Bailey v. Ancient Egyptian Arabic Order Nobles of the Mystic Shrine of North and South America

• Decision Date: 08 January 1948
• Docket Number: 2625
• Citation: 56 A.2d 311,162 Pa.Super. 5
• Parties: Bailey et al. v. Ancient Egyptian Arabic Order Nobles of the Mystic Shrine of North and South America, etc., et al., Appellants
• Court: Pennsylvania Superior Court

56 A.2d 311

162 Pa.Super. 5

Bailey et al. v. Ancient Egyptian Arabic Order Nobles of the Mystic Shrine of North and South America, etc., et al., Appellants

No. 2625

Superior Court of Pennsylvania

January 8, 1948

Argued October 10, 1947.

Appeal, No. 246, Oct. T., 1947, from decree of C. P. No. 7 Phila. Co., June T., 1946, No. 4797, in case of William H Bailey et al. v. Ancient Egyptian Arabic Order Nobles of the Mystic Shrine of North and South America, etc., et al.

Proceeding upon petition and rule by defendants to show cause why service of process should not be set aside and judgment stricken off.

Petition and rule dismissed, opinion per curiam. Defendants appealed.

Levi H. Morris and Reuben Singer, for appellants.

Raymond Pace Alexander, for appellees.

Rhodes P. J., Hirt, Reno, Dithrich, Ross, Arnold and Fine, JJ.

OPINION

DITHRICH, J.

When may a court of equity in the exercise of its discretion take jurisdiction of a bill affecting, incidentally, the internal management of a foreign corporation? Upon the answer to that question depends the right of appellees to be reinstated to membership in the appellant fraternal order, a nonprofit corporation incorporated under the laws of the District of Columbia and having its principal office and place of business in Washington, D. C.

Appellees were officers and members of a subordinate lodge domiciled in Washington. They were suspended August 14, 1946, by letter from the "home" office of the individual appellant, who is a resident of Buffalo, New York. Five days later, to wit, August 19, 1946, the forty-fifth annual convention of the imperial council of the order convened in Philadelphia and continued in session until August 23, 1946.

On August 21, 1946, appellees filed their bill alleging their suspension was in violation of the constitution and by-laws of the parent organization, and prayed that the imperial council and the individual defendant be enjoined from interfering with their right of admission to and participation in the sessions of the imperial council, then assembled in convention, and for other and further relief. A preliminary injunction enjoining defendants from interfering with plaintiff William H. Bailey, in the exercise of his rights and privileges as a past imperial potentate of the council, and with the other plaintiffs as representatives of Mecca Temple # 10, was issued. An attachment having issued for Raymond E. Jackson, individually and as imperial potentate and presiding officer of the imperial council, he appeared August 23, 1946, with counsel, a member of the Philadelphia bar, in the chambers of Judge Sloane, the chancellor, with a view to having the attachment dissolved. No general appearance was entered for the defendants and no answer was filed, and finally, as stated in the opinion of the learned court below, "plaintiffs took judgment pro confesso . . . when defendants, through their then counsel, delayed and finally failed to file an answer to plaintiffs' bill . . ."

On petition of defendants, a rule was granted upon plaintiffs to show cause why the service of the bill against the individual defendant should not be vacated and the judgment pro confesso against both the individual and corporate defendants should not be stricken from the record. Depositions were taken and after argument before a court en banc, the rule was discharged. Hence this appeal. It is based primarily on the fact, as found by the learned chancellor, that the defendant corporation was not doing business in this state; but that fact alone would not preclude the court from taking jurisdiction. The general rule is that while the courts of one state have the power to assume jurisdiction of actions by nonresidents against foreign corporations, they will not ordinarily interfere in controversies relating merely to the internal management of the affairs of the foreign corporation. 21 C. J. S. 116, Courts § 77. But "The rule against interference . . . does not apply so as to prevent a court from granting relief against a foreign corporation . . . where it has jurisdiction of the parties and of the subject matter, ^[1] and the suit does not involve a mere regulation of the internal affairs of the corporation; nor may the rule apply so as to preclude the granting of relief where the internal affairs of a foreign corporation are affected merely as an incident to the granting of such relief": 20...