Equity Jurisdiction. Corporation. A foreign corporation cannot maintain a bill in equity against a Massachusetts corporation of which it is not a shareholder to enjoin it from carrying out a vote, passed at a special meeting of its members and within the scope of its chartered powers, merely because of irregularities and other defects in the meeting and the vote.
A New York corporation, organized as a national body for a philanthropic purpose which contemplated separate organizations in different localities having the same purpose and practically the same constitution and under a provision of their constitutions paying half of their membership fees to the national body, cannot maintain a suit in equity to enjoin a Massachusetts corporation, organized under R.L.c. 125 as a local organization of the national body, from carrying out a vote passed by its members at a special meeting to withdraw from the national body. If such vote and such proposed action are ultra vires, they should be remedied in appropriate proceedings instituted by the public authorities or by individual members of the Massachusetts corporation. So far as the acts of the Massachusetts corporation constitute a breach of contractual relations with the national body, the remedy is at law.
A New York corporation, organized as a national body named a "council" for a philanthropic purpose, which contemplated separate organizations in different localities called "sections of the council" having the same purpose and practically the same constitution and under provisions of their constitutions paying one half of their membership fees to the national body and devoting contributions otherwise received to the purposes of the national body, cannot maintain a suit in equity to enjoin a Massachusetts corporation, organized under R.L.c. 125 with the corporate name "Boston Section of the Council," as such a section of the council from carrying out a vote to withdraw from the national body and from refusing further to pay one half of its membership fees to the plaintiff, and from expending other contributions independently of any action of the plaintiff, where the bill alleges merely that the defendant proposes to announce its severance from the plaintiff and to continue the use of its corporate name, and that it is the purpose of certain of the defendant's officers by holding themselves out as officers of the "Boston Council" "to obtain contributions and receive moneys intended to be devoted to the work of the" plaintiff, there being no allegation of a fraudulent intent on the part of the defendant or that it has received any money in trust for the plaintiff.
A New York corporation, organized as a national body called a "council" for a philanthropic purpose which contemplated separate organizations in different localities called "sections of the council," after it has permitted a Massachusetts corporation to be organized under R.L.c. 125 and to assume as its corporate name the "Boston Section of the Council," cannot maintain a bill in equity under R.L.c. 109, § 8, to enjoin the Massachusetts corporation from continuing the use of its corporate name after it has voted to withdraw from the national body.
SHELDON, J.
The bill as amended is brought only by a New York corporation in its own right. Accordingly the case must be considered as if the action of the defendant corporation now complained of had been taken with the unanimous consent of all its members and with the observance of all due formalities. Of such merely corporate action, affecting only the conduct of the corporation within the scope of its chartered powers, other parties cannot complain on the ground of irregularities or other formal defects. Beecher v. Marquette Pacific Rolling Mill Co., 45 Mich. 103. St. Louis Bank v. Grenada Bank, 83 Miss. 610. Central Trust Co. v. Condon, 67 Fed. Rep. 84, 104. This leaves no ground for the maintenance of the bill.
The defendant is a Massachusetts corporation, deriving its franchises and privileges from the laws of this Commonwealth and under obligation to conform to those laws. It has not been incorporated also under the laws of any other State (see Attorney General v. New York, New Haven, Hartford Railroad, 198 Mass. 413, 417); it has no rights and is subject to no liabilities under the laws of any other State. It could not make itself permanently subordinate to any other authority. Hill v. Rauhan Aarre, 200 Mass. 438. Saltman v. Nesson, 201 Mass. 534, 541. Thomas v. Railroad Co. 101 U.S. 71, quoted in Davis v. Old Colony Railroad, 131 Mass. 258, 269. District Grand Lodge v. Jedidjah Lodge, 65 Md. 236. Lamphere v. Grand Lodge of United Workmen, 47 Mich. 429.
If the defendant has gone beyond the scope of its corporate powers, the remedy must be found in action to be taken by the public authorities or by the individual members of the corporation according to the nature of the case. Any rights of the plaintiff against the defendant are of a contractual nature, and spring out of a voluntary relation, which can be altered or annulled at the will of either party, subject only to the ordinary remedies available against any one for a breach of contract or the violation of a duty. This is the principle of the decisions in somewhat similar cases. McFadden v. Murphy, 149 Mass. 341. Kane v. Shields, 167 Mass. 392. Sabourin v. Lippe, 195 Mass. 470. Attorney General v. New York, New Haven, Hartford Railroad, 197 Mass. 194. Rudolph v. Southern Beneficial League, 23 Abb. New Cas. 199. Kern v. Arbeiter Unterstuetzungs Verein, 139 Mich. 233. It is the doctrine that runs through the cases from New Jersey that have been cited in argument. Altmann v. Benz, 12 C.E. Green, 331. National Council of Jr. O.U.A.M. v. State Council of Jr. O.U.A.M. 19 Dick. 470, and 21 Dick. 429. State Council v. National Council, 1 Buch. 433.
The averments of the bill do not show that the defendant has received any money in trust for the plaintiff within the rule stated in National Council v. State Council, 19 Dick. 470. Nor is any such fraudulent intention averred as was found to exist in International Committee of Young Women's Christian Associations v. Young Women's Christian Association, 194 Ill. 194.
The name of the defendant corporation appears to have been assumed without objection from any one. It is now too late to make such objection under R.L.c. 109, § 8, or under any other statutory provision which has been called to our attention. We cannot enjoin it from continuing to use that name.
The decree sustaining the demurrer and dismissing the bill with costs must be modified by adding the costs of the appeal, and so modified must be affirmed.
So ordered.