society, unless at the time the debt was incurred he was a member thereof, except by an express contract, based on a good consideration, all which must be alleged and proved."

In First Nat. Bank v. Rector (1899) 59 Neb. 77, 80 N. W. 269, it appeared that an unincorporated religious society purchased a tract of land from the plaintiff for which payment was never fully made. After foreclosure proceedings the plaintiff sought to subject the property of the individual members of the society "to the payment of the deficiency judgment." It was held that the members of a voluntary association are not liable for its debts unless they have authorized or ratified the obligation, and that the defendants in this case were not liable since there was no averment or proof of any such authorization or ratification.

In McCabe v. Goodfellow (1892) 133 N. Y. 89, 17 L.R.A. 204, 30 N. E. 728, reversing (1891) 61 Hun, 619, 21 N. Y. Civ. Proc. Rep. 65, 15 N. Y. Supp. 377, it appeared that the plaintiff was engaged as counsel by a voluntary association, a Law and Order League, to assist in the enforcement of the liquor laws, and that he sought to recover for his services from the defendant, the treasurer of the league. It was held that since the funds of the league were to be raised by collections and subscriptions, no authority was ever given to any agent of the league to bind the personal credit of the members, who were entitled to presume that all expenses would be paid from the funds so obtained.

In Hosman v. Kinneally (1904) 43 Misc. 76, 86 N. Y. Supp. 263, the plaintiff sought to recover for services performed on a newspaper, from the treasurer of a political party which conducted the paper. By statutory provision the plaintiff had no right of action against an unincorporated association unless he might have proceeded against all the members of the association. It was held that the members of the party had never contemplated or authorized the transaction of business on their credit, nor would such authorization be presumed

on the part of the members of an association except where the business transacted was necessary for the preservation of the association.

In Lightbourn v. Walsh (1904) 97 App. Div. 187, 89 N. Y. Supp. 856, wherein the plaintiff, an employee on a paper published by the political party of which the defendant was treasurer, sought to recover for his services, it was held that he could not recover, since it did not appear that authority had ever been given to the defendant to contract any debts in excess of the funds established by the payment of membership dues. No assumption could be made that the members of a political party pledged their personal credit for the business of the paper.

In Devoss v. Gray (1871) 22 Ohio St. 159, it appeared that the plaintiffs had erected a building for an unincorporated religious society, and it was sought to hold the deacons and trustees thereof liable for an unpaid balance due on the work. It was decided that to hold the deacons liable as principals, it would be necessary to show that, as members of the church, they had sanctioned or ratified the business transactions of the building committee which had ordered the work done. Since there was no averment or proof going to show such authorization on the part of the defendants, they could not be held liable.

In Flemyng v. Hector (1836) 2 Mees. & W. 172, 150 Eng. Reprint, 716, 2 Gale, 180, 6 L. J. Exch. N. S. 43, it appeared that the defendant was a member of a club to which the plaintiff had sold a quantity of wine. The rules of the club provided that the members should pay cash for all services, and provided for a committee to manage the affairs of the club. It was sought to hold the defendant liable for the purchase of wine by the club. The court held that since the club had provided to finance its affairs a fund composed of the entrance and annual fees of the members, paid in ready money, for all services, there was no ground for taking the position that the members had authorized the committee to pledge

their credit when making purchases for the club.

In Re St. James Club (1852) 2 De G. M. & G. 383, 42 Eng. Reprint, 920, wherein it was sought to wind up the affairs of an insolvent club, the question arose as to the liability of the members thereof for the obligations incurred. The court said: "The law

is now settled that no member of a club is liable to a creditor except so far as he has assented to the contract in respect of which such liability has arisen." It was pointed out that those who concur in an expenditure become bound thereby, but that in this case the committee had exceeded the power given them when they undertook to issue debentures.

In Todd v. Emly (1841) 7 Mees. & W. 427, 151 Eng. Reprint, 832, 10 L. J. Exch. N. S. 161, subsequent appeal in (1841) 8 Mees. & W. 505, 151 Eng. Reprint, 1138, 10 L. J. Exch. N. S. 262, wherein the plaintiff sought to hold the defendants liable for wine purchased for a club by the steward, it appeared that the defendants were members of the committee for the management of the club, the members of which paid into a fund entrance fees and annual dues, all refreshments being paid for in cash. It was held that in order to hold the defendants liable, it would be necessary to show that the obligation was incurred with their knowledge.

In Rohl v. Pfaffenroth (1915) 31 West. L. Rep. (Can.) 197, wherein the plaintiff sought to recover on a contract for the erection of a church for an unincorporated religious society, it was held that those members who had evidenced their dissent from the building plan could not be held liable on the obligation.

had the defendant been present or a party to any of the later transactions. It was held that the defendant could not be held liable as a member of the association.

II. Liability as partner.

a. In absence of statute.

In at least two jurisdictions, in the absence of statute, members of a voluntary association not organized for profit are held to be liable as partners for the contracts entered into on behalf of the association. Wilkins v. St. Mark's Church (1874) 52 Ga. 351; Thurmond v. Cedar Spring Baptist Church (1900) 110 Ga. 816 36 S. E. 211; Fetner v. American Nat. Bank (1915) 15 Ga. App. 736, 84 S. E. 185; Shiflett v. John W. Kelly & Co. (1915) 16 Ga. App. 91, 84 S. E. 606; Chick v. Trevett (1841) 20 Me. 462, 37 Am. Dec. 68; McKenney v. Bowie (1900) 94 Me. 397, 47 Atl. 918.

In Fetner v. American Nat. Bank (1915) 15 Ga. App. 736, 84 S. E. 185, the court said: "The court did not err in not charging the jury that the defendants would not be liable unless they had, after joining the voluntary association, delegated to the signer of the note power and authority to bind them."

In Nolan v. McNamee (1914) 82 Wash. 585, 144 Pac. 904, the court, while not passing directly on the subject, held that each member of a voluntary association is individually bound for all the debts thereof, and that the liability is joint and several.

And in Korstad v. Williams (1914) 80 Wash. 452, 141 Pac. 881, it was held that a college fraternity, an unincorporated association, had been correctly specified in a pleading as a copartnership.

In Wilkins v. St. Mark's Church (Ga.) supra, wherein suit on a contract was brought against an unincorporated church, service having been made on its officers, the court said that if all the members had been served, they, the members, might have been held liable "as joint promisors, contracting through an agent, or as partners, contracting in a firm name.”

Thurmond v. Cedar Spring Baptist

Church (1900) 110 Ga. 816, 36 S. E. 221, was an action against a church for money due on a contract to erect a building. The court held that a voluntary association such as the defendant could not be sued, but that its members were "liable on its contracts as joint promisors or partners."

In Fetner v. American Nat. Bank (1915) 15 Ga. App. 736, 84 S. E. 185, it was shown that the defendants were members of a social club, and had been present at the meeting when it was organized. It was held that they might properly be considered as partners in the undertaking, with the result that all might be bound by the acts of one when such acts were within the scope of the partnership business. Their belief that they would not be liable for the debts of the association was immaterial.

In Shiflett v. John W. Kelly & Co. (1915) 16 Ga. App. 91, 84 S. E. 606, wherein a suit was brought for liquor, it appeared that the goods had been purchased for a "locker club" of which the defendant was a member and also the treasurer and steward. It was held that "any of the individual members of the locker club could have been held liable on its contracts as general promisors or partners." The defendant was also liable as an agent of an irresponsible principal, an unincorporated association.

Chick v. Trevett (1841) 20 Me. 462, 37 Am. Dec. 68, was an action on an instrument signed by the defendants as trustees, whereby they promised to pay the plaintiff for building a parsonage. The defendants were members of a voluntary association formed for various purposes, including the building of the house. It was held that if the defendants were to be considered as representatives of a voluntary association, they might be held liable as members of that body. nonjoinder of the other members, the defendants should have pleaded in abatement.

For

In McKenney v. Bowie (Me.) supra, the action was on a promissory note signed by the defendants as "trustees" and treasurer of the Durham Agricultural & Horticultural So

ciety, which was an association including the defendants. The court said: "Not being incorporated, all of the associated persons were liable upon contracts lawfully made by the association. Those sued being associates, and not interposing the objection that others bound were not sued, cannot escape liability on the note, whether it is regarded as the note of the association or of the individual signers."

b. Under statute.

In Vermont, by statute, all the members of a voluntary association not organized for profit are individually liable to execution creditors for the amount of a judgment remaining unpaid after execution on the joint property. F. R. Patch Mfg. Co. v. Capeless (1906) 79 Vt. 1, 63 Atl. 938; Harbell v. Gifford (1906) 79 Vt. 369, 65 Atl. 80, later appeal in (1909) 82 Vt. 222, 72 Atl. 921, 17 Ann. Cas. 1143.

In Tarbell v. Gifford (1906) 79 Vt. 369, 65 Atl. 80, wherein it was sought to hold the defendants liable as members of an unincorporated association, it was held that, under the statute, an execution creditor might proceed for the amount of his judgment remaining unsatisfied after the sale of association property, against any one or more of the members thereof.

In F. R. Patch Mfg. Co. v. Capeless (Vt.) supra, it appeared that a judgment was obtained against an association of which the defendants were members, The judgment had not been satisfied, and the plaintiff endeavored to recover the amount unpaid thereon from the defendants as members of the association. It was held that, by operation of the statute, the members of the society were individually liable.

In Tarbell v. Gifford (1909) 82 Vt. 222, 72 Atl. 921, 17 Ann. Cas. 1143, the plaintiffs brought an action against the defendants as members of an agricultural society for professional services rendered the society as attorneys at law. The plaintiffs had recovered judgment against the society which had been satisfied only in part

by execution thereon. The court held that the judgment against the agricultural society was conclusive of the lia

bility of those who were members when the liability merged in the judgment was created. R. S.

V.

parties.

The facts are stated in the opinion Argued before Buffington, Woolley, and Haight, Circuit Judges.

Mr. E. A. Merrill for appellant. Mr. Conover English, for appellee: The administratrix of the estate is an indispensable party, without whom the case cannot proceed, and whose presence would oust the court of jurisdiction.

Groel v. United Electric Co. 132 Fed. 252; Gibson v. Shufeldt, 122 U. S. 27, 29, 30 L. ed. 1083, 1084, 7 Sup. Ct. Rep. 1066; Swan Land & Cattle Co. v. Frank, 148 U. S. 603, 611, 37 L. ed. 577, 580, 13 Sup. Ct. Rep. 691; McArthur v. Scott, 113 U. S. 340, 28 L. ed. 1015, 5 Sup. Ct. Rep. 652; Waterman v. Canal-Louisiana Bank & T. Co. 215 U. S. 33, 54 L. ed. 80, 30 Sup. Ct. Rep. 10; Buchanan v. Buchanan, 75 N. J. Eq. 274, 22 L.R.A. (N.S.) 454, 138 Am. St. Rep. 563, 71 Atl. 745, 20 Ann. Cas. 91; Lake Street Elev. R. Co. v. Ziegler, 39 C. C. A. 431, 99 Fed. 114.

no

The complainant, Ryan, has standing to sue in the Federal court, or to prosecute this suit.

Gibson v. Shufeldt, 122 U. S. 27, 29, 30 L. ed. 1083, 1084, 7 Sup. Ct. Rep. 1066; Whitney v. Robbins, 17 N. J. Eq. 360; Mallory v. Kirkpatrick, 54 N. J. Eq. 50, 33 Atl. 205; Kinmouth v. White, 61 N. J. Eq. 358, 48 Atl. 952; Disborough v. Outcalt, 1 N. J. Eq. 298; Has

of the court.

ton v. Gastner, 31 N. J. Eq. 697; Iauch v. De Socarras, 56 N. J. Eq. 524, 39 Atl. 381; Merchants' & M. Transp. Co. v. Borland, 53 N. J. Eq. 282, 31 Atl. 272; First Nat. Bank v. White, 60 N. J. Eq. 487, 46 Atl. 1092; Lanning v. Parker, 84 N. J. Eq. 429, 94 Atl. 64; Lilienthal v. Drucklieb, 34 C. C. A. 657, 92 Fed. 753; Huff v. Bidwell, 81 C. C. A. 43, 151 Fed. 563; Handley v. Stutz, 137 U. S. 366, 34 L. ed. 706, 11 Sup. Ct. Rep. 117.

Woolley, Circuit Judge, delivered the opinion of the court:

In August, 1912, Equitable Life Assurance Society issued to David T. Finnie a policy of life insurance for $5,000 on an annual premium of $159.55. Finnie paid the first and second premiums and enough of the third to keep the policy alive until January 20, 1915. Until payment of the balance of the third premium on this date, the policy had no surrender value and was not entitled to full payment of the third premium participate in dividends; and unless were made on this date the policy lapsed. On payment of the balance of the premium, the policy acquired a surrender value of $190.

The insured, being unable to pay

the premium and longer to carry the policy, offered to dispose of it to Sarah H. Kelsey, the defendant below, for a sum sufficient to pay the balance of the premium of $120 and to yield him $95. Kelsey accepted the offer. The transaction was completed by an assignment of the policy under circumstances which raised the question in this suit, whether the assignment of the policy was made as collateral security for a loan of $215 $120 premium balance and $95 cash-or was absolute and was made for the outright sale of the policy in consideration of the money that passed.

The annual premiums subsequent ly maturing were paid by Kelsey until 1917, when Finnie died. Thereupon, Kelsey proved the death of the insured and collected from the society the principal of the policy.

Nelle E. Finnie, the widow of the insured, was in due course granted letters of administration of the estate of her husband. William Ryan, a creditor of the insured, and later the complainant in this action, instituted suit in a state court and recovered judgment against the administratrix, execution on which was returned unsatisfied. Ryan, a citizen of the state of New York, singly and alone, filed a bill of complaint against Sarah H. Kelsey, a citizen of New Jersey, in the district court of the United States for the district of New Jersey, to enforce his judgment, subsequently joining Nelle E. Finnie, as co-complainant, not in her capacity of administratrix, but "as sole distributee" of her husband's estate.

The scope of the bill of complaint is disclosed by its prayer, which is, in substance, that the assignment of the policy be declared to be a security only for such sums as the defendant advanced to the insured during his lifetime, together with interest thereon; that the defendant be declared a trustee of the balance of the insurance moneys for the benefit of the estate of the insured, and that the defendant make an accounting of this trust to Nelle E. Finnie, the

administratrix, and pay over to her as administratrix the balance which such accounting shall show remains in her hands, with interest.

Aside from answering the complainant's bill on the merits, the defendant challenged the right of Ryan, as creditor of the insured, to maintain this action on behalf of the estate of the insured, and also the right of Nelle E. Finnie to maintain this action as distributee of the estate, and challenged also the jurisdiction of the court on the ground that Nelle E. Finnie, in her capacity of administratrix, is a necessary party, and that, being also a citizen of New Jersey, her joinder would instantly oust the court of jurisdiction for lack of diversity of citizenship. The cause coming on to be heard, the court dismissed the bill on two grounds: "First, that the administratrix was a necessary party, and that if she be made a party there would be a lack of diversity of citizenship; second, that the evidence would not justify the changing of the assignment (which was absolute in its terms) into a collateral one."

We refer to Finnie v. Walker, 5 A.L.R. 831, C. C. A., 257 Fed. 698, a case involving other insurance transactions of the same David T. Finnie and cited by both parties as sustaining their respective contentions, merely to dispose of it in a manner that will make certain that the decision in the instant case does not disturb that decision. That case, brought on other policies of insurance issued to the same insured and decided by the district court of the United States for the southern district of New York adversely to the plaintiff, prior to the argument before us, was cited by the defendant as ruling this case. As that decision has since been reversed by the United States circuit court of appeals for the second circuit, the decision of the latter court is now cited by the complainant with equal insistence as ruling the case in his favor. The case cited and mutually relied on was brought by the administratrix