bill in the superior court of Cook county, based on the judgment of March 13, to discover and reach moneys in the hands of the association. The defendant was served with summons, just as it was in the suit at law. No answer being made, it was defaulted. The officers of the association answered1 for themselves and the other members of the association, and upon their answer being replied to, the cause was referred to a master, and proofs were taken upon the issue thus formed. The decree of the court was in favor of complainant. Defendants severally prayed an appeal, but afterward withdrew their prayer for appeal, and John E. Fitzpatrick, as receiver of the association, having been appointed by the circuit court on July 21, 1894, made himself a party to the cause and perfected the appeal. The cause was taken to the appellate court for the First district, and is brought here to reverse the decision of affirmance in that court.

The first ground upon which appellant relies for reversal here is that the circuit court had no jurisdiction over the person of the defendant association, as it was sued as a corporation, summons being issued and served upon its officers only, instead of each of the members, as should have been done, to bring a voluntary association within the jurisdiction of the court. If a court has proceeded without jurisdiction, its judgment is absolutely void for every purpose, and will be so declared in any court in which it may be presented, and that question is, therefore, proper to be considered here. But we think, from an examination of the record, the appellate court and the trial court were justified in finding, from the evidence, that the association was a de facto corporation, and properly served with process. The Switchmen's Mutual Aid Association of North America had an organization, consisting of directors, a president, secretary and other officers. Its name implied a corporate body. It authenticated its acts by a common seal and exercised corporate powers, and it is thus estopped from denying its corporate existence. United States Express Co. v. Bedbury, 34 Ill. 459.

Judgment affirmed.

Note. See, 1695, Knight v. Corporation of Wells, 1 Lutw. f. 508; 1729, Henriques v. Dutch West India Co., 2 Ld. Raym. 1532; 1842, Stone v. Berkshire Congregational Society, 14 Vt. 86; 1848, Johnston v. South West R. Bank, 3 Strob. Eq. (S. C.) 263; 1851, Stoddard v. Onondaga Conference, 12 Barb. (N. Y.) 573; 1857, Abbott v. Aspinwall, 26 Barb. (N. Y.) 202; 1858, Kennedy v. Cotton, 28 Barb. (N. Y.) 59; 1860, Dooley v. Cheshire Glass Co., 15 Gray (Mass.) 494; 1860, Calender v. Painesville, etc., R. Co., 11 Ohio St. 516; 1864, The United States Express Co. v. Bedbury, 34 Ill. 459, holding that the name "The United States Express Co." imported a corporation; 1871, McCullough v. Talladega Ins. Co., 46 Ala. 376; 1874, Grape Sugar and Vinegar Mfg. Co. v. Small, 40 Md. 395; 1879, Humphrey v. Patrons Mercantile Assn., 50 Iowa 607; 1881, Empire Mfg. Co. v. Stuart, 46 Mich.

1 This answer, as stated in the report of the case in 58 Ill. App. 532, on 533, alleged that "it was a voluntary association having several thousand members throughout the United States and Canada; that it was not incorporated under the laws of this or any other state or country; that it did not hold itself out to the public or to its members as a corporation, and that it was not a corporation de facto." The master found these allegations to be substantially true. See 58 Ill. App. 534.

482; 1882, Dobson v. Simonton, 86 N. C. 492; 1886, Kelly v. Newburyport & A. H. R., 141 Mass. 496, 6 N. E. 745; 1888, Williams v. Stevens Point Lumber Co., 72 Wis. 487; 1891, Scheufler v. Grand Lodge A. O. U. W., 45 Minn. 256; 1892, Roll v. St. Louis, etc., Smelting & M. Co., 52 Mo. App. 60; 1893, Stewart Paper Mfg. Co. v. Rau, 92 Ga. 511, 17 S. E. 748; 1893, Meneer v. Detroit Mut. Benev. & P. Assn., 95 Mich. 451; 1898, Bishop v. Kent & Stanley Co., 20 R. I. 680, 9 Am. & E. C. C. (N. S.) 718.

Sec. 170.

(2) The associates.

(a) Among themselves.

FOSTER v. MOULTON.

1886. IN THE SUPREME COURT OF MINNESOTA. 35 Minn. Rep. 458-460.

Appeal by defendant, E. H. Moulton, from an order of the district court for Blue Earth county, Severance, J., presiding, overruling his separate demurrer to the complaint.

BERRY, J. The complaint in this action sets out what purports to be the articles of incorporation of a mutual benefit association, which appears to have been intended to be a sort of mutual insurance company, and alleges that said articles were duly executed by defendants, and duly recorded with the register of deeds and secretary of state; that one McCarthy became a member of the association, paid his dues and received a certificate of membership; that he sustained bodily injury, entitling him, as such member, to pecuniary benefit; that the amount due him under the terms of his membership has not been paid, and that he has duly assigned his right to such benefit to the plaintiff.

The association did not comply with the statute so as to become an insurance corporation de jure. The appellant (one of the defendants) contends that it was duly incorporated as a benevolent society under Gen. Stat. 1878, ch. 34, title iii. This can not be so, for it is no more a benevolent society than any mutual insurance company, or other mutual company, or any partnership of which one member undertakes to do something for the pecuniary advantage of another member in consideration of the undertaking of the latter to do a like thing for him. The undertaking is not in any proper sense benevolent, but it is for a quid pro quo it paid for. People v. Nelson, 46 N. Y. 477. The association involved in the case at bar is, in substance, for purposes of mutual insurance. State v. Merchants' Exch. Mut. Benev. Soc., 72 Mo. 146; State v. Benefit Assn. 6 Mo. App. 163; Commonwealth v. Wetherbee, 105 Mass. 149; May Ins., § 550, a.

But notwithstanding it is not a corporation de jure, we think it must at least, as between its members, be regarded as a corporation. de facto. It is manifest that the understanding between the members and the basis upon which certificates of membership were issued was that the association was a corporation in fact as it was in form. Morawetz Priv. Corp., § 139. It never could have been intended or ex

bected that the members of the association, whether original founders -members like defendants—or those who should become members by joining at any time, should or would be liable as individuals, either jointly or severally, to any particular member who should, by virtue of and under the terms of his membership, become entitled to pecuniary relief or benefit. On the contrary, the intention and the real contract was that the association, as a corporation in the contemplation of the parties, i, e., the members, should be liable, and the association only. In such a state of facts, though the association is not a corporation de jure, and perhaps not for every purpose a corporation de facto, it is as between the members themselves to be treated as a corporation de facto (for that is the way in which the contract of the parties treats it), and the right of a member to pecuniary benefit from the association by virtue of his membership must stand upon the basis that it is a corporation de facto. Being presumed to know the signifi cance of his membership, its rights and liabilities (Coles v. Iowa State Mut. Ins. Co., 18 Iowa 425), he is estopped to take any other position. This is not only intrinsically just and fair, but it is in accordance with the principles of the authorities. Morawetz Priv. Corp., $8 131, 132, 134-137; Buffalo & A. R. Co. v. Cary, 26 N. Y. 75, followed in 57, 64, 67 N. Y., and 95 U. S.; White v. Ross, 4 Abb. Dec. 589; Aspinwall v. Sacchi, 57 N. Y. 331; Eaton v. Aspinwall, 19 N. Y. 119; Sands v. Hill, 46 Barb. 651; Sanger v. Upton, 91 U. S. 56; Chubb v. Upton, 95 U. S. 665.

It is important to bear in mind that no fraud is alleged against defendant; and, further, that this is a case in which a member of the association is seeking relief by virtue of his membership. If the action were between a purported or pretended corporation, which was wholly unauthorized and invalid, and a stranger, different rules and principles might, in some circumstances, be involved.

The application of the foregoing views is that, the action having been brought against defendants as individuals merely, the general demurrer of the appellant, who was one of the defendant members of the association, was erroneously overruled. The overruling order is accordingly reversed.

Note. See note to next case, infra, p. 649.

Sec. 171. Same.

(b) As to the corporation or its creditors.

1. Upon subscription liability.

CANFIELD v. GREGORY.1

1895. IN THE SUPREME COURT OF ERRORS OF CONNECTICUT. 66 Conn. Rep. 9-23.

* *

BALDWIN, J. * The plaintiff sues as trustee in insolvency of a joint-stock corporation, upon an assessment which it has called in upon Only part of the opinion is given.

the defendant's stock, and the only answer is nul tiel corporation. The second reply is that, however this may be, the defendant is estopped from making such a defense, because the debts, whose existence have made the company insolvent, are due to creditors who trusted it as a corporation, because they were led to believe that it was such by the acts of the defendant, in promoting its organization, publishing its articles of association, acting as a director and as its president, and contracting in its name and behalf these very liabilities.

It is claimed that these averments were not sufficient, because no bad faith, willful wrong or gross carelessness is charged. No such charges were necessary. The plaintiff represents the rights of the creditors of an insolvent company, who contracted with it as being a corporation. Whatever rights they formerly had against those who were its members he now has. They were led to believe in the existence of such a corporation by the acts of the defendant, as a promoter, stockholder, director and president of the company, which are set out in the reply. It was natural that such acts should induce that belief. He had means of knowledge as to the manner in which the company was organized which were not possessed by the public in general. Had he in fact known that its organization was so defective that the corporation, in whose name he was contracting, had no existence, or was incapable of transacting business, his acts would have been no more prejudicial to the other contracting parties. It is not his intent, so much as the result of his conduct, which determines his liability.

The modern estoppel in pais is of equitable origin, though of equal application in courts of law. It is much more than a rule of evidence. It establishes rights; it determines remedies. An equitable estoppel does not so much shut out the truth as let in the truth, and the whole truth. Its office is not to support some strict rule of law, but to show what equity and good conscience require, under the particular circumstances of the case, irrespective of what might otherwise be the legal rights of the parties. The key to its application is not infrequently to be found in the rule that in matters of trust and confidence, when one of two innocent persons must suffer, in consequence of the acts of one of them, the loss must generally be borne by him who thus occasioned it. Horn v. Cole, 51 N. H. 287, 12 Am. Rep. 111; Stevens v. Dennett, ibid. 324, 330; 2 Pomeroy's Eq. Juris., § 802.

This rule clearly governs the case at bar. It is true that it does not extend to acts or representations not naturally calculated to mislead, and on which others had no right to rely. Danforth v. Adams, 29 Conn. 107. But those of the defendant were addressed to the public and to the parties injured. They came from one who was in a position to know what he affirmed. They gained credit to an organization in which he was interested. The company was a de facto corporation. Its creditors, who contracted with it as a corporation, could not hold the individuals who had associated to form it personally liable as co-partners, for with them no contract had been made. 2 Morawetz on Private Corporations, § 748. The defendant was thus shielded from

partnership liability by his representations as to its corporate character, and on these representations those with whom he dealt as one of its officers had a right to rely. Northrop v. Bushnell, 38 Conn. 498, 511; West Winsted Savings Bank v. Ford, 27 Conn. 282, 289.** It was not in dispute between the parties to this cause that the articles of association and organization certificate were sufficient in form, and that they were duly published and filed for record. The only issue tendered by the answer was upon the allegation that there was not and never had been any such corporation as that of which the plaintiff claimed to be a trustee, but the estoppel set up in the reply had a broader reach, and was invoked to preclude the defendant from denying that the corporation ever existed, and that it was capable of contracting debts and making calls on stock subscriptions.

As the case was tried in the court below in this broader aspect, and as if turning on the right of the defendant to rely on the falsity of material statements in the organization certificate, we have treated it from the same point of view, although it may be that, in strictness, the answer was disproved by the admitted facts, which went to show that a corporation was organized, although it never became legally competent to commence business. If this be so, the plaintiff would no less have been entitled to a verdict on the issues closed.

There is no error in the judgment appealed from.
In this opinion the other judges concurred.

Note. 1. As to subscription liability. 1819, Chester Glass Co. v. Dewey, 16 Mass. 94, 8 Am. Dec. 128; 1850, Oswego & S. P. R. Co. v. Rust, 5 How. Pr. (N. Y.) 390; 1856, Eaton v. Aspinwall, 13 How. Pr. (N. Y.) 184; 1857, Stoops v. Greensburgh P. R. Co., 10 Ind. 47; 1859, Rice v. Rock Island & A. R. Co., 21 Ill. 93; 1862, Buffalo & A. R. Co. v. Cary, 26 N. Y. 75; 1873, Montpelier & W. R. Co. v. Langdon, 46 Vt. 284; 1873, Upton v. Hansbrough, 3 Biss. 417, Fed. Cas. 16,801; 1874, Ossipee Hosiery & W. Mfg. Co. v. Canney, 54 N. H. 295; 1875, Parker v. North Cent. M. R. Co., 33 Mich. 23; 1877, Baile v. Calvert Ed. Soc., 47 Md. 117; 1878, Dows v. Naper, 91_Ill. 44; 1880, Home Ins. Co. v. Sherwood, 72 Mo. 461; 1885, Thompson v. Reno Sav. Bank, 19 Nev. 103, 3 Am. St. Rep. 797, with note, p. 806; 1888, Aultman v. Waddle, 40 Kan. 195, 19 Pac. Rep. 730; 1890, National Com. Bank v. McDonnell, 92 Ála. 387; 1894, American Homestead Co. v. Linigan, 46 La. Ann. 1118, 15 So. Rep. 369; 1893, Building & L. Assn. v. Chamberlain, 4 So. Dak. 271,56 N. W. Rep. 897; 1895, Greenbrier Indus. Ex. v. Squires, 40 W. Va. 307, 52 Am. St. Rep. 884; 1898, In re Davis Estate v. Watkins, 56 Neb. 288, 76 N. W. Rep. 575.

2. But preliminary subscriptions to the stock of a corporation to be formed are presumed to be made with the understanding that a de jure corporation will be formed, and hence if there is no other ground of estoppel than the mere subscription, the subscriber is not estopped from denying that there is a valid corporation. 1874, Indianapolis F. & M. Co. v. Herkimer, 46 Ind. 142; 1879, Rickhoff v. Brown's R. S. S. M. Co., 68 Ind. 388; 1894, Capps v. Hastings Pros. Co., 40 Neb. 470, 42 Am. St. Rep. 677, 24 L. R. A. 259, 58 N. W. Rep. 956, supra, p. 239. But see Dorris v. French, 4 Hun (N. Y.) 292 (1875).

3. What acts will raise an estoppel.

(a) Payments on calls estop: 1864, Ohio, etc., R. v. McPherson, 35 Mo. 13, 86 Am. Dec. 128; 1866, Boggs v. Olcott, 40 Ill. 303; 1879, Rickhoff v. Machine Co., 68 Ind. 388; 1880, Musgrave v. Morrison, 54 Md. 161; 1886, Bell's Appeal, 115 Pa. St. 88, 2 Am. St. Rep. 532; 1891, Minnesota Gaslight Ec. Co. v. Denslow, 46 Minn. 171, 48 N. W. Rep. 771; 1895, Greenbrier Indus. Ex. v. Squires, 40 W. Va. 307, 52 Am. St. Rep. 884.