Nonprofit corporation’s By-laws were a contract between corporation and its members
How later courts described this case
- Nonprofit corporation’s By-laws were a contract between corporation and its members
Written by the judges who cited it.
The opinion
*241 Judge Wynn
dissenting.
The majority contends that the trial court’s grant of summary judgment in favor of defendants was proper because plaintiffs claim is now moot. I respectfully disagree, and therefore dissent.
The majority cites Nicholson v. State Educ. Assist. Auth., 275 N.C. 439 , 168 S.E.2d 401 (1969), and Fulton v. City of Morganton, 260 N.C. 345, 132 S.E.2d 687 (1963), for the proposition that a court may not issue a mandatory injunction to undo what has already been done. However, there is a contrary line of cases. In R.R. v. R.R., 237 N.C. 88 , 74 S.E.2d 430 (1953), our Supreme Court held:
[A court of equity] may, by its mandate, compel the undoing of those acts that have been illegally done, as well as it may, by its prohibitive powers, restrain the doing of illegal acts. The court may compel the restoration to the plaintiff of that which was wrongfully taken from him. A mandatory injunction based on sufficient allegations of wrongful invasion of an apparent right may be issued to restore the original situation.
Id. at 94 , 74 S.E.2d at 434 (citations omitted). See also Crabtree v. Jones, 112 N.C. App. 530 , 435 S.E.2d 823 (1993), disc. review denied, 335 N.C. 769 , 442 S.E.2d 514 (1994); Town of Pine Knoll Shores v. Evans, 331 N.C. 361 , 416 S.E.2d 4 (1992); Wrightsville Winds Townhouses Homeowners’ Ass’n. v. Miller, 100 N.C. App. 531 , 397 S.E.2d 345 (1990), disc. review denied, 328 N.C. 275, 400 S.E.2d 463 (1991).
Contrary to the majority’s assertion, plaintiff’s claim is not moot simply because the merger has occurred. As the majority opinion implicitly recognizes, a court may, in an appropriate case, issue a mandatory injunction undoing acts which were illegally done.
In the instant case, there are issues of material fact regarding whether the defendants caused the merger outside of the statutory authority to do so. Accordingly, I would reverse the grant of summary judgment and remand for a trial to determine whether, in fact, the merger occurred outside of the authority to merge nonprofit corporations granted by N.C. Gen. Stat. § § 55A-40(a)(l) (1990) (recodified N.C. Gen. Stat. § 55A-ll-03(b) (1993)) and 55A-31 (1990) (recodified N.C. Gen. Stat. § 55A-7-05 (1993)), and if so, whether justice demands that the merger be undone. See Crabtree v. Jones, 112 N.C. App. at 534 , 435 S.E.2d at 825 (holding that when summary judgment was improperly granted against a plaintiff seeking a mandatory injunc *242 tion, this Court should remand for a determination whether the balancing of the equities demands the issuance of the injunction rather than deciding for ourselves).
Moreover, the record indicates that the subject merger had not occurred at the time of the 4 April 1994 hearing on the preliminary injunction. According to the defendants’ motion for summary judgment, the Articles of Merger were filed with the Secretary of State on 29 April 1994, some 3 weeks after the 4 April 1994 hearing. Hence, the merger was completed after the denial of the preliminary injunction but before the 8 June 1994 hearing on defendants’ motion for summary judgment which is the subject of the instarit appeal.
By determining that a merger completed after the denial of a preliminary injunction, but before a hearing on the permanent injunction results in the plaintiff’s claim being moot, the majority in essence renders the preliminary injunction determination to be the final decision in cases like this one. A preliminary injunction is only intended to preserve the status quo pending trial on the merits. Kaplan v. Prolife Action League of Greensboro, 111 N.C. App. 1, 14 , 431 S.E.2d 828, 834 (1993), motion to dismiss allowed and disc. review denied, 335 N.C. 175 , 436 S.E.2d 379 (1993), cert. denied, 114 S.Ct. 2783 , 129 L. Ed. 2d 894 (1994). The preliminary injunction determination should not be the end of the case.
Finally, the majority opinion changes the longstanding rule discouraging appeals from the denial of a preliminary injunction. As a general rule, the grant or denial of a preliminary injunction is interlocutory, and no appeal lies unless a substantial right is affected. N. C. Elec. Membership Corp. v. N.C. Dept. of Econ. & Comm. Development, 108 N.C. App. 711, 716 , 425 S.E.2d 440, 443 . However, in the instant case, the majority opinion requires appeal from the denial of a preliminary injunction, lest the subject matter be consummated rendering the action moot because the act cannot be undone. Doubtlessly, the majority opinion will encourage interlocutory appeals from the denial of preliminary injunctive relief.