60 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 



While, as between the inenibers of an unincorporated association, each is 

 bound to pay only his numerical proportion of the indebtedness of the concern, 

 yet as against the creditors each member is individually liable for the entire 

 debt, provided, of course, the debt is of such a nature and has been so con- 

 tracted as to be binding on the association as a whole * * *^ ^jj unin- 

 corporated association organized for business or profit is in legal effect a mere 

 partnership so far as the liability of its niembers to third persons is concerned, 

 and accordingly each member is individually liable as a partner for a debt 

 contracted by the association. 



It should be borne in mind that the association involved in this 

 case was organized and operated for profit and was not a nonprofit 

 association. This case illustrates one of the serious objections to 

 unincorporated associations, and in turn emphasizes one of the great 

 advantages of an incorporated association in which generally the 

 members are not liable for the debts of the association. 



MONEY MUST BE USED FOR PURPOSE FURNISHED. 



In a New Jersey case ®^ it was said : 



" The Yote must be for some piu'pose for which the money was contributed. 

 A majority* can not de^'ote the money of the minority or even of a single member 

 to any other purpose without his consent. 



The rule that money can be used only for the purpose for which 

 contributed appears settled.'*^ In the West Virginia case just cited, 

 a retail butchers' protective association was organized with a consti- 

 tution which specified the purposes for which money could be used. 

 Through dues paid by the members a fund of $1,800 was accumu- 

 lated. There were 24 members of the association. At a regular 

 meeting 20 Avere present, and by a vote of 12 to 8 an order was passed 

 to distribute all of the money in the treasury except $100 among the 

 members. Certain of the members who opposed this use of the 

 money obtained an injunction preventing the distribution of the 

 money, and the Supreme Court of the State held that although a 

 majority of the members present at the meeting had voted in favor of 

 the distribution, yet it could not lawfully be diverted from the pur- 

 pose for which contributed as set forth in the constitution. 



EXPULSION OF MEMBERS. 



It was pointed out earlier in this discussion on unincorporated asso- 

 ciations that the rights of the members between themselves was a 

 contractual one and that the constitution and by-laws, or either of 

 them, constituted a contract between the members. It follows from 

 this fact that if the constitution or by-laws assented to by the mem- 

 bers state causes for expulsion from the association, ordinarily the 



s^Abels V. McKeen, 18 N. J. Eq. 462. 



s" Kalbitaer v. Goodhue, 52 W. Va. 435, 44 S. E. 264. 



