Court Opinion

ID: 9559772
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:35:26.164866+00
Date Added: 2024-06-11T09:11:42.803408
License: Public Domain

CAETEE, J.
I dissent.
I agree with the holding that the giving of unequal voting rights in a nonprofit corporation is authorized by the California corporation law statutes and cannot, therefore, be declared to be against public policy, and also that A. M. Johnson’s declaration of intention does not affect the present controversy. But I think this court should hold that a member of such a corporation .may not be removed as such without cause or hearing. The by-laws here involved, while seemingly authorizing such, should be interpreted to mean that cause and hearing are required.
*589While it is true nonprofit corporations may make provision for the cancellation of memberships (Corp. Code, §§ 9402, 9608), yet those provisions are subject to the general rules with respect to the expulsion of members from unincorporated associations as summarized by this court in Cason v. Glass Bottle Blowers Assn., 37 Cal.2d 134, 143 [231 P.2d 6] : “In cases of this type we must strive both to protect the rights of individual members and to avoid impairing the right of the union to govern itself. The courts will interfere with the decision of an association expelling one of its members if the rules of the association governing expulsion have not been observed or if the accused member has not been afforded those rudimentary rights which will give him a reasonable opportunity to defend against the charges made. ... It is a fundamental principle of justice that no mam may be condemned or prejudiced in his rights without an opportunity to make his defense, and this principle is applicable not only to courts but also to labor unions and similar organizations. ... It is, of course, true that the refined and technical practices which have developed in the courts cannot be imposed upon the deliberations of workingmen, and the form of procedure is ordinarily immaterial if the accused is accorded a fair trial. . . . The union’s procedure, however, must be such as will afford the accused member substantial justice, and the requirements of a fair trial will be imposed even though the rules of the union fail to provide therefor. . . . The authorities recognize that such a trial includes the right to notice of the charges, to confront and cross-examine the accusers, and to examine and refute the evidence.” (Emphasis added; see also Taboada v. Sociedad Espanola de Beneficencia Mutua, 191 Cal. 187 [215 P. 673, 27 A.L.R. 1508]; Otto v. Journeymen Tailors’ P. & B. Union, 75 Cal. 308 [17 P. 217, 7 Am.St.Rep. 156]; Von Arx v. San Francisco G. Verein, 113 Cal. 377 [45 P. 685] ; McConville v. Milk Wagon Drivers’ Union, 106 Cal.App. 696 [289 P. 852] ; Ellis v. American Fed. of Labor, 48 Cal.App.2d 440 [120 P.2d 79]; Knights of The Ku Klux Klan v. Francis, 79 Cal.App. 383 [249 P. 539]; Grand Grove etc. of Druids v. Garibaldi Grove etc. of Druids, 105 Cal. 219 [38 P. 947]; Supreme Lodge of The World v. Los Angeles Lodge No. 386, 177 Cal. 132 [169 P. 1040] ; Grand Grove etc. of Druids v. Garibaldi Grove, 130 Cal. 116 [62 P. 486, 80 Am.St.Rep. 80]; De Mille v. American Fed. of Radio Artists, 31 Cal.2d 139, 155 [187 P.2d 769, 175 A.L.R. 382]; Lawson v. Hewell, 118 Cal. 613 *590[50 P. 763, 49 L.R.A. 400] ; Smith v. Kern County Medical Assn., 19 Cal.2d 263 [120 P.2d 874] ; Haynes v. Annandale Golf Club, 4 Cal.2d 28 [47 P.2d 470, 99 A.L.R. 1439], incorporated association; 21 A.L.R.2d 1397; 20 A.L.R.2d 344, 536; 37 Yale L.J. 368; 43 Harv.L.Rev. 993; 58 Yale L.J. 999.) Moreover, it has been said: 1 ‘ The proceedings of the society, in order to be regular and legal, in effect, must, therefore, provide for notice to the accused and afford him an opportunity to be heard. . . .
“Indeed, it has been held that even though the by-laws expressly provide for the expulsion of a member without a trial such a provision is void and an expulsion in pursuance of such a by-law is not binding. . . .
“It has been held that in the absence of by-laws covering the subject that a member is entitled to a fair trial after due notice and that the procedure in such cases is to be analogous to ordinary judicial proceedings so far as necessary to render substantial justice.” (Emphasis added; Taboada v. Sociedad Espanola de Beneficencia Mutua, supra, 191 Cal. 187, 191.)
The majority seems to intímate that there are no civil or property rights here involved and the Foundation is a religious organization and the courts will not interfere with its ecclesiastical affairs.
There can be no question that here property and civil rights are involved. While the members have no interest in the corporate assets, they as directors may receive a fee and expenses for attending meetings and their prestige and community standing may be adversely affected by a cancellation of their membership. Plaintiff was engaged independently in missionary and religious activities similar to those of the Foundation. By his arbitrary expulsion his standing and ability to carry on those activities will be affected. These may be “personal rights” but they are important. “When we turn aside from the authorities and consider the actual human interests which suffer from an expulsion, it becomes apparent that in many cases they are chiefly interests of personality. The expelled club member finds his social reputation blasted, and is likely to be blackballed by other desirable clubs. The former trade unionist is ostracized by union members. A student like Shelley who has been excluded from college is branded for years to come, and deprived of intimate associations with places and companions. Excommunication from a church means loss of the opportunity to worship God in familiar surroundings with *591a cherished ritual, and inflicts upon the devout believer loneliness of spirit and perhaps the dread of eternal damnation. In comparison with such emotional deprivations, mere losses of property often appear trivial. It would seem natural that courts of equity should consider the desirability of remedying such injuries to personality, but they are hindered from doing so by the oft-repeated doctrine that equity protects only property rights. Dean Pound and others have shown the unsubstantial basis of this doctrine in the older cases, and its unfortunate effect in restricting the ability of courts to remedy many of the evils of modern life. Injunctions and similar flexible remedies of equity are much better suited than a speculative action for damages to protect interests of personality when the injuries to them are sufficiently serious to warrant the interference of the courts. The trend of the decisions today is toward such protection, even in Ihe courts of last resort, and an examination of unreported cases in the lower courts collected from newspapers indicates that such courts are willing to go farther than the appellate judges in frankly protecting interests of personality.” (43 Harv.L.Rev. 998.) It is settled in this state that equity will protect purely personal rights, hence the obstacle mentioned in the above quotation is removed. (Orloff v. Los Angeles Turf Club, 30 Cal.2d 110 [180 P.2d 321, 171 A.L.R. 913].) There is, therefore, no reason why plaintiff’s rights here should not be protected.
As heretofore pointed out there are civil and property rights here involved and there are no ecclesiastical disputes of any kind. There are no questions of whether the correct creed or tenets are being followed or what such creeds are. It is simply a matter of whether a member of a nonprofit corporation may be removed without cause and hearing. This court said in Rosicrucian Fellowship v. Rosicrucian etc. Church, 39 Cal.2d 121, 131 [245 P.2d 481] : “The general rule that courts will not interfere in religious societies with reference to their ecclesiastical practices stems from the separation of the church and state, but has always been qualified by the rule that civil and property rights would be adjudicated. . . . Whether an activity is ecclesiastical or involves property rights, especially when a decision on one necessarily involves consideration of the other, are difficult questions. Ecclesiastical matters include in the main, creeds and proper modes of exercising one’s belief. While the principle that courts will not purport to exercise ecclesiastical *592jurisdiction is settled as an abstract proposition, they will determine civil and property rights which depend essentially on the contracts of tile parties as evinced by rules, regulations, practices and customs accepted and followed.” Substantial authorities have stated that courts have jurisdiction to review the expulsion of a member of a religious organization to determine if it was in accordance with natural justice. (Hughes v. North Clinton Baptist Church, 75 N.J.L. 167 [67 A. 66]; In re Koch, 257 N.Y. 318 [178 N.E. 545]; Fairchild v. Tillotson, 118 Misc. 639 [195 N.Y.S. 39]; Gray v. Christian Society, 137 Mass. 329 [50 Am.Rep. 310] ; Moustakis v. Hellenic Orthodox Soc., 261 Mass. 462 [159 N.E. 453] ; Rock Dell Norwegian Evan. L. Congregation v. Mommsen, 174 Minn. 207 [219 N.W. 88].) They stress that the by-laws are not to be construed to permit an expulsion unless absolutely necessary. The court said in Gray v. Christian Society, supra, 137 Mass. 329, 331: “The necessity of complying with these requirements of common justice [hearing] has been so uniformly asserted, that only a few cases need be cited, in addition to those last referred to, to show how unwilling courts have been to admit that charters, by-laws, or rules could be intended to deprive a man of his membership without a hearing.” This is especially true in the instant case where there is no question of religious belief or practices.
The situation is the same as if a social club or nonprofit corporation is involved. The rules are stated with supporting authority: “One of the bases for court action as to an expulsion from a club is the fact that it was in violation of the principles of natural justice. . . .
“One of the denials of natural justice which will base court interference is that of a fair hearing or fair trial. . . .
“It has been held that a hearing must be afforded by the group exercising the expulsory power in all proceedings which may result in loss of property, position, or character, regardless of whether its committee has previously accorded a hearing and of whether the accused demands it, and the expulsion of a member without affording him a hearing is void. ...
‘ ‘ [L] ack of proper notice to the accused member of hearing or trial is another violation of the principles of natural justice upon the basis of which court action may take place. . . .
“It is generally held that a member against whom expulsion proceedings are brought is entitled to notice of the charge against him, . . .
*593“A bylaw, rule, or other regulation of a club permitting expulsion of a member without notice of the charges against him would be invalid as being inconsistent with law, and notice that a member’s conduct in a certain class of transactions is to be investigated is not sufficient to base expulsion in the absence of any specific charge.” (20 A.L.R.2d 352.)
The majority opinion states that plaintiff had a notice and hearing and there was cause for dismissal under the evidence. The trial court made no clear-cut finding on the first question and this court should not in effect make one as the evidence is capable of different constructions. There was no pretense at the meetings at which plaintiff was expelled that a hearing was being held to consider charges. No charges were made nor evidence given at those meetings. The only thing done was the taking of a vote on the question of expulsion. To justify its position that there was cause for plaintiff’s expulsion the majority relies on evidence introduced at the trial of the action. To have a proper hearing, there should have been a charge and notice of a hearing thereon and evidence should have been given at the hearing and directed to the board members. In other words plaintiff was entitled to know the nature of the charge against him and the time and place fixed for a hearing thereon so that he might be prepared to meet any evidence presented in support of such charge. If no such evidence was presented, the charge must necessarily fail. Here there was no charge, notice, hearing or evidence as a basis for plaintiff’s expulsion. The fact that evidence was presented at the trial of the action brought for the purpose of nullifying the invalid expulsion order does not give such order validity.
I would, therefore, reverse the judgment.
Appellant’s petition for a rehearing was denied November 24, 1954. Carter, J., was of the opinion that the petition should be granted.