Ostrom v. Greene

This case presents for determination an unfortunate controversy arising among ladies who joined hands in the first instance for the commendable and patriotic purpose of raising funds for the erection of a soldiers’ monument. That the controversy has caused much bitterness and excitement is apparent. That it has been one of unusual character is unquestioned, and this should be a cause for gratification. That any resulting memorial will unfortunately perpetuate in the community memories of the controversy as well as of the heroes of Sullivan county is evident and to be regretted; but, regardless of these things, the questions presented, like all others, must be determined by the rules of law applicable thereto, if they can be Ascertained. It appears that on the 14th of September, 1892, seven ladies interested in the project met

“We, the undersigned, hereby agree to pay the sum set opposite our respective names for the purposes of creating a fund to be devoted to the erection of a soldiers’ monument, in the village green, at Monticello, New York.”

Funds were also raised for the association by concerts, school entertainments, and by various other methods.. At the time of the meeting of January 3, 1893, the membership of the association had increased to 78, and it had raised, and had in the hands of its treasurer, the sum of $776.66. She also had in her possession the treasurer’s book, the records and minutes of the society, and the several subscription lists referred to. That meeting was called.to order by the president, Mrs. Niven, and 35 members were present, a considerably larger number than usual. Some business was transacted, after which Mrs. Ostrom, the present plaintiff, offered a resolution that the members of the association present proceed to organize an incorporated association, under and pursuant to the statutes of the state of New York, to accomplish the object of the association. The president thereupon read a written address against incorporation, and afterwards, upon calls for the question, refused to put the motion, on the grounds, as she stated, that it was out of order, as well as illegal. Mrs. Fairchild, one of the vice presidents, was then asked to put the motion, but she declined. Mrs. Bush, another vice president, was then requested to do so, and the motion to incorporate was put by her, and carried, 27 members voting for the motion, and 7 against it, Mrs. Bush not voting. A motion to adjourn was then put, and lost, whereupon the members who had voted against incorporation left the meeting. Included in this number were Mrs. Niven, the president, and Mrs. Roosa, the secretary and treasurer. Since that time, those who left and tiiose who remained at the meeting, together with their respective adherents, have each maintained

Those who remained proceeded to appoint a president and secretary pro tern., and, after transacting some business, unanimously adjourned to January 17th. A meeting was held upon the last-named date, at which about 30 members were present. One of the vice presidents called the meeting to order, and a president and secretary pro tern, were chosen. A resolution was adopted that the office of secretary and treasurer be separated; that Mrs. Roosa continue to hold the office of treasurer; and that the association proceed forthwith to elect a permanent secretary in the place of Mrs. Roosa. Mrs. Thornton was thereupon elected permanent secretary. A resolution was also adopted that within five days Mrs. Roosa pass over to her successor, as secretary, all records and papers pertaining to the affairs of the association. This resolution was afterwards served upon or handed to Mrs. Roosa. After transacting other business, the meeting adjourned to January 31st, following. On the last-named date a meeting was held, which was attended by 31 members. Mrs. Ostrom was again chosen president pro tern., in the absence of the president. Resolutions were adopted by a unanimous vote, removing Mrs. Niven from the office of president, and Mrs. Roosa from the office of treasurer, without personal notice to either of them, and directing each of them to render an account to the association of all moneys received by them respectively, and directing Mrs. Roosa to pay over to the treasurer, who shall hereafter be elected, all moneys, books, and papers pertaining to her office; also providing that the duties of the office of president be performed by a vice prest ident until a permanent president shall be elected; and also directing the secretary to cause a notice to the members of the association to be published in the two newspapers printed in Monticello, that at the next meeting of the association an election of president and treasurer to fill the vacancies caused by the removal of Mrs. Niven and Mrs. Roosa respectively would be held. A resolution was also adopted that “this association shall continue under the name of the ‘Sullivan County Ladies’ Soldiers’ & Sailors? Monument Association.’ ” The meeting was adjourned to February 7th, and notice thereof was published as directed. A meeting was held pursuant to this adjournment and notice on the last-named date, at which 54 members were present. It was called to order by Mrs. Ostrom, vice president. An election for president in place of Mrs. Niven, and for treasurer in the place of Mrs. Roosa, was then held, resulting in 52 ballots being cast for Mrs. Ostrom for president, and 52 for Mrs. Decker for treasurer; and Mrs. Ostrom and Mrs. Decker were thereupon declared elected to the offices of president and treasurer respectively. A resolution was adopted directing the treasurer, Mrs. Decker, to make a personal demand of Mrs. Roosa for the immediate possession of all books, papers, and moneys pertaining to the offices of treasurer and secretary. This resolution was afterwards delivered to Mrs. Roosa by Mrs. Decker, but Mrs. Roosa did not comply with its direction, for the reason, as she stated, that she had resigned as treasurer, a^d had turned over everything to Mrs. Wright. A

The action is brought by the plaintiff under section 1919, Code Civ. Proc., which provides that:

“An action may be maintained by the president or treasurer of an unincorporated association, consisting of seven or more persons, to recover any property, or upon any cause of action, for or upon which all the associates may maintain such an action by reason of their interest or ownership therein, either jointly or in common. * ■* * Any partnership, or other company of persons, which has a president or treasurer, is deemed an association within the meaning of this section.”

That this is an association such as is described in the section referred to cannot fairly be denied, and counsel upon each side in this-case agree- that a settled rule of law with respect to associations of this character is that the intervention of the courts cannot be invoked to interfere with the action of voluntary associations, except where property interests or rights or valuable personal privileges, are involved.' The' right to the possession of the funds, books, and papers of this association is, in my opinion, such a right and interest

The fact that this association had no rules, constitution, or bylaws for its government renders judicial decisions relating to societies that are so governed of little value in determining the questions presented. While it had no such rules for its guidance, yet the testimony reveals a usage or custom with reference to its meetings which cannot be ignored, and which is entitled to be considered in determining the questions involved. It was the custom, from the organization of the association down to the time when the disruption occurred, and down to the time when the plaintiff claims to have been elected president, to adjourn each meeting to a definite time and place, and to announce the time and place of the adjournment in the village newspapers. It was not the custom to send notices to the members. Such members as chose to do so attended these meetings pursuant to these adjournments and to the notices so given. These were the regular meetings of the association. It was at these meetings prior to January 3, 1893, at which Mrs. Niven presided, of which a record was kept by its secretary, that important business was transacted by those who attended. It cannot fairly be said, under the circumstances, that it required a majority of all the members to constitute a quorum or to transact business. The society was composed of an indefinite number of members. There was no rule providing the number that should constitute a quorum, and, in absence of such rule, the members who attended the regular meetings held in accordance with the established custom constituted a quorum, and were entitled to transact any business that fairly came within the purposes for which the association was formed. The fact that less than a majority of all the members appeared at any of these meetings was of no importance, because those who failed to attend impliedly gave their assent that those who did attend should, by a majority vote, transact the business of the association. These' principles are supported by numerous authorities. Nibl. Vol. Soc. (1st Ed.) § 127; 2 Kent, Comm. side page 293, subd. 8; Dill. Mun. Corp. (4th Ed.) § 277; Mor. Priv. Corp. § 476.

It appears that Mrs. Niven attended the meeting on the 3d day of January, and, after calling it to order, read a paper congratulating the association upon its success, and suggesting that, as the money was all subscribed, they should close the roll of membership, collect the subscriptions, and appoint a committee to select a site. Then followed some other business, the trouble over her refusal to put the question with reference to the proposed incorporation, the-[jutting of it by a vice president, its adoption by a large majority

I do not regard the action at the meeting that day with reference to the proposed incorporation, or with reference to turning the property of the association over to the incorporation when formed, or what occurred there in these respects either before or after the withdrawal of these members, as material upon the questions involved here. It is sufficient to say that the action taken that day and the certificate of incorporation there prepared were ineffectual to create a corporation, and therefore the resolution with reference to the property had no force. The important fact to be considered in this connection is that at the close of all the other transactions there, as clearly appears by the testimony, the voluntary association adjourned to meet on the 17th day of January. Following that, adjournments were also had to January 31st, February 7th, and February 21st, and then to meet on the call of the president and secretary. All these adjournments were in the usual manner, and notices thereof! were given by the method which was customary; the only difference, if any, with respect to the meetings held after January 3d, as compared with those held before, being that after that date greater publicity was given, occasioned, no doubt, by the excitement incident to the controversy which then arose. I think these adjournments were regularly and lawfully had, in pursuance of the established usage, and that the meetings held pursuant to these adjournments were the

The next question to be considered is as to whether or not Mrs. Niven was lawfully removed from the office of president, and the plaintiff elected thereto, so as to give the latter the right to maintain this action. It will be noticed that, when Mrs. Niven was elected president, she was not elected for a definite term of office. There was nothing in the rules or regulations of the society which fixed the tenure of her office. She was chosen at the first meeting, when only 7 members were present. Subsequent to that time, and prior to the disruption, the membership had increased to 78. There being nothing to fix her rights, powers, duties, or privileges or the term of her office, the election as president gave her no rights superior to that of any other member, except the right to preside over the meetings of the society during its pleasure, or until it should choose another in her place. Nibl. Mut. Ben. Soc. § 35; Ang. & A. Corp. §§ 426, 429; Brendon v. Worley, 8 Misc. Rep. 253 , 28 N. Y. Supp. 557 . It is claimed here, however, that the act of the association in removing Mrs. Niven from the office of president was not done by a majority of all the members, only 31 being.present at the meeting at which the resolution of removal was unanimously adopted, and therefore that she was not lawfully removed. But, as we have seen, it was not essential for a majority of all the members to act. If the removal was lawful, it could be done by a majority of those who attended a regular meeting. It is also claimed that the removal was not lawful, because it was without charges, and without notice and opportunity to be heard; and numerous cases are cited holding that a person cannot be expelled from membership in a voluntary unincorporated society without notice and. an opportunity to be heard. I do not think these cases are applicable. No case has been called to my attention, nor do I know of any, which holds that a person chosen to office in an association like this, for no defined term, is entitled to notice and an opportunity to be heard with reference to a removal from office or to the election of a successor.

Following the removal at the time and in the way stated, Mrs. Ostrom, the plaintiff, was elected president of the association, at a regular meeting thereof held on the 7th of February, at which 54 members were present, 52 of whom cast their ballots for her. This wrould have been effectual, in my judgment, to have caused a removal of Mrs. Niven from the office of president, even if the association had not at the prior meeting passed a resolution of removal. Ang. & A. Corp. §§ 426, 429; Nibl. Mut. Ben. Soc. § 35. At this meeting it will be seen that a large majority of all the members of the association voted in favor of the plaintiff for president.

What has been said with reference to the removal of the president and the election of her successor applies with equal force to the removal of the treasurer and the election of her successor, as substantially the same methods were pursued in both cases.

The- defendants’ counsel also urge that the plaintiff is not entitled to succeed because the self-imposed trust of the association has been discharged by the application- of the moneys in question to the use for which they were raised. The secretary’s minutes show that the association was organized for the purpose of raising funds to erect a monument to the soldiers of Sullivan county, at Monticello, and the subscription papers used state that the fund was “to be devoted to the erection of a soldiers’ monument in the village green, at Monticello.” Upon the trial evidence was received, notwithstanding the plaintiff’s objection thereto, that Mrs. Wright, since the commencement of the action, had paid the moneys received by her from the defendant Roosa to the contractor who furnished the monument on the green. If this was an action in equity, it would have been proper for the court to have received evidence of facts arising subsequent to the commencement of the action, and to bring its relief down to the date of the judgment. Kilbourne v. Supervisors, 137 N. Y. 178 , 33 N. E. 159 . But while the plaintiff, in her complaint, asks for an accounting, as well as for a judgment for the moneys and property of the association, yet, the amount of the fund having been ascertained without the aid of the equity powers of the court, the action proceeded and the trial was had as an action at law upon an allegation of wrongful conversion, and with no equitable defense interposed. That being so, the evidence as to the disposition of the funds subsequent to the commencement of the action was not admissible. The defendants cannot avail themselves of a defense not pleaded, though the facts upon which it is based appear in the record. Douglass v. Ferris, 138 N. Y. 192 , 204, 33 N. E. 1041 ; Hall v. Reflector Co., 30 Hun, 375 .

But, if the defense now urged had been pleaded, I am unable to-see that it would serve to defeat the action. Conceding, for the sake of the argument, that Mrs. Wright, without the direction of the association, applied these funds to the erection of a monument in the-village green, was such application by her a satisfaction of the trust reposed in the association with reference to them? I think not. These moneys were not contributed to any individual member or members, but to the association. It was for the association to execute the trust, not for one member nor a faction of members. The association itself, acting through a majority of its members participating in its regularly constituted meetings, was the only agency or authority to fix upon a location and a design, to determine the materials for the monument, and to agree upon suitable inscriptions to-

It appears that the defendant Roosa did not have in her possession, at the time the suit was commenced, any of the money or property sued for, and at that time Mrs. Wright had the custody of all such money and property. This is an action where a "separate judgment may be rendered against either of the defendants. For these reasons, the plaintiff’s counsel consents in his brief to a dismissal of the complaint as against the defendant Roosa, without costs; and the judgment may so provide. The plaintiff, as president, etc., may have judgment against the defendant Greene, as executrix of Mrs. Wright, for the sum of $776.66, with interest thereon from January 24, 1893, with costs, and also for the possession of the books, records, papers, and subscription lists of the association delivered to Mrs. Wright by the defendant Roosa on that date. Ordered accordingly.