On September 9,1974, the members of the defendant Jordan Hospital Corporation (hospital) purported to adopt new corporate by-laws which provided, for the first time, that employees of the hospital, their spouses, and children constitute a separate class of members ineligible to vote. The plaintiffs brought this proceeding to challenge the propriety of the purported by-law change. We conclude that the members lawfully could vote on the proposed by-laws at the September 9 meeting but that the plaintiffs have alleged sufficient facts to state a claim that the practices followed by the defendants in obtaining that vote may have been contrary to the requirements of law.
In order to assess the issues, the procedural developments in the Superior Court must be set forth first. The defendants filed a motion to dismiss the action pursuant to Mass. R. Civ. P. 12 (b) (6),
The allowance or denial of the motion to amend was within the discretion of the judge in the circumstances. See
Castellucci
v.
United States Fidelity & Guar. Co., ante
288, decided today. Under Mass. R. Civ. P. 15 (a),
We accept the premise of the defendants’ argument that a judge properly may deny a motion to amend because the complaint as amended would fail to state a claim on which relief could be granted. 3 Consequently, we analyze the *296 issues argued on behalf of the plaintiffs on the basis of the allegations of the complaint, as proposed to be amended, to determine whether the plaintiffs have alleged a claim which may entitle them to relief.
The complaint, as proposed to be amended, alleges the following facts. The hospital was established under Pub. Stat. c. 115, the predecessor of G. L. c. 180. On or before July 11, 1974, the plaintiffs Schilling and Sommi paid one dollar and became members of the hospital as provided in the hospital’s by-laws. On or about July 11, 1974, the secretary of the corporation sent a notice of a special meeting of members to be held on September 9, 1974, which stated that the meeting was called “for the purpose of reviewing and voting upon proposed changes to the Hospital Corporation Bylaws.” The notice of the meeting advised each corporate member that, by an enclosed card, he could “request a copy of the Proposed Bylaws, if... [he] desire [d] a copy prior to the September 9th meeting.” Any one who had any questions was advised to call the hospital’s administration office. Schilling and Sommi requested and received a copy “of what they assumed were the proposed bylaws.” Certain other persons, including the other named plaintiffs, became members of the corporation late in July, 1974, and did not receive notice of the meeting. The by-laws permitted a member to vote at a meeting after he had been a member of sixty days. These new members were not advised that their right to vote might be taken away by action at the September 9 meeting, and they did not attend the meeting. Other members who received the notice and subsequently received a copy of the proposed by-laws “believed the express or implied promise (contained in... [the call of the meeting]) that the bylaws they received in the mail were the bylaws to be voted on at the September 9th meeting...,” and they did not attend the meeting. Schilling and Sommi, however, did attend the September 9 meeting with the intention of objecting to a provision in the by-laws, as distributed, which limited nominations to those candidates nominated by a nominating committee.
*297 At the meeting Sommi was handed copies of a document entitled “BYLAWS (of March 4, 1968, as amended to and including September 9, 1974)____” Many of the provisions in the copy distributed at the meeting were substantially different from the provisions of the by-laws distributed in response to requests invited in the call of the meeting. 4 Schilling assumed that the copy of the by-laws being distributed was the same as the copy she received by mail and did not obtain a copy of the by-laws distributed at the meeting. The president of the hospital presided at the meeting and allowed “less than ten (10) minutes to read and study the new proposed ‘BYLAWS.’ ” A question was asked “as to what the substantial changes were,” and either the president or the chairman of the by-law committee “stated that they were too numerous and would take too much time to explain, but that two changes were: (1) increasing the Board of Directors to thirty-three to include one employee member and, (2) allowing nominations from the floor.” No mention was made of the change which would establish employees of the hospital, their spouses, and children who were corporate members as a “separate class designated as hospital members... (who would) have the same rights as regular members, except that hospital members shall be ineligible to vote” (emphasis in complaint). Schilling and Sommi heard that nominations from the floor would be allowed “and relying on the defendants’ silence about any other substantial changes... believed that their sole objection to the proposed bylaw changes had been obviated.” Relying on the defendants’ statements, including their silence, concerning substantial changes, Sommi and Schilling voted in favor of the by-law amendment, which was passed unanimously. No separate vote was held by the so called hospital members who, for greater clarity, we shall describe in this opinion as the employee members.
*298 The plaintiffs subsequently learned that the by-law changes created a special membership class of employee members, and objected to the corporate action, demanding that the by-laws adopted at the September 9 meeting be declared null and void. No relief was extended to the plaintiffs, who then commenced this action, alleging that the defendants acted fraudulently, in violation of their fiduciary obligations to the plaintiffs, and illegally. They sought a declaration that the by-laws purportedly adopted on September 9, 1974, were null and void with respect to the disenfranchisement of the employee members. They additionally sought injunctive relief to protect their voting rights. Thereafter the procedural events described earlier in this opinion occurred, and the plaintiffs’ appeal has been transferred here.
The plaintiffs raise two objections to the action of the September 9 meeting based on claims that the members had no lawful right to consider the challenged by-law amendment. They object further that an affirmative vote of employee members as a class was necessary to adopt corporate by-laws disenfranchising employee members. They argue finally that, even if the challenged amendment properly could have been considered by a collective membership vote at the September meeting, the conduct of the defendants was such that the vote of disenfranchisement must be invalidated. The plaintiffs do not argue that under no circumstances may they be disenfranchised by a by-law amendment. A voting member of a charitable corporation, having no ownership interest in that corporation, “is not deprived of any vested interest when he is deprived of his right to vote.”
Langrock
v.
Porter Hosp. Inc.,
1. The plaintiffs argue first that the notice of the meeting was fatally defective because it failed to warn the *299 plaintiffs explicitly that their right to vote might be lost by an amendment to the by-laws at the September 9 meeting.
A c. 180 corporation may provide in its by-laws for the manner of calling its meetings, provided that its chosen method is consistent with law. G. L. c. 180, § 6A. Members of a c. 180 corporation have the power to amend the corporate by-laws. See G. L. c. 180, § 6A, incorporating by reference G. L. c. 156B, § 17. The hospital by-law provision applicable to any amendments to be made at the September 9 meeting stated that the by-laws may be amended “at any meeting called for the purpose.” The by-laws thus did not require notice of the substance of any changes to be proposed at any meeting called to amend the by-laws. They only required notice that amendments to the by-laws might be proposed, and that general notice was given, as the plaintiffs concede. The plaintiffs also concede that there was no statutory requirement of notice of the substance of by-law changes which might be proposed, but they contend that the case law of this Commonwealth requires notice of the substance of proposed by-law changes before they may be acted on properly at any meeting of the hospital’s corporate members.
There is no established principle that a c. 180 corporation’s by-laws may be amended only as to subjects referred to specifically in the call of a meeting, and we see no reason to impose such a limitation where the corporation’s by-laws do not so require. The authorities relied on by the plaintiffs do not support their position. In
People’s Mut. Ins. Co.
v.
Westcott,
2. The plaintiffs argue next that the notice of the meeting was so phrased as to permit the meeting to consider only those proposed by-laws which were referred to in the notice of the meeting as available on request. Neither the existing by-laws nor any statute required that the precise form of any by-law change be established prior to the meeting. The meeting was “called for the purpose of reviewing and voting upon proposed changes to the Hospital Corporation Bylaws.” The notice also advised each member that by return card he could request “a copy of the Proposed Bylaws____” The notice did not state that the bylaws then available were to be voted on as then prepared. The available copy of the by-laws was described as pro *301 posed, and the procedure of making copies available to members reasonably implied that a member might review a copy of the proposed by-laws and propose changes at the meeting. Indeed, two plaintiffs strongly favored one substantive change made at the meeting. The meeting was not restricted solely to consideration of the draft of the by-laws available at the time the notice of the meeting was sent.
3. The plaintiffs argue next that the employee members were entitled to vote as a class on any proposed amendment disenfranchising them as members. In
Espinola
v.
Club Liberdade, Inc.,
In assessing whether the plaintiffs have been subjected to such unfair treatment that the equitable powers of the courts should be exercised in their favor, we must weigh the nature of their grievance. They complain about the absence of a class vote on a question which neither a statute nor the hospital’s by-laws required be put to a class vote. Each plaintiff acquired annual membership in the corporation by the payment of one dollar, never had any proprietary interest in the assets of the corporation, and thus would lose nothing of financial value by a by-law amendment disenfranchising them. When the problem is so analyzed, the by-law amendment is not “inconsistent with principles of natural justice.” See Espinola v. Club Liberdade, Inc., supra at 26.
4. We come finally to the plaintiffs’ contention that their allegations concerning the course of conduct followed by the defendants are sufficient to state a claim warranting an invalidation of the disenfranchising amendment. The answer to this question depends on whether the complaint, as proposed to be amended, failed in all respects to allege facts which might justify “any form of relief, even though the particular relief... [the plaintiffs have] demanded and the theory on which... [they seem] to rely may not be appropriate.” Nader v. Citron, ante, 96, 104 (1977). We believe that certain of the plaintiffs have alleged facts *303 which, if more fully developed and proved at trial, might justify relief in their favor.
Two of the plaintiffs attended the September 9 meeting for the purpose of objecting to a proposed by-law provision which would limit nominees to those persons proposed by the nominating committee. One of the plaintiffs was handed a copy of a document which was entitled in part “BYLAWS (... as amended to and including September 9, 1974)----” He noticed that many provisions were different from the proposed by-laws he received in the mail. The other plaintiff chose not to take a copy of the by-laws which was being distributed. The presiding officer “allowed less than ten (10) minutes to read and study the new proposed ‘BYLAWS.’ ” In response to a question from someone as to what the substantial changes were, either the presiding officer or the chairman of the by-law committee “stated that they were too numerous and would take too much time to explain,” but that two changes were increasing the size of the board of directors and allowing nominations from the floor. No one stated that the by-laws created a separate class of nonvoting members, consisting of employees of the hospital, their spouses and children. A motion to adopt the by-laws was passed without dissent. The complaint, as proposed to be amended, alleges that the plaintiffs in attendance “were induced to vote in favor of” the by-laws because they relied “on the accuracy of the proposed bylaws received in the mail and the statements of the defendants (including their silence) concerning the substantial changes____”
We think that the allegations of the complaint were sufficient to survive a motion to dismiss. The by-laws of a corporation are a contract between the corporation and its members.
Massachusetts Charitable Mechanic Ass’n.
v.
Beede,
The allegations of the complaint are sufficient to put the defendants on notice that the plaintiffs are claiming that, in seeking to disenfranchise the employee members of the corporation, some or all of the officers and directors of the corporation failed to meet their fiduciary obligations to the plaintiffs. The claim rests in part on the assertion that the defendants did not disclose the proposal to create a class of nonvoting members, even when the question of significant changes was inquired about at the meeting. 6
One theory expressed by the plaintiffs rests on an allegation of fraud. We think the complaint, as proposed to be amended, shows sufficient aspects of reliance and damage to meet the requirement of Mass. R. Civ. P. 9 (b),
It will be a matter for proof at trial, of course, whether any of the defendants in fact acted fraudulently or whether, in all the circumstances, any defendant acted in bad faith or, even if not in bad faith, failed to fulfil a fiduciary obligation to disclose the proposal to disenfranchise employee members of the hospital. Such a determination can be made only on the entire circumstances which will be disclosed at trial. 7
*305 The defendants argue that a member of a charitable corporation sustains no actionable damage in losing his right to vote.* ****** 8 Such a member, of course, has no property interest to protect. However, the plaintiffs became members of the hospital voluntarily by the payment of dues. Each had a vote concerning the operation of the hospital to the extent the by-laws provided. That right to vote should not be taken away except in accordance with lawful procedures and practices. As we noted earlier, we are not concerned with the question whether the plaintiffs could have been excluded from membership in the corporation. They were members already.
5. The judgment dismissing the complaint is reversed, and the plaintiffs’ motion to amend the complaint is to be allowed.
So ordered.
Notes
There is some authority for the proposition that consideration of the legal sufficiency of an amendment is not an appropriate test in such a situation. See discussions in 6 C.A. Wright & A.R. Miller, Federal Practice and Procedure § 1487, at 432-433 (1971), and 3 Moore’s Federal Practice, par. 15.08 [4], at 902, 904-905 (2d ed. 1974, & Supp. 1976-1977).
The complaint, as proposed to be amended, does not incorporate the old by-laws, the draft available by mail, or the by-laws distributed at the meeting.
The plaintiffs do not rely on the incorporation of G. L. c. 156B, § 8, into G. L. c. 180. See G. L. c. 180, § 10A. Section 8 (6) of G. L. c. 156B makes G. L. c. 156B, § 71, applicable to protect the rights of a class of stock against a multiclass vote on certain proposed action which would adversely affect that class. Although § 8 (6) refers to bylaws and articles of organization, § 71 refers only to amendments to articles of organization, a matter not involved in this case. We should not be understood, however, to have decided that § 8 (b) is inapplicable to the facts of this case. The plaintiffs simply do not argue the point.
We have assumed in this opinion, without deciding, that a vote to create two separate classes of members, one with greater rights than the other, should be treated as if those classes already existed and thus any required vote by class would apply to the vote creating those classes.
The defendants’ brief nowhere comes to grips with the allegation that, on inquiry concerning significant by-law changes, no one disclosed explicitly the proposal to disenfranchise employee members.
It is doubtful that a case for invalidation of the by-law amendment can be made on behalf of those employee members who became members within sixty days prior to the September 9 meeting because they could not vote at that meeting. Also, those members who did not attend *305 the meeting cannot have relied on any failure to disclose facts at that meeting. However, those plaintiffs who attended the meeting may be successful in persuading the judge that the only effective remedy for any wrong committed is to invalidate the disenfranchisement provision in the by-laws adopted on September 9, leaving the corporation the option of seeking to amend its by-laws in this respect at a subsequent meeting at which all then current members of the corporation can vote.
Although the complaint does not allege that the corporation was formed for charitable purposes, the defendants’ brief refers to the hospital as a charitable corporation.