Entre Nous Club v. Toronto

287 P.2d 670, 4 Utah 2d 98, 1955 Utah LEXIS 184
CourtUtah Supreme Court
DecidedSeptember 21, 1955
Docket8259
StatusPublished
Cited by11 cases

This text of 287 P.2d 670 (Entre Nous Club v. Toronto) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Entre Nous Club v. Toronto, 287 P.2d 670, 4 Utah 2d 98, 1955 Utah LEXIS 184 (Utah 1955).

Opinions

[100]*100McDonough, chief justice.

A petition praying a restraining order against the respondent, secretary of state, to prevent his further action in a proceeding to revoke the charter of appellant, Entre Nous Club, a nonprofit Utah corporation, was dismissed in the lower court. Appel-ant cites the dismissal as error, contending that the secretary of state had no jurisdiction to act and was also acting under an unconstitutional statute.

U.C.A.1953, 16-6-13 provides:

“The secretary of state shall require proof from any social club, recreational or athletic. association, or kindred association, incorporating under the provisions of this chapter, that such club or association is a bona fide club or association, the object of which is not for pecuniary profit; that it is organized with actual participating members; and that it will not be used for permitting gambling or any other violation of law or ordinance. If it is afterwards shown to the satisfaction of the secretary of state, after he shall have held a hearing thereon, of which notice shall have been given to such club or association, that any such social club, recreational or athletic association, or kindred association, was actually organized for pecuniary profit, or that such association or corporation was or is actually used for gambling or other purposes in violation of law or ordinance, the secretary of state shall revoke the charter of such corporation.” (Emphasis added.)

In accordance with the power thus given him, the secretary of state, acting upon an affidavit of the chief of police of Salt Lake City setting forth certain violations and disturbances occurring on the Entre Nous premises, mailed notices to four of the eight men listed in the Articles of Incorporation of the Entre Nous Club as officers and directors. This Order to Show Cause was entitled “In the Matter of the Revocation of the Charter of the Entre Nous Club, a nonprofit corporation,” was directed to the Officers of the Entre Nous Club, and began: “You and each of you are hereby directed to appear before the Secretary of State * * * then and there to show cause why the charter of the Entre Nous Club * * * should not be revoked * * *.” A copy of the affidavit of the chief of police was attached.

Appellant argues that since no means of giving the notice required by the statute is spelled out in U.C.A.1953, 16-6-13, supra, the legislative intent must be viewed as requiring service of process in accordance with the Utah Rules of Civil Procedure for the secretary of state to obtain personal jurisdiction over the club. This argument is supported by neither the authorities cited to us nor by historical [101]*101development in the field of administrative law.

The Utah Rules of Civil Procedure are the rules for the government of the courts adjudicating formal contest between adverse parties, U.R.C.P., Rule 1(a) and Rule 81, Vol. 9, U.C.A.1953; clearly they are inapplicable to a proceeding before an administrative body seeking to regulate activities burdened with a public interest. Differences in the parties, the experience of the hearing officer in the particular matter, the considerations involved, and the objects to be obtained point up the need for more flexible procedure before agencies and administrative officers than is utilized in the trial of a case at law. Federal Communications Comm. v. Pottsville Broadcasting Co., 309 U.S. 134, 142-143, 60 S.Ct. 437, 84 L.Ed. 656.

However, although the formal pleadings are much less important in a proceeding such as this than one before the courts, and orders of an administrative body will not be set aside for technicalities if substantial rights have been protected, the due process clause of the U. S. Constitution sets certain limitations upon the sacrifice of procedure to expediency.

“ * * * While hearings before administrative bodies need not have all the formality of judicial procedure but may be informal and, if suited to the matter involved, rather summary * * *, yet there are certain elements of fair play required by the Constitution which are necessary in any character of hearing affecting personal or property rights. In respect to hearings before administrative bodies (as well as judicial tribunals) those elements include (1) a reasonable time and place for hearing where interested parties may attend with reasonable effort * * *; (2) reasonable notice to interested parties * * *; and (3) a reasonable opportunity for presentation of such evidence and argument as are appropriate to the proceeding * * Chamber of Commerce v. Federal Trade Commission, 8 Cir., 13 F.2d 673, 683.

In the present case, the corporation received actual notice through the Show Cause Order issued to its officers, for counsel appeared specially to question the secretary of state’s jurisdiction over it. But the notice as issued was not notice which we could generally characterize as “reasonably calculated to give actual notice” and was not given to the club as required by the statute. The proceeding was directed against the corporation for misuse of its corporate franchise, and hence, the corporation was the only necessary or proper party defendant and the order directing the officers to appear to defend the corporation was not sufficient notice to the corporation. 13 Am.Jur., Corporations, sec. 1331. At the time this action was begun, there was no [102]*102statutory duty upon the club to register changes in its official personnel nor to select one of them as an agent upon whom process might be served; for this reason, the notices, directing those listed as directors at the time of incorporation to appear, might never reach any person presently sufficiently interested in the club to notify it or to defend it.

It has been held that deviations from notice requirements may be the ground for the invalidation of the determinations of administrative bodies, People ex rel. v. Zoller, 337 Ill. 362, 169 N.E. 228; Roosevelt Hotel Bldg. Co. v. City of Cleveland, 25 Ohio App. 53, 155 N.E. 233. However, in some jurisdictions, actual notice or an appearance will cure defective notice, McKinley v. Lucas County, 215 Iowa 46, 244 N.W. 663; Federal Land Bank v. Flanders, 105 Vt. 204, 164 A. 539; Horstmyer v. Trial Board of City of Sacramento, 21 Cal.App.2d 533, 69 P.2d 1021. On the other hand, some courts have held that the defect cannot be cured even if the objecting parties have availed themselves of the opportunity to defend, Matthiessen v. Ott, 268 Ill. 569, 109 N.E. 260; Hatt v. Township Board, 144 Mich. 266, 107 N.W. 1058.

Thus, the question of what type of deficiency in the notice given by an administrative body will void the proceedings, when actual notice was received, becomes a question of policy — i. e., what method will best achieve fairness and expedience? Professor Gellhorn, Administrative Law Cases and Comment, p. 393 if. suggests that the difference in cases dealing with the curability of defective notice might be explained with regard to two categories.

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Entre Nous Club v. Toronto
287 P.2d 670 (Utah Supreme Court, 1955)

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Bluebook (online)
287 P.2d 670, 4 Utah 2d 98, 1955 Utah LEXIS 184, Counsel Stack Legal Research, https://law.counselstack.com/opinion/entre-nous-club-v-toronto-utah-1955.