1. The proofs on final hearing fully established complainants' contention that the defendant International had wholly without warrant, and without legal justification or excuse, taken over the property and affairs of the Local. The excuse put forward by the International that its action was necessary if the Local was to be preserved from destruction by reason of internal dissension, falls; the only dissension was as to who was the legally elected business agent of the Local. Under the constitution, the Local had the right to choose the business agent, and this the members of the Local did by a considerable majority vote. The defeated candidate, as well as those who voted for him, had the right of appeal under the constitution of the organization, and also had the right to resort to the courts of law for a determination, if he or they thought themselves aggrieved, and the International should have supported the action of the majority of the Local and advised the taking of such legal course by the defeated candidate and the dissatisfied minority, instead of taking up the cause of that candidate and attempting to force him upon the unwilling majority and to deprive the Local of its right to control its property and affairs.
2. The rule that members of a union are not entitled to come into the court of chancery without first exhausting their remedies within the organization, does not apply where the pursuit of such remedies would be futile, illusory or vain. Walsche v. Sherlock, 110 N.J. Eq. 223, followed. Defendant International held, restrained permanently from enforcing its order suspending the meetings and self-government of the Local, from interfering with complainant's control of its property and affairs in anywise, from holding its chosen candidate out as business agent of the Local, and from attempting to enforce the order purporting to vest in the executive committee of the Local the powers belonging to the Local itself.
3. Complainants are entitled to a money decree against the financial secretary and treasurer of the Local, for the shortage established by the report on the accounting. They are not entitled to such a decree against the International, the proofs failing to establish the fact he was in possession of the Local's funds as agent of the International at any time.
4. Defendant International held, restrained from attempting to enforce any liability of the Local to it for dues paid into the Local or its financial secretary and treasurer prior to the appointment of the receiver in this cause. The International is not guiltless of equitable liability in relation to the loss caused to the Local through the defalcation of the financial secretary and treasurer; by its arbitrary and unwarranted action in suspending the meetings of the Local and attempting to take over its affairs — an action never in anywise revoked, and whose results the International took no step to undo — International created such a state of doubt, fear and uncertainty in the minds of the members of the Local that many failed to pay their dues. Although the exact amount of the loss to the Local through non-payment of dues is unproven, it clearly exceeded in total the amount of funds in the hands of the financial secretary and which were due to the International from the Local, at the time of his defalcation. Additional reasons for this restraint are that International resisted, and successfully so, the original application of complainants for the appointment of a receiver, whose early appointment would have saved a considerable portion, if not all, of the defalcation; International knew of the defalcation some time before the Local did, and did not notify the Local or take any action in the matter, and, finally, International is protected by a surety bond and the Local is not.
5. By reason of its acts necessitating this suit and its conduct thereafter and up to the present time in relation to this litigation, the cost of the litigation, including the costs of the receivership and accounting, held, decreed to be paid by the International. Against these costs, International is entitled to a credit of the amount now in the hands of the receiver, received by him from members and due to it under organization regulations for "due stamps" for the individual members, provided it issues such "due stamps" to the Local for distribution to the respective members.
6. Matters contained in a second supplement to the bill of complaint, setting out certain direct dealings by International with members of the Local and its plan to revoke the present charter and to issue a new one to members opposed to the complainants, held, not within the scope of the original bill and therefore not determined herein. Complainants given leave to apply later for a more detailed restraint if occasion proves it necessary to accomplish the results, or prevent the evasion, of the present determination.
PER CURIAM.
The decree appealed from will be affirmed, for the reasons stated in the opinion of Vice-Chancellor Buchanan in the court of chancery.
For affirmance — THE CHIEF-JUSTICE, LLOYD, CASE, BODINE, DONGES, HEHER, PERSKIE, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, JJ. 12.
For reversal — None.