Pitcher v. Board of Trade

McAllister, P. J. The first question for consideration arises upon the position taken by counsel for appellant, and seemingly much relied upon, that whatever power to expel or disfranchise a member may have been given by the incorporating act of the Board of Trade, was conferred in terms upon the members of the corporation at large, that in its nature it was a power in trust, and could not. therefore, be delegated to a board of directors and exercised by a quorum of twelve of that body. The authorities recognize a distinction, based upon reason, as respects the power of expulsion, between voluntary, unincorporated bodies, and those which are incorporated, or created by statute. The reason is, that the former class come into existence by the mutual agreement of the persons forming them, and are carried on solely under rules and regulations which the respective bodies adopt. It logically follows in such a case, where all the rights and privileges of the individual members are derived from the body itself, and the members are bound by mutual agreement to be governed by such rules and regulations, that the power of expulsion, may be provided for by rules and by-laws, and if it be exercised by a fair and honest compliance with such rules or by-laws, an expelled member is without redress from the courts. But in the latter case, where the body is incorporated and the several members are in the enjoyment of a franchise conferred by statute, as in Bagg’s Case, 11 Coke, 93, or that of The People v. The Medical Society of the County of Erie, 32 N. Y. 187, it has generally been held that a member can not be expelled and disfranchised by any act of the corporation, because such member derived his franchise, rights and privileges from the statute, and not from the corporation, unless the power to do so is expressly conferred by the statute. This is peculiarly so as to any corporation owning property in which the respective members have a beneficial interest either absolute or contingent. Bagg’s Case, supra; Evans v. Philadelphia Club, 50 Penn. St. 107 ; White v. Brownell, 2 Daly, 357; Ang. & Ames, on Corp., §410; Hopkins v. Exeter, Law Rep. 5 Eq. 68; Wood v. Wood, Law R., 9 Exch. 190 ; Blisset v. Daniel, 10 Hare, 493; Hutchins v. Lawrence, 67 How. Pr. R. 38. It appears from the record that appellee is a body corporate created by special act of the legislature passed Feb. 18, 1859; that it owns a large amount of property; that its general objects are the promotion of trade in the products of the country and the interests of its members, by providing a commodious exchange hall, telegraphic facilities and other conveniences, for the transaction of their business, and prescribing rules and regulations under which it may be done; that so valuable are these privileges, the fee to be paid upon becoming a member is ten thousand dollars. It appears that at the time of passing said act, there existed a voluntary unincorporated body of the same name; but just how numerously composed, does not appear. How, by the first section of that act, all the members of said voluntary body were incorporated as a body politic and corporate, under the name of “ The Board of Trade of the City of Chicago.” As to those persons it is manifest that whatever franchises, rights or privileges were conferred upon them respectively, were derived directly from the statute. But from our study of said- act, it seems to us that as to all persons who should subsequently become members, the character of a voluntary association is plainly marked; that is, that the rights and privileges of such persons were to be in reality derived from the body itself rather than from the statute. At the close of § 1 express authority is given, “ to make such rules, regulations and by-laws, from time to time, as they may think proper or necessary, for the government of the corporation hereby created, not contrary to the laws of the land.” Then again, § 4 says: “ The said corporation is hereby authorized to establish such rules, regulations and by-laws for the management of their business, and the mode in which it shall be transacted, as they may think proper.” But § 6 comes close to the question under consideration. It reads: “ Said corporation shall have the right to admit or expel such persons as they may see fit, in manner to be prescribed by the rules, regulations and by-laws thereof.” Here the power is expressly conferred by the act creating the corporation, to expel such persons as “ they may see fit, in manner to be prescribed by the rules, regulations and by-laws thereof. ’’ But counsel for appellant seem to suppose that the words “in manner ” have reference to the mere method of doing it, through a majority of all the members of the corporation, but are not broad enough to authorize a delegation of the power to a board of directors. Lexicographers give to the word “manner” a broader meaning than that of “method .” The derivation of the word “marine?’” is from the Latin ma?ius, the hand. “ Marnier is literally the handling of a thing, and has a wider sense, embracing both method and ?node.” Webster’s Diet, (new Ed.) “method” It seems to us, from a consideration of all the provisions of the act, that its framer s intended to leave the whole subject-matter of the expulsio n of members, to be regulated, both as to method and tribunal, by rules and by-laws of the body, not inconsistent with the principles of natural justice or the laws of the land. In pursuance of that power, the by-laws set out in our statement of the case were adopted, by "which appellant, on admission, formally agreed to be bound. We are of opinion that such by-laws were authorized by the act, are not inconsistent with any principle of natural j ustice or the laws of the land, and are valid; that the trial, conviction and expulsion of appellant were by a tribunal, not only authorized by appellee’s charter, but by reason of appellant agreeing to be bound by said by-laws. This conclusion we regard as removing the only basis for a distinction between this case and cases decided by the Supreme Court of a similar character. We felt it incumbent upon us to fully consider the point that the tribunal expelling was without authority, because, in that event, the resolution or order of expulsion would have been illegal and void, and the appellant’s rights unaffected by it. Wood v. Wood, L. Rep. 9 Exch. 190. And the appellant having made so strong a showing as to irreparable injury, we were in doubt whether the case would not present such special circumstances as that an injunction would lie. As to the other grounds, we think the case, as respects the jurisdiction of chancery, is governed by the cases Fisher v. Board of Trade, 80 Ill. 85, Baxter v. Same, 83 Ill. 146. Those cases are directly in point and hold that a court of chancery is not the proper forum. In other States, and in England, the rule is different; but we are absolutely bound by the decisions referred to in our Supreme Court, because no distinction can be made upon the facts between this and those referred to. The decree of the chancellor will be affirmed. Affirmed.