Hartnett v. Plumbers' Supply Ass'n of New England
| Decision Date | 20 October 1897 |
| Citation | 169 Mass. 229,47 N.E. 1002 |
| Parties | HARTNETT v. PLUMBERS' SUPPLY ASS'N OF NEW ENGLAND. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Sanford
H. Dudley, for petitioner.
Elder Wait & Whitman, for respondent.
The statute provisions under which this petition is brought were introduced by St.1851, c. 233, §§ 55-64, and have been continued in force without much change. See St.1852, c. 312 §§ 42-50; Gen.St. c. 145, §§ 16-24; Pub.St. c. 186, §§ 17-25. In plain and positive terms, they purport to give relief to any person whose private right or interest has been injured or is put in hazard by the exercise by any private corporation of a franchise or privilege not conferred by law. In the earliest cause in which they were considered it was said that they conferred upon the court a manifestly high power, to be exercised only upon extraordinary occasions, and in aggravated cases of usurpation and encroachment. See Hastings v. Railroad Co., 9 Cush. 596, 599. These views, however, were not repeated or referred to in the succeeding cases of Bank v. Boynton, 11 Cush. 369, Boston & P.R. Corp. v. Midland R. Co., 1 Gray, 340, or Goddard v. Smithett, 3 Gray, 116. In the present condition of society, having regard to the actual power of corporations as compared with that of natural persons whose interest they affect, we think that the exercise by a private corporation of franchises or privileges not conferred by law may be a serious usurpation and encroachment, which, when it injures or puts in hazard the private rights of any person, will justify the exercise by this court of the powers given it by the statutes under consideration. In such cases, this explicitly given remedy, like that of the writ of mandamus, should now be "regarded as an ordinary process in cases to which it is applicable." See Insurance Co. v. Phillips, 141 Mass. 531, 546, 6 N.E. 534.
The defendant corporation was chartered under Pub.St. c. 115. The purposes for which it was formed are stated in its charter to be those of "promoting pleasant relations among its members; discussing, arbitrating, and settling all matters pertaining to the prosperity and promotion of the jobbing plumbers' supply business; and establishing and maintaining a place for social meetings." Chapter 115 is entitled "Of Associations for Charitable, Educational, and Other Purposes," and authorizes corporations to be formed for the following purposes only: "For any educational, charitable, benevolent or religious purpose; for the prosecution of any antiquarian, historical, literary, scientific, medical, artistic, monumental or musical purposes; for supporting any missionary enterprise having for its object the dissemination of religious or educational instruction in foreign countries; for promoting temperance or morality in this commonwealth; for encouraging athletic exercise or yachting; for encouraging the raising of choice breeds of domestic animals and poultry; for the association and accommodation of societies of Free Masons, Odd Fellows, Knights of Pythias, or other charitable or social bodies of a like character and purpose; for the establishment and maintenance of places for reading rooms, libraries, or social meetings." Pub.St. c. 115, § 2. The subsequent act authorizing the incorporation of labor or trade organizations (St.1888, c. 134) for the purpose of improving in any lawful manner the condition of employés in any lawful trade or employment has no bearing upon the present case. The franchises and privileges conferred upon the defendant by law are limited by the purposes enumerated in Pub.St. c. 115, § 2. Business corporations are formed under Pub.St. c. 106, or the other chapters relating to special businesses; and, for such corporations to obtain a charter, a capital stock is required, and there are other prerequisites to the granting of a charter than those required of corporations formed under Pub.St. c. 115.
The report finds that the defendant corporation consists of about 20 firms engaged in selling plumbers' supplies. This means only that its members are persons who are interested in such firms. It takes proceedings against persons whom its members may represent to it as owing them overdue bills for plumbers' supplies, sending notices to such persons, and also notices to its members other than the creditor. The notice sent by the corporation to the person so alleged to owe an overdue account, after reciting that he has failed to settle the demand, informs him, on behalf of the corporation, that, unless he shall settle the claim within 10 days, the members of the corporation will be notified, and that, in consequence, he may be unable to purchase any goods from any of them except for cash before delivery; suggests that, if he has any reason why such notice should not be given, he should immediately present the same to the corporation; and concludes with the threat that inattention to this will bring about the consequences above indicated. The corporation keeps in a book the names of all persons represented to it by its members to be their delinquent debtors, and provides each of its members with a book for the purpose of having the names of such persons entered upon such a book in the possession of each member. After the notice has been sent by the corporation to the alleged debtor, if he does not settle the claim, or present to the corporation some reason for not doing so, the corporation sends to each of its members a formal statement that the alleged debtor's name has been entered on the books of the corporation, and that by its by-laws its members are debarred from selling goods to him except for cash before delivery, until he shall have settled. This statement orders the members of the corporation not to fail to enter the debtor's name in the book provided for that purpose, and states his name and address, the name of his creditor, and the amount of the debt.
That the defendant claims to take such proceedings under its corporate franchises appears from its by-laws, and from the forms which it prepares and uses and sends to its members, to be used in the proceedings. The by-laws make it the duty of all members to report to the secretary any information concerning failures or financial embarrassments in the trade and "to sell only for cash paid before delivery to customers who have unjustly failed to meet their trade contracts and obligations, and so long as that failure continues." They provide that if a member is involved as defendant in any legal proceeding growing out of his membership, and caused by his obedience to and action under the rules and by-laws of the corporation, the costs and expenses incurred shall be paid out of its funds, if the member places his case in the hands of an attorney approved by its executive committee. There is also a provision that, in cases where the correctness of accounts between members and others is disputed, the creditor shall appoint one arbitrator, the debtor another, and that the two arbitrators shall choose a third, and also that the matter may be referred to its...
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