Duffy v. Kelly

91 N.W.2d 916, 353 Mich. 682, 1958 Mich. LEXIS 410, 42 L.R.R.M. (BNA) 2721
CourtMichigan Supreme Court
DecidedSeptember 10, 1958
DocketDocket 78, Calendar 47,555
StatusPublished
Cited by8 cases

This text of 91 N.W.2d 916 (Duffy v. Kelly) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duffy v. Kelly, 91 N.W.2d 916, 353 Mich. 682, 1958 Mich. LEXIS 410, 42 L.R.R.M. (BNA) 2721 (Mich. 1958).

Opinions

Edwards, J.

This case represents another in a series of suits brought about as a result of the ill-fated effort of Local 636 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada to acquire a new home. We have recently remanded for a hearing (Mathews v. United Association, 351 Mich 293) a bill of complaint filed on the part of 9 Local Union members seeking to cancel Local Union suspensions and/or fines of $1,425 levied against each of them partly because they' were alleged to have started still another suit — this one for accounting of funds claimed to have been accumulated and disbursed by the Building Association.

In the instant action, plaintiff-appellant Duffy, a Local Union member, seeks to restrain the officers of the Local Union from making disbursements of certain Local Union funds. The chancellor below heard and granted a motion to dismiss the bill of complaint.

On appeal in such a situation, we accept as true all well-pleaded allegations in the bill. Mathews v. [685]*685United Association, supra; Cortez v. Ford Motor Company, 349 Mich 108. These include:

That plaintiff is a member in good standing of Local 636, and that defendants are the officers of same and that Local 636 is a voluntary labor association having as members pipe fitting and steam fitting workers in the heating and air-conditioning industries in the Detroit metropolitan area.

The crucial allegations then follow, and we set them forth in full •

“5. More specifically plaintiff is informed and believes and alleges the facts to he:
“(a) That on or about January 16, 1956, a certain action was brought in the Wavne county circuit court, in chancery, against Jack Barton, Tim McCarthy and Jack McGuire, individually and as officers, directors and trustees of Pipe Fitters Local 636, Building Association, Inc., a Michigan nonprofit corporation, by divers persons seeking an accounting of their activities as said officers and directors of said corporation; that their activities as such officers and directors was not within the scope of anv employment or authority of Jack Barton, Tim McCarthy and Jack McGuire, as officers, servants, agents or employees of Local 636, hut, notwithstanding this, Local 636 funds in the total sum of $7,000 were used, transferred and conveyed to hire legal counsel and for other expenses in connection with the defense of said action in behalf of Jack Barton, Tim McCarthy and Jack McGuire.
“(b) Commencing in the summer of 1952, and during the course of the next year or two, certain interest-bearing certificates of indebtedness were issued by Local 636, Building Association, Inc., a Michigan nonprofit corporation, in the total amount of approximately $27,000; said certificates of indebtedness were purchased as an investment by divers persons; further that said certificates of indebtedness were not the obligation of, the proceeds therefrom did not inure to the use or benefit of, and were [686]*686not sold on the credit of said Local 636; notwithstanding the foregoing plaintiff is informed and believes and alleges the facts to be that the defendants herein have been, and are, using, transferring, conveying and dividing the funds belonging to Local 636 to and among the investors in said certificates of indebtedness, and are using, transferring and conveying the funds of Local 636 for the purpose of retiring said certificates of indebtedness and paying interest accrued thereon.
“6. Plaintiff is informed and believes and alleges the facts to be that the use, division, transfer and conveyance of Local 636 funds, as aforesaid, has been and is being purportedly carried on pursuant to certain motions and resolutions passed at the regular membership meetings of said Local 636 held on divers dates which are unknown to your plaintiff but well known to your defendants.
“7. Plaintiff is informed and believes and alleges the facts to be that said motions and resolutions passed at regular membership meetings were wholly ineffectual to authorize or permit defendants herein to use, divide, transfer or convey Local 636 funds as aforesaid, as defendants herein well knew and well know for the following reasons:
“(a) Because such action is forbidden by the constitution of the United Association and the bylaws of Local 636, as more fully set forth above;
“ (b) Because said action is not part of the regular business of the Local Union and should have been made the subject of a special meeting, or meetings, with special notice, or notices, to all members of Local 636;
“(c) Because there was no affirmative vote by the entire membership of said Local 636 authorizing such action, even if the entire membership of said Local 636 should be deemed to have the power to authorize such action under the constitution of the United Association.”

Plaintiff-appellant’s basic contention is that the actions of the Local Union to which he objects were [687]*687violations of the Local bylaws and the Union constitutions. In paragraph 4 of the bill of complaint, specific reference is made to section 150 (b) and (e) of the constitution of the Association, and to article 22, §§ 5 and 6, of the constitution of Local 636. These documents [, along with many others referring'to this controversy,] we find quoted* in the appendix attached to plaintiff’s bill of complaint and made a part thereof by reference.

The simple answer to our current problem is that, accepting all facts as stated by plaintiff, we can find no provision of the constitution of the Association or the Local constitution and bylaws which said actions can be held to have violated.

As to section 150 (b) and (e) of the constitution of the Association, this section is entitled Restrictions on Local Unions Withdrawing or Disaffiliating, and its entire content deals with restrictions upon disposition of Local Union funds or property on the happening of such a contingency. No withdrawal or disaffiliation is alleged in the bill of complaint, and the documents in the appendix make clear none is taking place. The section is plainly inapplicable to the actions currently complained of. Nor do we find any other which lends weight to plaintiff’s claim of constitutional violation.

As to violation of the Local constitution and bylaws, plaintiff asserts the actions complained of “should have been made the subject of a special meeting, or meetings.” Article 22 of the constitution-of Local 636 contains no such mandate, nor do we find any such in the entire Local constitution and bylaws. In article 2 of the Local constitution, we do find provision for the calling of special meetings by call of the president, or on written request of 15 members in good standing. The bill of complaint makes no [688]*688allegation that any effort was made to secure such a meeting on the questions involved.

In short, we do not find either in the sections cited or elsewhere in the constitutions and bylaws depended upon by plaintiff any specific prohibition against the expenditures contemplated, or any procedural rule which the actions complained of may be held to have violated.

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Duffy v. Kelly
91 N.W.2d 916 (Michigan Supreme Court, 1958)

Cite This Page — Counsel Stack

Bluebook (online)
91 N.W.2d 916, 353 Mich. 682, 1958 Mich. LEXIS 410, 42 L.R.R.M. (BNA) 2721, Counsel Stack Legal Research, https://law.counselstack.com/opinion/duffy-v-kelly-mich-1958.