Brotherhood of Railroad Trainmen v. Williams

• Decision Date: 19 June 1925
• Citation: 211 Ky. 638,277 S.W. 500
• Parties: BROTHERHOOD OF RAILROAD TRAINMEN ET AL. v. WILLIAMS ET AL.
• Court: Kentucky Court of Appeals

277 S.W. 500

211 Ky. 638

BROTHERHOOD OF RAILROAD TRAINMEN ET AL. v. WILLIAMS ET AL.

Court of Appeals of Kentucky.

June 19, 1925

Rehearing Denied, with Modifications, Dec. 15, 1925.

Appeal from Circuit Court, Greenup County.

Action by C. B. Williams and others against the Brotherhood of Railroad Trainmen and others. From a judgment dismissing defendants' answer and counterclaim, and awarding funds to plaintiffs, defendant Brotherhood appeals. Reversed for proceedings in accordance with opinion.

S. S Willis, of Ashland, for appellant.

John S Fullerton, of Ashland, and E. E. Fullerton, of Greenup, for appellees.

SAMPSON J.

Appellant Brotherhood of Railroad Trainmen, is a national organization operating through local lodges, one of which, Chesapeake Lodge, No. 454, was located at Russell, a railroad center, in Greenup county. During the year 1920, this local, without authority from the Grand Lodge, and in defiance, as it is averred, of the constitution and general rules of the order, participated in an unlawful strike for more than 10 days. For this violation of the general law of the order Chesapeake Lodge, No. 454, was outlawed, and its charter revoked, by the president of the Grand Lodge in the way and manner provided by the constitution and general rules of the national organization. At the time of the revocation of its charter, Chesapeake Lodge, No. 454, owed no debts and had on deposit in the bank $416.39, and owned and had at the same bank for safe-keeping Liberty bonds of the par value of $800, and United States war savings stamps of the par value of $834. In addition to this, the local lodge owned some furniture, including a rug, desks, chairs, and other such articles, located in a lodge room at Russell. After the revocation of the charter of the local, the grand lodge demanded that the money, bonds, war savings stamps, and other property of the local be surrendered and turned over to the Grand Lodge, but this was refused.

While this controversy was pending this suit was instituted in the Greenup circuit court by appellees, Williams, McCormick, Auxier, Osborne, and Vaughn, members of Chesapeake Lodge, No. 454, at the time of the revocation of its charter, on behalf of themselves as former members of the lodge and as citizens and residents of Russell, Ky. and more than 400 others similarly situated, against the Brotherhood of Railroad Trainmen and the First National Bank of Russell, to determine the ownership of and right to the money, bonds, war savings stamps, and other property to which we have referred, all of which was mentioned and described in the petition. In the petition it was averred:

"That on said date, May 28, 1920, the said Brotherhood of Railroad Trainmen revoked the charter granted to the said subordinate lodge by the Grand Lodge of the Brotherhood of Railroad Trainmen, by which the said local lodge had its existence and exercised its functions, and that upon said charter being revoked said subordinate lodge became a 'defunct lodge' under the constitution of the Grand Lodge, and its constitution; * * * that said money and bonds belonged to the members of the 'defunct lodge' pro rata, and should, after its debts and claims against said 'defunct lodge' are paid, be distributed pro rata to the members of said lodge at the time said charter was revoked. * * * Plaintiffs say that the defendant, the Brotherhood of Railroad Trainmen, is unlawfully making claim to said money, bonds, war savings stamps, and also to the furniture, druggets, etc., heretofore itemized and set out; that, by reason of the claim made by the said Brotherhood of said Railroad Trainmen, the defendant bank refused to deliver to the plaintiff the money, bonds, and war savings stamps in question until the question was adjudicated, and an order of court entered directing it to pay the money and deliver the bonds and war savings stamps to the party or parties to whom they belonged, according to the judgment of the court."

The defendant, now appellant, Brotherhood of Railroad Trainmen, filed answer, and denied that the plaintiffs, now appellees, Williams et al., and any or either of them, were entitled to the money, bonds, war savings stamps, and personal property, described in the petition, and pleaded that Chesapeake Lodge, No. 454, was a subordinate lodge under the jurisdiction of the appellant, Grand Lodge, an organization created and existing under and by virtue of the "constitution and general rules" and the laws of the Grand Lodge of the defendant. The defendant states that said constitution, rules, and by-laws are "voluminous, and constitute a complete code for the government of said subordinate lodge." The answer then sets out and relies upon section No. 43 of the constitution of the national organization, which says:

"Sec. 43. A lodge whose charter has been voluntarily surrendered, or reclaimed by the president of the Grand Lodge shall be known as a defunct lodge. The president of a defunct lodge shall deliver to the Grand Lodge, within thirty days after the dissolution of the lodge, the charter, seal, rituals, unwritten work, and all other supplies furnished by the Grand Lodge, and all effects of the lodge at the time of dissolution. Any president, treasurer, or secretary failing to comply with the provisions of this section shall forever be excluded from membership in the brotherhood.

Whenever the membership of a subordinate lodge falls below five members the charter of said Lodge shall be revoked."

Reliance is had, also, upon certain paragraphs of section 132 of the constitution of subordinate lodges, which in part reads:

"All money collected by the treasurer or collector for any purpose whatsoever shall be and remain the property of the subordinate lodge until property expended or remitted as provided by the constitution and general rules. * * * The funds and property of this lodge, having been raised for the relief of sick and distressed brothers, and other charitable purposes in the Brotherhood, are trust funds for the contingent benefit of its members, and shall not be divided, loaned or donated in any manner among or to its members individually, or to others, nor between the lodges, nor to any other that may branch from it, without the assent of a majority of the members in good standing upon its rolls. Whenever a brother ceases to be a member of this lodge, his rights, title and interest in and to the property of this lodge, or any part thereof, thereby becomes extinct."

Other sections of the constitution and general rules are set forth in the answer and relied upon by appellant, Grand Lodge, as controlling the rights of appellees, Williams et al., and a copy of the constitution and general rules of the Grand Lodge and of the constitution of the local lodge are filed and made a part of the answer.

By reply the averments of the answer and counterclaim were put in issue. Affirmatively pleading, appellees averred that at the time of the revocation of the charter of the local lodge all dues and assessments to the Grand Lodge had been duly paid; that the money, bonds, and property "to which they make claim belonged to them collectively and individually, and that the said Grand Lodge has no legal, just or equitable claim thereto or any part thereof; that any claim they make or might make is fraudulent and without consideration; that said Grand Lodge contributed nothing towards the building up of said funds, purchase of bonds and war savings stamps, or the purchase of the property in question, but the same grew out of dues collected from members of the said local lodge, and under the constitution and by-laws mentioned was funds and property of said local lodge," all of which is based upon section 132 of the constitution, found on page 121 of the book containing the constitution and general rules, etc., filed as part of the answer of appellant.

Appellees also pleaded that the Brotherhood of Railroad Trainmen, a corporation organized and existing under and by virtue of the laws of the state of Ohio, was carrying on and conducting and transacting business in the state of Kentucky without having first complied with the provisions of section 571, Kentucky Statutes, requiring the designation of an agent or agents upon whom process may be served in the state of Kentucky, and designating the office or offices at which its agent or agents may be found; that by reason of its failure so to comply with the provisions of that section of the Statutes it is without capacity to sue or defend. As the Brotherhood of Railroad Trainmen is not plaintiff but merely defendant, this ground, a very questionable one, is not available to the appellees, and this phase of the case will not be further noticed. Section 571, Kentucky Statutes; Clark v. Cooper, 197 Ky. 530, 247 S.W. 929; Warren Oil & Gas Co. v. Gardner, 184 Ky. 411, 212 S.W. 456; Yewell v. Board, etc., 187 Ky. 434, 219 S.W. 1049; Artman Lumber Co. v. Bogard, 191 Ky. 392, 230 S.W. 953; Great Western Petroleum Co. v. Samson, 192 Ky. 818, 234 S.W. 727; Reichart v. Ellis Ferry Co., 184 Ky. 150, 211 S.W. 403. The parties stipulated the facts, and, the case being submitted to the court, judgment was entered dismissing the answer and counterclaim of the defendant, Brotherhood of Railroad Trainmen, and awarding the funds and property in controversy to appellees, Williams et al.; hence this appeal by the Brotherhood.

It is the contention of appellant, Brotherhood, that the constitution and general rules of a fraternal benefit association constitute a contract among its members, and settle the rights created among them, and that courts will not interfere so long as the procedure erected by such constitution is regarded in the transaction of its business that an...