Court Opinion

ID: 5349861
Source: CourtListenerOpinion
Date Created: 2022-01-08 06:34:53.271749+00
Date Added: 2024-06-11T08:29:42.830337
License: Public Domain

Dore, J. (dissenting).
The respondent Commodity Exchange, Inc., would be non-existent if the consolidation agreeihent of February 10, 1933, the instrument which authorized its creation, had failed to contain the mutually agreed upon provisions of article XV, schedule A, thereof, which assured and preserved to the respective four constituent commodity exchanges, autonomy with respect to the control of their respective commodities. Such provision was a basic inducing consideration for the approval and execution *30of the consolidation agreement by the four constituent exchanges, as parties thereto; and section 139-B of the by-laws enacted pursuant thereto adequately preserved these agreed rights to such trade groups.
The attempted amendment to the consolidation agreement together with the proposed amendment to section 139-B of the by-laws abrogates and destroys this fundamental control by the registered members of each trade group of amendment to the by-laws and rules affecting the particular commodity in which they are interested. Such amendment did not relate merely to procedural or administrative matter but destroyed and transformed the very foundation upon which the respondent Commodity Exchange, Inc., was created and erected. It was adopted in complete disregard of the express provisions of article XV of schedule A annexed to and forming part of the consolidation agreement, pursuant to which the exchange came into being, as well as in disregard of that portion of section 139-B of the by-laws, which requires that proposed amendments be approved by two-thirds of the registered members o'f each trade group before adoption.
The term “ vested rights ” is not rigidly defined in the law. Contract obligations secured by solemn agreement are afforded equal protection, even by constitutional provisions, against impairment without due process of law. The power of amendment under section 30 of the Membership Corporations Law is not exempt from all restraint. Amendments must not be unreasonable in nature or degree; nor in effect, should they destroy or transform the basic contract in its fundamental purpose. (Steuernagel v. Supreme Council of R. A., 234 N. Y. 251, 257.)
The order entered June 2, 1936, now appealed from was correctly made, both as matter of law and of discretion, and should be affirmed.
Order reversed, with twenty dollars costs and disbursements, and motion denied, with ten dollars costs.