Case ID: ad_122/html/0764-01.html
Source: Caselaw Access Project
Author: {"author": "Clarke, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Petition of New York Electrical Workers’ Union, and Maurice R. Jarvis, Appellant, v. William J. Sullivan and Others, Respondents.
    First Department,
    December 20, 1907.
    Membership corporation — election of officers when notice not necessary — percentage constituting quorum.
    When the by-laws of a domestic membership corporation do not require notice of the election of officers, an election held at the regular time and place set by the by-laws is not invalid by reason of a failure to give notice. '
    A corporation duly organized under the Membership Corporations Law with by-laws governing the number of members necessary to constitute a quorum which are inconsistent, cannot invoke the common-law rule that "the number of members present and voting at any regular meeting constitute a quorum and a majority is sufficient to elect. Such corporation is governed by section S of the Membership Corporations Law, providing that a quorum shall consist of not less than one-third of the members, and if one-third be nine or more, then not less than nine; and when there are 1,200 members entitled to vote, an election of officers at a meeting at which only twenty members were present will be set aside.
    In ordering a new election the court should require members to be notified that a receiver formerly in charge of the affairs of the corporation has been discharged. ,
    Appeal by the petitioner, Maurice B. Jarvis, from an order of the Supreme Court, made at the Eew York Special Term and entered in the office of the clerk of the county of Eew York on the 22d day of E ovember, 1907, denying the said petitioner’s application for an inquiry into the election of officers of the Eew York Electrical Workers’ Union, and for an order directing a new election.
    
      Benjamin Patterson, for the appellant.
    
      William D. MoWulty, for the respondents.
   Clarke, J.:

The Eew York Electrical Workers’ Union is a domestic corporation organized and existing under the provisions of the Membership Corporations Law. An action was brought against said union by the People to remove divers officers by reason of misconduct and maladministration, and a judgment was entered therein on the 8th day of April, 1907, removing a majority of the officers, directing that their removal be reported to the Governor, and appointing a receiver, who took possession on the 8th of April, 1907. On the 13th of June, 1907, the Governor appointed the petitioner, Maurice B. Jarvis, president, and certain others to the various offices of the union. On the 28th of August, 1907, the receivership terminated and the receiver was discharged. The receiver’s report advised that all members in good standing on the 1st day of February, 1907, should be recognized as such upon the termination of the receivership and recommended that notice of the annual meeting to be held on the second Wednesday of September for the purpose of electing officers, as provided by the by-laws, should be given to all members who were in good standing on the 1st day of February, 1907.

The petitioner alleges that there were 1,200 members in good standing; that there is a provision of the by-laws to the effect that no member shall receive a nomination unless he is present or has sent a written acceptance of such nomination and is also clear on the books for three months; that some twenty members of the union held a meeting on the twenty-eighth of August, the-day of the discharge of the receiver, and nominated officers; that on the eleventh of September the annual meeting was held, some twenty members being present; that no notice was given to the members of the termination of the receivership and that no notice was given as recommended by the receiver of the holding of the annual meeting; that four members were turned away and not allowed entrance to said meeting, and that it proceeded to elect officers for the year. It is alleged that no quorum was present, and, therefore, the petitioner prays for a new election of officers and directors and for such other relief as right and justice may require.

This proceeding is under section 27 of the General Corporation Law (General Laws, chap. 35 ; Laws of 1892, chap. 687), which provides that “ The Supreme Court shall, upon the application of any person or corporation aggrieved by or complaining of any election of any corporation, or any proceeding,, act or matter touching the same, upon notice thereof to the adverse party, or to those to be affected thereby, forthwith and in a summary way, hear the affidavits, proofs and allegations of the parties, or otherwise inquire into the matters or ' causes of complaint and establish the election or order a new election, or make such order and give stich relief as right and justice may require.”

The by-laws of this corporation- provide as follows :' Article 3, .section 1. “ The regular meeting of this Union shall be held on every Wednesday of each month, and at such timé and place as the Union may direct.” Article 12, section 1. All nominations for officers and standing committees to be elected at the annual meeting at the first meeting in September of each year, are to be made two weeks before such elections.” There is no provision in the. by-laws requiring the giving of notice of meetings,' either monthly or annual. It is conceded that, although the receiver reported that all the members should be given notice of the meeting for the election of officers, the order of the court' confirming said report did not so require,' and that no such notice was given. Article 3, section 5 of said by-laws provides that “Twenty-five per cent of the members in good standing shall constitute a quorum for the transaction of all business which does not involve the scale of wages or the appropriation of money.” Section 6 provides that “ One hundred members in good standing shall constitute a quorum for the transaction of business involving the appropriation of money on the sinking fund. * * * ” Article 13, section 1, provides that “ A quorum for meetings of the Union shall consist of- ten per cent of the membership in good standing.”

Section 11 of the General Corporation Law (General Laws, chap. 35 [Laws of 1892, chap. 687], as amd. by Laws of 1895, chap. 672) provides that “Every corporation, as such, has power, though not specified in the law under which it is incorporated : * * * 5. To make by-laws, not inconsistent with any existing law, for the management of its property, the regulations of its affairs * * * and the calling of meetings of its members.”

Section 8 of the Membership Corporations Law (General Laws, chap. 43 ; Laws of 1895, chap. 559) provides that “ The by-laws of any such corporation may make provisions not inconsistent with, law or with its' certificate of incorporation regulating * * * the number of members, not less than one-third, or if one-third be nine or more, not less than nine, whose presence shall be necessary to. constitute a quorum at its meetings. * * ”

There are two questions presented by this record. First, that no notice of the annual meeting was sent to the members. It is not claimed that there is any provision of law requiring the sending of such notice. The by-laws provide for the annual meeting and the annual meeting was held at the regular meeting rooms of the union at the time fixed by the by-laws. There are no provisions in the by-laws for the sending of notices Of any of the' meetings. It is claimed that it had not been the custom to send notices of the regular monthly meetings, but it had been the custom to send notices of the annual -meeting. It is further claimed that there was a patent necessity therefor in this case, because of the appointment of the receiver and his discharge a short time before the date of said meeting. Although under the circumstances of this case it would have been wise and proper to have followed the recommendation of the receiver and to have given notice of said meeting, the court failed to require it in its order, and as the members of a corporation are held to be bound by its by-laws, I do not see how it- can be held as strict matter of law that it was illegal to have held a meeting at t-be regular time and place without notice. It is not alleged that said meeting was held at any unusual time of day or in. any foreign- of unusual place.

Second, it is claimed that there was no legal quorum- present. There are conflicting provisions in the by-laws. One by-law fixes the quorum at ten per cent and another at twenty-five per cent of the membership. ■ Neither is in strict accordance with the provisions of law.providing'that the .by-laws may fix the quorum at not less than one-tliird of the membership, or if one-third be nine or more, not less than nine.

The petition alleges that there were,about 1,200 members in good and regular standing at the time of the appointment of the receiver and the receiver advised that all members in good and regular standing on the 1st day of February, 1907, should be recognized as such upon the termination of the receivership. There is no denial of said statement of fact as to the membership, and it is obvious that the twenty men present at the annual meeting did not constitute ten per cent or twenty-five per cent as. provided by either one of the by-laws fixing the quorum, or óne-third fixed by the Membership Corporations Law, cited supra.

The respondents claim that as the two provisions of the by-laws are inconsistent, and as neither of them strictly conforms to the law, inasmuch as neither provides that the quorum shall be * * * not less than nine,” no legal by-law has been made fixing the quorum and that, therefore, resort must be had to the common-law rule, and the number of members present and voting at any regular meeting constituted a quorum and a majority thereof was sufficient • to transact business.

The difficulty in applying that proposition is that this body was not a voluntary association with . no rules, constitution or by laws for its government, as was the case in Ostrom v. Greene (20 Misc. Rep. 177) where Mr. Justice Chester said : “The society was com-, posed of an indefinite number of members: There was no rule providing the number that should constitute a quorum, and in absence óf such rule the members who attended the regular meetings held in accordance with the established custom constituted a quorum and were entitled to transact any business that fairly came within the purposes for which the association was formed. The fact that less than a majority of all the members appeared at any of these meetings was of no importance, because those who failed to attend impliedly gave their assent that those who did attend should, by a majority vote, transact the business of the association. These principles are supported by numerous authorities.” (Niblack Mutual Benefit Societies § 127 ; 2 Kent’s Comm. *293 (subd. 8) ; Dillon Mun. Corp. [4th ed.] § 277 ; Morawetz Priv. Corp. [2d ed.] § 476.)

When that case reached the Court of Appeals (161 N. Y. 353), Judge Vann said: There is a marked difference between a voluntary association with rules and one without. * * * Even if a majority of all the members was necessary to constitute a quorum in order to lawfully transact business, which, in a society composed of an indefinite number of persons, is open to question, a minority could adjourn from time to time, and hence each meeting was regularly held. (Field v. Field, 9 Wend. 403 ; Spelling on Private Corporations, § 374.) ”

In 10 Cyc. (p. 329) it is said: “ The rule of the common law seems to be that where a body is composed of an indefinite number of persons, a quorum for the purposes of elections and voting upon other questions which require the sanction of the members, consists of those who assemble at any meeting regularly called and warned, although such number may be a minority of the whole; in which case a majority of those who assemble may elect, unless there is a different rule established by statute or by a valid by-law.”

I reach the conclusion that as this is not a voluntary association, but a corporation organized under the Membership Corporations Law of the State, we cannot invoke the common-law.rule, and that if the by-laws in question are invalid by reason of their inconsistent and conflicting provisions, or because there is no limitation therein contained, that at least nine members are necessary to constitute a quorum, then we must be governed by section 8 of the Membership Corporations Law, of which the fair intendment is, that a quorum should be not less than one-third of the members, unless specifically provided that if one-third be nine or more, it be not less than nine.

It should be noted that the statute, section 27 of the General Corporation Law,-’ under which this application was made, provides ■that the court should establish the election or order a new election, or make such order and give such relief as right and justice inay require.” Thé learned court below dismissed the application. We think that under the -circumstances disclosed in this record the application should not have been dismissed, but that in view of the suspensión of the duties and obligations of the members of the corporation while in the hands of the receiver, notice, of the discharge, of the receiver and of the meetings for the election of officers should have, been required to have been given to all the members.

It follows, therefore, that the order appealed from should be reversed, with ten dollars costs and disbursements, and the matter remitted to the Special Term, with instructions to enter an order setting aside the election and to order a new election upon notice to all the members who were: such members on the 7th of February, 1907. . ’

Pattebson, P. J., Inge a ham, McLaughlin and Houghton, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and matter remitted to Special Term as stated, in opinion. Settle order on notice.