Konta v. St. Louis Stock Exchange

87 S.W. 969, 189 Mo. 26, 1905 Mo. LEXIS 63

• Court: Supreme Court of Missouri
• Decided: May 24, 1905
• Status: Published

Opinion

BRACE, P. J'.

This is an appeal from a judgment of the St. Louis City Circuit Court dissolving an injunction. After a careful consideration of the whole record, the able arguments of counsel, and the cases cited in support of their respective contentions, we find the facts of the case so "fairly and clearly stated and the law governing it so aptly and admirably applied thereto in the opinion of Judge Horatio D. Wood, before whom it was tried, and for a copy of whose opinion we are under many obligations to counsel, that we take pleasure in adopting the same as the opinion of this court. The opinion of Judge Wood is as follows:

“In this ease the plaintiff alleges that he is a stockbroker engaged in selling stocks in the city of St.' Louis; that the defendant, the St. Louis Stock Exchange, is an unincorporated association of stock brokers, and that the other defendants named are offik cers thereof; that the St. Louis Stock Exchange was organized in 1896, and that plaintiff was one of the organizers of said organization; that he conducted his business as a stockholder on the floor of the Exchange until the latter part of 1899’, when ho left for a visit to Europe; that he returned on the 20th of April, 1902, and when about to exercise his rights as a member he was informed by the president of the defendant company that he had been expelled and that his membership had been forfeited, and that sinfee that time he has been denied access to the floor and deprived of all benefits and profits of his membership; that the officers and agents assigned as a reason for the forfeiture of his membership that he had not paid any dues, and that plaintiff stated to the defendants that he had received no notice that any dues were assessed or were payable but that he would nevertheless pay to the defendant, the St. Louis Stock Exchange, the dues alleged to have been levied and assessed against him which had not been paid during his absence in. Europe, if the defendant, the St. Louis Stock Exchange, its officers and agents, would indicate what amount was due and payable, but that the defendant, the St. Louis Stock Exchange, refused to state what, if any, dues were levied and payable; that the defendant, the St. Louis Stock Exchange, failed to furnish him with any record of the proceedings alleged to have Been had with respect to his alleged expulsion for non-payment of dues. He then alleges that all the actions and proceedings concerning his expulsion are illegal and void, and prays that .the St. Louis Stock Exchange, its officers and members, be restrained from interfering with the exercise by plaintiff of his rights and privileges as a member o'f said St. Louis Stock Exchange, and that he be restored to his membership in the exchange.

‘ ‘ To this petition an answer was filed denying that the plaintiff is, or ever was, a member of the St. Louis Stock Exchange; that the St. Louis Stock Exchange was organized on the 1st of July, 1899, as a voluntary unincorporated association of individuals; that the plaintiff has never become a member of the St. Louis Stock Exchange by signing its by-laws; that the plaintiff was a member of a prior association known as the St. Louis Bond & Stock Brokers’ Association, and that he was offered an opportunity to become a member of the defendant association by signing the constitution and by-laws, but he declined to avail himself thereof and failed to become a member of the defendant association.

“The answer further states that he was dropped from the rolls by reason of his failure to entitle himself to membership by signing the constitution and paying the dues aforesaid, and that although nearly three years have elapsed, during the entire time the plaintiff made no claim to membership and has never offered to comply with the conditions of membership in any manner whatever. It also alleges that even if plaintiff had become a member of the association, he was, in pursuance of the constitution and by-laws of the St. Louis Stock Exchange, legally suspended and expelled by reason of his'failure to pay certain dues. With the answer is filed a motion to dissolve the injunction heretofore issued in this cause.

‘ ‘ The facts as shown by the testimony are that the plaintiff was a member of the St. Louis Bond & Brokers’ Association, which was a voluntary unincorporated association organized in 1896, and which at that time and for sometime thereafter held its meetings on the floor of the Merchants’ Exchange. Owing to the disadvantages and inconveniences to the business resulting from holding meetings on the floor of the Merchants’ Exchange, the members of the St. Louis Bond & Stock Brokers’ Association discussed the propriety of going elsewhere and establishing a new exchange. On March 28,1899, the initial step was taken 'by the appointment of a committee to consider the advisability of establishing the St. Louis Stock Exchange, and the president of the St. Louis Bond & Stock Brokers’ Association, of which the plaintiff was a member, appointed as such committee Messrs. Hodgman, Wasserman and Little.

‘ ‘ On April 4, 1899, a motion was adopted that the St. Louis Stock Exchange be established, and a committee was appointed to formulate a constitution, bylaws and rules for the new organization and find a place for the transaction of its business.

“On the same day, April 4, 1899, article VII of the by-laws of the association, of which plaintiff was a member, to-wit, the St. Louis Bond & Stock Brokers ’ Association, was amended, so as to make the annual dues $10, payable January 2d of each year, and the committee appointed 'to consider the advisability of forming a stock éxchange reported that it was advisable to establish the St. Louis Stock Exchange, and upon the report of this committee it was resolved to establish the St. Lonis Stock Exchange.

‘ ‘ On August 17,1899, a meeting of the members of the St. Louis Bond & Stock Brokers’ Association, which will hereafter be referred to as the old association, was held, and the secretary and treasurer were authorized to transfer all money and property of the association to the secretary and treasurer of the St. Louis Stock Exchange.

“On the same date, August 17, 1899, a meeting of the members of the St. Louis Stock Exchange was held and the officers of the old association were elected to hold similar positions as officers of the new organization, and a constitution and by-laws of the new organization were adopted. These were signecl by all the members of the old association except the plaintiff. By section 1, article Y, of the by-laws of the new organization the dues were $40 per year, payable on the first' day of January and July of each year. The testimony shows that all the members of the old organization were invited to join and had the privilege of joining the new "organization if they desired to become members thereof.

‘ ‘ On October 10,1899, at a meeting of the board of directors of the St. Lpuis Stock Exchange a motion was made and seconded ‘that owing to the absence of Mr. Konta the measures adopted concerning unpaid dues and fees be not applied to him until his return to St. Louis.’ The language ‘measures adopted’ in this resolution refers to the action of the board of directors on September 27,1899, wherein a motion was adopted that all delinquents in fees and dues be given until Saturday, September 30, to pay, the same or be suspended according to the rules.

‘ ‘ The last dues paid by Mr. Konta are shown by receipt dated January 31, 1899, said receipt being for the sum of $10 annual dues for 1899, and is signed, ‘St. Louis Bond & Stock Brokers’ Association, A. D. Grant, Secretary, $10.’ This receipt on its face and by the amount paid shows that it was a payment for dues in the old organization.

“The members of the old organization moved their place of business previous to the formation of the St. Louis Stock Exchange from the Merchants’ Exchange building, for we find that on June 30, 1899, they resolved that a meeting of members be held July 5 at 211 North Fourth street to act on the new constitution and by-laws. The old organization also held meetings in the Continental Bank building, and in 1901 the new organization, the St. Louis Stock Exchange, commenced to transact business at its present location.

“On January 9, 1900, a resolution was adopted by the board of directors of the St. Louis Stock Exchange as follows:

“ ‘The secretary is authorized to notify Mr. Konta that not having paid his dues, he is suspended from the Stock Exchange.’

‘C. R. Drummond, Secretary.’

“And on page 27 of the record of the St. Louis Stock Exchange appears the following:

“ ‘July 11, 1900,.President Kotany reported to the board that Alexander Konta, a member of the exchange, was in arrears in his dues to the exchange; that Mr. Konta had been notified to pay the same, and that he had paid no attention to said notice, and that he was now in arrears for one year. After a full discussion Mr. Wasserman moved, seconded by Mr. Donaldson, that Mr. Konta’s membership be declared forfeited in accordance with section 2, article Y, of the bylaws of this exchange, and that the secretary be directed to strike Mr. Konta’s name from the rolls and Mr. Konta notified in writing that His membership had been declared forfeited by the board. Carried.’

“The evidence shows that the plaintiff left St. Louis in May, 1899, and did not return to this city until April, 1902; that he knew of the design to form the new association when he left; that he knew it was contemplated to have independent quarters and to reorganize a new association. He knew they had moved from the Merchants’ Exchange before he left; that he never attended any of the preliminary meetings incident to the new organization; never signed the constitution and has never paid any license as a broker since he left the city in the year Í899, and that prior to 1901 he never authorized anyone to pay any dues for him in this city.

“In January and in July, 1900, a membership in the St. Louis Stock Exchange had no market value. The evidence shows that at the time this suit was instituted such a membership was worth from $7,500 to $8,000.

‘ ‘ Plaintiff states that he first learned that his membership might be forfeited in a letter written him by J. J. Mull ally, dated May 13, 1901. In this letter the writer asked for an assignment of his membership, and the only information respecting dues is that there were dues unpaid and that his membership ‘ will be forfeited in a short time unless same is paid. ’ It will be noticed that this letter is subsequent to the action taken by the members of the St. Louis Stock Exchange forfeiting his membership. Upon the receipt of this letter he mailed it to Gr. H. Ten Broek, instructing him to read it carefully, and upon receipt of plaintiff’s letter Mr. Ten Broek called upon Mr. J. H. Dieekman, vice president of the exchange. Mr. Dieekman testified that Mr. Ten Broek called upon him and that he told him that the plaintiff had been dropped from the rolls for the nonpayment of dues. He testifies that Mr. Ten Broek did not offer to pay any dues, and the testimony of Mr. Ten Broek does not disclose the fact that lie made any such offer.

“The testimony shows that the plaintiff made no effort whatever to become a member of the new organization, although, as heretofore stated, he knew of its contemplated formation, and it further tends to show that he was really hostile to the old organization, one of the witnesses testifying that he stated to him that he desired to see it broken up. This statemént, however, the plaintiff denies. . •

“It is evident from the petition that the theory of plaintiff in this case is that the St. Louis Bond & Stock Brokers’ Association and the St. Louis Stock ■ Exchange are identical, and the fact that plaintiff was a member of the old organization constituted him a member of the new organization. Such a theory is untenable. The evidence shows that the members of the old organization instead of amending the constitution of the old organization adopted a new constitution. They changed the amount payable as dues. They elected officers for the new association. They transferred the assets of the old association to the new association. All of which facts are inconsistent with the theory either that the associations were identical or that the new association was a mere continuation of^ the old organization under the original constitution and bylaws. In fact, in answer to the question, ‘And didn.’t you know it was contemplated to reorganize and have a new association?’ the plaintiff answered, ‘Certainly.’

“If membership in the old organization did not, ipso facto, constitute the member a member of the new organization, did the plaintiff ever become a member of the new organization? To determine this question let us consider the nature of unincorporated voluntary organizations such as the St. Louis Stock Exchange. The St. Louis Stock Exchange is a voluntary association of individuals united, without any charter from the State, in an organization for the purpose of affording to its members facilities for the transaction of business as brokers in stocks and securities and a convenient exchange for the conduct of such transactions. The association operates under a constitution, rules and bylaws, which measures the duties, rights and privileges of'each member as such. It is obvious that these constitutions can have no binding force or effect except what they derive from the assent of the individual members. The constitution, rules and by-laws constitute the contract of membership, and no person can invoke the benefits of a contract or incur any liability thereunder unless he assents to such contract; and it has been repeatedly held that before such constitution and by-laws can have any binding force whatever upon a member of .an unincorporated association which, will be recognized and enforced by the courts, it .must appear that such member personally assented to their provisions. The evidence in this case not only shows that Mr. Konta did not assent to the constitution, rules and by-laws of the St. Louis Stock Exchange, but that he did not, either by word or action, assent to its organization, and I am satisfied from the evidence, not only that he did not become a member of the new organization, but, also, that he never intended to join the St. Louis Stock Exchange. If he did not become a member of the St. Louis Stock Exchange, his right to prosecute this action fails.

“I might rest the decision of this case upon this proposition, but it may be said that the St. Louis Stock Exchange is estopped to deny the membership of the plaintiff by reason of its action in January, 1900, in suspending him for non-payment of dues, and by reason of its action of July 11, 1900, in dropping his name from the rolls for an alleged failure to comply with its rules respecting the non-payment of dues. An estoppel arises where one, by his words or conduct, willfully or knowingly causes another to believe in a certain state of things, and induces him to act on that belief so as to injuriously alter his previous position. No man. can set up another’s act or conduct as an estoppel unless he has been misled or deceived thereby. Was the plaintiff deceived by the action of record of the St. Louis Stock Exchange in suspending him in January for non-payment of dues, and in July thereafter expelling him for such non-payment? He testified that he knew nothing about this action of the St. Louis Stock Exchange until shortly prior to the commencement of this suit. If he knew nothing about it, how can he be said to have been misled or deceived thereby? If he was in ignorance of this action on the part of the St. Louis Stock Exchange, how can he be said to have injuriously altered his previous position? It will be seen, therefore, that the case presented is destitute of an essential element necessary to constitute an estoppel. The action of the St. Louis Stock Exchange in this regard not having been acted upon by the plaintiff to his injury, did not estop the defendant from denying that the plaintiff ever became a member of the association.

“But even assuming, as contended by plaintiff, that Mr. Konta was a member of the St. Louis Stock Exchange, and that his expulsion was undoubtedly illegal, as it certainly was if he was ever a member of the exchange, he was bound, within a reasonable time after obtaining knowledge of such expulsion, to assert his rights; otherwise, he will be deemed to have consented to such expulsion, however illegal or irregular it may have been.

“In the case of Glardon v. Supreme Lodge Knights of Pythias, 50 Mo. App. 45, it is held that where a member was illegally expelled, it was incumbent upon him to affirm or disaffirm the act of expulsion within a reasonable time and in some distinct manner under the circumstances ; and where he takes no steps of any kind to secure his reinstatement, allows dues to remain unpaid which had accrued and were payable prior to the date of expulsion, and neither tenders such dues nor any which accrued subsequently, he must be taken to have acquiesced in and consented to the sentence of expulsion.

“In this case plaintiff ascertained through his agent, Mr. Ten Brook, in April or May, 1901, that he had been expelled from the St. Louis Stock Exchange for non-payment of dues. He had allowed dues to accrue which were payable on January 1, 1900, July 1, 1900, and January 1,1901. He has at no time tendered these dues, nor any dues which accrued subsequently and prior to the institution of this suit, to-wit, dues payable July 1, 1901, and January, 1902. Nor did he take any steps whatever to set aside his alleged illegal expulsion until June 9,1902.

“At the time he was suspended and at the time he was expelled memberships in the St. Louis Stock Exchange were worthless. He waited over a year and until a membership in the exchange was worth $7,500 before taking any steps whatever to assert his rights. Such delay as this, pending which there has been such a change in the value of memberships, must be deemed unreasonable, and a suit thus brought, after such lapse of time does not appeal to the conscience of the chancellor.

“For further authorities upon this proposition see 1 Am. and Eng. Ency. Law, 570, and Niblack on Benefit Societies, par. 58.

“But there is another proposition which is fatal to the plaintiff in this case, and which seems to have been overlooked by counsel for both parties.

“It is a familiar maxim that he who seeks equity must do equity. The petition in this ease alleges that he applied to the officers of the St. Louis Stock Exchange to ascertain what duties were assessed and levied against him, and that he offered to pay such officers all dues which were payable, if the defendant or its officers and agents would indicate what amount there was due and payable, but that the defendant, the St. Louis Stock Exchange, refused to state what, if any, dues had been assessed or levied against the plaintiff, or what dues were payable. To successfully maintain this suit it was incumbent upon the plaintiff to show either that he had paid or tendered all dues payable to the St. Louis Stock Exchange, or that he had made application to pay the amount of such dues and the defendant refused to accept the same, or refused to state what dues, if any, were payable. There is no evidence whatever either that the plaintiff paid or offered to pay any dues, and there is no evidence whatever that he applied to any of the officers of defendant to ascertain the amount which was due and payable, and that such officer or officers declined to state what dues were payable by plaintiff.

“Fortunate, indeed, would be the plaintiff, if without having contributed, or offered to contribute, a dollar as dues, he should, as a regard for his ingenuity, in discovering that he was a-member of an organization which he did not join or intend to join, be rewarded by a decree of this court investing him with all the rights and privileges of such a membership! A decree reinstating him under such state of proof would be grossly inequitable. The motion to dissolve the injunction heretofore issued is sustained.”

For the reasons stated in the foregoing opinion the judgment of the circuit court will be affirmed.

All concur, except Marshall, J., not sitting.