56 A.D. 225 | N.Y. App. Div. | 1900
The plaintiff, a member of the New York "Stock Exchange, was expelled from that body, his membership was forfeited, his right of membership sold, and. the proceeds of the sale were paid over to him. Upon the receipt of such proceeds, he executed under seal an instrument by which, after an acknowledgment of the receipt of the money, he transferred his membership to another person and relinquished all" his “ right, title and interest as a member of said New York Stock Exchange.”
The expulsion of the plaintiff was the result of an investigation by the governing committee of the Stock Exchange, that being the appropriate tribunal, of certain transactions of the plaintiff for the firm of which he was a member, had upon the floor of the Stock Exchange, which transactions, it was claimed, were fraudulent. A written charge was preferred against the plaintiff, namely, that he was guilty of fraud, the specifications of the charge being, in substance, that on the 30th of March, 1897, he procured, prepared and furnished, or caused to be furnished, to certain other parties, facilities, means or instrumentalities for the perpetration or concealment of frauds, or of fraudulent,-dishonest or criminal practices-; that on or about March 30, 1897, he, on the request or by the procurement^ or for the account of the E. S. Dean Company, or one Samuel Reliar, its agent, instructed and requested Herzog & Sichel, a firm represented, on the New York Stock Exchange, to make and deliver to the plaintiff or his firm a false, fraudulent and fictitious report of the sale by Herzog & Sichel for account of the plaintiff’s firm of certain stocks, naming them, at a certain fixed price, and that thereupon Herzog & Sichel, by. the instructions and at the request of the plaintiff, delivered to his firm a false, fraudulent and fictitious report of the transactions specified, and that none of the transactions mentioned in the report as having taken place did in fact take place, and. that neither the plaintiff nor his firm intended that any of the transactions should be executed by Herzog & Sichel; that after that report had been received by the plaintiff’s firm or by him and on the same day with the intent to procure a similar false and
To this charge and its specifications the plaintiff interposed a written answer in which he denied that he had been guilty of fraud, and he proceeded to give what he claimed to be an explanation of the transactions referred to in the specification. That explanation was, in substance, that the firm of which he was a member had for a customer a concern known as the E. S. Dean Company; that prior to March 30, 1897, the plaintiff’s firm had bought for that customer various stocks, and that on the afternoon of March 29, 1897, the
A hearing was had before the governing committee of the Stock Exchange upon the charge and answer, and after an investigation the plaintiff was found guilty and expelled as above stated. Sometime after. his relations with the Stock Exchange were thus terminated the plaintiff brought this action to be-reinstated as a member and for damages for his expulsion, he claiming that he did not have a fair trial by the committee; that there was not sufficient- evidence to support the determination of the committee; that gross abiises of authority were committed on the investigation, and that he was in ignorance of the facts which invalidated the-action of-the committee in expelling him until long after the' determination "was made and the paper in which he relinquished his right of membership was executed.
There are seven specific grounds upon which the plaintiff attacks, in this action, the proceedings had before and the judgment of the governing committee upon the charge and specification upon which he was tried. They are as follows: First. That on -the trial, evh dence of acts and transactions wholly. disconnected from those mentioned in the written charges and of which plaintiff had no
The court at Special Term directed a judgment in favor of the defendant on the merits. A careful examination of the whole record satisfies us that the 'cause was properly decided. The plaintiff was brought to trial upon a written charge, directed to his transactions upon the Stock Exchange of one specific day. He presented an answer to that charge which contains an admission that the transactions took place. He only denied that they were fraudulent, and that they were intended to aid in a dishonest practice. It appears that there was a full ‘investigation made of the circumstances surrounding the transaction, or, in other words, the merits were fully inquired into, and if the investigation was a fair one, the judgment of the Stock Exchange, to which the plaintiff as a member of that body was subject, cannot be reviewed on the merits by the courts. As was remarked in Lewis v. Wilson (121 N. Y. 288), whether the committee decided rightly or wrongly upon the merits does not change the “ attitude.of the plaintiff as a member of the association. * * * All that he could require was^ that the investigation should be conducted bona fide upon notice to him and an opportunity to be heard, and that the decision made should be within the scope of the jurisdiction conferred on the committee. (Bigelow v. Benedict, 70 N. Y. 204; White v. Brownell, 2 Daly, 329 ; Lambert v. Addison, 46 L. T. Rep. 20; Dawkins v. Antrobus, L. R. [17 Ch. Div.] 615.) ” There can be no question here of the jurisdiction nor of the legality of the steps taken by the Stock Exchange to procure an investigation of the charge made against the plaintiff. When we come to examine the evidence in the record of the trial of this action we are struck by the absence of proof to sustain any one of the specified accusations made against the committee or its members in the conduct of the investigation which resulted in the plaintiff’s expulsion. There is no evidence of acts or transactions wholly disconnected from those mentioned in the written charges having been received and used against the plaintiff. The stenographer’s minutes of the: proceedings before the governing committee were lost with the1
There is one subject brought to our attention which requires notice, in view of the claim of the appellant that he was deprived by a ruling of the court of documentary evidence material to his case. He had caused to be served upon an officer of the defendant a subpoena duces tecum to produce a number of papers which it was asserted were used upon the investigation before the committee of the Stock Exchange. There was also served upon the attorneys for the defendant a notice to produce the papers. The secretary of the Stock Exchange was called as a witness. He had no knowledge of such papers, and could not, therefore, comply with the subpoena.
We think the court was right in declining to compel the defendant’s attornéy to produce the papers, because it did not appear that they were material to the case, hut we do not agree with the court below that it was without authority to- require the production in a. civil action of papers shown to be material and actually in court.
The judgment should be affirmed, with costs.
Van Brunt, P. J., Rumsey, O’Brien and 'McLaughlin, JJ.. concurred.
Judgment affirmed, with costs.