Court Opinion

ID: 8187749
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:10:29.079769+00
Date Added: 2024-06-11T16:40:29.142324
License: Public Domain

Maeshall, J.
This appeal must turn on whether the complaint states a cause of action. That depends on whether the board of directors of the defendant had jurisdiction under thé laws of the corporation to consider the charges filed against appellant. At the outset such jurisdiction was chai-*379lenged because plaintiff assigned bis certificate. It is now conceded that such circumstance did not sever appellant’s connection with the corporation nor militate against the power of its board to try him upon charges filed. The material grounds now insisted upon to support the claim of want of jurisdiction will be considered in detail.
1. Do the facts alleged against appellant constitute an offense against the laws of the corporation ? It is a sufficient answer to that to say that a court of equity never exercises its jurisdiction to prevent another court or tribunal from exercising its jurisdiction upon the theory that if permitted to do so it will commit jurisdictional error. That is what the action before us seems to have been aimed at. At the outset of the trial of appellant before the board it must necessarily accord to him a hearing on the question of the sufficiency of the charges filed. By his membership in the corporation he is bound by contract, so to speak, to submit that question to the proper corporate tribunal, the same as he is the question of his guilt or innocence. The situation of appellant is unlike that of the plaintiff in Bartlett v. L. Bartlett & Son Co. 116 Wis. 450, 93 N. W. 473. There the tribunal of the corporation exercised its jurisdiction to decide upon the matter in hand, but exceeded it by reason of violating the rules of the corporation. If the action had been brought to prevent the trial board from making a decision, upon the ground that if suffered to do so it would go beyond its jurisdiction, manifestly the action could not have been maintained.
'2. Are the charges sufficiently specific to comply with the rules of the corporation ? That is effectually met by the familiar rule that mere indefiniteness is not a jurisdictional defect. If appellant deems the charges indefinite his remedy is an appeal to the trial board to have them made specific. The board has ample jurisdiction to hear all complaints of that kind, and a court of equity cannot, in advance of its acting at all, assume that when called upon to do so it will either *380refuse to perform its duty or commit jurisdictional error •otherwise. No doubt, as said in Hutchinson v. Lawrence, 67 How. Pr. 38, to which our attention has been called, in every proceeding to discipline a member of a corporation for violating its laws he is entitled to be informed of the charges with sufficient definiteness to enable him to know the precise nature thereof; but the primary tribunal to enforce that right is the one provided by the corporation. Hence, a suit to enjoin it from acting while it has jurisdiction over the subject matter must be regarded as one to interfere with the exercise of jurisdiction rather than one to avoid the injurious results of jurisdictional error.
3. The point is further made that the conduct called in question did not concern the corporation or any of its members, hence it is not covered by the by-laws; that the corporation has no jurisdiction to try appellant for what he may have done outside of its jurisdiction or with a stranger. The language of the by-laws is general. In its literal sense it covers conduct on the part of members of the corporation regardless of place or of the person concerned therein. That is in strict harmony with the declared purpose of the corporation, to promote just and equitable principles in trade — not merely between the members of the corporation or in its chamber, but generally. Consistent with that, the by-laws were made to require the members of the corporation to observe a proper standard of conduct generally. In no other way could the corporation efficiently “promote just and equitable principles in trade.” To allow a person to enjoy its benefits as a member ■so long as his conduct with its members shall be above reproach, regardless of his conduct with strangers, would tend to promote a low rather than a high standard of business morals. Rules of the character of those under consideration have been commonly held to cover conduct of members of the corporate body outside its local jurisdiction. People ex rel. Thacher v. New York Comm. Asso. 18 Abb. Pr. 271, cited *381by respondent’s counsel, is directly in point, and covers the-entire field of controversy on tbis part of appellant’s argument. The object of the corporation there, as here, was to “inculcate just and equitable principles of trade.” A member was expelled for violating a by-law which was framed in-general language. A writ of mandamus was sued out to obtain a reinstatement of the member, the claim being made-that the by-law did not cover his case, as the offense charged, if committed, occurred outside the local jurisdiction of the-corporation and with a stranger; that to construe the by-law as reaching such a case would call for its condemnation for-unreasonableness. The court held that the purpose of the corporation and its by-laws clearly concerned the conduct of its members with strangers as well as with each other; that to hold that the corporation could promote a high standard of' business morals by controlling the conduct of its members ■with themselves and leaving them free to violate its standard of trade ethics in their dealings with strangers would be absurd. The language of the opinion received the approval' of the court of appeals in Haebler v. New York P. Exch. 149 N. Y. 414, 44 N. E. 87, and so fully meets the argumefit of' appellant’s counsel here at this point, that we may well give it a place in this opinion:
“If'it [the by-law] was obligatory upon him it was binding at all times. He had no right to make a distinction between dealing with members and strangers. He had no right to-say: I will inculcate these doctrines while at the association, but I claim the privilege outside of it to be as dishonest as I choose. I will be straightforward and 'honest in my dealings with one class of persons; but with others I will violate the-principles of integrity to which I have subscribed. If such a course of conduct could be tolerated and allowed, then so far as this great object is concerned, the association would be-of no account, of no sort of importance. It would only be a shield to cover up dishonesty and fraud outside of its meetings and when its members were engaged in dealing with strangers. Its professions of morality could amount to nothing,. *382and be but an empty name without any substance. In fact, while its ostensible object would be elevated and honorable, it would be but a cloak for those who sought to avail themselves of its privileges to be gui'lty of evil practices and improper behavior.”
4. The further point is made that the board of triers have no jurisdiction to entertain the charges because they were preferred by a member of the board. As suggested by respondent’s counsel, that is answered effectually by the fact that the by-laws require the board to examine all charges against any member, reduced to writing and filed by any other member or members with the president or secretary. There is no exception. The members of the board of directors are not precluded by any by-law from filing charges against a brother member, or exempted for any cause from performing their duty as directors to examine into filed charges. That .condition of things appellant assented to in joining the corporation, the same as he assented to any other feature of the jurisdiction of the board as laid down in its by-laws. Moreover, as an independent proposition, a board exercising mere quasi-judicial powers is not necessarily ousted of its jurisdiction in respect to any particular subject within that jurisdiction because the proceedings before it in that particular matter were instituted by one of its members. This court decided that in State ex rel. Starkweather v. Superior, 90 Wis. 612, 64 N. W. 304. There one of the members of the common council filed charges against the mayor, and he and others interested in the result subsequently participated as members of the council in trying him upon such charges. The claim 'was made, upon common-law writ, of certiorari, that the participation of such interested members of the council in the trial was fatal to the judgment rendered. This court held otherwise, because the charter made it the duty of the persons whose conduct was assailed to act as members of the trial body, and made no provision for their exemption upon *383the ground of prejudice or other cause; that as the legislature created the office of mayor it had a right to provide any method it might see fit for the removal of an incumbent of the office for cause; that, under the charter, interest of one or more members of the trial body in the result did not go to the jurisdiction of such body. The court did not intend, later, to overrule that in State ex rel. Getchel v. Bradish, 95 Wis. 205, 70 N. W. 172.
We can see no good ground for holding that the complaint shows that the board of directors of respondent has committed jurisdictional error. The cause seems to be wholly grounded upon the idea that if the board is permitted to exercise its jurisdiction appellant will not have a fair hearing. If that were sufficient to warrant a court of equity in controlling the. duly constituted tribunals of corporations and preventing them from exercising their jurisdiction, an easy way would exist for removing the trial of offenses against the by-laws of corporations from the jurisdiction of their tribunals to the courts. ISTo such judicial authority exists.- The methods provided by the laws of a corporation for disciplining its members, unless void for unreasonableness or violative of some law of the corporation itself, or of the land, are supreme. If the corporation violates its laws in the trial of one of its members, thereby committing jurisdictional error to the injury of the property rights of a member, equity will furnish him a remedy if he has none other.
By the Court. — The order is affirmed.