LIABILITIES OF FRIENDLY SOCIETIES.

New Zealand Herald, Volume XXVI, Issue 9323, 28 March 1889, Page 6

LIABILITIES OF FRIENDLY SOCIETIES.

BELL V. FITNESS AND OTHERS. IMPORTANT JUDGMENT. At the banco sittings of the Supreme Court, yesterday, His Honor Mr. Justice Gillies gave judgment in the case of Bell v. Fitness and others. This case, it will be recollected, was one in which the plaintiff sued the defendants as members of the Court Eureka,'A.O.F., for the sum of £800 due on a contract for the erection of a hall in Wakefield-street. Judgment was given against the trustees, but the assets were insufficient, and# was then sought to make the members individually liable. The case was argued before the vacation by Mr. Hesket.li for the plaintiff, and Mr. Theo. Cooper for the defendants. His Honor now delivered judgment as follows : — This is an action brought under rule 471 of our code of civil procedure, which says that "Any relief which might heretofore have been obtained by means of a writ of scire facias may be. claimed in an ordinary action, either alone or together with other relief, and the said writ shall no longer bo issued.'' The relief sought in the present case is to obtain execution agamsb the individual members of a friendly society against the,trustees of which society judgment was obtained as such trustees in April last, and the property of the society proved insufficient to satisfy the judgment. It is clear from the cases of Bosanquet. v. Rainsford and Clowes v. Brett-all that where under the English procedure it is sought to obtain execution against a member of a co-partnership, not a party named on the record scire facias is the proj>er remedy. But where a person sued as representing the co-partnership is also a member thereof, execution may issue against him without scire facia*, Harwood v. Law. Now, in the present case one of the defendants (Fitness) was one of the trustees of the society against whom, as trustee, judgment was obtained in the former case, so that if ho is also liable as a member execution could issue upon that judgment without set. fa-, or its substituted action. Again, Lovell (another of the defendants in the present case) was also defendant in the former case; and I then held that, being no party to the contract, although a member of the society, he was not personally liable. He ought to have had judgment entered in his favour, which would have been conclusive against the plaintiff in the present case, and this judgment in favour of Lovell in the former case virtually binds me in the present one as regards the members of the .Society generally. As, however, the present case has been argued on entirely different lines, and upon an entirely different class of authorities, and as it may be of considerable public importance to members of such societies to know the extent of their responsibilities, I feel it necessary to examine the arguments used in the present case. If I understand aright, the argument for the plaintiff was this: I have obtained a judgment against the trustees of the property of this society. That is, a judgment against the society, and every member of the society is liable upon that judgment, and this bein<jf a proceeding in oho nature of, though substituted for, m. fa., no member can set up a defence which' might have been pleaded to the original action against the trustees; for instance, that the trustees had ho power to enter into a contract to bind the members beyond the amount of their subscriptions. ■ Bradley and others v. Urquhart, and Poddell v. Gwyn are authorities for the position that where a judgment is obtained against the representatives appointed by law to sue and be sued on behalf of a company or corporation, no member of the company or corporation can set up in answer to sci. fa. it defence which might have been pleaded to the original action. But it must be observed that the trustees of Friendly Societies are not by our Friendly Societies Act, 1882, appointed to sue and be sued generally on behalf of the Society, but only (see sub-section 1) to bring or defend any action, suit, etc., touching or concerning any property, right, or claim of the Society, etc. The distinction is pointed out by Stawell, C.J., in the Colonial Bank of Australasia v. Draper (4 Victorian L.R., 53*2) : "The 16th section vests all the property of the society in trustees, and gives the power to sue and bo sued, but that power is limited by the words of the section to suits, etc., touching or concerning any property, right, or claim of or belonging to or had by such society." No allusion (as in ttie English legislation) is made to contracts or to suing and being sued generally. Tho section is substantially the same as the 21st sec. of 10 Geo. 4, c. 56, and almost a transcript of 1344, Vic., c 115, and (p 534) Mr. Baron Bramwell in Alexander v. Worman (30 L. J. Ex. 200) shows his opinion a3 to the proper construction to be put on 10 Geo. 4, c. 56, " That section only vests the property of the society in the trustees, and does not apply to contracts." The judgment, therefore, which is now sought to be enforced against the individual members of the society was not a judgment against the society but only against the property of the society. Besides, although in some of the earlier cases, such as Beaumont v. Meredith, and Silver v. Barnes, a benevolent society and a benefit society were termed co-partnership, I agree with Baron Martin that "it is an abuse of language to call such an association a partnership." Mr. Justice Lindley also in his well-known work on partnership lays it down clearly (vol. i., p. 52): "Societies and clubs, the object of which is not to share profits, are not partnerships, nor are the members of such liable for each others' acts. If liabilities are to be fastened on any of their members it must by means of the acts of those members themselves, or by reason of the acts of their agents, and the agency must be made out by the person who relies on it, for none is implied by the mere fact of association." No doubt Myers and another v. Rawson (L.J., Ex. 217) is an authority for the contention that members of an industrial provident society are individually liable on judgments obtained against the officers and trustees of the society. But the distinction is clear. Such societies have amongst their objects trading and sharing of profits, and so, being partnerships, their members are individually liable for the debts of the partnership. But in the case of a pure friendly society like the present, there is no trading or sharing profit, but only a dispensing to the members in certain events the funds derived from their own joint contributions, and therefore the members are not individually liable. Judgment must therefore be entered for the defendants.

Mr. Cooper said it was necessary for His Honor to answer the questions of law raised in the pleadings. The first was as to whether members of a friendly society were personally liable, and to that he understood His Honor's answer was " No." The other questions were not argued. His Honor said it was not necessary to answer them in that form. The judgment was for defendant, with costs. Mr. Hesketh said he understood the judgment would be on the point of law only—not a final judgment on the case. Mr. Cooper said that, although the judgment, as a matter of fact, disposed of the case as a matter of practice, it did not do so until the next step was taken. It was open for his friend to set down the case for hearing. He was content to take the judgment on the questions of law, with costs £30, as set down by the code.

His Honor said it was a very stupid rule, for this was really a demurrer, but he supposed it was as stated, and the judgment must be on the question of law, and on these he entered judgment for defendant, with costs £30.