The Redwood gazette., 1915-04-14
COURTS DECISION
IN EXCHANGE CASE
South St. Paul Live Stock Ex-
change Regulations Upheld.


lations was upheld by Judge Michael
in handing down a decision March 81
when the case of the JAS r. Kirk Co.
versus the South st. Paul Live Stock
Exchange, to prevent the exchange
from collecting fine imposed, was up
for trial in his court. The JAS R.
Kirk Co. had been accused of paying
rebates and having several solicitors
at work through the Northwest,
which is in open violation of the rules
of the exchange to which every candi
date voluntarily subscribes when be
coming a member.
The rules and regulations are sc
constructed as to make dishonesty i'm
possible when rigidly observed The
Kirk Co. having been accused of vio
lating the rules and regulations had
been cited to appear before the board
of directors of the exchange for in
vestigation, which on account of no
precedent ever having been estab
lished for the conduct of any investi-
cation, proceeded along lines that ap
peared fair and just, but which did
not meet the approval of the court,
who decided that on%account of GER
tain technical irregularities in the
preliminary conduct of the case there
was no proceedings, thus leaving it
open for the exchange to retry in a
more regular manner the pending
charges against the Kirk Co. The full
Of hn Fol
81 don't think the court will ever be
in better position to decide this
case than right now when the facts
and the argument of counsel are fresh
in the courts mind.
81 have no difficulty in holding that
the provisions of Rule ID of this asso-
citation are valid. | think their evil
dent purpose is to make for honesty
in the transaction of business.
''The disciplinary provisions in Rule
II, think, furnish reasonably plain
outline of what must be done when
charges are filed against a member
Section l provides for the filing OF
the charges. Section 2 provides for
serving a copy of the charges on the
accused and fixing time for hearing.
Section also provides that the board
of directors shall make an eXamina-
ton of the charges. To my mind, if
this contemplates that the board of
directors are to make an eX-parte eX
animation, it would so violate the
rules of natural justice as to be
against public policy and be void, be-
cause these disciplinary provisions go
directly to affect the membership and
property rights of the defendant in
those proceedings. | don't believe,
however, that is the correct construc-
ton of this rule. | don't think there
is any difference in the word 'eXami
nation used in this rule from what
there is in the word trial used in in
surance bylaws. | think they both
contemplate the same thing, and, so
construed, the rule is evidently fair
and valid. That does not necessarily
mean that trial must be surrounded
with all the technicalities and formal
tiles of trial in court, but it does
mean that it must conform to the es
sential features constituting a trial as
known to the law of the land, viz, the
right to be confronted with witnesses
the right to cross examine them.
"The court has no difficulty what
ever in finding that this board of d.
rectors acted in good faith, and that
it believed it was acting within the
powers conferred upon it by these
rules; but | think it is quite apparent
that the board of directors honestly
mistook their powers and functions in
the premises.
''It appears from the evidence and
the records that two witnesses were
examined in these hearings in the alb
sence and without knowledge of the
accused. 1t also appears that the evi-
dence upon which the board of direc-
tors largely depended in arriving at
it's judgment was the statement which
the committee of the board obtained
from Mr.. Johnson. This evidence
If it be such-was taken without mo-
tice to the accused and without their
knowledge. So it seems to me that
there was such irregularity in the con-
duct of this examination or trial
whichever 1t may be called) as to
vitiate the judgment arrived at. I
think there has been nothing done by
the accused in this instance to waive
those irregularities. In fact they seem
to have protested against the non-pro-
duction of the witnesses at the ex-
animation, and also objected to the
character of the evidence as hearsay.
ut is not necessary to pass upon
the fact Of whether or not this evi-
dence produced before the boardshad
any probative value. may say that
am not particularly impressed with
the attitude that tho plaintiffs here
assumed in that investigation--they
seem to have been evasive and an
tagonistic all the way through, and If
the court could see its way clear, upon
legal principles, to sustain this convic-
tion by the board, it would be disposed
20 do 50, but am free to confess that