On appeals from the Chancery Division of the Superior Court, certified by the Supreme Court at the instance of the cross-appellant, Industrial Union of Marine and Shipbuilding Workers of America.
For affirmance in part and reversal in part -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld and Burling. Opposed -- None. The opinion of the court was delivered by Heher, J.
[12 NJ Page 313] On a prior submission of this cause, it was held that there had been a valid secession of Local Union No. 1 from the defendant parent body, the cross-appellant herein, Industrial Union of Marine and Shipbuilding Workers of America (known in organizational parlance as the "National Union"), but that a self-executing provision of the National Union's constitution for the transfer, upon disaffiliation, of the local affiliate's property to National is
valid and enforceable, and the judgment of the Appellate Division of the Superior Court which resolved the first issue in the affirmative and the second in the negative was modified accordingly, and the cause was remanded for execution of the judgment as modified. Harker v. McKissock, 7 N.J. 323 (1951).
The individual defendants and the corporate co-defendants, Lester Investment Company and Shipbuilders Educational Society, applied for a rehearing on the ground that forfeiture of the property of Local No. 1 had been decreed, although the Local itself was not a party to the suit, either as an entity or by representation. The contention was that Local was not properly joined as a party plaintiff, and therefore the judgment was not binding against Local as an entity, although in their answer the individual defendants acknowledged that they were the duly constituted officers and trustees of Local and authorized to represent the body in the proceedings. The motion for a rehearing was denied. We pointed out that Local had not prayed for leave to intervene or for a rehearing and vacation of the judgment to that end, and that the judgment was binding upon the applicants for a rehearing, and there was no occasion then to consider whether Local was before the court as an entity, assuming that it could sue or was suable as an artificial person, or by virtual representation through the individual defendants as its officers and trustees, for a decision of that question in favor of representation would result in the same challenge then interposed, namely, that it was taken without affording the entity a hearing. 8 N.J. 230 (1951).
Upon the remission of the cause to the Superior Court, Local No. 1, then and now in affiliation with International Brotherhood of Boilermakers, Iron Shipbuilders and Helpers of America, Lodge No. 801, AFL, moved for "leave to intervene as a party" to the action "in order to assert the claims" pleaded in the amended complaint, on the hypothesis that
the local unit was not "an actual party" to the proceeding, "either as plaintiff or as defendant," and "the representation" of its "interests by existing parties is inadequate." The motion was denied, and Local appeals.
It is said that Local did not authorize "the institution of suit in its name," and the individual plaintiffs represented but a few of Local's members and did not and because of conflicting interests could not have adequately represented the membership in a class action, citing Giordano v. Radio Corporation of America, 183 F.2d 558 (C.C.A. 3, 1950); and that since the "entire theory" of the case "was predicated upon the fact" that the individual plaintiffs "were the true Local," and the individual defendants "were tort feasors who were acting independently and against the interest of Local," it cannot be deemed that Local was a party to the suit. In a word, the contention is that Local was not sued "in its name as a defendant," and the individual defendants were not sued "as representatives" of Local, but as tortfeasors, and therefore Local was not a party defendant, "either by name or through virtual representation." It is urged that Local is a "legal entity," and the officers and trustees "are only trustees for the legal body, to wit, Local; they are not the Local"; the officers and trustees, "taken together or separately, are no more Local than are the directors of a corporation the corporation," and "Local as a legal entity must be the party litigant, and as such is legally entitled to be made a party" and to make answer and defend its "property and rights" and to be represented by counsel of its own choosing.
The point is not well made. Local's collective membership was adequately represented in the proceedings, and the association is concluded by the judgment.
A voluntary unincorporated association is an aggregate of persons under a common name for the pursuit of a common enterprise. Absent a creative statute, an association is not in itself a legal entity, separate and distinct from the persons who comprise the society. Sanchez v. Bowers, 70 F.2d 715 (C.C.A. 2, 1934); Hall v. Essner, 208 Ind. 99,
193 N.E. 86 (Sup. Ct. 1934); Hanley v. American Railway Express Co., 244 Mass. 248, 138 N.E. 323 (Sup. Jud. Ct. 1923). A corporation derives its existence from a state franchise; an association, from the consensual agreement of the component members, who act not by a distinct entity but by virtue of a mere agency. Austin v. Searing, 16 N.Y. 112 (Ct. App. 1857); Niagara County v. People, 7 Hill 504 (Ct. Err. 1844); Ostrom v. Greene, 161 N.Y. 353, 55 N.E. 919 (Ct. App. 1900).
It is the rule at common law, proceeding on this premise, that absent an enabling statute, a voluntary association cannot sue or be sued in the associate name. Since the association does not constitute a separate legal entity, the action is maintainable only by or against the members collectively; and under the doctrine of virtual representation, where the members of the society are too numerous to be joined in one action, one or more of the members may sue or defend on behalf of themselves and all others similarly situated. Moffat Tunnel League v. United States, 289 U.S. 113, 53 S. Ct. 543, 77 L. Ed. 1069 (1933); Karges Furniture Co. v. Amalgamated Woodworkers' Local Union No. 131, 165 Ind. 421, 75 N.E. 877, 2 L.R.A., N.S. 788 (Sup. Ct. 1905); Pickett v. Walsh, 192 Mass. 572, 78 N.E. 753, 6 L.R.A., N.S. 1067 (Sup. Jud. Ct. 1906); Carpenters Union v. Citizens Committee, 333 Ill. 225, 164 N.E. 393, 63 A.L.R. 157 (Sup. Ct. 1928); United Brotherhood of Maintenance of Way Employees and Railway Shop Laborers v. Kennedy, 13 Del. Ch. 106, 115 A. 587 (1922). 4 Am. Jur. 485; 7 C.J.S., Associations, § 35, p. 82. The commonlaw status of an unincorporated association, so far as being made a party to an action, is akin to that of a partnership. Annotation, 6 Am. Cas. 833. The rule is the same in law and in equity, except that under the equity practice of parties by representation, a few of the members may represent all where there is a common interest in the subject matter of the litigation, or where the parties are too numerous to be joined. Kline v. Knights of the Golden Eagle, 113 N.J. Eq. 513 (Ch. 1933); Donovan v. Danielson, 244 Mass 432,
138 N.E. 811 (Sup. Jud. Ct. 1923); Maguire v. Reough, 238 Mass. 98, 130 N.E. 270 (Sup. Jud. Ct. 1921).
In New Jersey we have a statute providing that an unincorporated association consisting of seven or more persons may sue or be sued in its common name in any action or suit affecting its common property, rights and liabilities, as effectually as if the action or suit were prosecuted by or against all the members thereof; but, as concerns suits of an equitable nature, the act has no application to "a fraternal, charitable or other organization not organized for pecuniary profit." R.S. 2:78-1; 2:78-6; N.J.S. 2 A:64-1; 2 A:64-6. As to suits in equity, therefore, the enabling act does not seem to cover associations such as the local union here. Yet, independently of statute, Chancery has long entertained jurisdiction of suits instituted against labor unions by the associate name. Vide Newark International Baseball Club, Inc, ...