Loubat v. Le Roy — 1 N.Y. St. Rep. 178

Majority

p. 178

Loubat v. Le Roy, Treasurer Union Club of New York city.

(Supreme Court, General Term, First Department,

Filed June 1, 1886.)

Headnote

'1. VOLUNTABT ASSOCIATION—WHAT A SUFFICIENT TBIAL FOB EXPULSION OF MEMBEB. x

This club is a voluntary incorporated, association, consisting of a large membership and owning property. The plaintiff, a life member, was in form expelled May 85, 1882. His expulsion grew out of misconduct. The governing committee of the club was, by the constitution, to consist of twenty-four members, and a two-thirds vote of this committee was declared to be necessary for the expelling of a member. The governing committee initiated the proceeding as to plaintiff by appointing five of its members a committee to investigate and report to the governing committee an exact statement of the facts in relation to the difficulties between Messrs. L. and T,, they to be informed of the resolution and given an opportunity to appear before the sub-committee. A copy of the resolution and notice to .appear on a certain day was sent to them. Both L. and T. appeared and made statements. Afterward the sub-committee received other statements, plaintiff being absent. On the 25th the sub-committee made a report to the governing committee, to which they added the statements so obtained, This report was then considered by the eighteen members at that time present, including the five of the sub-committee. There were but twenty members of the committee at that time. Fourteen voted for expulsion and four against it. Reid, the sub-committee was one of mere investigation, the power to act was vested in the governing committee, and when the •sub-committee made its report the case was first placed in a condition in which effective action could be taken on the facts. The governing com■mittee was the sole body to hear and determine and to take action. Reid,

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also, that it required sixteen votes (that is two-thirds of twenty-four), to expel a member, and that plaintiff was not expelled, as only fourteen voted for his expulsion.

"3. Same—There must be an opportunity to be heard and to hear evidence AGAINST.

Held, plaintiff had no notice or opportunity to appear before the governing committee. The mere possibility of presenting mitigating circumstances is considered sufficient to require as a demand of justice that the party shall have an opportunity to exculpate himself. The committee had no jurisdiction to pronounce an effective judgment, and their action was coram non judice.

Same.

The plaintiff was under no obligation to request the privilege to be present and have a hearing. The committee was bound to extend and secure the opportunity to him before it could proceed.

4. Practice—An action wild be sustained only when every means in

THE ORGANIZATION HAS BEEN EXHAUSTED.

An action as to organizations of this description will not be sustained to correct errors or illegal acts in the course of their government and administration until the remedies provided for that object by the by-laws or constitution of the association have been exhausted.

'5. Same—When action may be commenced—When appeal will not

HAVE TO BE TAKEN.

An application tor a rehearing provided for by the laws and constitution of this club need not be taken when the probability of favorable action to the appellant is extremely remote. Plaintiff should not be held to be required to apply for such reconsideration before commencing an action to restrain the enforcement of the resolution against him if that should turn out to have been unlawfully adopted.

■6. Constitutions oe clubs, etc. , construed same as laws.

The courts are required to construe the constitution of a club as they do all other instruments, including the statute of the state, that is according to the fair or natural import of the language employed.

Appeal from a judgment rendered at the special term, •dismissing the plaintiff’s complaint.

Joseph H. Choate, for appellant.

James C. Carter and Edmond It. Robinson, for respondent.

The club of which the defendant is the treasurer is a voluntary unincorporated association consisting of a large number of members, and owning property for their use and enjoyment, and as such may be sued by .an action against the treasurer as a joint stock -company under the statutes of this state. The plaintiff was a member of the club who had paid the requisite sum of money to •entitle him also to life membership, and by a resolution of a quorum of the governing committee of the club, adopted on the 25th of May, 1882, he was in form at least expelled from his membership of the club. This expulsion was directed because of misconduct on the part of the plaintiff in part occurring in a conversation in the club house with

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several of its members on or about the 28th of November,. 1881. In this conversation the plaintiff indulged in what was regarded as a very improper observation. It caused an, immediate altercation, in which strong expressions of condemnation of what he had said were made by this person. This afterwards led to a repetition of the censure expressed,, and a correspondence further imbittering the relations existing between these persons. Publicity was given to the correspondence, afterwards resulting in the investigation producing the plaintiff’s expulsion. If the case were to be disposed of upon its merits as it was made to appear before the quorum of the committees acting upon the subject, m> reluctance whatever would be felt in the way of sustaining the conclusion arrived at, as it was a matter solely to be governed by the rules and regulations of the club itself, and the .authority designed to be invested in what was called the governing committee. Lawkins v. Autrobus, 17 Law Rep., Chy. Div., 615.

But the difficulties in the way of maintaining the proceedings which were taken do not arise out of the sufficiency of the charge of misconduct made against the plaintiff, or of the evidence given to sustain it, but have been created by the manner in which the proceedings were carried on for-me investigation of his conduct, and resulting in the resolution of expulsion. These proceedings have been assailed by the action as having been unlawfully carried on, and! upon that ground it has been insisted that the expulsatory resolution was inoperative and void. An objection to the consideration of these points has in the outset been made upon the effect of the ninth rule of the club. This rule provided that “in no case, when a resolution has been passed,, at a meeting of the committee, affecting the relations of a member of the club towards the club, shall such resolution be reviewed, acted upon or rescinded at a subsequent meeting without a notice in writing being sent by the secretary to each member of the committee at least ten days before the meeting, that such previous action will be brought up for review or reconsideration.”

The resolution of expulsion was adopted at a meeting of' a quorum of the committee mentioned in this rule, and under the rule the committee had the power to reconsider the action which had been taken, and to revoke the resolution which had been in form adopted. It is not entirely clear that the power of the committee, which might have been invoked in behalf of the plaintiff, but was not, does-not present a well founded legal objection to the right of the plaintiff to maintain this action, for the principle has been settled as to organizations of this description that an action will not be sustained to correct errors or illegal acts-

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in the course of their government and administration, until the remedies provided for that object by the by-laws or constitution, or both, of the association have been exhausted. Lafond v. Deems, 81 N. Y., 507 .

That case, however, differed from the present one by providing for an appeal to an officer not concerned in the ground •of complaint as the foundation of the action. Where such an appeal may have been provided, it is entirely just and reasonable that it shall be pursued and the remedy exhausted before an action should be allowed to be maintained in a •court of justice to rectify the alleged wrong. But the remedy mentioned in this section of the by-laws was not in the nature of an appeal or an application for a rehearing before a superior board or tribunal of the club, but it merely provided for and permitted an application to be made for a rehearing to the same persons who previously joined in the resolution of condemnation and expulsion. The committee, at the time when its action was taken, consisted of twenty members, eighteen of whom were present, and fourteen of the number voted for the adoption of the resolution. This was done upon the facts submitted for the consideration of these members of the committee, and the resolution which they adopted conclusively established the fact that they had formed and acted upon convictions adverse to the plaintiff, and after that the probability is extremely slight indeed that they could have been induced to change their views and act differently upon an application for the reconsideration of the resolution. The probability that favorable action might in this manner have been secured by the plaintiff, is so extremely remote that in the reasonable administration of the law he should not be held to be required to apply for such reconsideration before commencing an action to restrain the enforcement of the resolution against him, if that should turn out to have been unlawfully adopted; for if that should be required the requirement might as well be indefinitely repeated, which would have the effect of preventing an action of this description in all cases for the correction of the illegal proceedings of the association, and that would be no less than a denial of justice in this class of cases. The great improbability that the committee would reach a different conclusion upon a reconsideration of the evidence submitted to it, is considered to be a legal answer to this objection, and that will require the examination and consideration of at least two of the objections presented to the proceedings which have been taken.

The first of these relates directly to the manner in which the proceedings themselves were carried on. They were initiated by what is called the governing committee of the club. On the 18th of May, 1882, a committee of five of its

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members, was appointed at a special meeting of the board of governors to investigate and report to the governing; committee at a future meeting, an exact statement of facts, in relation to the difficulties existing between Messrs. J. F. Loubat and Henry Turnbull, with instructions to inform them of the resolution and giving them an opportunity to-appear before the committee of five. This committee transmitted a copy of the resolution to each of these individuals, accompanied with a notice from the chairman of the committee, that its members “will be glad to receive from you a statement of the facts, and hereby request you to appear' before them in the sub-committee room of the club house-on Friday the 19th, at four o’clock, p. M.” This committee-took the statements of the plaintiff and Henry Turnbull, and of other persons. That furnished by the plaintiff* was in writing and was made when he, himself, and his counsel, were in the presence of the committee. The other statements taken by the committee were obtained in the absence-of the plaintiff, and after obtaining these statements, and on the 25th of the same month the committee made a report to the governing committee, to which they added the statements so obtained by them. This report was considered by so many of the governing committee as were at, the time present, including the members of the committee of five, and it resulted in the adoption of the resolution for-the plaintiff’s expulsion.

It is clearly evident from the resolution under which the-committee of five was appointed, that the object of that, appointment was one of mere investigation. It was to collect, as far' as that could be done, authentic statements of' the facts relating to the plaintiff’s conduct and the contention and disagreement following it. This committee had no power either under the resolutions or the constitution, or-by-laws of the club to act upon the evidence so to be obtained. The power to act was vested by the constitution in. the governing committee, and when the report of the committee of five was made to it with a statement of the evidence, or information, obtained the case was first placed in. the condition in which effective action could be taken upon the facts. The governing committee was the sole body to-hear and determine the case and to adopt the conclusion or-take the action, which might be considered justifiable under-the circumstances appearing. But in taking the action which they did upon the report and the information submitted with it, no notice of their consideration or that they designed in any manner to act upon the report of the committee of five, was given to the plaintiff. He had no opportunity to appear before the governing committee, or to-be heard concerning the action which it might be considered.

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proper to take. If he had been, notwithstanding the cogency of the evidence against him, he might have submitted, some reasons, or some considerations which would have mitigated the action of the members of the committee in attendance, and resulted in a punishment short of that, which was provided for by the resolution. This probability,, or even though it may be only a possibility, has in all investigations of this description been considered sufficient to-require, as a demand of justice, that the party proceeded against shall in all cases have notice of the hearing intended to be had, and an opportunity to exculpate himself as far-as that may be done, either in the vindication or palliation of the misconduct forming the foundation of the complaint. The legal principle is a general one affecting all proceedings which may result in loss of property, position, or character or any disaster to another that he shall be first heard by the board or tribunal considering his case, before that-body will be legally permitted to pronounce his condemnation. This principle has been considered and applied to the-action of associations of this description, and it has been held in general terms that its committee is bound to act “according to the ordinary principles of justice, and are not to convict a man of a grave offense which will warrant. his expulsion from the club without fair, adequate, and sufficient notice, and an opportunity of meeting the accusation brought against him.” Fisher v. Keane, Law Rep., 11 Chy. Div., 353.

It was also considered in many other cases resulting uni-formally in its approval and confirmation (Hopkins v. Marquis, etc., Law Rep., 5 Eq., 63; Labouchere v. Earle, etc., Law Rep., 13 Chy. Div., 346; Wood v. Wood, Law Rep., 9 Ex., 190), where in the course of the decision it was said, “no man shah be condemned to consequences resulting from alleged misconduct unheard and without having the opportunity of making his defence. This rule is not confined to the conduct of strictly legal tribunal, but applies to every tribunal or body of persons invested with authority to adjudicate upon matters involving civil consequences to individuals.” Id., 196. A like principle was also declared in Ines v. Wylie (1 Car. & Kir., 262), Willis v. Child (13 Beav., 117), Murdocks. Phillips Academy ( 12 Pick., 244 ), and by Mr. Justice Lawrence in a very thorough and able opinion, considering the authorities in Hutchinson v. Lawrence ( 67 How., 38 ). This principle was violated in the proceedings taken against the plaintiff, for he was not afforded an opportunity to be present when the statements of other persons were obtained by the committee of five. Neither was-he permitted to be present before the members of the governing committee in attendance when the report of the-

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committee of five was received and acted upon, and the resolution adopted for his expulsion. The failure on his part to request the privilege to be present is no answer to this exclusion, for he was not legally bound to ask this privilege, but the committee taking action upon the evidence which was obtained, was legally bound to extend and secure the opportunity for a hearing to the plaintiff before its members could proceed to the hearing and consideration of the case. There was a total failure to observe this obligation of supplying the plaintiff with notice of the hearing and an opportunity to contest the action taken against him, and that deprived the proceedings as well as the final resolution of all legal effect as to him. The cases of People v. Police Comrs. ( 93 N. Y., 97 ), People v. Same ( 20 Hun, 402 ), and People v. Same ( 23 Hun, 351 ), are in entire harmony with this principle, for in each of them the relator was afforded an opportunity to be present before the board and contest its action when the final hearings were had upon which the decisions complained of were made. Instead of being authorities sustaining the proceedings taken against the plaintiff, they add further support to the necessity .already suggested of observing the obligation to give notice and afford the party proceeded against an opportunity to be heard before a determination can legally be made against him.

The governing committee of the club to which its government and management was confined was to consist of twenty-four members, and by subdivision 3 of section 4 of the constitution a two-thirds vote of the governing committee was declared to be necessary for the expulsion or suspension of a member. At the time when these proceedings were taken the committee had been reduced in number to twenty members, and but eighteen were present on the •occasion when the report of the committee of five was considered, and the vote for the expulsion of the plaintiff was taken. Fourteen only of the members who were present voted in favor of the adoption of the resolution, the other four being opposed to it. The resolution therefore failed to secure the vote of two-thirds of the members of the governing committee. To constitute such a vote, that of sixteen of the members was by this provision of the constitution required. But it has been supposed because the twelfth article of the constitution declared that “a majority of its members, exclusive of those absent by its permission, shall constitute a quorum of the governing committee ” that the action taken on this occasion had been in this manner provided for and sanctioned. And cases have been cited arising under the constitutions of different states relating to the powers of legislative bodies in support of this position.

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These cases do not require that any special attention shall be devoted to them, for the provisions of the constitutions under which they arose were entirely different from the constitution of this club.

They were so framed as to permit the quorum designated by them to constitute the legislative body, while the constitution of this club has not so provided, for it has not been declared that a majority of the members required to create a quorum should be authorized to expel a member from the club. Upon this subject but one provision was inserted in the constitution, and that declared a two-thirds vote of the governing committee to be necessary for this purpose. It was an extreme measure which might be attended with very disastrous consequences to the person expelled. And there was great reason, therefore, for specially guarding this power so that it should be exercised only upon occasions and charges fully justifying its use and by so large a body of members as would be free from the imputation of prejudice, bias, or other improper motives. That would not always be the case if the power could be exercised by two-thirds of the members required for a quorum, for as the provision of the constitution declaratory of the quorum was framed, this quorum might be reduced to a very small number of members by permitting the absence of other members of the governing committee. This permission was not restricted, but it was provided in such language as would enable the committee, by permitting the absence of members, to dispense with their attendance until the smallest possible number might be in attendance. In this manner the committee had the power to reduce the number requisite for a quorum to certainly no more than three persons, and if the quorum provided for possessed the power of expulsion, it might, by permitting absences, be exercised by the votes of even two of its members, for they would constitute two-thirds if but three members should be in attendance. This, it is true, is an extreme supposition, but it is justifiable as an illustration of the effect of the construction which should confide the power of expulsion to two-thirds of a simple quorum of the members of the governing committee. The number probably might never .be so far reduced, but as long as there is a possibility that it could be, that fact of itself indicates it to be highly probable that it was not intended to intrust a mere quorum with the exercise of this important power of expulsion. The constitution has not so provided. It has made but one declaration upon this subject, and that is not that two-thirds of a quorum may expel a member, but that it shall be done only by “a two-thirds vote of the governing committee.” This

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provision is plain, and no other contained in the constitution evinces the intention to have been, to provide for the reduction under any circumstances, of that vote. In this respect the provision is highly conservative, wisely providing for the protection of the rights of the members, and as long as. no other provision of the constitution has declared either in terms or by any clear implication that any less vote than that of two-thirds of the governing committee shall expel a member, the constitution should be construed as forbidding, the exercise of the power of expulsion in any other way. The courts are required to construe it as they do that of all other instruments, including the statutes of the state to be-construed, and that is according to the fair or natural import of the language employed. That is to be assumed to have been expressive of the intention of the parties framing and assenting to the instrument. The language which they employed upon this subject is free from ambiguity. ¡No other part of the constitution has referred to or qualified it in any manner whatever, and the protection intended to be-afforded by it should not be cut down or reduced by the further direction as to the number of members by which a quorum may be formed. The existence of that quorum, as. well as the provision of the constitution relating to it, will have full force and effect by allowing it to transact afi the other business of the association by a majority vote of the members present, excluding that requiring a larger vote, as-the provision for the expulsion or suspension of a member very clearly does. The resolution which was adopted did not receive this vote. It failed to the extent of two votes-of the designated two-thirds, and it was accordingly inoperative for this reason upon the rights of the plaintiff as a member of the club, and clearly found and stated in the-decision of the learned judge presiding at the trial. ¡No necessity, therefore, will exist for another trial of the action, but judgment upon the report and decision may be now finally pronounced, and that should be a judgment declaring the resolution of expulsion to have been adopted without legal authority and to be inoperative and void as to the-plaintiff, and restraining the enforcement of it by the officers or members of the club against him, but without prejudice, if that shall still be deemed advisable, to further-, proceedings to be taken against the plaintiff in conformity with the principles of the law prescribed for their conduct and government. Whether the plaintiff shall also be-allowed costs in the action will be reserved for determination to the time when the order shall be settled. As to the-costs and disbursements of the appeal their recovery should be provided for by the order.

I put my concurrence in the conclusion of my brother Daniels altogether upon the ground that the appellant was attempted to be removed without the trial and opportunity to be heard secured to him by the. constitution and by-laws of the club. The only body clothed with authority to hear, try and remove the accused was “the governing committee.”

That committee had power to direct how it would take the evidence of the facts to be presented for its consideration at the trial, and they directed the same to be taken by a subordinate committee, whose duties and functions were discharged whenever they made their reporb to the governing committee.

The case had then reached a point of readiness for a hearing. It was the duty then of the governing committee to have given notice to the appellant of the times and place of the trial, with reasonable opportunity to attend and defend himself against the charges and the judgment that ought reasonably to be imposed. They gave no such notice, but proceeded without any further hearing, notice ana attendance, and rendered judgment of expulsion. It matters not whether they did this by the voting of a quorum of the committee or of the entire body voting concurrently. In either view they had no jurisdiction to pronounce an effective judgment, and their action was coram nonjudice.

For this reason the judgment must be reversed and judgment ordered for plaintiff. My health will not permit me to examine the other questions of the case.

I concur in the result, Brady, J.