolution adopted at a meeting of the representatives of its members. That resolution, it will be recalled, provided that the assets on hand should be distributed by giving a certain proportion to each of the lodges or encampments now members, such proportion to be arrived at in a certain manner in said resolution set forth.

It will be remembered from the recital of facts that this corporation, under the act incorporating it, could not use its funds in any other manner except as provided in the act; that by its certificate of incorporation it set forth that its sole and exclusive object was the relief of indigent, aged or disabled members'. By its constitution it recites that its purpose is to purchase a home [396]*396for and to support and maintain aged and indigent Odd Fellows in the manner the by-laws prescribe. The by-laws prescribe that any lodge or encampment of the Independent Order of Odd Fellows might become a member by paying one cent a week for each of its members, and that such member, i. e., the lodge or encampment, had the privilege of applying for the admission of inmates, the essential details concerning which application and admission of such inmates having been heretofore set forth.

The proofs show that the maintenance of the home always cost more than the receipts from the dues of the lodges which, at any. one time, belonged to or were members of the defendant corporation. The so-called members of the corporation varied from year to }rear. Lodges would join and pay their contributions so long as they pleased, and then would cease paying their contributions, and thereupon cease to be members; and other lodges which had not theretofore paid dues would commence doing so and would thereupon become members. The deficit arising from the excess of expenditures over income from dues was made up out of the donations or gifts heretofore alluded to.

As has been explained, the records of the corporation have been lost, but from those which have been preserved it appears that such donations, for a period from January 1st, 1896, to June, 1908, amount to $14,388.59.

The by-laws in the seventeenth article provided that all such donations should be invested and only the interest used for maintenance. But evidently the exigency of the circumstances caused an entire disregard of this provision. It is the fact, however, that the amount of money now 'in hand almost exactly corresponds to the amount of donations that the corporation, by its present records, shows that It has received.

It is entirely clear that such donations were made to this corporation for its charitable purposes. Whether the work in which this corporation engaged was a charity in the legal sense is a question of doubt and difficulty; but that it was a charity in its popular sense there can be no doubt.

There was no suggestion a^where that anyone was to make any profit out of its operation. Whether the providing of a home for the indigent, aged or disabled members of a certain fraternal [397]*397order or society is within the limits of a “charity” as defined by the courts was debated at great length by counsel, and I find that there is a contrariety of decision in the courts. But I do not find it necessary for me to determine this question in this suit, and I therefore conceive it improper for me to indulge in any expression of my personal views concerning this question.

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Bluebook (online)
77 A. 36, 77 N.J. Eq. 386, 1910 N.J. Ch. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sumner-lodge-v-odd-fellows-home-njch-1910.