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United Electrical, Radio and Mach. Workers of America (UE) v. Derrickson

Court of Chancery of Delaware, New Castle County

February 2, 1954

UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA (UE), et al.
v.
DERRICKSON et al.

Proceeding to enjoin officers of local union from stripping local of assets and action for accounting. On motion to dismiss for failure to name an indispensable party, the Court of Chancery, New Castle County, Bramhall, Vice-Chancellor, held that where local and parent union claimed same assets, any judgment which might be rendered might seriously affect the rights of the other and local union was a necessary and indispensable party to the action.

Order in accordance with opinion.

[34 Del.Ch. 264] Complaint to enjoin defendants from ‘ stripping’ Local Union and action for accounting. Motion to dismiss.

Louis L. Redding Wilmington, for plaintiffs.

David B. Coxe, Jr., and Donald W. Booker, Wilmington, for defendants.

BRAMHALL, Vice-Chancellor.

Plaintiffs instituted an action against defendants, alleging in the complaint that the United Electrical, Radio and Machine Workers of America, hereinafter designated as ‘ UE’, is an international, or parental, labor organization which unites workers in an industry for their aid, benefit and protection and has chartered as a local union affiliate Local No. 144, United Electrical, Radio and Machine Workers of

Page 922

America, a voluntary, unincorporated association; that plaintiff Albert Fitzgerald is president of UE and sues individually and as representative of the members of UE and UE Local No. 144; that the individual defendants are former officers of UE Local No. 144; that under the charter issued by UE to UE Local No. 144 and accepted by the local, [34 Del.Ch. 265] the local agreed to conform to the constitution of UE and that the documents constituted a contract between UE and UE Local No. 144; that UE has an interest in the proper functioning of the local and in its property and in the use of said property in carrying out the purpose and objectives of UE as set forth in the contract between UE and UE Local No. 144.

Plaintiffs charge that the individual defendants, in violation of said contract between UE and UE Local No. 144, conspired to strip UE Local No. 144 of its founds and other property and to divert this property from the purposes set forth in the contract between UE and UE Local No. 144; that they called or caused to be called a meeting, in a manner in violation of the contract, of the purported membership meeting of UE Local No. 144; that they conducted this meeting in an atmosphere of intimidation and in a manner otherwise in violation of the contract for the purpose of bringing about a secession of this local from UE and a diversion of the funds of UE Local No. 144 to defendant Fibre and Plastic Union, Local 144. Plaintiffs contend that the meeting was illegally conducted and was of no force and effect for the reason, among others, that more than seven members voted in objection to the secession.

The constitution of UE provides in Section N of Article 18 thereof: ‘ If a local disbands, the local secretary and trustees shall send all funds and property belonging to local to the General Secretary-Treasurer. The General Secretary-Treasurer shall hold this property intact for one year. * * *’ . Section O of the same article provides: ‘ Any disbandment, dissolution, secession or disaffiliation of any local shall be invalid and null and void if seven or more members indicate their desire to retain the local charter.’

Defendants motion to dismiss is based upon a number of grounds. However, it will be necessary here to consider only one, namely, whether or not plaintiffs have failed to name an indispensable party.

[34 Del.Ch. 266] UE Local No. 144 was organized as an affiliate with UE. At the time of its affiliation with UE it agreed to abide by the constitution of UE. That agreement constituted a binding contract between the parties. Walter Kidde & Co., Inc. v. United Electrical, Radio & Machine Workers of America, CIO, 7 N.J. 528, 82 A.2d 184; Harker v. McKissock, 7 N.J. 323, 81 A.2d 480. One of the provisions of the constitution of UE, and therefore a part of the contract, was that any attempt by the members of a local organization to secede from the parent organization or to disband or otherwise disaffiliate would be invalid if seven or more members should indicate their desire to retain the local charter. It is alleged in the complaint that more than seven members of UE Local No. 144 indicated their desire to retain the local charter and that therefore the action taken at the meeting of UE Local No. 144 was invalid and of no effect. Accepting this statement in the complaint as correct, as I must for the purpose of this motion, then UE Local No. 144 is still in existence and has a legal right to bring action against the defendants for any wrong which it may have sustained by reason of defendants wrongful actions. See Walter Kidde & Co., Inc. v. United Electrical, Radio and Machine Workers of America, CIO, supra; Fitzgerald v. Santoianni, D.C.Conn., 95 F.Supp. 438. It is provided in the constitution of UE that the assets of the local remain the property of that organization except in the case of secession, disaffiliation or disbanding of the local, in which case the assets become the property of UE.

If it be true that UE Local No. 144 is still in existence, then ...


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