as a condition of permission to do business in that state. In such states, on insolvency, these securities will be applied to the payment of domestic stockholders, though they thereby obtain a preference over other members.""

UNINCORPORATED BUILDING ASSOCIATIONS

51. An unincorporated building association is a mere partnership, and as such is governed by the general law of partnership; but, in applying this law, the courts will be guided by the rules of the association, so far as they are not inconsistent with the general policy of the law. Such an association is not entitled to the benefit of a statute designed to protect associations incorporated under it. unincorporated building association may, by its trustees, take a bond and mortgage for a loan made by it, and such an obligation may be conditioned for the payment of subscription during the continuance of the enterprise.'

127

While unincorporated building associations have not the rights which incorporated associations acquire by virtue of their incorporation, so, on the other hand, they are untrammeled by the restraints imposed by statute upon incorporated associations, and are free to mold their own course, within the limits of general law, of justice, and of equity, by their articles of association, or constitution, and by-laws passed in conformity therewith. By-laws inconsistent with the constitution of an unincorporated building association are void.

An unincorporated building association is conducted in the same manner and by the same officers as an incorporated association. The association acts in all its contract dealings upon the principles of agency, and is bound thereby.

The incorporation of an unincorporated building association under a general statute does not affect the right of its trustees to maintain an action on a bond previously given to it.128 In availing themselves of the provisions of the statute,

the associates lose none of the rights which they had previously acquired. The debts due to them while unincorporated are, in legal effect, and by operation of law, transferred and assigned to the corporation. The validity of a contract is not affected, one way or the other, by an incorporation of the association subsequent to the date of its organization.

TAXATION

52. The stock of building associations is liable to taxation under general laws providing for the same upon the capital stock of other corporations, unless it be specially exempted; the amount of the capital stock subject to taxation is the fund which accrues from monthly stock payments, from premiums and interest on loans, and from fines.

THE LAW OF BENEFICIAL

ASSOCIATIONS

INTRODUCTION

1. Definition. A beneficial association is an association for the accumulation of a fund from the contributions of its members, to be used, in the event of sickness or death, for the benefit and amelioration of the contributors or their families.

ORIGIN AND GROWTH

2. Beneficial associations have their origin in the guilds, fraternities, and clubs which have existed from time immemorial. The earliest of these associations were the Eranoi of Greece and the Collegia of Rome. The essential principle of the guild was the banding together for mutual help, mutual enjoyment, and mutual encouragement in good endeavor.' In the middle ages, social guilds sprang up all over Europe, but chiefly in England and Germany. Their objects included "not only devotions and orisons, but, also, every exercise of Christian charity, provision of work, visitation and comfort of the poor and sick, and the burial of the dead." These social guilds were followed by the institution of merchant and craft guilds. The social guilds have largely given way to the modern friendly societies and social and literary clubs, and to such great secret fraternities as the Masons and Odd-Fellows. The merchant guilds have disappeared in the modern Boards of Trade and

For notice of copyright, see page immediately following the title page

Chambers of Commerce, while the craft guilds have been superseded by the trades-unions of the present century."

3. The English government has long since recognized friendly societies as organizations beneficial to society, and deserving the support and encouragement of the community, and has defined them, by act of parliament, as “institutions whereby it is intended to provide, by contribution on the principle of mutual insurance, for the maintenance or assistance of the contributors thereto, their wives or children, in sickness, infancy, advanced age, widowhood, or any other natural state or contingency whereof the occurrence is susceptible of calculation by way of average." They are now under careful supervision, as much so as life-insurance companies, and are required to make regular returns to the chief registrar of the government."

4. In the United States, beneficial associations, while resembling in some respects the English Friendly Societies, have, besides, many of the features characteristic of such great secret orders as the Freemasons and Odd-Fellows. The oldest leading beneficial order in the United States and Canada is the Ancient Order of United Workmen, organized in 1868, and having, in 1901, a membership of about 420,000. The largest order is the Modern Woodmen of America, now having a membership of over 700,000. Of the secret ritualistic societies and charitable fraternities, of which the OddFellows, Freemasons, and Knights of Pythias are examples, the Odd-Fellows was the first in the United States to guarantee to its members a definite amount of money in the event of sickness or of death. It was founded in the United States in 1819, and has now a membership of over 1,000,000. The oldest secret fraternal society is the Masonic Order, with a membership, in 1901, in the United States and Canada of about 900,000. The Knights of Pythias, founded within the last century, has a membership approximating 520,000.

3 Bacon Ben. Soc., p. 9.

459 Geo. III. c. 128.

5 Encyc. Brit.

6 Bacon Ben. Soc., pp. 19. 20. notes;

N. Y. World Almanac. 1902.

5. Large industrial establishments, and even railroad companies, now frequently operate relief associations for the benefit of such of their employes as choose to become members. Fixed contributions are paid monthly, and deducted by the company from the wages of the employes. As the purpose of these associations is to furnish protective relief to the members in case of sickness or death, they are regarded in the eye of the law as being indistinguishable from the ordinary beneficial society. Railroad companies operating such relief departments frequently provide, in their by-laws, that the acceptance of benefits by a member shall be a release of the company from any liability for the negligence producing the injury for which the benefits were accepted. The validity of such by-laws has frequently been questioned in the courts. However, it is settled that mere membership in such an association is no bar to the maintenance of an action for damages in the courts;' but, while some authorities hold that the acceptance of benefits by a member for injuries resulting from the negligence of the company is, also, upon grounds of public policy, no bar to the institution of an action in the courts for damages for the same injury," there are other authorities which contend that the acceptance of such money after the cause of action has arisen against the company for its negligence must be considered a waiver of the suit at law, and a complete release of the company from any further liability for damages."

DISTINGUISHED FROM INSURANCE COMPANIES

6. The great underlying purpose of a beneficial association is to afford protective relief to its members in case of sickness or injury, or to provide the means of a decent burial in the event of death. Its design is almost wholly philanthropic or benevolent; it is not a mere business enterprise, in which, for a stipulated consideration or premium, it

7 44 Neb. 44 (1895).

849 N. E. Rep. 582 (1898); 76 Fed. Rep.

439 (1896).

9 163 Pa. 127 (1894); 70 N. W. Rep. 630

(1897).