State ex rel. Cuppel v. Milwaukee Chamber of Commerce

47 Wis. 670

• Court: Wisconsin Supreme Court
• Decided: August 15, 1879
• Status: Published

Opinion

LyoN, J.

We think the plaee of trial was regularly changed from the circuit to the county court, and that the latter court had jurisdiction of the case, langson, who made the affidavit for such change, was the secretary and a director of the chamber of commerce, and a defendant in the action. He swears in such affidavit that he makes the same, and prays for the change, on behalf and at the request of all the defendants; and all of them moved, by their attorney, for such change! The case is clearly within the rule of Wolcott v. Wolcott, 32 Wis., 63, and Rupp v. Swineford, 40 Wis., 28.

The visitorial or superintending power of the state over corporations created by the legislature will always be exercised, in proper cases, through the medium of the courts of the state, to keep those corporations within the' limits of their lawful powers, and to correct and punish abuses of their franchises. To this end the courts will issue writs of quo war-ranto, mandamus or injunction, as the exigencies of the particular case may require; will inquire into the grievance complained of, and, if the same is found to exist, will apply such remedy as the law prescribes. Every corporation of the state, whether public or private, civil or municipal, is subject to this superintending control, although in its exorcise different rules may be applied to different classes of corporations. The cases in this court are very numerous in which such control has been sanctioned and exercised. In one of them, this court sent its peremptory mandate to the chamber of commerce of Milwaukee, the principal respondent in this action, commanding the restoration of a member who had been unlawfully suspended. State ex rel. Graham v. The Chamber of Commerce, 20 Wis., 63. In another case, it adjudicated the validity of a by-law of the chamber, for the violation of which a member was threatened with expulsion or suspension. Dickenson v. The Chamber of Commerce, 29 Wis., 45.

In the light of these judgments we cannot accept the doctrine, which seems to have received the sanction of the supreme court of Illinois in People ex rel. Rice v. The Board of Trade of Chicago, 80 Ill., 134, that the power of such corporations to enact by-laws is unlimited, and that the courts will not interfere with the enforcement of any by-law thus enacted. The case seems in conflict with earlier decisions of that court, and we are not aware that the court has reasserted any such doctrine, although it has since considered several cases involving the legality of the proceedings of the same board of trade. See Fisher v. The Board of Trade of Chicago, 80 Ill., 84; Sturges v. The Same, 86 Ill., 441; Baxter v. The Same, 83 Ill., 146. True, these were equity cases, in which the respective complainants sought to restrain the hoard from expelling them, or to compel it to restore them after expulsion; yet the doctrine of The People ex rel. Rice v. The Board of Trade, supra, is referred to hypothetically in the opinions of the court, and no mention whatever is made of that case. Whether that learned and able court adhere to that doctrine or not, we are unable, as at present advised, to adopt it as the law of this state.

We now proceed to an examination of the record before us. The return of the respondents to the alternative writ of mandamus, and the answer of the relator to such return, have been carefully examined, and we are unable to find in either pleading an averment of any material fact which is not sufficiently stated in the amended relation. We think both of them might safely be expunged from the case without detriment to either party.

Under a familiar rule of law, a demurrer to the return to a mandamus reaches back to the relation. State ex rel. Cothren v. Learn,, 9 Wis., 279; State ex rel. Burns v. Supervisors, etc., 34 Wis., 169. This is on the principle that, notwithstanding the defect of the pleading demurred to, the court will give judgment against the party whose pleading was first defective in substance. Babb v. Mackey, 10 Wis., 371; Ferson v. Drew, 19 Wis., 225, and cases cited. Hence, the demurrer to the relator’s answer reaches back and must be treated as a demurrer to the amended relation. The county court evidently so considered it, and must have held that the relation fails to show facts which, if true, entitle the relator to a ma/ndamus. Otherwise that court would not have given final judgment against the relator on the demurrer.

The question to be determined is, therefore: Are sufficient facts stated in the amended relation to show that the relator is entitled to be reinstated as a member of the chamber of commerce, from the privileges of which the board of directors has suspended him ?

To determine this question, it is not necessary to define tlie precise limits of the power of the court in the exercise of its control over corporations, or to lay down any general rules as to how far the courts will go in reviewing corporate action. This will not be attempted. It is sufficient for the purpose of this case to say, that, if it appears from the relation that the relator was duly notified of the charge preferred against him, and had a fair trial before the board of directors; if the testimony tended to prove the charge; if the former proceeding against him for the same offense is a nullity; and if the rule or by-law under which he was prosecuted, convicted and suspended from membership, is a valid regulation of the chamber — then the relation fails to show that the relator is entitled to be reinstated.

1. The relator had due and timely notice of the charge against him, and of the time appointed for his trial. He appeared before the board of directors in person and by counsel, cross-examined the witnesses called by the prosecution, produced witnesses in his own behalf, who were sworn and testified, and his counsel argued his case to the board. It satisfactorily appears that he was tried fairly, and in all respects in accordance with the rules of the chamber.

2. The testimony is made a part of the relation, and there was abundant proof tending to show that the relator had committed the offense charged against him. He was convicted of the offense, and the penalty imposed was that prescribed by the rules.

It should be observed that it is doubtful, to say the least, whether in such a case the court will look into the testimony for any purpose. But the exigencies of this case do not require a determination of that question.

8. The relation shows that the first proceeding against the relator was without notice, formal complaint or trial, and was had in his absence. Such a proceeding is not only irregular but is utterly void. Moreover, the board of directors, when so advised, annulled the whole proceeding and restored the relator to membership.

Should a magistrate, on being told that a person had committed an assault and battery, enter in his docket a judgment convicting such person of that offense, and imposing a fine upon him therefor, without formal complaint, process, arrest, appearance or trial, such judgment would be a nullity, and would constitute no bar to a regular prosecution for the offense. The same principle applies here. The first void proceeding against the relator is no bar to a subsequent regular proceeding for the same offense.

4. The only remaining question to be considered is, whether the rule of the chamber under which the proceedings were had against the relator, is valid. The rule reads as follows: “ Members of the chamber of commerce are hereby prohibited from gathering in any public place, in the vicinity of the exchange room, and forming a market for the purpose of making any trade or contract for the future delivery of grain or provisions, before the time fixed, for opening the exchange room for general trading, or after the time fixed for closing the same, daily; and any member who shall make any trade or contract in the manner herein prohibited, shall be deemed to have violated this rule, and he may, therefor, be fined by the president in a sum not exceeding five dollars for each and every such offense, and shall be liable to such additional discipline as the board of directors may determine; and any member refusing or neglecting to pay any such fine shall be suspended by the board of directors from all privileges of the association during the time that such fine shall remain unpaid.”

The more material objections urged against the validity of this rule (and the only objections which it is deemed necessary to consider) are: first, that it is not competent for the chamber to restrict the right of its members to assemble ánd make contracts for the future delivery of grain or provisions when and where they choose; second, that the chamber cannot lawfully delegate the power of suspension or expulsion to the board of directors; and third, that the rule is void for uncertainty, in that it fails to define what is a “ public place in the vicinity of the exchange room,” and what constitutes “forming a market.”

The respondent chamber of commerce, although theretofore organized under chapter 132 of the General Laws of 1858 (R. S. 1858,490), was specially incorporated by chapter 158, Private and Local Laws of 1867. That act was amended by chapter 39, Laws of 1877. The charter, as contained in these acts, confers upon the chamber power to make such rules and by-laws, and to alter the same from time to time, “ as may seem proper and necessary for the good government of the corporation hereby created; such rules and by-laws not to contravene the laws of this state or of the United States.” Section 1, ch. 158. Section 6 of that chapter provides that “ the said corporation shall have power to admit and to suspend or expel members, as it may see fit, in manner to be prescribed by the rules and by-laws.” And section 9, as amended by the act of 1877, contains the following: “ Said corporation shall elect, in the same manner and at the same time prescribed for the election of other officers, nine directors, who, together with the ex officio members of the board hereinafter designated, in addition to the performance of such other duties as may be assigned to them in the rules aud bylaws, shall investigate complaints against members, and when sitting in such capacity shall have power to examine witnesses under oath, to be administered by the presiding member; and when, in their judgment, any member has been proven guilty of conduct meriting suspension or expulsion, they may suspend or expel such member.” The ex officio members of the board thereinafter designated are the president, vice presidents (of whom there are two), and secretary.

The objection that the chamber has no power to make a rule or by-law which prohibits its members from meeting when and where they please, and then and there making contracts for the future delivery of grain or provisions, is based upon the alleged positions, that such a rule or by-law is not for the good government of the chamber, and, therefore, ultra vires; and further, that the same is unnecessary and unreasonable, and operates as an unlawful restraint upon trade.

We cannot concur in these positions. Eegarding the rule under consideration merely as a police regulation, enacted for the purpose of affording the members of the chamber of commerce free and convenient ingress and egress to and from the daily meetings of the chamber, and to prevent the confusion and disturbance in the public places near its exchange room which might result from the unlimited right of the members to trade in those places, we could not hold that the rule" in that behalf may not be proper for the good government of the chamber, or that it imposes an unlawful restraint upon trade, or is unreasonable or unnecessary. But it is probable that the rule was enacted for other than mere police purposes. It may be that experience had shown that the unrestricted right of the members to form a market at the times and in the places specified in the rule, for the purpose of making the class of contracts therein mentioned, tended to promote irregular- transactions by persons not members of the chamber and not amenable to its rules.

In the preamble to its rules the chamber declares its object •to be, “to promote just and equitable principles in trade, to correct abuses, to establish and maintain uniformity in the commercial usages of the city, to acquire, preserve and disseminate valuable business information, and to support such regulations and measures as may advance the mercantile and manufacturing interests of the city of Milwaukee.” These are laudable objects, and we cannot say that none of them are promoted by the rule under consideration.

We may conclude our remarks on this subject with a single additional suggestion. The testimony taken before the board of directors on the trial of the relator is made a part of the relation. On that trial the relator gave evidence tending .to prove, that nearly all of the time contracts mentioned in the rule 'are wager or gambling .contracts, and ■ .therefore void. If that proposition were proved, it would be difficult to hold that a rule which operates as a restraint upon the making of such contracts is an unlawful restraint upon trade. In that case, if it is a restraint, the rule and the statute are in entire harmony.

The next objection to the rule is, that the chamber cannot lawfully delegate to its board of directors the power of suspension or expulsion. The learned counsel for the relator relies upon the case of The State ex rel. Graham v. The Chamber of Commerce of Milwaukee, 20 Wis., 63, to support this objection. It was there held that the power of expulsion was in the body of corporators, and could not, under the law as it then stood, be delegated to the board of directors. That case arose under chapter 132, Laws of 1858, before cited, which provided merely that corporations organized under it “ shall have the right to admit as members such persons as they may see fit, and expel any members as they may see fit.” Sec. 2. The ruling was undoubtedly correct; but the law has since been changed, and the statutes above cited confer upon the board of directors the power of. suspension or expulsion in proper cases (sec. 9, supra), and also upon the chamber power to prescribe rules and regulations for admitting and expelling members (sec. 6). The statute also gives the chamber very extensive authority in respect to the enactment of rules and by-laws, and the conferring of powers thereby upon the board of directors.

As the law now is, we do not doubt that the rule under consideration legally confers upon such board the power, and imposes upon it the duty, of suspending a member convicted under it, who refuses to pay the fine imposed upon him by the president.

The last objection is, that the rule is void for uncertainty. We do not think so. We think the language of the rule is reasonably explicit, and that there should be no difficulty in understanding what is a “ public place in the vicinity of the exchange room,” or what acts constitute the forming of a market there, within the meaning of the rule. The rule doubtless means a place in that vicinity public to all the members of the chamber, and includes the hall or passage way leading from the street to the exchange room. “ Forming a market ” evidently means conducting negotiations and making contracts of sale. Perhaps the rule might have been better drawn, but its meaning is as clear as that of many penal statutes which the courts constantly enforce.

Upon the whole case, we conclude that the relation fails to state facts showing that the relator was unlawfully suspended.

The judgment of the county court denying a peremptory mandamus and dismissing the relation, must be affirmed.

By the Gow'rt. —Judgment affirmed.