Sherman v. Yiddisher Kultur Farband

99 A.2d 868, 375 Pa. 108, 1953 Pa. LEXIS 441

• Court: Supreme Court of Pennsylvania
• Decided: October 15, 1953
• Docket: Appeal, 139
• Status: Published

Opinions

Opinion by

Mr. Justice Allen M. Stearns,

May petitioners, who are not members of a nonprofit corporation, intervene and petition the court of common pleas to revoke its decree of incorporation, upon the ground that such decree had been obtained through fraudulent misrepresentation?

The Yiddisher Kultur Farband, also known as Jewish Culture Association, in proceedings under the Nonprofit Corporation Law of May 5, 1933, P. L. 289, obtained a charter from the Court of Common Pleas of Allegheny County on May 22, 1944- The application stated that the purposes for which the corporation was formed were to encourage the study of Jewish literature, arts, and cultural pursuits, together with a number of similar objectives.

Samuel Louis Sherman and Paul Ginsburg filed a petition in that court as of the original term and number at which the charter was granted, in which petition they pray that they be permitted to intervene specially as parties. They allege that the incorporators, directors and officers wilfully, maliciously and corruptly perpetrated a fraud upon the court by misrepresenting the purposes of the corporation, “its true and clandestine purpose being the establishment of a Communist formed, controlled and directed ‘front’ for unlawful purposes,” and that the existence of the corporation constitutes a continuing fraud upon the court and a gross abuse of the corporation laws of the Commonwealth. They aver, therefore, that, after investigation of the facts, the charter of the corporation should be revoked and punitive measures taken against the persons responsible. The court granted leave to the petitioners to intervene and fixed a time for a hearing. The Association, by its counsel, filed preliminary objections. The court below announced its intention to take testimony in order to determine whether the alleged fraud was in fact committed. The Association has appealed to this Court under the Act of March 5, 1925, P. L. 23, 12 PS 672, which authorizes an appeal where on- preliminary objections, the jurisdiction of a court is raised. There is no question that a court of common pleas possesses jurisdiction to revoke its decree of incorporation, but such proceeding must be instituted by interested parties and in an appropriate statutory action.

All corporations, whether for profit or nonprofit, are creatures of statute, which prescribes not only how they shall be formed but how they shall be dissolved: Act of May 5, 1933, P. L. 364, as amended, 15 PS 2852, and Nonprofit Corporation LaAV of May 5, 1933, P. L. 289, as amended, 15 PS 2851. This Court has consistently decided that in corporations formed for profit the Attorney General, by an action of quo warranto, is the appropriate official to petition for the dissolution and termination of an improperly formed or illegally conducted corporation: Centre and Kishacoquillas Turnpike Road Company v. McConaby, 16 S. & R. 140; Commonwealth ex rel. v. American Baseball Club of Philadelphia, 290 Pa. 136, 138 A. 497; Commomoealth ex rel. v. United States Annuity Society, 303 Pa. 19, 154 A. 24. Section 209 of the Act of May 5, 1933, supra, 15 PS 2851-209, under which the present nonprofit corporation Avas formed, provides: “The articles of incorporation, approved by a judge and recorded by the recorder of deeds, shall be conclusive evidence of the fact that the corporation has been incorporated, but proceedings may be instituted by the Commonwealth to dissolve, wind up and terminate a corporation which should not have been formed under this act or which has been formed without a substantial compliance with the conditions prescribed in this act as precedent to incorporation.” (Italics supplied) The statutory remedy of revocation is by the Commonwealth in an action of quo warranto.

Petitioners possess no status as interested parties in this proceeding. The Act of June 14, 1836, P. L. 621, §2, 12 PS 2022, provides that the writ of quo warranto may be issued “upon the suggestion of the Attorney General, or his deputy, in the respective county, or of any person or persons desiring to prosecute the same.” But the words “any person desiring to prosecute the same” have uniformly been held to mean a person having an interest of his own to be affected, or a wrong to be redressed, separate and distinct from that of the Commonwealth or the community in general; they do not give a private relator the use of the writ in a case of public right involving no individual grievance. In short, a stranger who has no interest in a corporation except that which is common to every citizen cannot demand a judgment of ouster in a writ of quo warranto: Commonwealth v. Allegheny Bridge Co., 20 Pa. 185, 190; Murphy v. Farmers’ Bank of Schuylkill County, 20 Pa. 415, 418; Commonwealth ex rel. Banning v. The Philadelphia, Germantown and Norristown Railway Co., 20 Pa. 518; Commonwealth ex rel. McLaughlin v. Cluley, 56 Pa. 270, 272; Commonwealth ex rel. Attorney General v. Dillon, 81 Pa. 41, 45, 46; Commonwealth ex rel. Butterfield v. McCarter, 98 Pa. 607, 612-614; Commonwealth ex rel. Gast v. Pfromm, 255 Pa. 485, 489-491, 100 A. 276, 277, 278; Commonwealth ex rel. Attorney General v. American Baseball Club of Philadelphia, 290 Pa. 136, 144, 138 A. 497, 500; Commonwealth ex rel. Schermer v. Franek, 311 Pa. 341, 344, 166 A. 878, 879, cf. Wiegand v. The Barnes Foundation, 374 Pa. 149, 97 A. 2d 81. Tlie present petitioners are merely informers ■without any peculiar interest of their own, and if they were to be permitted to institute quo warranto proceedings the same right would exist on the part of each and every citizen of the Commonwealth however irresponsible, however improperly motivated, he might be. If the Association here is what petitioners allege it to be the situation is one of public concern and a public wrong, not a private injury, and, as such, it is for the Commonwealth and for it alone, acting through the Attorney General, to apply for the issuance of a writ of quo warranto.

The order of the court below is reversed. The preliminary objections are sustained, and the petition is dismissed. Costs to be paid by appellees.