This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A voluntary association consists of a number of natural persons, united together without being incorporated, for some purpose other than carrying on a profession or business, or making profits.1 It usually takes the form of internal organization of a corporation not for profit, and exists for the same purposes as such corporations.2 The mere fact of membership in a voluntary association does not of itself render each member liable for contracts entered into by such association.3 Thus an association of pilots, having no power to contract for pilot fees is not bound by a contract of a member on their behalf.4 Subscribers to a law and order league's guaranty fund are not personally liable to an attorney retained by its officers even if they know and approve of such employment.5 A member is not liable for debts incurred before he became a member.6 In order to hold a member for a contract of such an association it must be shown that he either authorized it or ratified it. He may authorize such contract in three ways: First, he may join the association understanding that a part of its objects was making such contracts.7 Thus a member of a polo team who joins understanding that certain expenses were to be incurred in which he should share is liable thereon.8 Second, he may specifically authorize the contract in question.9 Third, his authority may be shown by the fact that he was instrumental in making the contract.10 Thus persons who sign as directors,11 or as treasurer,12 or allow their names to be used as officers,13 or themselves make the contract as a committee,14 bind themselves personally. Thus subscribers to a fund as a bonus to induce a factory to locate in their town are not liable for the contracts of an alleged association with no definite members, formed at a citizens' meeting, to secure such location.15 A member may ratify contracts expressly, or impliedly as by accepting benefits which he knows or should know were obtained by such contract. Such an association cannot go out of existence, with contracts outstanding.16
1 Grand Grove v. Garibaldi Grove, 130 Cal. 116; 80 Am. St. Rep. 80; 62 Pac. 486; Lewis v. Tilton, 64 Ia. 220; 52 Am. Rep. 436; 19 N. W. 911; Brown v. Stoerkel, 74 Mich. 269; 3 L. R. A. 430; 41 N. W. 921; Burt v. Lathrop, 52 Mich. 106; 17 N. W. 716; Abels v. McKeen, 18 N. J. Eq. 462; Ash v. Guie, 97 Pa. St. 493; 39 Am. Rep. 818; Kalbitzer v. Goodhue, 52 W. Va. 435; 44 S. E. 264.
2 "Associations of this character are not bodies politic or corporate; nor are they recognized by the law as persons. They are mere aggregates of individuals, called, for convenience, like partnerships, by a common name." Grand Grove v. Garibaldi Grove, 130 Cal. 116, 119; 80 Am. St. Rep. 80; 62 Pac. 486.
3 Clark v. O'Rourke, 111 Mich. 108; 66 Am. St. Rep. 389; 69 N. W. 147; McFadden v. Leeka, 48 O. S. 513; 28 N. E. 874.
4 The City of Reading, 103 Fed. 696.
5 McCabe v. Goodfellow, 133 N. Y. 89; 17 L. R. A. 204; 30 N. E. 728.
6 Hornberger v. Orchard, 39 Neb, 639; 58 N. W. 425.
The members of the association may enforce a contract entered into with the association as made for their benefit.17 So where a superior labor organization took away the charter of an inferior association, the latter can sue on causes of action accruing in its favor.18 If a member of the association is liable in one of these ways, he cannot avoid liability because the contracting party did not know his name or identity.19
7 Lawler v. Murphy, 58 Conn. 294; 8 L. R. A. 113; 20 Atl. 457; Mc-Kenney v. Bowie, 94 Me. 397; 47 Atl. 918; Clark v. O'Rourke, 111 Mich. 108; 66 Am. St. Rep. 389; 69 N. W. 147.
8 Bennett v. Lathrop, 71 Conn. 613; 71 Am. St. Rep. 222; 42 Atl. 634.
9 Winona Lumber Co. v. Church, 6 S. D. 498; 62 N. W. 107.
10 Comfort v. Graham, 87 Ia. 295; 54 N. W. 242; Kierstead v. Bennett, 93 Me: 328; 45 Atl. 42; Fredendall v. Taylor, 23 Wis. 538; 99 Am. Dec. 203.
11 Pelton v. Place, 71 Vt. 430; 46 Atl. 63.
12 Kierstead v. Bennett, 93 Me. 328; 45 Atl. 42.
13 Murray v. Walker, 83 Ia. 202; 48 N. W. 1075. Contra, by statute, members of a G. A. R. post are not personally liable though they make the contracts in person for the post. Pain v. Sample, 158 Pa. St. 428; 27 Atl. 1107.
14 McKinnie v. Postles (Del.), 54 Atl. 798.
15 Cheney v. Goodwin, 88 Me. 563; 34 Atl. 420.
16 Camden, etc., Co. v. Guarantors, etc., 59 N. J. L. 328; 35 Atl. 796; Roper v. Burke, 83 Ala. 193; 30 So. 439; McFadden v. Murphy, 149 Mass. 341; 21 N. E. 868; Lafond v. Deems, 81 N. Y. 507; Strickland v. Prichard, 37 Vt. 324.
A difficulty in enforcing a contract against a voluntary association is found in the fact that the association can not be sued by name, but the individual members in the jurisdiction of the court must be made parties,20 unless by statute the association may be sued by its name. The statutory right to sue an association by name does not abrogate the Common Law right to sue the individual members,21 nor does it give a member a right to sue the association.22 Members of an association who are jointly liable cannot sue the association on a policy.23 So the adjuster of a voluntary association of dredgers who divides the work cannot sue the association because he does not get his share of their earnings.24
A note by a fluctuating society, signed individually by trustees, is considered in equity as a charge on their property,25 and an association though it has no power to borrow, may pledge a claim against an insolvent trust company for its deposits.26
17 Senour v. Maschinot (Ky.), 31 S. W. 481; Local Union, etc., v. Barrett, 19 R. I. 663; 36 Atl. 5; Acker-mann v. Schuetzen Verein (Tex. Civ. App.), 60 S. W. 366.
18 Wicks v. Monihan, 130 N. Y. 232; 14 L. R. A. 243; 29 N. E. 139.
19 Lawler v. Murphy, 58 Conn. 294; 8 L. R. A. 113; 20 Atl. 457.
20 Allnut v. Lancaster, 76 Fed. 131.
21 Jenkinson v. Wysner, 125 Mich. 89; 83 N. W. 1012.
22 Huth v. Humboldt Stamm, 61 Conn. 227; 23 Atl. 1084.
23 Perry v. Cobb, 88 Me. 435; 49 L. R. A. 389; 34 Atl. 278.
24 Potter v. Dredging Co., 59 N. J. Eq. 422; 46 Atl. 537.
25 Society of Shakers v. Watson, 68 Fed. 730; 15 C. C. A. 632.
26 Commonwealth v. Trust Co., 161 Mass. 550; 37 N. E. 757.