75 N.J. Eq. 245 | N.J. | 1909
The opinion of the court was delivered by
In the opinion of the court of chancery in the first case which arose in this state growing out of the controversy between the national council and the state council, it was held that the relation between the parties was a purely voluntary one; that any member might withdraw at any time. Since neither the national council nor the state council had any individual members, but were composed of delegates, it necessarily followed that the subordinate councils might continue their life and existence without reference to or assistance from either state or national council, and that they and their individual members comprised and formed the very life and soul of the whole order, as was subsequently stated by the same vice-chancellor, in the opinion in State Council v. National Council, 71 N. J. Eq. (1 Buch.) 433. In that opinion he contrasted the legal relation between the national, state and subordinate councils with the legal relation between the national government and the governments of the several states. The decree in the first ease was affirmed upon the vice-chancellor’s opinion, and the appeal from the decree in the second ease was dismissed. It is thus settled that it is the subordinate councils which have an independent existence, and that their relationship with the state and national councils is, as the vice-chancellor said, a purely voluntary one. The state council
The fact that the national and state councils chose to call their permission' to organize subordinate councils a “charter” and chose to call their constitution and by-laws “general laws,” does not give them the force of law. As the vice-chancellor held in the opinion approved by this court, the relationship is purely contractual, and in ascertaining the terms of that contract, recourse must be had to the so-called “charter” and “laws,” which embodied the terms upon which individual members became associated in these organizations. Those documents have a twofold aspect. In the first place, they determine the relationship between the three grades of councils and the method of securing co-operation and enforcing discipline, and in the second place, they contain provisions affecting the property rights of the individual members of the order in the funds arising out of their contributions. In the present case, we are concerned only with the property rights.
In determining these rights it is of the first importance to consider the object with which the funds are raised and the method of disposition in contemplation of the individual members of the order. Enterprise council is a New Jersey corporation organized for benevolent and charitable purposes. Its specific objects are set forth in what is called its constitution, which are to maintain and promote the interests of the American youth and shield them from the depressing effects of foreign competition; to assist Americans in obtaining employment; to encourage Americans in business; to establish a sick and funeral fund; to prepare the youth of America to become members of the order of United American Mechanics when the}1" arrive at the proper age. It seems probable that the only object for which funds would be likely to be accumulated is the establishment of a sick and funeral fund. ■ No provision is made in the constitution and by-laws either of the national or state council for turning over any of this fund to either of those organizations. The right of the state and national councils to revenue is limited to what is called a tax, and is really a contribution of 'a small sum par capita for the necessary expenses of those councils collected
It is convenient to deal with the latter question first. The provision relates to “all books, papers, &c., the property of the said council.” It would seem that this language was hardly intended to cover accumulated funds. If it had been in contemplation in 1868 that such funds would -be accumulated, it is difficult to explain the omission of any reference thereto, and the charter is careful not to say that all the property of Enterprise council shall become the property of the state council, but to limit it to the “books, papers,” &c., which are the property of Enterprise council. It probably was not contemplated at the time that funds would be accumulated, and it was no doubt thought that all that would be necessary upon the dissolution of Enterprise council would be to take up the books and papers, including, perhaps, the regalia and similar property. But even if the language is sufficient to include invested funds, it becomes necessary to determine whether the condition upon which the property was to pass to the state council has been fulfilled. This condition was not that the so-called charter should be forfeited, but that the council should be dissolved, and the law which we have quoted provided that a council might be suspended or dissolved and its charter and property forfeited to the state council. In view of the use of language such as “charter,” “laws,” “tax” and “dissolution,” which appears throughout the documents, it seems probable that the authors had the idea that the order possessed the power to grant charters, enact laws, levy taxes and dissolve subordinate councils; in short, that it possessed, so far as the order was concerned, governmental powers. If this is so,
We approve of the rule established in Austin v. Bearing, 16 N. Y. 112. The court there said: “The effect of some of the provisions of these constitutions is to create a tribunal having power to adjudicate upon the rights of property of all the members of the subordinate lodges, and to transfer that property to others; the members of this tribunal being liable to constant fluctuations, and not subject in any case to the selection or control of the parties upon whose rights they sit in judgment. To create a judicial tribunal is one of the functions of the sovereign power, and although parties may always make such tribunals for themselves, in any specific case, by a submission to arbitration, yet the power is guarded by the most cautious rules. A contract that the parties will submit confers no power upon the arbitrator, and even where there is an actual submission it may be revoked at any time. The law allows the partjr, up to the last moment, to ascertain whether there is not some covert bias or prejudice on the part of the arbitrator chosen. It would hardly accord with this scrupulous care to secure fairness, in such cases, that parties should be held legally bound by the sort of engagement that exists here, by which the most extensive judicial powers are conferred upon bodies of men whose individual members are' subject to continual fluctuation.”
In the later case of Wicks v. Monihan, 130 N. Y. 232; 29 N. E. Rep. 139, the court said: “The property of local assembly No. 4119 was not derived from the general assembly, but was contributed and owned by the associated members of No. 4119, and held by an absolute title as perfect and unconditional, so far as is shown by the case, as is the title by which any person or corporation holds its individual property. To hold that the general assembly can, by a decree, divest the title to property and vest it in itself, is giving to it a power which is forbidden to be exercised by congress or by the legislature of any state.”
A similar result was reached in Wells v. Monihan, 129 N. Y. 161; 29 N. E. Rep. 232. The court said, referring to Excelsior Assembly 4120 of the Knights of Labor: “Their charter was revoked for insubordination, of which, very likely, they were
The same result was reached in a like litigation in Maryland (District Grand Lodge v. Jedidjah Lodge, 65 Md. 253; 3 Atl. Rep. 104, and in a later phase, 67 Md. 117; 9 Atl. Rep. 13), where the court said: “It is true that when this corporation was formed, this lodge was a subordinate lodge, forming part of the general order, and by several of the articles of association it was bound to observe and enforce the rules and regulations of the grand lodge of the district. But the courts must look to the powers, which the state has, by its laws, conferred upon this corporate body. Among them, as we have said, is the power to change its articles of association, given not only by the original act of 1853, but secured by the present corporation laws. Such a change of its articles as would completely sever all connection between this corporation and the district grand lodge or the general order could be made without, so far as we can perceive, affecting injuriously any substantial property or pecuniary rights of any of the corporators or members; and it is such rights only that the courts can consider. But, even if such change could not be made without inflicting such injury, and if the corporation has wrongfully refused to obey the order of tire grand lodge, still this would only be cause for the annulment of its charter by the legislature, or for proceedings against it as provided by the corporation laws. A corporation can only be dissolved, but the mode for doing that is likewise provided by^ law.”
The court added: “Whatever powers the higher lodges in such
There is another objection to the procedure by which the state council attempted to forfeit the rights of Enterprise council. -By virtue of the constitution and by-laws of the order, an appeal was allowed from the action of the state council to the national council, so that the contract between the parties did not permit a forfeiture by the a.ction of the state council alone. It is no answer to say that the appeal from the state council to the national council had become impossible by reason of the severance of their relations, for the right of forfeiture was a contractual right, and the terms of the contract must be strictly complied with to work the forfeiture. If such compliance became impossible by reason of the act of the state council in severing its relations with the national council, whether that act was rightful or wrongful, it did not thereupon become possible for the state council to alter, to its own advantage, the contract with Enterprise council and with the individual members.
The attempt to forfeit the qharter of Enterprise council seems to have been made upon notice, as required by the then existing constitution and by-laws of the state council, adopted in 1900. But the effect of the forfeiture, if it has the force attributed to it by complainant, is to take away not only the rights of Enterprise council growing out of its connection with the state council, but to destroy the interest of the individual .members of Enterprise council in funds contributed by themselves or their predecessors and associates. Before they could- be deprived of this property right they were themselves entitled to be brought into the proceeding. So far as appears, the only effort that was made to give notice was a service upon the recording secretary of Enterprise council.
We have not found it necessary to determine the question whether the advisory master who heard this cause was at the time authorized to hear it. If he was not, the appellants were quite within their rights in not arguing the case before him; if he was, the appellants should not, by reason of that default, be deprived of their right of appeal, for the reason that the respondent submitted to answer the petition of appeal, and has thereby submitted the case to the decision of this court, and should be
Eor the reasons stated we think the property in question was the property of Enterprise council, and the decree adjudging that it belonged to the state council must be reversed, with costs.