Nelson v. Board of Trade , 1895 Ill. App. LEXIS 60 ( 1895 )

Mr. Presiding Justice Waterman

delivered the opinion of the Court.

We can not regard the attempt of the Board of Trade to limit the charges which warehousemen may make or the business which the managers of grain warehouses may do as an infringement of or counter to any law of this State. True it is that under the laws of this State the charges that may be made for the storage of grain in public warehouses are limited, but there is as yet no legislation depriving ware-housemen of the right to make their charges less than the maximum fixed by law. The action of the Board of Trade in this regard is merely that of declining to class the grain certificates issued by warehousemen as regular unless such warehousemen comply with certain conditions. The Board of Trade is under no legal obligation to classify warehouse certificates as regular, and the warehousemen are under no legal obligation to keep the certificates hereafter issued by them regular.

The Board of Trade and the warehousemen are each at perfect liberty to terminate all business relations.

What the effect of the rule imposing new obligations upon the warehousemen as a condition of having the certificates issued by them treated by the Board of Trade as ■regular, may be upon the bonds by them heretofore given to protect such certificates, is a question upon which we are not now called to express an opinion.

Whether because of the proceedings against the petitioner, as a result of which he was indefinitely suspended, the court will, by mandamus, compel his re-instatement, presents a question of more difficulty.

As a general rule it may be stated that where the rules and regulations of a voluntary society provide for the disciplining of members and for a method of hearing as to, and determining whether offenses have been committed, the judgment of such tribunal is final and conclusive, the rules, regulations and judgment of such society not being opposed to the law of the land nor in disregard of its charter or by- • laws. Angell & Ames on Corporations (11th Ed.), Sec. 418; High on Ex. Legal Remedies (2d Ed.), Sec. 292; Pitcher v. Board of Trade, 121 Ill. 412.

Appellant contends that while it is true that the rules of the Board of Trade provide that a member may be suspended for “ any act of bad faith,” and he is charged in terms Avith being guilty of such an act, yet the specification in the charge, defining, as it does, Avhat the so-called act of bad faith is, negatives upon its face the idea that such act could be bad faith upon his part.

The charge is bad faith and dishonorable conduct in not carrying out a certain agreement. This agreement it is not charged was made or signed by the petitioner or on his behalf or by his procurement; neither is it alleged that he was or is in any way a party thereto, or bound honorably or otherwise to carry the same out, or that he is able to do so.

The petitioner does appear to be the manager of the National Elevator and Dock Company, but it nowhere appears that either as such manager or personally he was a party to such agreement or is able or bound to carry the same out.

On the contrary it fairly appears that he is not able to carry out such agreement.

By the pleadings it is admitted that appellant’s membership has a value of $800. This is a substantial sum, one which never has been and can not be passed by under the maxim De minimis non curat lex. Such value for the purposes of this proceeding is as efficacious as if it were a million of dollars. It appears, also, by the petition, that appellee owns in the city of Chicago, real estate of the value of about $3,000,000; that its aggregate income for the current year, 1893, was $229,586.85, of which $119,198.18 was from tenants occupying rooms in the building it has erected at a cost of $2,500,000; that during said year it received for the rent of tables and drawers upon its floor, $12,181.49, from assessment upon members, $84,960, and paid for taxes on its real estate, $27,252.19, for insurance, $4,700.52, for expenses of its real estate department, $62,719.05, and for janitor’s services $3,860, leaving a net profit derived from its real estate department of $54,527.50; that it has outstanding an indebtedness of $1,250,000 secured by mortgage upon its real estate.

Appellant, as a member, has an interest in this great property as well as in the net income of over $50,000 per annum derived therefrom.

It is manifest that such a property must be managed with skill and integrity, else it will be lost to its owners. Appellant, by his suspension, is deprived of all voice in the control and supervision of this property and rendered powerless to prevent its waste or neglect by improvidence, or its dissipation through fraud.

The petition of appellant is manifestly concerning a property right. Weaver v. Fisher, 110 Ill. 146; Jones v. Fisher, 116 Ill. 68.

Courts of law, acting by the writ of mandamus directly upon corporations, exercise a control over the power of amotion, and may, and do investigate proceedings for the amotion of corporate members. High on Extraordinary Remedies, Sec. 291, 293, 294 and 295; Angell & Ames on Corporations, 10th Ed., Secs. 704 and 705; The State ex rel. Cuppell v. Milwaukee Chamber of Commerce, 47 Wis. 670; The State ex rel. Graham v. The Chamber of Commerce, 20 Wis. 63; Green v. African Methodist Episcopal Society, 1 Serg. & Rawle, 254; Commonwealth ex rel. Fischer v. The German Society, 15 Penn. St. 251; Dos Passos on Stock Brokers and Stock Exchanges, 37; State ex rel. George E. Sibley v. The Board of Management of the Carteret Club of Elizabeth, 40 N. J. L. 295.

The right to the writ of mandamus extends to one improperly suspended. Lambert v. United Workmen, 47 Mich. 86.

Appellant, in becoming a member of the Chicago Board of Trade, agreed to be bound by its rules and regulations. Among these are by-laws for the disciplining of members and providing for a tribunal before which they may be tried. Where such tribunal proceeds regularly, that is, in accordance with its own rules, they being not contrary to public policy or to the law of the land, and the procedure not being mala fides or repugnant to natural justice, the-merits of a judgment thus rendered will not be inquired into collaterally. Black & White Smiths Society v. Van Dyke, 2 Wheaton 309; Dawkins v. Antrobus, L. R., 17 Ch. Div. 615; Angell & Ames on Corporations, Sec. 418; Pitcher v. Board of Trade, 121 Ill. 412-420.

When the action of such tribunal is violative of the rules, of the corporation, in disregard of the rights of members thereunder or of the law of the land, courts will interfere to compel the restoration of the corporate franchise of which a member has been improperly deprived.

The tribunal of a private corporation created by the agreement of its members is a quasi-judicial body; but it is not, even in respect to the matters by consent committed to its charge, a court of superior jurisdiction. It does, indeed, sit and act judicially, but with a limited and inferior jurisdiction; and is bound to proceed in conformity with the rules under which it exists and acts. Ryan v. Cudahy, Supreme Court of Illinois, opinion filed at the March term, 1895; Labouchere v. Earl of Wharncliffe, L. R., 15 Ch. Div. 346.

A person in becoming a member of a corporation and agreeing to be bound by its laws, does not agree to submit to acts violative of the rules by which he and all other corporators are bound.

The petitioner in the present case does not complain of the by-law providing for expulsion or suspension; his insistance is that in pretended following of the by-law, an act, manifestly not one of “ bad faith ” or dishonorable conduct, has been charged and found to be so; in other words, that the plain meaning of language has been tortured and perverted to the end that he might be suspended for no offense; that by violation of its rules and not in accordance therewith has he been suspended by the directors of the Board of Trade.

If the words of statutes are to be interpreted in their ordinary—their popular sense, nti loquitur vulgus (Endlich on the Construction of Statutes, Sec. 76; Potter’s D warns on Statutes, page 307; Maillard v. Lawrence, 16 Howard, U. S. 251-261), how much the more should so just a rule be applicable to the by-laws of a private corporation, not only made'for, but the enforcement of which is confided to men not learned in the law ?

The words “ bad faith ’’.imply a breach of faith, a willful failure to respond to a plain and well understood obligation. They mean not only the existence of an honorable obligation, but a dishonorable refusal or neglect to comply with the same; they imply much more than mere inability to respond.

The directors of the Chicago Board of Trade have not the power to declare that “ bad faith and dishonorable conduct ” which is nothing of the kind; the rule permitting expulsion for acts of bad faith is not one by which members may be expelled at the pleasure of the board, without reference to the character of the deeds it may see fit to designate as bad faith and dishonorable conduct.

To have charged the petitioner with bad faith and dishonorable conduct in not enforcing in Chicago the law against the opening of dramshops on Sunday, or in not procuring the restoration of the free coinage of silver, or in not carrying out the engagement of John Doe and Bichard Boe to pay rent to the board, would have been characterized as absurd. So, too, is such a charge when described as consisting in a failure to carry out an agreement which the defendant is not alleged or shown to have been a party to, or bound or able to perform.

Where property rights are involved, courts have the power to examine-the proceedings of the quasi-judicial tribunals of corporations such as this for the purpose of seeing if the action of such body has been in substantial accordance with the law and rules provided for its government. Ryan v. Cudahy, supra; Angeli on Corporations, Sec. 311; American and Eng. Ency. of Law, Vol. 4, page 289; State v. Williams, 75 N. C. 446; White v. Brownell, 4 Abb. Pr. N. S. 446.

The judgment of the Superior Court is reversed and the cause remanded for further proceedings not inconsistent with this opinion.