29 N.Y.S. 307 | The Superior Court of the City of New York and Buffalo | 1894
Lead Opinion
The relator was a member of a corporation, the defendant. He was, in regular form, charged with a violation of one of the by-laws, and was found guilty and was suspended from membership. He applied below for a peremptory mandamus to the corporation to restore him to membership. The application was denied, and this appeal is taken from the order then made.
The complaint against the relator charged him with, or accused him of, proceedings inconsistent with just and equitable principles of trade, as follows: Nonfulfillment of contract of November 1G, 1892. It thus appears that the offense alleged is the nonfulfillment of a contract, which is, in and of itself, stated by the complaint to be a proceeding inconsistent with just and equitable principles of trade. The position taken by the relator is that neither the charter nor the by-laws made the mere nonfulfillment of a contract an offense. The by-law in question was that any member who shall be accused, etc., of fraudulent breach of contract, or of any pro
Concurrence Opinion
(concurring). I think it is fair to conclude that a belief by defendant’s board of managers that a breach of contract is a proceeding inconsistent with “just and equitable principles of trade,” within the méaning of that term, as used in the by-laws of defendant, led to the plaintiff’s expulsion. The belief did not accord with the fact. A breach of contract is not the “proceeding”
Dissenting Opinion
(dissenting). This is an appeal from a final order of the special term denying a motion for a peremptory mandamus. The relator was a member of the New York Produce Exchange, the respondent herein, from which he has been suspended. The respondent is a corporation created by special act of the legislature. Laws 1862, c. 359. It was not organized for the sake of profit, but its leading purposes were “to provide and regulate a suitable room or rooms for a produce exchange in the city of New York, to inculcate just and equitable principles of trade, to establish and maintain uniformity in commercial usages, to acquire, preserve and disseminate valuable business information and to adjust controversies and misunderstandings between persons engaged in business.” It has power to enact by-laws and to elect new members, and to expel or suspend members, in such manner as may be provided by the by-laws. The by-laws provide that if any member be accused of a willful violation of the charter, a fraudulent breach of contract, or any proceedings inconsistent with just and equitable principles of trade, or other misconduct, he may, by a complaint in writing, be summoned before the complaint committee, when, if he desire, he shall be heard in his defense. If that committee is unable to conciliate the disputants, or induce them to arbitrate, and the circumstances seem to warrant, the complaint shall be referred to the board of managers, when both plaintiff and defendant shall have an opportunity to be heard again, in person, prior to final action in the case; and if, in the opinion of the board, the charge or charges against said defendant be substantiated, it (the board of managers) may, by a vote of not less than two-thirds of all the members present, either censure, suspend, or expel him from the exchange. At the time the relator was admitted to membership in the exchange, he signed an agreement to abide by the charter and by-laws, and any amendment which might thereto be made; and at such time of admission the charter and by-laws provided as above set forth, and so provided at all the times under consideration: On or about December 22,1892, the firm of Whitman Bros., members of the exchange, made a complaint against the relator, accusing him of “proceedings inconsistent with just and equitable principles of trade, as follows: Nonfulfilment of contract,” etc. The relator appeared, and presented his defense on the merits; and the complaint committee, being unable to conciliate the disputants, or induce them to arbitrate, referred the matter to the board of managers. The relator then appeared before the board of managers, and presented his defense on the merits. After hearing the testimony the board of managers, by a vote of more than two-thirds of all the members present, suspended said relator; holding that the charge of proceedings inconsistent with just and equitable principles of trade, in respect to the nonfulfillment of the contract in question, was
It is claimed on the part of the relator that the complaint filed by Whitman Bros, did not confer jurisdiction on the exchange. By its charter and by-laws, to which relator subscribed, and by which he agreed to be bound, jurisdiction was conferred upon the exchange to suspend a member for "proceedings inconsistent with just and equitable principles of trade.” The complaint is as follows:
“To the Chairman of the Complaint Committee of the New York Produce Exchange—Sir: The undersigned and above-named complainants hereby complain of the above-named defendant, member of the New York Produce Exchange, and accuse him of proceedings inconsistent with just and equitable principles of trade, as follows: Nonfulfilment of contract of November 16th, 1892. Also, claim the costs of this complaint.
“Whitman Brothers, Complainants.”
The relator claims that, under some circumstances, it is not “inconsistent with just and equitable principles of trade” to break a contract, and that the complaint should have been more specific; that it should have specified or indicated that the contract was claimed to have been broken through the fault or fraud of relator. We are of opinion, however, that the complaint was sufficient, as it gave relator knowledge of the alleged offense which he w7as to meet. See Ang. & A. Corp. § 422. The complaint stated that the relator had broken a specified contract. This fact, once established, called for an explanation from the relator. It was the province of the board to determine, from all the facts and circumstances, whether the conduct of the relator in respect of the contract was inconsistent with just and equitable principles of trade. The nature and purpose for which a corporation was created is the controlling consideration, in determining the validity of its by-laws; and if they are foreign to its character, and a departure from its purposes, they are void. If otherwise, and they are in harmony with the general laws, they are valid. That a corporation purely commercial in its character would soon cease to be respected or respectable if it tolerated among its members a violation of an undisputed contract, is a proposition too plain for argument. People v. Board of Trade, 45 Ill. 112. In the case at bar the charge against relator makes out a case of proceedings inconsistent with just and equitable principles of trade; and the relator must abide by an adjudication from the committee or board by whom, as one of the terms of membership, he agreed such matters should be investigated. Hurst v. Produce Exchange (H. Y.) 3 N. E. 42, opinion of Danforth, J. In the case last above cited, which controlled the court below, and which discloses a state of facts similar to those in the case at bar, and presents a similar question of jurisdiction, the court of appeals