Derry Council No. 40. v. State Council of Pennsylvania
| Decision Date | 08 October 1900 |
| Docket Number | 14 |
| Citation | 47 A. 208,197 Pa. 413 |
| Parties | Derry Council No. 40, Jr., Order United American Mechanics of Hummelstown, Pennsylvania, v. The State Council of Pennsylvania, Junior Order United American Mechanics, et al |
| Court | Pennsylvania Supreme Court |
Argued May 28, 1900
Appeal, No. 14, May T., 1900, by defendants, from decree of C.P. Dauphin Co., No. 260, in equity, in case of Derry Council No. 40, Jr., Order United American Mechanics of Hummelstown, Pennsylvania, by its Trustees, H. Wells Buser George Spidle and Stauffer Stephenson, v. The State Council of Pennsylvania, Junior Order United American Mechanics, and the National Council of the Junior Order United American Mechanics of the United States of North America. Reversed.
Bill in equity to restrain the collection of a per capita tax levied upon the members of an incorporated beneficial society.
The facts are fully stated in the opinion of the Supreme Court.
The court entered a decree enjoining the defendants from levying a per capita tax.
Error assigned amongst others was the decree of the court.
Upon a review of the whole case, we are persuaded that the injunction awarded by the court below was improper. The decree is reversed and the bill dismissed at the cost of the appellees.
W. U Hensel, with him A. D. Wilkin and A. M. DeHaven, for appellants. -- The adoption of the national laws of 1890, at Minneapolis, was in accordance with the laws governing the Order, and was not in violation of the charter nor ultra vires: Lumbard v. Aldrich, 8 N.H. 31; McCall v. Byram Mfg. Co., 6 Conn. 428; Hutchins v. New England Coal Mining Co., 4 Allen (Mass.), 580; Arms v. Conant, 36 Vt. 744; Stoney v. The American Life Ins. Co., 11 Paige (N.Y.), 635; Bard v. Poole, 12 N.Y. 495; Smith v. Alvord, 63 Barb. (N.Y.) 415; Merrick v. Van Santvoord, 34 N.Y. 208; Connecticut Mut. Life Ins. Co. v. Cross, 18 Wis. 109; Galveston R.R. v. Cowdrey, 11 Wall. (U.S.) 459; Reichwald v. Commercial Hotel Co., 106 Ill. 439; Saltmarsh v. Spalding, 147 Mass. 224; Newburg Petroleum Co. v. Weare, 27 Ohio 343.
The National Council is not such a corporation as is subject to the ordinary rule of judicial construction on extraterritorial acts: Christian Union v. Yount, 101 U.S. 352; Mann Mining Co.'s Case, 2 Chester Co. Rep. 90; Hussey v. Gallagher, 61 Ga. 86; Kerr on Injunctions (3d ed.), chap. 23.
The complainants are estopped by their previous acts from objecting to the change in the method of levying the per capita tax, on the ground that it was effected at a meeting held outside of the state: Wood v. Boney, 21 A. Repr. 574; Handley v. Stutz, 139 U.S. 417.
The maintenance of the central office at Philadelphia and the transaction of all business there, is a sufficient compliance with the requirements of the charter, that the place of business of the corporation shall be Philadelphia: Railroad Companies v. Keokuk Bridge Co., 131 U.S. 371; Central Transportation Co. v. Pullman Car Co., 139 U.S. 24; McCormick v. Market Bank, 165 U.S. 538.
The act of 1865 gives the National Council, a majority of whose members are nonresidents, express authority to transact business outside the state of Pennsylvania.
John E. Fox, with him W. A. Pike and M. W. Jacobs, for appellees. -- The Minneapolis laws are invalid: Ohio & Miss. R.R. Co. v. Wheeler, 1 Black, 286; Allegheny County v. Cleveland, etc., R.R., 51 Pa. 228; Matthews v. Trustees, 7 Phila. 270; Com. v. Standard Oil Co., 101 Pa. 119; Miller v. Ewer, 27 Me. 509; Smith v. Silver Valley Mining Co., 64 Md. 85; Aspinwall v. O. & M.R.R. Co., 20 Ind. 492; Ormsby v. Vt. Cooper Mining Co., 56 N.Y. 623; Franco-Texan Land Co. v. Laigle, 59 Tex. 339; Duke v. Taylor, 37 Fla. 64; Camp v. Byrne, 41 Mo. 52; Hodson v. Duluth, Huron & Denver R.R. Co., 46 Minn. 454; Freeman v. Machias, 38 Me. 343; Hiles v. Parrish, 14 N.J. Eq. 380; Green's Brice's Ultra Vires, p. 442; Thompson on Corporations, sec. 694.
The act of 1865 has no application: Arthur v. Morrison, 96 U.S. 108; Esterley's App., 54 Pa. 192.
The proceedings to collect the per capita tax from councils subordinate to the state council are not warranted by the Minneapolis legislation: Sperry's App., 116 Pa. 391; Com. v. Bank of Pennsylvania, 3 W. & S. 184; Baptist Congregation v. Scannel, 3 Grant, 48; Sarver's App., 81* Pa. 183; Failey v. Stockwell, 2 Dist. Repr. 197; Tunis v. H., M. & F.R.R. Co., 149 Pa. 70; Leech v. Harris, 2 Brewst. 571; Lowry v. Stotzer, 7 Phila. 397; Potter v. Search, 7 Phila. 443; Brush Electric Co.'s App; 114 Pa. 574; Johnston v. Price, 172 Pa. 427; Conemaugh Gas Co. v. Jackson Farm Gas Co., 186 Pa. 443.
Before GREEN, C.J., McCOLLUM, MITCHELL, DEAN, FELL, BROWN and MESTREZAT, JJ.
The injunction in this case was awarded solely on the ground that the action of the National Council of the Junior Order of United American Mechanics of the United States of North America, in levying the per capita tax at Minneapolis in 1899, was null and void. The court below so concluded, because, in its judgment, the levying of the tax was a corporate act by the body, which, having been incorporated in this state under our corporation act, had no power to do a corporate thing -- that is, something relating to or concerning its existence -- beyond the limits of the commonwealth that had created it. It is true, as a general proposition, that a corporation can have no legal existence beyond the bounds of the sovereignty that gave it life, and must dwell within the place of its creation: Ohio & Miss. R.R. Co. v. Wheeler, 1 Black, 286; County of Allegheny v. Cleveland & Pittsburg R.R. Co., 51 Pa. 228; Commonwealth v. Standard Oil Co., 101 Pa. 119. It is equally true, as a general rule, that, as the corporation cannot exist beyond the limits of the sovereignty from which it springs, its strictly corporate acts must be performed within such limits: Miller v. Ewer, 27 Me. 509; Smith v. Silver Valley Mining Co., 64 Md. 85; Green's Brice's Ultra Vires, p. 442, note a; Thompson on Corporations, sec. 694. What was done by the National Council at Minneapolis in 1899 to provide for the collection and payment of the per capita tax was, as held by the court below, a corporate act of the body. In levying this tax, it was providing for revenue upon which its existence may have depended. If it had no right to exist within another sovereignty and perform such corporate acts as are complained of, the decree before us for review ought not to be disturbed; but, if it is not such a corporate body as should be subject to the general rule relating to the place of the existence of a corporation and the limits within which all strictly corporate acts must be performed, the court below erred in awarding the injunction, unless for other good cause it should have issued.
The National Council of the Junior Order of United American Mechanics of the United States of North America was incorporated by the court of common pleas, No. 3, of Philadelphia, on April 10, 1893, under the provisions of the act of April 29, 1874, and its supplements, and is a corporation designated by the statute as "not for profit." Nearly a quarter of a century before its incorporation, it had been organized, having been composed of the state councils of Pennsylvania, New Jersey and Delaware. Now it is composed of councils and members of thirty-two states and territories. The purposes of the Order, as an unincorporated society, continued to be the same after its incorporation, and were beneficial and protective, and "to maintain and promote the interests of the Americans and shield them from the depressing effects of foreign competition; to establish a sick and general fund; to maintain the public school system of the United States and to prevent sectarian interference therewith; to uphold the reading of the Holy Bible therein; to assist the American youth in obtaining employment, and to encourage them in business; to afford relief to the members and their families in case of sickness, and to defray the expenses of their funerals, or such other cases of distress as shall be defined by the by-laws." It exists as a great family, to help and protect its members. It is of a social and not of a business character. It has no capital stock, and the making of money is not its object. Its aims and membership, as declared by its charter, are national, confined to no state or locality. A majority of its members and councils are nonresidents of Pennsylvania. Must such an order, such an incorporated body, as diffusive as the limits of the nation, exist and act only within the borders of the sovereignty that created it; or should it, a purely beneficial organization, with its broad aims and objects and its brotherhood extending from ocean to ocean, be permitted, from time to time, to act at such places beyond this commonwealth, as may be selected for the manifest convenience and welfare of its members? If the reasons of the general rule requiring a corporation to perform its corporate acts within the state or sovereignty that gave it life, extend to this order, it was properly enforced by the court below; but, if they do not apply, the rule itself should not. Cessante ratione legis, cessat ipsa lex. These reasons must be, as in any ultra vires act by a corporation: "1. The interest of the public, that the corporation shall not transcend the powers granted. 2. The interest of the stockholders, that the capital shall not be subjected to the risk of enterprises not contemplated by the charter, and therefore not authorized by the stockholders in subscribing for the stock. 3. The obligation of every one, entering into a contract with the corporation, to take notice of the legal limits of its powers:" Railway Companies v. Keokuk Bridge Co., 131 U.S. 371. The reason of...
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