N.J. Bankers Ass'n v. Riper

• Decision Date: 30 June 1948
• Docket Number: 158/567.
• Citation: 60 A.2d 98
• Parties: NEW JERSEY BANKERS ASS'N v. VAN RIPER, Atty. Gen. et al.
• Court: New Jersey Court of Chancery

60 A.2d 98

NEW JERSEY BANKERS ASS'N

v.VAN RIPER, Atty. Gen. et al.

158/567.

Court of Chancery of New Jersey.

June 30, 1948.

Suit for declaratory decree as to constitutionality of the Escheat Act, N.J.S.A. 17:9-19 et seq., by New Jersey Bankers Association, a voluntary unincorporated association, against Walter D. Van Riper, Attorney General of the State of New Jersey, and others. On defendants' motion to strike the bill.

Motion denied.

Syllabus by the Court

.

1. An unincorporated organization or association consisting of seven or more persons and having a recognized name may now by virtue of the statute (R.S. 2:78-1, N.J.S.A.) sue or be sued in any court of this state by such name in any action or suit affecting its common property, rights and liabilities with the same force and effect as regards such common property, rights and liabilities as if the action or suit were prosecuted by or against all the members thereof.

2. The legislature in speaking of the common rights and liabilities of an unincorporated organization or society contemplated the rights and liabilities which its members similarly share or incur, i. e., those pertaining with like application and relevancy to the members of the group.

3. The remedial provisions of the Declaratory Judgment Act are expressly made available to an unincorporated association or society.

4. The legislature placed within the jurisdiction of Chancery the controversial issues which might arise from the Escheat Act.

Riker, Emery & Danzig, of Newark (Alan V. Lowenstein, of Newark, of counsel), for complainant.

John W. Griggs, Deputy Atty. Gen., of New Jersey, for Attorney General and State Treasurer.

JAYNE, Vice Chancellor.

The present bill of complaint is addressed to this court by New Jersey Bankers Association which is a voluntary unincorporated organization of 360 of the 374 banks, trust companies and savings institutions now engaged in business in the State of New Jersey.

Tersely stated, the cardinal object of the bill is to elicit in the manner of a declaratory decree a determination of the constitutionality of P.L.1945, chapter 199, as amended and supplemented by P.L.1946, chapter 78, and P.L.1947, chapter 91, N.J.S.A. 17:9-19 et seq., commonly identified as the ‘Escheat Act.’

The complainant alleges that its member banks for which it is authorized to speak entertain the apprehension that the act in some specified respects contravenes certain provisions of our state (1844) and national constitutions. The advisory relief is sought in pursuance of R.S. 2:26-69, N.J.S.A.

The subject of immediate consideration is the inaugural motion introduced on behalf of the Attorney General for an order dismissing the bill. In the notice of the application the following reasons are indicated:

‘1. The complainant, a voluntary unincorporated association (as alleged in its bill of complaint) has no power to bring this suit.

‘2. It is not alleged in the bill of complaint that this suit affects complainant's common property, rights or liabilities.

‘3. It is not alleged in the bill of complaint that the decree prayed will affect the complainant.

‘4. The bill of complaint states no cause of action in favor of complainant.

‘5. The bill of complaint discloses no personal interest of complainant.

‘6. The bill of complaint discloses no interest of complainant in common with the interest of its members, the protection of which is alleged to be the purpose of this suit.

‘7. The complainant has no power to sue in its own name to protect the individual members of the association.

‘8. There is no allegation that the rights, status, or other legal relations of complainant are affected by the statutes mentioned in the bill of complaint.

‘9. It is not alleged that there are no corporations, other than members of the complainant association, which are affected by the statutes mentioned in the bill of complaint.

‘10. This court has no jurisdiction to entertain this suit because the complainant prays a decree in respect to the statutes mentioned in the bill of complaint, which relate to the rights of complainant's members and their depositors, a purely legal question.’

Manifestly, the foregoing specified reasons can be expediently assembled under three principal subjects.

Foremost is the insistence that the complainant as an unincorporated association and in the circumstances alleged in the bill is not legally competent to prosecute this cause.

I shall not undertake to trace historically the growth of the statutory authority conferred upon unincorporated associations to sue or be sued in our courts of law and equity. See, for example, Kline v. Knights of the Golden Eagle, 113 N.J.Eq. 513, 167 A. 758.

The existing legislation of present notice is found in R.S. 2:78-1, N.J.S.A., under the title ‘Unincorporated Associations.’ It reads:

‘Any unincorporated organization or association, consisting of seven or more persons and having a recognized name, may sue or be sued in any court of this state by such name in any action or suit affecting its common property, rights and liabilities, with the same force and effect as regards such common property, rights and liabilities as if the action or suit were prosecuted by or against all the members thereof. Such an action shall not abate by reason of the death, resignation, removal or legal incapacity of any officer of the organization or association or by reason of any change in its membership.’ (Italics mine.)

To sustain the motion I am requested to ascribe to the statute the interpretation that the authority to prosecute an action is confined to suits which directly affect the property, rights, and liabilities of the association itself as distinguished from those of its members. Assuredly such associations do not have any corporate individuality and their basic and fundamental objects are of a cooperative nature. The presence of the adjective ‘common’ in the phraseology of the section of the statute cannot be ignored, much less can the clause ‘as if the action or suit were prosecuted by...