Opinion
Filed 22 November, 1950.
1. Associations 5: Common Law — The common law rule that a unincorporated association has no legal entity and can neither sue nor be sued in its own name obtains in this State except to the extent it has been modified by statute. G.S. 4-1.
2. Parties 1 — An action must be prosecuted in the name of the real party in interest. G.S. 1-57, G.S. 1-68.
3. Associations 5 — The common law rule that an association is without power to sue in its common name has been modified by statute in this State only to the extent of permitting an association to sue in its common name in an action concerning a certificate or policy of insurance issued by it, and in other cases permitting one or more members of an association to sue for the benefit of all when its members are so numerous that it is impractical to bring them all before the court, G.S. 1-70, and provisions of this statute are controlling and preclude an association from suing in its common name on a cause of action unrelated to insurance.
PETITION by defendants, appellees, to rehear the case reported ante, 252, 59 S.E.2d 829, where the facts as shown in the record on appeal are stated.
Elledge Browder and Eugene E. Phillips for plaintiff.
Ingle, Rucker Ingle for petitioners.
DEVIN, J., dissenting.
ERVIN, J., concurs in dissent.
The ground on which the petition to rehear, now in hand, is based is that, in passing upon the question as to whether plaintiff has the legal capacity to sue in this action, the provisions of G.S. 1-70 were not taken into consideration, and that the conclusion reached was made to rest upon statutes which are not pertinent. It is contended, and we think properly so, that the provisions of G.S. 1-70 are pertinent to and determinative of the question.
It is well settled that at common law an unincorporated association was not recognized as having legal entity, and could not sue or be sued in the association name. The common law required the action to be brought by or against the members composing the association. In this State, so much of the common law as has not been abrogated or repealed by statute is in full force and effect. G.S. 4-1, formerly C.S. 970. Scholtens v. Scholtens, 230 N.C. 149, 52 S.E.2d 350, and cases there cited.
And in this State the statute on civil procedure, Chapter 1 of the General Statutes, provides that every action must be prosecuted in the name of the real party in interest, G.S. 1-57; and that all persons having an interest in the subject of the action and in obtaining the relief demanded may be joined as plaintiffs, either jointly, severally, or in the alternative, except as otherwise provided, G.S. 1-68.
And G.S. 1-70, as now constituted, a consolidation of what was formerly C.S. 457, and an act amendatory thereof, Chapter 182 of Public Laws of 1933, relates to "Joinder of Parties"; and to "Actions by or against one for the benefit of a class." In pertinent part G.S. 457 reads as follows: "Of the parties to the action, those who are united in interest must be joined as plaintiffs or defendants," and "When the question is one of common or general interest of many persons, or where the parties are so numerous that it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all."
The 1933 Act amended C.S. 457 "by adding another section thereto as follows: Any and/or all unincorporated, beneficial organizations, fraternal benefit orders, associations and/or societies, or voluntary fraternal beneficial organizations, orders, associations and/or societies issuing certificates and/or policies of insurance, foreign or domestic, now or hereafter doing business in this State, shall have the power to sue and/or be sued in the name commonly known and/or used by them in the conduct of their business to the same extent as any other legal entity established by law, and without naming any of the individual members composing it: Provided, however, this act shall apply only in actions concerning such certificates and/or policies of insurance."
Thus it is clear that the General Assembly has, by the provisions of G.S. 1-70 abrogated the common law in respect of the parties to an action at law to the extent, and only to the extent that (1) "when the question is one of common or general interest of many persons, or where the parties are so numerous that it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all"; and (2) when an unincorporated association of the kind or character enumerated, is engaged in issuing certificates and policies of insurance, or either, and doing business in this State, it may sue or be sued in any action concerning such certificates and policies, or either, without naming any of the individual members composing it.
In the present action, plaintiff alleges in its complaint that it is "an unincorporated fraternal organization or society," but there is no allegation, proof or suggestion that it is engaged in the business of, issuing certificates and policies of insurance, or of either. Therefore, plaintiff, as an unincorporated fraternal association, may not, as such, maintain an action at law, — but the provisions of the statute are open to its members.
It is noted that the opinion reported ante, at 252, recognizes the uniform holding of the courts that following the rule of common law an unincorporated association does not have the capacity to sue, unless given that capacity by some pertinent statute. And the opinion points out, G.S. 1-97 (6), requiring certain unincorporated associations to appoint process agents, and G.S. 39-24 through G.S. 39-27, authorizing certain voluntary organizations and associations to acquire, hold and convey real estate, as grants of implied authority. It would seem, however, that the provisions of G.S. 1-70 bear directly and expressly upon the question presented, and are controlling.
Hence the petition is allowed, and the judgment from which appeal is taken is affirmed.
Petition allowed.