Reising v. Fraternal Aid Union
Reising v. Fraternal Aid Union
Opinion of the Court
The opinion of the court was delivered by
This is an action by a member of a fraternal insurance society alleging mismanagement, abuse and actions by the directors and officers of the society beyond the authority conferred upon them by law, or the charter, causing and calculated to result
Our statute relating to fraternal benefit societies (R. S. 40-716, as amended by chapter 231 of the Laws of 1927, § 40-713) provides, in substance, that when such a society, or its officers, shall exceed its powers, or conduct its business fraudulently, or fail to comply with any of the provisions of the statute relating to such society, and such acts come to the knowledge of the commissioner of insurance, he may investigate the society and exclude it from doing business in the state if defects found to exist are not corrected, and on his request an appropriate action shall be brought by the attorney-general, and that no injunction will be granted or receiver appointed by any court against such society except on application of the attorney-general at the request of the commissioner of insurance. The gist of plaintiff’s complaint is that the officers of the society exceeded their powers and failed to comply with the provisions of the statute relating to such society.
In previous actions in this court it has been held that a member of a fraternal beneficiary society cannot maintain an action such as this; that all power to maintain suits of this character is withdrawn from such members and placed in the commissioner of insurance and attorney-general. (Albach v. Fraternal Aid Union, 100 Kan. 511, 164 Pac. 1065; Cavlovic et al. v. Croatian Beneficiary Association, 117 Kan. 545, 232 Pac. 598; Cavlovic v. Baker et al., 118 Kan. 412, 234 Pac. 1009.) The holding of the federal court construing this statute is to the same effect. (Soptich v. St. Joseph Nat. Croatian Beneficiary Ass’n, 34 Fed. [2d] 566.)
Appellant cites Haynes v. Fraternal Aid Union, 34 Fed. (2d) 305, where in a similar action a motion to dismiss the bill was overruled
Appellants cite and rely on Folts v. Globe Life Ins. Co., 117 Neb. 723. Without reviewing that case in detail it is sufficient to say that it involves an entirely different question. Moreover, the record disclosed that the procedure complained of in the action had been submitted to and approved by the insurance department and attorney-general of the state. In this case there is no allegation that any complaint had ever been made to the insurance department or attorney-general of this state of the alleged irregularities sought to be corrected by this action.
The trial court correctly held that the plaintiff had no capacity to maintain this action, and its judgment is affirmed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.