SACKETT & WILHELMS LITHOGRAPHING AND PRINTING COMPANY and HAROLD BUNKER, Respondents,
NATIONAL ASSOCIATION OF EMPLOYING LITHOGRAPHERS and Others, Appellants.
APPEAL by the defendants, the National Association of Employing Lithographers and others, from part of a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 14th day of July, 1909, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the complaint but granting costs and an extra allowance to the plaintiffs in an action for an injunction.
Charles E. Rushmore of counsel [Henry Root Stern with him on the brief],Wile & Oviatt, attorneys, for the appellants.
J. Aspinwall Hodge, for the respondents.
In 1904 there had been serious trouble between employing lithographers and their employees, resulting in a general suspension of work. This was ended by a one year's working agreement made between the employers and the unions, which was renewed for a further year, the renewed agreement expiring in April, 1906. A further tentative agreement was reached at a conference between representatives of the employers and representatives of the unions, subject to a ratification by a vote of the members of the unions. The men remained at work, but it was expected that labor troubles and strikes were impending.
Under these conditions a meeting known as the Pittsburg convention was held in Pittsburg May 22, 23 and 24, 1906, which was attended by representatives of a large number of lithographic employers in the country. It was decided to form an association of lithographic employers and to incorporate under the Membership Corporations Law of New York. A declaration of principles was unanimously adopted by the convention as follows: '1st. Prior to the commission of hostile action on the part of any union or unions toward any member of the association, we favor the settlement of disputes with unions by reference of such questions to properly constituted boards of conference and arbitration, and should any labor union or unions approve and have ratified by its members the
form of conference and arbitration agreement which is hereto appended, upon the offering to us of said agreement for a term of not less than five (5) years, we bind ourselves to accept and ratify it. 2nd. In the event of the commission of any hostile action on the part of any union or unions toward any member of this association, the 'open shop' shall be established with reference to such hostile union or unions, under such shop rules and practices as may be adopted by this national association.'
As a result the defendant National Association of Employing Lithographers was incorporated May 31, 1906, under the Membership Corporations Law. The certificate of incorporation stated that the purposes and objects thereof are 'to foster the business of Lithographers, to reform abuses therein, to secure for ourselves and our business freedom from unjust and unlawful exactions, to produce uniformity and certainty in the customs and usages of the business, to settle differences among the members of the corporation, to promote a more enlarged and friendly intercourse between the members, to maintain amicable relations between the members and their employees, to prevent unjust and unreasonable discrimination against any person or persons by any combination, person or conspiracy in any matter relating to the business of the members of the corporation, and in general to foster and advance the industrial progress of the Lithographic trade.'
The plaintiff corporation is a domestic corporation formed under the Business Corporations Law to carry on the business of lithographing and printing, and the individual plaintiff, Harold Bunker, is a stockholder thereof, and, in the spring of 1906, was a director and officer. He attended the Pittsburg convention and represented the plaintiff. He signed the certificate of incorporation of the defendant, and was named therein as one of its directors.
The constitution adopted by the defendant incorporated the declaration of principles. It provided: 'Section 1. Restrictions. The members of this corporation shall be restricted to such persons as are engaged individually, or are members of firms or are stockholders in corporations which are engaged in the business of lithographing, and own and operate lithographic power presses. No applicant shall be admitted to membership
in this corporation who, as an individual, or whose firm or corporation has any agreement with any labor union in the lithographic trade.
'Section 2. Applications. * * * The applicant shall also in his application agree that he will abide by the constitution and by-laws of this corporation, and by the rules, directions and orders of the board of directors and of all duly authorized committees, and that the firm or corporation which he represents shall do likewise. Upon election to membership the applicant shall qualify and become a member only after the payment of his membership fee. Such application for membership, if the applicant is a member of a firm or a stockholder in a corporation which is to be represented in this corporation, shall be accompanied by a written request of such partnership or corporation that the applicant be admitted to membership.'
'Article III. * * * Section 5. Directors. The Board of Directors shall manage the property and affairs of this corporation, and shall have absolute and complete power to do any and all acts in furtherance of the purposes and objects of this corporation. The entire power of this corporation, except such as is expressly reserved to the members by this constitution, is vested in this Board.'
'Article VIII. Controversies. Section 1. Duties of Members. Each member of this corporation shall be bound and governed by the Declaration Principles of this corporation in all his relation with his lithographic employees or with organized labor in the lithographic trade, and shall also be required to strictly observe such additional rules and regulations as may from time to time be adopted by this corporation or the Board of Directors thereof, or any committee acting by the authority of such Board of Directors for the government of the relations of the members of this corporation with such employees and to such organized labor.'
'Article XI. Funds. Section 1. Membership Fees. Every incorporation member and each new member elected shall pay into the treasury of this corporation a membership fee in an amount to be fixed by the Board of Directors, and which shall be computed at the rate of Five hundred dollars for each lithographic power press operated or owned by the member, or his firm
or corporation. * * * Section 5. Loan of funds. The Board of Directors may loan to any member from the funds of this corporation an amount not exceeding the membership fees of such member, provided such fees have been paid into the treasury of the corporation in cash, and such borrowing member shall give to this corporation for this loan a note made by himself, and if such member represents a firm or corporation, endorsed by such firm or corporation. Such note shall be made payable three months after date and its date shall not be filled in but shall be blank. The blank in the date of the said note may be filled in at any time that this corporation shall determine to collect or negotiate said note by either the president or the treasurer of this corporation or by any person authorized so to do by the Board of Directors. The Board of Directors may take from a member a similar note in payment of the member's membership fee. Such note shall at all times represent legal debts from such member to the corporation, and the statute of limitations shall not be pleaded or taken advantage of by any maker or endorser of such note.'
The required application for membershp containing the required agreements was executed by Harold Bunker and the Sackett & Wilhelms Company on or about June 5, 1906, and the amount of the membership fee required was fixed by the board of directors at $11,500. The board adopted the following resolution: 'Whereas a large number of members of this Association have offered and desire to pay their membership fees by notes, in accordance with the provisions of the constitution; and whereas there is no immediate necessity that the treasury of this corporation should contain any very large amount of cash, there being no immediate need for the same,
' Now, therefore, be it resolved by the Board of Directors of the National Association of Employing Lithographers that this corporation and its officers be and they are hereby empowered to accept notes of the form attached to this resolution from each member, now or hereafter ...