In a dispute over who is entitled to collect the proceeds from two life insurance policies taken out on the late Phyllis Schlafly by defendant Eagle Forum, a non-profit membership organization incorporated under the laws of Illinois, the court held that:
There is no merit in Andrew’s argument that members of Eagle Forum own Eagle Forum’s corporate property, i.e., the Policies. It is well-settled that members or shareholders of a corporation have no right to use or possess corporate property. Stephen M. Bainbridge, The Board of Directors as Nexus of Contracts, 88 Iowa L. Rev. 1, 3 n.5, 13 n.50 (2002) (“[O]wnership is not a particularly useful concept in the corporate context.... [S]hareholders have no right to use or possess corporate property.” (citing cases) )
Schlafly v. Eagle Forum, CV172522ESSCM, 2019 WL 2498768, at *5 n.4 (D.N.J. June 17, 2019). Andrew is a member of the defendant non-profit corporation and advanced various claims that the corporation's board of directors was misusing the proceeds. In one of his claims, "Andrew seeks to direct the insurance proceeds to the benefit of the class of Eagle Forum members into a constructive trust because the members of Eagle Forum, not Eagle Forum itself, are the rightful beneficiaries of the Policies."
in reply, the Court rued that "The plain language of the John Hancock and Lincoln National Policies are subject to one interpretation only: that Eagle Forum, not its membership, is the owner and primary beneficiary on the Policies." It then dropped the footnote to dismiss the alternative argument.
