#### Evans *et al. versus*Adams *et al.*

*1.*By tbe by-laws of a board of brokers, when a member becomes insolvent he shall, within three days, make good friendly loans, etc., from members and overdrafts on a bank; if he fails to settle with his creditors, his seat shall be sold and the proceeds paid *pro rata*to his creditors in the *board.*By the constitution a member wishing to sell his seat, the purchaser’s name shall be submitted to a committee, and on their approval the transfer may be made if the seller has no unsettled contracts or claims against him for stock differences or borrowed money'. Wister, a member, having claipis against him by members, became insolvent; he sold his seat; the treasurer was informed by the creditors of their claims, and they, Wister, and the purchaser, were told by him that no transfer would be made till the purchase-money was paid to the *treasurer;*it was paid with the assent of Wister and the transfer'made. *Held,*that this was a case of insolvency under the by-laws; not a voluntary sale under the' constitution.

2. After the transfer of the seat was completed a creditor of Wister issued a foreign attachment which was served on the purchaser and the board of brokers as garnishees. *Held,*that there could be no recovery against the garnishees.

January 15th, 1875.

Before Agñew, C. J., Sharswood, Williams, Merctjr, Gordon, Paxson, and Woodward, JJ.

Error to the District Court of Philadelphia, of January Term, 1873, No. 198.

This was a foreign attachment in case, issued April 23d, 1872, by Manlius F. Evans, Cadwalader Evans, and William' F. Wharton, trading as Evans, Wharton & Co., against Francis Wister. The attachment was executed in accordance with the writ, and the Philadelphia Board of Brokers and Frank McDowell summoned as garnishees. On the 21st of September, 1872, judgment was taken against the defendant and damages assessed at $1221.38. On the 24th of September a *scire facias*was issued against the garnishees. ,On the 26th of September interrogatories were filed, to these answers were filed, and on the 14th of November the record was amended by striking out “ The Philadelphia Board of Brokers,” and substituting Bushrod W. Adams, a very large number of persons being the iudiyidual members of t¿e board.

The following facts were agreed upon as a case stated:.

*444On November 20th, 1871, Cadwalader Evans, one of the plaintiffs, became a member'of the Philadelphia Board of Brokers, and as a condition precedent to his admission executed the following paper:

“ I hereby accept the above transfer, and pledge myself to abide by the rules and regulations of the Philadelphia Board of Brokers.

“ Cadwalader Evans.” [seal.]

In 1871, the defendant, Francis Wister, was a member of the Philadelphia Board of Brokers, which is an unincorporated association; the defendant Wister became indebted to plaintiffs prior to the admission of said Cadwalader Evans to the board. On or before January 10th, 1872, Wister became insolvent.

Section 10 of the by-laws of the board of brokers contains the following provisions:

■ “ Any member who fails to comply with his contracts, or who becomes insolvent, shall immediately inform the president of the board of the fact, whose duty it shall be to give notice forthwith, from the chair, of the failure of such member; and in case of the refusal or neglect of .such delinquent to make such report to the president, it shall be the duty of any member having a' knowledge of the fact to report the same forthwith to the standing committee or the president, who shall thereupon appoint a committee of three members to inquire into the fact and report thereon without delay, and if said committee report the charge to be true, and the boai’d confirm the report, said member shall be suspended ; and it shall furthermore be the duty of the standing committee, upon receiving information thereof, or having directly or indirectly any knowledge of such failure on the part of any member to comply with his engagements as above stated, to report the same without delay to the president, and ask for the appointment of a committee, as before provided. And in case of the insolvency of any member he shall, within three days, make good to the full amount thereof, all friendly loans of cash or stocks from members, or any overdraft on any bank. But seven days shall be allowed to him in which to settle stock contracts.

■K’

“ If any suspended member fails to settle with his creditors within one year from the time of his suspension from the board, his seat shall be sold by the secretary and the proceeds shall be paid pro *rata*to his creditors in the board. No expulsion or suspension of a member shall afiect the rights of creditors, as provided for in the constitution and by-laws.”

*445Section 12 of the constitution of the said board, provides :

“ When any member wishes to sell his membership, the name of the proposed purchaser shall be submitted to the standing committee of the board, and on the approval of two-thirds of said committee, the transfer may be made, provided the member selling has no unsettled contracts or claims against him, for stock differences or borrowed money.”

The defendant, Wister, had at the time of his insolvency claims against him fob stock differences or borrowed money, due to members of the board, to the amount of about $1700.

On or before January 10th, 1872, the defendant, Wister, sold his seat at the open board (it being the custom that members’ seats should be offered for sale in this way), and on January 10th, 1872, Wister addressed a letter to the president of the board, informing him that he had made the said sale, and desiring the approval of the board ; on January 13th he executed a power of attorney to transfer his seat. The members of the board, who were creditors, then informed John C. Johnson, the secretary and treasurer of the board, of their claims, and were told that no transfer of defendant’s seat would be permitted until the price of the seat was paid into the said John C. Johnson’s hands.

McDowell, the purchaser, was also told by Johnson that the transfer could not be completed until the price of it was paid to him. McDowell then, with the assent of Wister, paid over $1300, the price of the seat, to Johnson. The transfer of the seat was completed on January 20th, 1872, and McDowell, the transferee, became a member of the board.

At or about the time of the sale of defendant’s seat, he handed to John C. Johnson a memorandum of the debts due by himself to members of the board, the aggregate of which exceeded the proceeds of defendant’s seat. This list of defendant’s debts was found by the arbitration committee of said board to be correct.

The duties and powers of the arbitration committee are defined by Section 9 of the constitution, as follows:

“ On the first Monday in January of each year there shall be elected a standing arbitration committee, to consist of seven members, whose duty it shall be to investigate and decide all claims and matters of different' amounts between members of the board, and also to adjudicate such claims as may be preferred against members by non-members, when such non-members agree in writing to abide by its decision. The decision of this committee shall be final, except in eases involving a difference of five hundred dollars, or over, when *446either party may appeal within three days to the board for final adjudication.”

In the month of February, 1872, Cadwalader Evans, representing the partnership plaintiff, presented the claim, for which the judgment in this suit was subsequently obtained, to the arbitration committee, and claimed that a *pro rata*share of the proceeds of defendant’s seat, then in the hands of John C. Johnson, should be paid to him on account thereof. Ilis case was duly heard and considered by said committee. On or about the 24th of February, 1872, the committee refused to allow said claim, as appears by the following entries in their minutes:

Messrs. Evans, Wharton & Co. presented a claim against proceeds of sale of F. Wister’s seat. Decided, that they have no claim, Mr. Evans not being a member of the board at the time the claim originated. Notwithstanding this decision, which Mr. Evans as a member of the board was bound to abide by, his firm obtained an injunction from the Court. Matter transferred to standing committee.”

No appeal from the decision of the arbitration committee was ever taken by said Cadwalader Evans.

The Court is to be at liberty to d raw any inferences of fact.

If the Court shall be of opinion that the plaintiffs are entitled to recover, judgment shall be entered for the plaintiff for $1221.38, with interest from September 21st, 1872 ; otherwise judgment to be entered for defendants.

The judgment entered shall be in the nature of a judgment on a special verdict, with leave to either party to sue out a writ of error.

On the 27th of December, 1872, the Court entered judgment for the garnishees.

The plaintiff took a writ of error, assigning for error the entering of judgment for the garnishees.

*G. T,*Bispham, for plaintiff in error.

The right of a member of the board of brokers is not a mere license; it is not revocable: Prince *v.*Case, 10 Com. B., 375; Leach *v.*Harris, 2 Brewster, 571; Evans *v.*Philadelphia Club, 14 Wright, 118. But if a license, yet after it has been turned into cash by a sale, the money may be attached: Knabb *v.*Drake; 11 Harris, 489. This was not a forfeiture to the board under section 10 of the by-laws, but a sale as authorized by section 12 of the constitution.

*A. 8. Biddle*and *G.*Biddle, for defendants in error.

The right to the seat was a mere license allowing Wister to participate in transactions of the board, which otherwise he *447could not lawfully do: Thomas *v.*Sorrell Vaughan, 351; Prince *v.*Case, 10 Conn. R., 375; Coleman *v.*Forster, 10 H. & W., 36; Rerick *v.*Kern, 14 S. & R., 267. The test to determine that it was a license is, that it was limited to the person to whom it was given. Defendant could have recovered nothing from the board at the service of the writ; the attaching creditor could have no more: United States *v.*Vaughan, 3 Binney, 394; Walker v. Gibbs, 2 Dallas, 211; Sergeant on Att., 89; Stevenson *v.*Pemberton, 1 Dallas, 3 ; Watson *v.*Bagaley, 2 Jones, 165. The plaintiff is estopped, having agreed when he became a member to submit to the rules of the board, and having under those rules submitted his claim, which was rejected: Fenn *v.*San Francisco Stock Board, 7 Pacific L. R., No. 23, p. 179.

Judgment was entered in the Supreme Court, January 25th, 1875.

Per Curiam:

We think upon the facts stated in the case before us, and the inferences which by its'terms we are per-, mitted to draw from it, this was a case of insolvency falling within the tenth by-law of the board of brokers. The facof insolvency is admitted. It is true that Wister proceeded to make a sale of his seat, hut was arrested in his progress. The creditors made claim to the secretary and treasurer of the board, who promised them their debts should be held against the seat, that is, that no transfer of the seat would be permitted until the price was paid into his hands. The purchaser was also informed that the transfer would not be permitted until the price was paid to the secretary and treasurer. The purchaser then paid the price to the treasurer with the assent of Wister, who himself furnished a list, of his creditors. No inference can be drawn from these facts except one, to wit, that the board through its officers held the price of the seat as in a case of an insolvency, and this with the assent of Wister. The sale was, therefore, not a voluntary and free sale under the 12th section of the constitution as contradistinguished from the 10th by-law. The proviso to the 12th section was made operative.

Judgment affirmed.