Clarence C. Mendelsohn, Reading, for appellants.
Philip F. Schmehl, Charles H. Weidner, Reading, for appellees.
Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross, Arnold and Gunther, JJ.
[ 171 Pa. Super. Page 422]
The corporate appellee, P. & R. Home Association, is a nonprofit corporation, incorporated September 6, 1921, under the Act of April 29, 1874, and supplements thereto, 15 P.S. § 1 et seq. It was organized on a nonstock basis for the purpose of maintaining a club for social enjoyment, but at no time was such a club maintained. Its membership was limited to those employees of the Philadelphia and Reading Railway Company, who were also members of Subordinate Lodge No. 168, American Federation of Railroad Workers. A portion of the monthly dues paid to the Lodge by its members was paid over to the Association. Between 1921 and 1942, the year the Lodge was dissolved, the Association received $16,289.67 in dues payments. After dissolution of the Lodge the members continued to pay dues to the Association at the rate of $1 each month. From 1942 to 1950 the amount of the dues paid was $5,337.50.
The Association operated a plan for many years whereby 'funeral benefits' were paid to the heirs of deceased members. At a special meeting on March 7, 1946, section 5a of the by-laws was adopted, which provided: 'On and after May 1, 1946, * * * when a member has paid his dues in full and has become beneficial for the total amount of funeral donations prescribed in
[ 171 Pa. Super. Page 423]
his particular case * * * he shall discontinue paying monthly dues and he shall remain in good standing -- which will cease when a full or partial division of the funds of the Association are made among its members * * *.' At the same meeting a plan was adopted for final distribution of the assets of the Association among its members 'on a basis for each month a member has been a member of the association.' In accordance with section 5a appellants and other members of the Association were notified on March 26, 1946, that they were beneficial for death benefits and would remain so indefinitely without paying dues.
A regular meeting was held June 8, 1950, at which the members present unanimously adopted a resolution to discontinue payment of death benefits, effective August 1, 1950, and to substitute in lieu thereof a division of Association funds among its members or their heirs 'in accordance with action taken March 7, 1946.' The action was confirmed at a special meeting held July 20, 1950, without opposition, upon motion 'that this be considered the 3rd and final reading, and that it be adopted as read.'
A meeting of the trustees and officers of the Association was held October 3, 1950. It was there agreed that the first distribution of funds of the Association be made on a basis of 95 cents per month for the period during which a member had been continuously beneficial. The determination of the trustees was to be submitted to the entire membership of the Association on October 18, 1950, for necessary approval. The liquidation of the assets of the Association having produced a fund of $19,628.87, under the plan proposed, the 73 members entitled to share in the distribution would receive amounts ranging from $60.80 to $323.
Appellants, members of the Association in good standing, filed a bill in equity ...