International Fraternal Alliance v. State

Citations

• 86 Md. 550
• 40 L.R.A. 187
• 39 A. 512
• 1898 Md. LEXIS 15

Syllabus

<p>Benefit Societies— Life Insurance by Fraternal Association — Exceeding Powers—Forfeiture of Charter.</p> <p>Defendant was incorporated under Code, Art. 23, sec. 127, etc., for social fraternal and beneficial purposes with a capital stock of $10,000, and was reincorporated under the Act of 1894, chap. 295, as a fraternal beneficiary association. Under Code, Art. 23, sec. 127, etc., no insurance could be issued by such a society for a greater sum than $1,000 on any one life, and associations formed under the Act of 1894 were required to have a representative form of government, and be conducted not for profit, but for the sole benefit of the members The defendant issued policies of insurance in excess of $1,000 on single lives, which it was not authorized to do as a fraternal society and which only a regularly constituted insurance company was empowered to issue. The business of the defendant as a fraternal benefit society under the Act of 1894, and its business as a benefit insurance society with a capital stock were blended together and the whole was conducted for the profit of the stockholders. Held, that the defendant had violated its charter by issuing policies in excess of the amount authorized and also in attempting to evade the law relating to fraternal societies and that its charter should be forfeited.</p> <p>The provision of Code, Art. 23, sec. 263, authorizing proceedings to restrain a corporation from transacting any business not authorized by its charter does not exclude other proceedings against a corporation for the abuse or misuse of its powers.</p>