Opinion
October 14, 1930.
1. ACTION: Right to Maintain: Voluntary Entity. A voluntary unincorporated association cannot sue or be sued as such unless the statute authorizes it to sue in its adopted name.
2. ____: ____: Fruit-Growers Exchange. A voluntary fruit-growers exchange, engaged in the production and marketing of strawberries or other agricultural products, cannot alone sue or be sued, as such, under the statutes of this State. Such an association does not possess any power or privilege not possessed by individuals or partnerships.
3. ____: ____: ____: Statutes. Sections 9749, Chapter 90, Revised Statutes 1919, invests corporations with power to sue and be sued, and Section 9722 declares that "the term `corporation' as used in this chapter, shall be construed to include all joint stock companies or associations having any powers or privileges not possessed by individuals or partnerships;" and under these sections, a voluntary association, in order to sue or be sued, must possess powers or privileges not possessed by individuals or partnerships, and it does not possess either if it is purely a creature of convention, organized and existing under the common-law right of contract only.
4. ____: ____: ____: Amendments of 1921 and 1923. The Act of 1921 (Laws 1921, p. 260) and the Act of 1923 (Laws 1923, p. 111), conferring certain rights and privileges upon associations engaged in the production and marketing of agricultural products, make the incorporation of such association an essential prerequisite to the enjoyment of the franchises which they grant: they do not confer upon any such association which is not incorporated, the right to sue to recover damages sustained in the shipment of any such products.
5. ____: ____: Section 1186: Summons. Section 1186, Revised Statutes 1919, is a part of the General Code, and by its seventh division prescribes the manner of serving summons on a "voluntary or unincorporated association or organization," but it does not confer on any such association the right to sue, or make them suable: it merely prescribes the method of serving a writ of summons on such unincorporated associations as are suable entities — those which are invested by statutes with powers and privileges not possessed by individuals or partnerships.
Transferred from Springfield Court of Appeals.
AFFIRMED.
Leo H. Johnson and J.A. Sturgis for appellant.
(1) The statute prescribes the manner of service of process on voluntary associations and organizations in suits brought against them. Sec. 1186, R.S. 1919. (2) A voluntary association or organization is classed and enjoys the same rights at law as a corporation. Sec. 9722, R.S. 1919. The powers of a corporation thus defined entitles such entity, i.e. a voluntary association, to sue and be sued. Sec. 9749, R.S. 1919. (3) To permit such an entity as a voluntary association or corporation to be sued, thus giving it the same recognition at law as a private individual or corporation, when named as a defendant, and then refuse it the right to bring suit in its own name, would be contrary to both the spirit and letter of the law. In defending an action, such an association or organization would in certain instances be properly entitled to assert by offset or counterclaim, any lawful defense it might have to such action. If permitted to so defend, it should be permitted to become a litigant at will. The statutes cited above, construed together, seem to anticipate such right in a voluntary association and organization, and the decisions of our courts protect the assertion of such right. (4) Our courts at times have been inclined to deny this right, as in the Express Company cases, i.e., Express Co. v. Railway Co., 126 Mo. App. 471; Railway Co. v. Express Co., 145 Mo. App. 371. These cases were later overruled by the Williams case cited below; but of more recent years our courts have interpreted the statutes more broadly and have extended to a voluntary association or organization, such as the appellant or those of similar standing and structure, the privilege to institute suit at will. Williams v. Express Co., 195 Mo. App. 364; Bruns v. Union, 242 S.W. 421; Wiethucchter v. Miller, 276 Mo. 328; Whitmire v. Association, 286 S.W. 843. (5) It is true that the law, as to what constitutes a corporation and the powers of such an entity, including its right to sue, have been in force and effect in this State since 1879; but had the courts considered the application of the aforesaid statutes after due citation by litigants in the aforesaid Express Company cases and others, the Williams case cited above would doubtless have followed rather than overruled the decisions in those cases. The case of Lilly v. Tobbein, 103 Mo. 477, holding in effect that a voluntary association could not be sued as such, later followed by the decisions in the Express Company cases, probably gave inspiration, even though belated, for the enactment of the amendment of 1915 to Sec. 1760, R.S. 1909 (now Sec. 1186), whereby it was made lawful to institute suit and serve process against a voluntary association or organization. (6) Corporations as defined by Sec. 9722, R.S. 1919, are creatures of statutory law and the State has plenary power to make and clothe them as she will, excepting in those instances where our Constitution provides certain limitations — none of which are applicable to the instant case. Sylvester etc. Co. v. Company, 238 S.W. 496; Mo. Constitution, Sec. 2. Art. 12, and Sec. 21, Art. 10; State v. Lee, 233 S.W. 27. (7) It is further suggested that the doctrine of estoppel might properly be applied by the court to the question now before it. In short, the respondent in this case having contracted with the Newton County Farmers Fruit Growers Exchange in such name, and having accepted a carload of strawberries from it for shipment, and having issued to it respondent's bill of lading, cannot well be heard to now deny the right of such association or organization to institute suit to enforce its rights arising under and by virtue of such contract and relationship. In such matters the doctrine of estoppel when applicable is too well recognized to need citations of authorities.
Cyrus Crane, Hugh E. Martin and Mercer Arnold for respondent.
(1) The court properly sustained the demurrer because the petition alleged, stripping it of all legal conclusions and confining it to allegations of fact, that plaintiff was a voluntary association or organization, not incorporated and without assignable shares of stock, and, upon such allegations under the law, such an organization is without capacity to sue, and the petition does not state sufficient facts to show in plaintiff a capacity to sue. Road District v. Jackson 208 Mo. App. 194; State ex rel. Hadley, Atty-General, v. Stock Exchange, 211 Mo. 181; O'Rourke v. Kelly, 156 Mo. App. 91; State ex rel. Rabiste v. Southern, 300 Mo. 417; Carter County v. Huelt, 303 Mo. 194; Anderson v. Drainage Levee District, 309 Mo. 189; Whitmore v. Mutual Ben. Assn., 286 S.W. 842; Adams Express Co. v. Street Railway Co., 126 Mo. App. 471; Metropolitan Street Railway Co. v. Express Co., 145 Mo. App. 371; District No. 21, United Mine Workers of America v. Bourland, 277 S.W. 546; Brown v. Protestant Episcopal Church, 8 F.2d 150; Great Southern Fireproof Hotel Co. v. Jones, 177 U.S. 449. (2) The statute law of our State does not give the right to a voluntary association or organization to sue in its name. The fact that Sec. 9722, R.S. 1919, provides that the term "corporation" shall be construed to include all joint stock companies or associations having any powers or privileges not possessed by individuals or partnerships does not sustain plaintiff's contention that the court erred in ruling that plaintiff was without capacity to sue. Plaintiff having alleged itself to be a voluntary association not incorporated, and not having assignable shares of stock, and voluntary associations or organizations not being expressly given the right to suit in their names, the demurrer was properly sustained. Sec. 9722, R.S. 1919; Sec. 2963, R.S. 1909; Sec. 1760, R.S. 1909; Sec. 1186, R.S. 1919; Great Southern Fireproof Hotel Co. v. Jones, 177 U.S. 449; Sec. 12053, R.S. 1919. (3) The petition further alleges that each member of the Newton County Farmers Fruit Growers Exchange having or owning berries that went into this shipment share in the proceeds received from the sale of the berries, less expenses proportionately with the share of each in the products sold; thereby the petition shows the real parties in interest are not the parties plaintiff herein and that the plaintiff has no right to bring this action. Sec. 1155, R.S. 1919; Carter v. Railroad, 170 Mo. App. 698; O'Rourke v. Kelly, 156 Mo. App. 91. (4) Plaintiff's legal capacity to sue was properly raised by demurrer and in this case there is no ground for the application of the doctrine of estoppel as against defendant. Harrill v. Davis, 168 F. 187; Whitmire v. Benefit Assn., 286 S.W. 842; Bank v. Lee, 182 Mo. App. 185; Road District v. Jackson, 208 Mo. App. 194; State ex rel. Hadley v. Exchange, 211 Mo. 181; Adams Express Co. v. Railway, 126 Mo. App. 471; Brown v. Protestant Episcopal Church, 8 Fed. (2) 149.
The original appeal in this case was to the Springfield Court of Appeals. That court deeming its decision in conflict with that of the St. Louis Court of Appeals in Bruns v. Milk Wagon Drivers Union, 242 S.W. 419, certified the cause to this court in accordance with the provisions of Section 6. Article VI, of the Constitution. The decision of the Springfield Court of Appeals is reported in 2 S.W.2d 125. We adopt that court's statement of the case and its opinion, in part, as follows:
"This is an action to recover damages to a car of strawberries alleged to have been caused by failing to properly ice. The cause was filed in McDonald County, but the venue was changed to Jasper County. Defendant filed a demurrer to plaintiff's petition. The demurrer was sustained, and plaintiff appealed.
"The demurrer alleged that the petition did not state facts sufficient to constitute a cause of action, and also challenged plaintiff's legal capacity to sue. The question of plaintiff's legal capacity to sue is the only question we deem necessary to consider.
"So far as material to the question presented, plaintiff's petition alleged:
"`Plaintiff, in this its amended petition, states that it is a voluntary association or organization, existing under the laws of the State of Missouri, and capable of suing or being sued the same as a corporation; that although not incorporated, it possesses rights other and different from individuals, co-partnerships, and joint-stock companies; that its members are fruit farmers associated together for the purpose of marketing their products under the name of the Newton County Farmers' Fruit Growers' Exchange, each member thereof sharing in the proceeds received from the sale of such products, less expenses, proportionately compared with their part of the products sold, with rights to withdraw from membership at any time, and without joint liability for or on account of losses sustained, also without dissolution on account of withdrawal, death or insolvency of any member or members, and without assignable shares of stock therein.'
"According to the petition, plaintiff is a voluntary, unincorporated association. It will be observed that the petition alleges that plaintiff, although not incorporated, possesses rights other and different from individuals, co-partnerships, and joint-stock companies, and that it is capable of suing or being sued the same as a corporation. These allegations as to the rights that plaintiff possesses and as to its capacity to sue are mere conclusions and will not be considered as admitted by the demurrer. [State ex rel. Rabiste v. Southern, 300 Mo. 417, 254 S.W. 166.] The question of the legal capacity of voluntary, unincorporated associations to sue, in the absence of specific statutory authority, has long been a vexing and troublesome point to the bench and bar. The question has often been presented, but in some instances it has passed without specific ruling. [See Aurora Fruit Growers' Assn. v. St. Louis-San Francisco Ry. Co. (Mo. App.), 297 S.W. 440.]
"An unincorporated association has no legal entity distinct from its members and cannot at common law maintain an action in its own name. [5 C.J. 1365; 30 Cyc. 99; 19 R.C.L. 1317; State ex rel. Hadley v. Kansas City Live Stock Exchange et al., 211 Mo. 181, 109 S.W. 675, 124 Am. St. 776; State ex rel. Great American Home Savings Inst. v. Lee, 288 Mo. 679, l.c. 703, 233 S.W. 20; Bruns v. Milk Wagon Drivers' Union (Mo. App.), 242 S.W. 419; Road District v. Jackson, 208 Mo. App. 194, 231 S.W. 1043; O'Rourke v. Kelly The Printer Corporation. 156 Mo. App. 91, 135 S.W. 1011; Adams Express Co. v. Met. St. Ry. Co., 126 Mo. App. 471, 103 S.W. 583; Met. St. Ry. Co. v. Adams Express Co., 145 Mo. App. 371, 131 S.W. 101; Williams v. U.S. Express Co., 195 Mo. App. 362, 191 S.W. 1087; Brown v. Protestant Episcopal Church (D.C.), 8 F.2d 149; Great Southern Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 20 Sup. Ct. 690, 44 L.Ed. 842.]
"That the general rule is that a voluntary or unincorporated association cannot, in the absence of statutory authority, sue or be sued as such, cannot be doubted. Many cases from many jurisdictions are cited in Corpus Juris note sustaining this general rule. There are none to the contrary. Unless our statutory law authorizes plaintiff to sue in its adopted name, then it cannot maintain this cause."
The statutory provisions invoked by appellant as conferring upon it power to sue are found in Sections 9749, 9722 and 1186, Revised Statutes 1919. Sections 9749 and 9722 are found in Chapter 90, which deals with private corporations; the first invests corporations with the power "to sue and be sued;" the second declares that "the term `corporation' as used in this chapter, shall be construed to include all joint stock companies or associations having any powers or privileges not possessed by individuals or partnerships." Section 1186 is a part of the General Code; it prescribes the manner of serving summons — the 7th division relating to the service on a "voluntary or unincorporated association or organization."
Under Sections 9722 and 9749, taken together, joint stock companies and associations having any powers or privileges not possessed by individuals or partnerships, as well as corporations proper, have the power to sue and be sued. [Williams v. Express Co., 195 Mo. App. 362, 191 S.W. 1087.] Appellant does not claim that it is either a corporation or a joint stock company, but it does assert that, though a voluntary association, it possesses powers and privileges not possessed by individuals or partnerships. It fails, however, to point out the source of any such powers or privileges. So far as appears, it is purely a creature of convention, organized and existing under the common law right of contract only. In the absence of a statute conferring upon it a power or privilege not possessed by individuals or partnerships, it has no such power or privilege: it cannot exalt itself by pulling on its own boot straps. [State ex rel. Home Savings Inst. Co. v. Lee, 288 Mo. 679, 703, 233 S.W. 20.] There are only two statutes of this State which profess to confer any rights or privileges upon associations engaged in the production and marketing of agricultural products; one was enacted in 1921 (Laws 1921, p. 260), and the other in 1923 (Laws 1923, p. 111); both make the incorporation of such associations an essential prerequisite to the enjoyment of the franchises which they grant. Of course appellant was not organized pursuant to the provisions of either of the acts; otherwise, it would be a corporation. It is plain that it does not have any powers or privileges not possessed by individuals or partnerships.
It was thought for a time that Subdivision 7th of Section 1186, by indirection at least, made voluntary associations suable entities, and that conversely they had the capacity to sue. But in the recent case of Mayes v. United Garment Workers, 320 Mo. 10, it was held that the amendatory act which added Subdivision 7th to the section, in so far as constitutionally valid, merely prescribed the method of serving a writ of summons on such unincorporated associations as are suable entities, that is, those which are invested by statute with powers and privileges not possessed by individuals or partnerships.
The judgment of the circuit court is affirmed. All concur.