Court Opinion

ID: 9418486
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:27:17.010989+00
Date Added: 2024-06-11T17:16:01.773021
License: Public Domain

Mb. Justice Bbandeis,
concurring.
I agree that the Future Trading Act is unconstitutional; but I doubt whether the plaintiffs are in a position to require the court to pass upon the constitutional question in- this case. It seems proper to state the reasons for my doubt.
In essence this is a suit by eight members of the Chicago Board of Trade to prevent its directors and officers from accepting the offer of the Goyernment to designate it a “ contract market.” The act does not require the corporation to become a “ contract market.” If — and only if — it elects to become such, must its rules, and the conduct of its business,, conform to requirements prescribed by the act or the Secretary of Agriculture. In that event its members may likewise be subjected individually to some slight additional trouble and expense; for the Secretary of Agriculture may require a more detailed record of transactions than is ordinarily kept and may require that the records be presérved three years. Members may, in that event, also suffer individually some loss of business *73through the competition of representatives of producers cooperative organizations who are to be admitted to the privileges of the exchange if it becomes a “ contract market.” On the other hand, by acceptance of the designation as a “ contract market ” members of the Board of Trade would be relieved from all danger of liability for taxes on their future trading; and if the act is enforced generally, the profits of the individual members may increase largely; because the general public, being debarred by the act from gambling on futures in bucket shops, will naturally turn to the few “ contract markets ” when desiring to speculate in futures.
To decide whether the corporation and its members will be benefited or injured by its becoming a “ contract market ” is a matter calling for the exercise of business judgment. The charter vests in the directors and managers broad powers; and, so far as appears, there is nothing in the by-laws or in the nature of the action proposed which prevents their exercising freely their judgment in this, as in other matters affecting the business. No radical or fundamental change in the object, character or methods of the business of the corporation or of its members is involved. There is no allegation that the directors -and managing officers are incapacitated from acting because their interests are adverse to the corporation or its members; or that their action should be interfered with because they are purposing to exercise their powers fraudulently or otherwise in violation of their trust. Nor is it alleged that efforts have been made to control their action by calling a meeting of the 1600 members or that such efforts would be vain, or that there is an emergency requiring interposition of a court of equity. The requirements of Equity Rulé 27 are not complied with by alleging simply that plaintiffs requested the Board of Directors “ to institute a suit to have said Future Trading Act adjudged unconstitutional ” and that the plaintiffs “ are informed and *74believe that said Board of Directors refused said request because they fear to antagonize the public officials whose duty it is to construe and enforce said Act.”
That under such circumstances a stockholder’s bill is fatally defective, although it was brought to restrain the enforcement of a statute alleged to be unconstitutional, is well settled; and the rule has been recently applied. Wathen v. Jackson Oil & Refining Co., 235 U. S. 635; Corbus v. Alaska Treadwell Gold Mining Co., 187 U. S. 455. In the case at bar, plaintiffs’ case is still weaker than it was in those cited. For aught that appears most of the members of the exchange, as well as its directors and managing officers, maybe of opinion that they will be benefited by the enforcement of the act. Nothing is better settled than that an individual may ..acquiesce in or waive an admitted infringement of a constitutional right; and I am not aware of any rule of law which requires a corporation, upon' request of a minority stockholder, to play the knight-errant and tilt at every statute affecting it, which he beheves to be invalid. A corporation, like an individual, may refrain from embarking in litigation to enforce even a clear right of action if litigation is deemed inadvisable; and it is immaterial, in this respect, whether the right of action arises at common law or under a statute or under a constitutional provision. Nor do I know of any reason why the disadvantages which may flow from “ antagonizing public officials ” may not properly be considered by directors and managing officers of a corporation in determining whether to embark in litigation. The fear of antagonizing customers or other business connections or the public is. a motive which "quite commonly and properly influences the conduct of men.
If, after the corporation has. become a “ contract market ” its directors and managing "officers should seek to subject the plaintiffs, as members, to¿ unauthorized restrictions or should attempt to deprive" them-of vested.rights, *75relief may, of course, be had in a proper proceeding. And likewise if the plaintiffs now have, as individuals, rights entitled to protection, there are appropriate remedies. But this is not such a suit. Here members of a cor=. poration seek to enforce alleged derivative rights; and I doubt whether they have shown that they are in a position to do so.