An association has no right to take and hold realty in the association name, and therefore it has no power to receive real property, either by gift or by bequest. This rule undoubtedly constitutes one of the great dis advantages of voluntary associations, and because of it many clubs and societies incorporate under the non stock, or membership, corporation laws of the vari ous states.' Corporations of this kind, formed ac cording to statute regulations, are generally, to all intents and purposes, the same as voluntary associa tions, except that they have a, separate and distinct right to bold property, and at least a part of their constitution and by-laws is contained in the public stat utes. These public statutes, of course, take preced ence over the provisions of' the constitution and by laws adopted by the society itself.
Voluntary associations may hold personal property, but the title rests in the individual members. It has been repeatedly held, in the absence of a statute to the contrary, that an association is disqualified from re ceiving a legacy bequeathed to it in its organization nom e.
_Associations are liable for all obligations contracted by- duly authorized agents, whether those agents have been appointed by express authority, or merely by im plication.
7. Meeting of constitution and by-laws usually prescribe the method of holding and conducting meetings, but in the absence of any provi sion the ordinary rules of parliamentary law govern.
8. Pozvers and liabilities of officers have only those powers which are conferred on them by the constitution' and by-laws, or to which they are entitled as a result of established custom. The law of principal and agent governs and for the purpose of binding an association, its officers will be considered agents if they can be proved to be such under the rules of agency. As a ffeneral rule, officers are personally responsible for contracts which they make with a third party in behalf of the association, unless the agreement itself clearly indicates a different arrangement. rul—e follows from the fact that the association has no legal existence.
9. Rights and liabilities of the ab sence of a rule to the contrary, a majority of members may bind the body to any contract that is in keep ing with the purpose of the association. Each mem ber of an association is liable for the debts that it in curs during his periods of membership, provided the debt has been contracted for the purpose of carrying out the objects of the association. Under this rule a member is liable for such debts even if action is not brought to recover thc amount of the debt till after the member has withdrawn.
According to the statutes of some states, an action may be brought against one or more members of an association as representatives of the organization, but these statutes ordinarily do not affect the right of the creditor to include all members whom he cares to hold personally liable.
10. Dissolution of associations.—The causes of the termination of an association are generally tbe same as those that affect a partnership, except that the death or the withdrawal of a member does not affect the association's existence. If there is no stip ulation to the contrary in the constitution or the by laws of the association, the existence of any conditions that show an abandonment of the purposes of the so ciety constitute a sufficient reason for its termination.
Upon the dissolution of a society, its property will be divided equitably among the creditors, and any thing that remains will be apportioned among the members. If funds have been impressed with a trust a society cannot dissolve and divide its funds among the members. Thus, it was held that the funds of
a Freemason lodge, accumulated in accordance with a by-law providing for their use "for the good of the craft, or for the relief of indigent and dis tressed worthy Masons, their widows and orphans," cannot be divided among the members upon dissolu tion.
11. Advantages of voluntary associations.—One important advantage of a voluntary association is the fact that it may be very simply formed. Its man agement is very flexible, for it may adopt such rules as it may deem expedient in the conduct of its business. It was urged before the Pujo Coimuittee that if the New York Stock Exchange were compelled to in corporate, "serious consequences of a detrimental char acter would be involved," since the present voluntary association method of organization is based on the con tractual relationship.
The present disciplinary power of the governing body is based on this contractual relationship. Under the contract fixing the terms of membership, every member agrees to ob serve the rules of the Exchange and submits himself to the jurisdiction of the Board of Governors to punish any viola tion of the rules by.fine, suspension or expulsion, as the case may be. The most effective of these rules are couched in the broadest language, to bring within their sweep not only acts that are wrongful from a legal point of view, but acts that are inconsistent with fair dealing and in any way detri mental to the Exchange aS a great market for securities. Under this contract a member charged with a violation of a. rule is tried before the Board of Governors, the selected representatives of the whole membership of the Exchange, and because of this contract between the members the courts will not interfere with any exercise of the punitive powers of the Board, if it appears that the written charge made against the member concerns a violation of some rule; that the mem ber has been heard in his defense; that there is evidence to support the decision of the Governors; and that the GOV ernors have acted in good faith. There are numerous cases to that effect. If it were permitted to a member who bas been suspended or expelled, to take his case into court for a judicial determination on the evidence of the question whether he should have been punished, the delays, and the possible conflicts between the courts, looking at the matter from a strictiv legal point of view, and with the legal habit of mind, and the Governors looking at it from the point of view of. practical men of great experience in the actual transactions of the Exchange would inevitably impair the efficiency of the disciplinary- power and debase the morale of the Exchange and its membership.1 12. Disadvantages of voluntary associations.—The outstanding disadvantage of voluntary associations is their inability to hold property in the group name. As was indicated above, this is the main reason for the incorporation of clubs and other membership socie ties. In contrast with the advantage of flexibility is the disadvantage of irresponsibility and general loose ness. Because members are liable for only those debts that are incurred during their membership, and be cause the membership fluctuates, it is difficult to fix financial responsibility. This irresponsibility is apt to beget all forms of abuse, which are magnified if its members have little business experience. All of these disadvantages will be vivid12,- brought to mind by any one who has had business dealings with college classes and college societies.