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Lewis v. Wilson

30 N.Y. St. Rep. 987 Court N.Y. Decision date 1890-04-29 English

Delivered by Andrews, J.

Contents

Majority

p. 987
Samuel W. Lewis, App’lt, v. Charles G. Wilson, as Pres’t, Resp’t.[1]
(Court of Appeals,
Filed April 29, 1890.)

Headnote

1. Associations—Stock Exchange—Membership.
Plaintiff was a member of the Consolidated Stock and Petroleum Exchange. A complaint was made against him by another member for violation of contract. After notice and an opportunity to be heard was given, he refused to appear and an examination of the charge was had by the complaint committee; on failure to pay the sum adjudged he was suspended from membership. Held, that he could not come into court and compel the exchange to reinstate him on the ground that the contract was a “ gambling contract,” and therefore did not render hiip amenable to suspension under the rules.
2. Same.
Plaintiff cannot insist upon remaining a member of the association while at the same time repudiating the conditions of membership. The members of the association may, if they so agree, say that no associate shall remain a member and enjoy the privileges of the association if he refuses to comply with its rules.
3. Same.
Whether the committee should decide rightly or wrongly does not change the attitude of the plaintiff as a member of the association or qualify his obligation to submit to the decision of the agreed tribunal under pain of suspension.
Appeal from judgment of the supreme court, general term, first department, affirming judgment for defendant obtained at special term.
Albert Allen Abbott, for app’lt; W. J. Curtis, for resp’t

There can be no doubt that this case has been correctly decided.

The plaintiff seeks the aid of the court to reinstate him as a member of the Consolidated Stock and Petroleum Exchange, a voluntary unincorporated association, notwithstanding he has been' supended from membership therein in strict conformity with the constitution of the exchange, to which he assented on becoming a member. A complaint was made against him by another member for violation of contract, and after notice and opportunity to be heard in respect to the charge, and after an examination of the charge by the complaint committee, the tribunal which by the constitution of the exchange had jurisdiction to hear and decide complaints against members, the complaint was sustained, and on failure to pay the sum adjudged he was suspended from his membership.

The principal ground upon which the plaintiff invokes the

p. 988
equitable power of the court is that the alleged contract for the breach of which he was supended was a gambling contract, and that its violation was not a “ breach of contract.” and, therefore, did not render him amenable to suspension under the rules. This might have been urged by the plaintiff before the committee in answer to the charge. But he refused to appear before the committee except for the purpose of denying its jurisdiction. The committee proceeded to examine the complaint. The contract claimed to have been broken was in' writing, and was valid on its face. Its vice, if any, grew out of an undisclosed intent of the parties. The committee sustained the complaint, and suspension followed as a necessary result, unless the plaintiff paid the claim adjudged within forty-eight hours, or took an appeal to the arbitration committee. He did neither, but comes into court to have the court adjudge him to be still a member of the association, although he has refused to be bound by the conditions to which he assented, upon which retention of membership was to depend.

Whether the contract to which the complaint before the committee related was valid or void, is, we think, wholly irrelevant to the present inquiry. The plaintiff cannot insist upon remaining a member of the association, while at the same time repudiating the conditions of membership. The exchange cannot enforce the contract, whether valid or void, and the decision of the complaint committee will not preclude the plaintiff from defending against it in a court of law. But the members of the association may, if they so agree, say that no associate shall remain a member and enjoy the privileges of the association, if he refuses to comply with its rules. It may be true that the committee, if the facts had been presented and proved as they are claimed by the plaintiff, would nevertheless have regarded the gambling element as no excuse to the plaintiff for not performing his contract. But whether the committee should decide rightly or wrongly does not change the attitude of the plaintiff as a member of the association, or qualify his obligation to submit to the decision of the agreed tribunal under pain of suspension. 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. See 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 is an intimation in the argument of the plaintiff’s counsel that the exchange was organized as a cover for illegal trading. If this was the truth, the plaintiff is in the plight of asking the court to exert its equitable powers to re-instate him as a member of this illegal body.

The judgment should be affirmed.

All concur.