Stewart v. Monongahela Valley Country Club

112 A.2d 444, 177 Pa. Super. 632, 1955 Pa. Super. LEXIS 798
CourtSuperior Court of Pennsylvania
DecidedMarch 24, 1955
DocketAppeal, No. 251
StatusPublished
Cited by5 cases

This text of 112 A.2d 444 (Stewart v. Monongahela Valley Country Club) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stewart v. Monongahela Valley Country Club, 112 A.2d 444, 177 Pa. Super. 632, 1955 Pa. Super. LEXIS 798 (Pa. Ct. App. 1955).

Opinion

Opinion by

Ross, J.,

Certain individuals filed a complaint in equity against the Monongahela Valley Country Club, a nonprofit corporation, its directors and officers. The individuals, described in the complaint as “members in good standing” of the club, requested the court to restrain the club, its directors or officers from “calling any meeting for the election of directors, amendments of by-laws or transacting business” unless plaintiffs and other persons “similarly situated and affected” were “given the right to vote and participate therein”. Further, plaintiff sought an order directing the defendants to “call a meeting of all the members . . . for the election of directors, amendments of the by-laws and transaction of general business of the corporation”.

The defendants filed preliminary objections in the nature of a demurrer, the court below entered a decree sustaining the preliminary objections and dismissing the complaint, and plaintiffs have appealed to this Court.

The Monongahela Valley Country Club is a nonprofit corporation formed prior to the enactment of the Nonprofit Corporation Law (Act of May 5, 1933, P. L. 289, 15 PS sec. 2851-1 et seq.). The club was incorporated by the Court of Common Pleas of Washington County on December 15, 1919. Its purpose, ac[634]*634cording to the articles of incorporation, is “the maintenance of a club for social enjoyment by the acquiring and maintaining of a clubhouse and grounds for social gatherings and playing of athletic games and sports”.

The by-laws of the corporation, as pleaded by the plaintiffs, provide for two classes of membership: “(a) Active Members — being persons who have been duly elected to membership and who own at least one share of the capital stock; and (b) Non-Resident Members — being persons who have been duly elected to membership residing not less than fifteen miles from the club house and which own at least one share of stock or pay an initiation fee in the sum of $50.00”. The by-laws provide further, according to the complaint, that “only active members shall be entitled to hold office or vote at the meeting of the club, or have any right, title or interest in the property of the club”. (Italics supplied.)

Plaintiffs admit they do not hold stock in the corporation and, thus, are not “active members” of the club as defined by the by-laws. They contend, however, that “the by-laws requiring ownership of stock as a condition precedent (to the right to vote and participate in management) have been waived by the corporation, the directors and the officers since about 1926”. Further, plaintiffs contend, the “provisions in the by-laws, that only active members who own stock shall hold office or vote at the meetings of the club, are illegal and unreasonable”.

If a waiver of the by-laws under consideration is to aid these plaintiffs and entitle them to the relief they seek, it must, in our opinion, primarily appear that persons similarly situated have been given the right to vote and participate in the management of the club.

[635]*635The first inquiry is the status of plaintiffs in relation to the defendant corporation. The only allegation in the complaint hearing upon this issue is plaintiffs’ assertion that they are “members in good standing of the Monongahela Valley Country Club, each of which was duly elected to membership without any qualifications or restrictions of their rights as members”. It is to be recalled that plaintiffs seek by this suit to establish their right to vote and otherwise participate in the management of the club. The question, then, is whether persons who are simply “members in good standing . . . duly elected to membership without any qualifications or restrictions of their rights as members” have ever been permitted to enjoy the rights plaintiffs seek for themselves. Only in such case would there be evidence of a waiver of the particular by-law under attack, i.e., the by-law providing that “only active members shall be entitled to hold office or vote at the meeting of the club”.

Plaintiffs allege in their complaint: “. . . since about 1926 the directors and officers of said club have waived the by-laws by electing to active membership persons who do not hold a share of stock in said corporation and they have not been required to own a share of stock or to pay an initiation fee. Such persons have been elected to full membership without any restrictions on their privileges or curtailment of the rights and benefits that appertain to membership, such as the right to vote at the meetings of the corporation and to participate in the management thereof”. (Italics supplied.) Subsequent paragraphs of the complaint indicate, however, that these unnamed persons elected to active membership did not enjoy the privileges of active members simply because there was no express limitation placed upon their rights by the directors and officers of the club. It appears that the stockholders [636]*636.jealously reserved to themselves the privileges of voting and management whenever the issue arose. Plaintiffs allege that “the last meeting held by the said directors was on October 27, 1937, which was restricted to the stockholders for the purpose of amending the Articles of Incorporation”. Plaintiffs further allege that the directors and officers “called a special meeting of the stockholding members for July 15, 1953, for the purpose of electing a Board of Directors”; that “about 75 members, a vast majority of whom were nonstockholding members” appeared at the meeting of July 15, 1953; and that “an agreement was reached publicly” whereby the election of officers by the board would be deferred until the annual meeting of October 20, 1953, at which time amendments to the by-laws prepared by a committee of stock holding and nonstockholding members would be submitted to the entire membership of the club and the entire membership would then elect a Board of Directors and officers. Thereafter, the complaint continues, “The said board then did call a meeting of the stockholding members for Tuesday, October 20, 1953, for the purpose of electing twelve directors and to take action on proposed amendments to by-laws. No notice of said meeting was given to non-stockholding members”. What transpired at the meeting of October 20, 1953 does not appear in the complaint for the very good reason that the complaint was filed on October 13, 1953. Further, it is not disclosed why some or all of the non-stockholding members did not appear at the meeting of October 20, 1953 to assert their rights under the alleged agreement reached with the stockholding members on July 15, 1953. True, it is alleged that no notice of the October meeting was given to non-stockholding members but the date of the October meeting was fixed at the preceding July meeting and, in fact, it is alleged that [637]*637non-stockholding members actually served on a committee which “did prepare amendments to the by-laws, which amendments were presented to the board and approved by said board”.

We find nothing in the complaint indicating that the stockholding members ever permitted non-stock-holding members to exercise the rights which plaintiffs now seek.

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Cite This Page — Counsel Stack

Bluebook (online)
112 A.2d 444, 177 Pa. Super. 632, 1955 Pa. Super. LEXIS 798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stewart-v-monongahela-valley-country-club-pasuperct-1955.