Stafford v. Wood , 234 N.C. 622 ( 1951 )

68 S.E.2d 268 (1951) 234 N.C. 622

STAFFORD
v.
WOOD et al.

No. 604.

Supreme Court of North Carolina.

December 12, 1951.

Robert S. Cahoon, Atlanta, Ga., for the defendants, David Draper Wood and the Textile Workers Union, appellants.

Pittman & Webb and McNeill Watkins, all of Rockingham, for plaintiff, appellee.

ERVIN, Justice.

It appears on the face of the record that the Textile Workers Union is an unincorporated labor union. In consequence, we necessarily consider at the outset whether this organization is such a being as can be subjected to the jurisdiction of the court. Jinkins v. Carraway, 187 N.C. 405, 121 S.E. 657. In the very nature of things, a court must observe the limits of its own authority, and stay or dismiss a legal proceeding of its own motion in case it lacks power to try the cause. Henderson County v. Smyth, 216 N.C. 421, 5 S.E.2d 136; Miller v. Roberts, 212 N.C. 126, 193 S.E. 386; Nelson v. Atlantic Coast Line R. Co. Relief Department, 147 N.C. 103, 60 S.E. 724.

An unincorporated association is merely a body of individuals acting together, without a corporate charter, but upon the methods and forms used by incorporated bodies, for the prosecution of some common enterprise. Hecht v. Malley, 265 U.S. 144, 44 S. Ct. 462, 68 L. Ed. 949. At common law such an association is not an entity, and has no existence independent of its members. This being true, an unincorporated association has no capacity at common law to contract, or to take hold, or transfer property, or to sue or be sued. Venus Lodge v. Acme Benevolent Ass'n, 231 N.C. 522, 58 S.E.2d 109, 15 A.L.R. 2d 1446. In short, the common law regards an unincorporated association as an "airy nothing," or a "non-existent legal ghost," no matter how powerful it may be in reality. Venus Lodge v. Acme Benevolent Ass'n, supra; Nelson v. Atlantic Coast Line R. Co. Relief Department, supra. The common law view that an unincorporated association does not exist as a legal entity and can neither sue nor be sued still prevails in this State, except to the extent it has been altered by statute. Ionic Lodge v. Ionic Lodge Free Ancient & Accepted Masons, 232 N.C. 648, 62 S.E.2d 73, and Id., 232 N.C. 252, 59 S.E.2d 829.

The common law rule that an unincorporated association cannot be sued was applied to unincorporated labor unions in these cases: Hallman v. Wood, Wire & Metal Lathers Union, 219 N.C. 798, 15 S.E.2d 361; Citizens Hotel Co. v. Asheville Typographical Union, 187 N.C. 42, 121 S.E. 31; Tucker v. Eatough, 186 N.C. 505, 120 S.E. 57.

Subsequent to the rendition of these decisions, the legislature enacted chapter 478 of the 1943 Session Laws, which is now embodied in G.S. § 1-97(6) and reads as follows:"Any unincorporated association or organization, whether resident or nonresident, desiring to do business in this state by performing any of the acts for which it was formed, shall, before any such acts are performed, appoint an agent in this state upon whom all processes and precepts may be served, and certify to the clerk of the superior court of each county in which said association or organization desires to perform any of the acts for which it was organized the name and address of such process agent. If said unincorporated association or organization shall fail to appoint the process agent pursuant to this subsection, all precepts and processes may be served upon the secretary of state of the state of North Carolina. Upon such service, the secretary of state shall forward a copy of the process or precept to the last known address of such unincorporated association or organization. Service upon the process agent appointed pursuant to this subsection or upon the secretary of state, if no process agent is appointed, shall be legal and binding on said association or organization, and any judgment recovered in any action commenced by service of process, as provided in this subsection, shall be valid and may be collected out of any real or personal property belonging to the association or organization.

"Any such unincorporated association or organization, now performing any of the acts for which it was formed, shall, within thirty days from the ratification of this subsection, appoint an agent upon whom processes and precepts may be served, as provided in this subsection, and in the absence of such appointment, processes and precepts may be served upon the secretary of state, as provided in this subsection. Upon such service, the secretary of state shall forward a copy of the process or precept to the last known address of such unincorporated association or organization."

This statute clearly manifests the legislative intent to make all unincorporated associations or organizations doing business in North Carolina legally accountable as separate entities for acts done by them in furtherance of the objects for which they are formed.

When the statute is read aright, it does these things: (1) It provides that any unincorporated association or organization, whether resident or nonresident, which is doing business in North Carolina by performing any of the acts for which it is formed, is subject to suit as a separate legal entity; and (2) it prescribes the manner in which service of process is to be made upon such association or organization when it is so sued. It necessarily follows that an unincorporated labor union, whether resident or nonresident, which is doing business in this State by performing any of the acts for which it is formed, is suable as a separate legal entity.

Notwithstanding our decision as to the suability of unincorporated labor unions, we are compelled to hold on the present record that the court below erred in denying the motion of the Textile Workers Union lodged on its special appearance for a dismissal of the action as to it for want of jurisdiction over it. Under G.S. § 1-97(6), the service of process upon the Secretary of State is not binding on an unincorporated association or organization unless it is doing business in North Carolina by performing acts for which it is formed. There is no factual foundation for the legal conclusions and ruling that the Textile Workers Union has been brought before the court by a proper service of process in this action. The underlying finding that the Textile Workers Union had an affiliated local union in Richmond County, North Carolina, on the date this action was instituted merely indicates an undefined connection between the nonresident Textile Workers Union and the resident local union. 2 C.J.S., Affidavits, § 28, p. 988. It does not show, however, that the Textile Workers Union is doing business in North Carolina by performing acts for which it is formed. Radio Station WMFR, Inc., v. Eitel-McCullough, Inc., 232 N.C. 287, 59 S.E.2d 779. The court below properly paid no heed to the supposed service of process upon "Joel Layton, agent." Such attempted service was unavailing, for it ignored the statutory provision relating to service upon unincorporated associations or organizations. Medlin v. Ebenezer Methodist Church, 132 S.C. 498, 129 S.E. 830; International Brotherhood of Boilermakers, Iron Shipbuilders, Welders and Helpers of America v. Wood, 162 Va. 517, 175 S.E. 45.

We pretermit an analysis of the allegations which the complaint levels at the defendant Wood. That pleading was ample to withstand his demurrer.

Error on the appeal of the defendant, Textile Workers Union of America.

Affirmed on the appeal of the defendant, David Draper Wood.