MacDowell v. Ackley

M. was a member of the Philadelphia Stock Exchange when in 1875 it amended its constitution by providing for a gratuity fund, out of which. §2000 were to be paid to the representatives of every full member on his decease. M. paid certain assessments for the formation of this fund. In 1877 a further amendment was adopted by the Exchange, wherein it was provided “ that any suspended member who shall have failed for three months to pay in full all gratuity dues and assessments, shall forthwith cease to be a full member for the purpose of” participation in the gratuity fund. M. failed to pay his regular quarterly dues for the several quarters from March 31st L877 and ending June 30th 1878 ; also the annual sums payable to the gratuity fund December 1st 1877, and the several asssessments due from him to the gratuity fund by reason of the deaths of members which occurred on the 7th of August and 9th of September 1877, and in August 1878. On the 6th of August 1878 he was suspended for the non-payment of his regular quarterly duos. In April previous he had become insane, and in November 1878 he died. Held, that having subscribed to the constitution and by-laws, and the amendment of 1877 having been made in accordance therewith, he could not be permitted to question its validity, and was bound thereby. Held, further, that having failed to pay his dues and assessments for the benefit of the gratuity fund, he ceased to be a full member for the purposes of said fund. With his loss of full membership his right to the gratuity fund fell with it during his life, and there was nothing to transmit to his representatives.

Error to the Court of Common Pleas, No. 2, of Philadelphia county : Of January Term 1880, No. 146. Case stated for the opinion of the court wherein Blanche R. MacDowell, guardian of Caroline G. MacDowell was plaintiff, and Shreve Ackley and others, officers and members of the Philadelphia Stock Exchange, were defendants. The case as stated in the nature of a special verdict, with power to the court to draw the same inferences of fact as a jury might draw, was in substance as follows: James J. MacDowell, the deceased, father of Caroline G. MacDowell, purchased a seat in The Philadelphia Stock Exchange, and was duly elected to membership therein on the 28th of August 1865. In December 1875, sect. 17, of the constitution, relating to gratuity fund, excepting the portion thereof hereinafter set forth, was passed. The following are the material portions of said section : 1. Every full member of the Philadelphia Stock Exchange, in addition to all other payments which ho is required under those by-laws to make, shall, at the time of his admission to the Philadelphia Stock Exchange, pay into the hands of the trustees thereof the sum of fifteen dollars, and the further sum of fifteen dollars, annually, upon the first day of December of each year. Upon the death of any full member of the stock exchange, he shall in addition, pay a farther assessment, or sum, of ten dollars, to said trustees. 2. The trustees aforesaid, shall keep the fund arising from the payments and assessments made under this section of the by-laws, separate and distinct from all other funds of the Philadelphia Stock Exchange; said fund shall be styled “The Gratuity Fund,” and shall be used solely for the purposes hereinafter mentioned. 3. All payments and assessments becoming due under this sec-. tion of the by-laws shall be charged against the membership of each member of the Philadelphia Stock Exchange, and shall be collected in the same manner, and have the same priority as all other fines, assessments and dues, due from the members of the Philadelphia Stock Exchange to the Exchange. 5. The trustees of the Philadelphia Stock Exchange shall, within thirty days after the death of any full member thereof, pay out of the gratuity fund herein mentioned two thousand dollars to the person or persons especially designated by said deceased member to receive the same. * * * In case he has not so designated any person to receive it, then, in the discretion of said trustees, ,either to his widow or to his child or children, as they may think best; and in case no widow, or child or children, survive him, and he has not designated any person to receive said sum in the manner above specified, then to his legal representatives. The said sum of money shall, in all cases, be a gratuity only, and shall be paid at the death of such member, clear and free of any and all assessments or claims of any kind whatsoever. * * * 6. * * * A full member for the purposes of this section shall be construed to mean a member owning a seat in the stock exchange, whether suspended or otherwise. After the passage of this gratuity fund clause MacDowell paid a number of assessments made under its provisions, in fact all dues and assessments so .made, except such as" fell due as hereinafter stated. On the 17th of November 1877 the following addition to section 17 of the constitution was duly made by the defendants. “ That any suspended member, who shall have failed for three months to pay in full all gratuity dues and assessments, shall forthwith cease to be a full member for the purposes of this section; such member 'may be restored to such full membership by a favorable report of the standing committee, upon paying in full all arrears of gratuity dues and assessments.” There is no evidence that MacDowell was present or voted at the meeting or meetings at which said amendment was adopted, or that he in any way assented or agreed thereto, unless assent compulsory or acquiescent is to be inferred from the fact of membership as stated herein, from the constitution of defendants, and from the fact that he never dissented upon any occasion. He could have been present at meetings and assented if he desired to do so, hav ing the same privileges as the other members of the exchange. MacDowell’s dues began to be in arrear in 1877, after which time he continued indebted to the said stock exchange until his death. During this time his attention was frequently called to the fact of this indebtedness by the secretary and treasurer of the exchange. On August 6th MacDovrell was duly suspended for non-payment of dues to the stock exchange, aud upon the same day a letter stating the fact was mailed to his address. Upon both occasions a printed copy of the addition to section 17, adopted November 17th 1877 was enclosed to him. On April 28th 1878 ■ MacDowell was duly confined, on certificates of two physicians, in the Pennsylvania hospital for the insane. At the time of his confinement in the hospital he was without mental power sufficient to comprehend business of any kind, and remained in that condition without lucid intervals, and without being permitted to leave said hospital until the date of his death. He died on the 26th of November 1878, intestate, leaving the said Caroline G. MacDowell. his only child, a minor about four years of age, his sole heir. He left no letter designating the person to whom the gratuity should be paid. At and prior to his death he was insolvent, owing to members of the Philadelphia stock exchange a larger sum than the proceeds of his seat. The proceeds of his seat have not been distributed, but are held by the treasurer of the stock exchange. His indebtedness to the Philadelphia Stock Exchange at the time of his death (said indebtedness being the same then as at the time of his suspension), amounted to $61.15, and was as follows: March 81st 1877 to August 6th 1878, annual dues, $16.15. Assessment due by him on death of members, $80. Annual dues, gratuity fund, $15. The said stock exchange has, since his death, in accordance with the provisions of its constitution, sold his seat or membership for the sum of §1500, and have applied §61.15 of the said sum to the payment of the dues and assessments above stated. All of these duos wore debts due by him prior to his suspension. During the period of his suspension, that is, between August 6th 1878 and November 26th 1878, several gratuity assessments and one regular quarterly subscription to the stock exchange, became due and payable by all non-suspended members, to the exchange. These sums would have been due and payable by MacDowell, hut for the fact of his suspension, as aforesaid; but on that account, he was not charged with nor did he pay any of them, nor has any deduction for any portion of said sum been made from the proceeds of his seat. If the court be of the opinion, that the plaintiff is entitled to the above-mentioned gratuity, then judgment for the plaintiff in the sum of $2000, together with whatever interest the court may hold to be due thereon. If not, then judgment to be entered for the defendant. The case was referred to a referee, under the provisions of this Act of May 14th 1874, who found— “1. That J. MacDowell, the father of the plaintiff, Caroline G. MacDowell, was, as a member of the Philadelphia stock exchange, subject to the provisions of section 17, paragraph 6, of the constitution thereof, as amended on November 17th 1877. “ 2. That being so subject, the said MacDowell, having been suspended from the Philadelphia stock exchange on August 6th 1878, and not having paid in full his assessments and dues to the gratuity fund for three months thereafter, ceased, ipso facto, at the expiration of that period, to be a full member of the exchange, qua this gratuity fund. “ 3. That the defendants, after the death of the said MacDowell, and the sale of his seat therein, deducted from the proceeds of the latter, the amount of the dues and assessments owing by MacDowell to- the gratuity fund, at the time of his suspension from the exchange, namely, $61.15, does not in the opinion of the referee, alter or affect his decision upon the question of the right of the said MaoDowell’s representatives to the benefits of the gratuity fund. “ The retention of these dues and assessments by the exchange, after the insolvency and death of MacDowell, from the proceeds of the sale of his seat, was 'not in the opinion of the referee a waiver, by the exchange of the provisions of its constitution above referred to; and by virtue of which, the referee has decided, that the said MacDowell ceased to be a full member for the purposes of this gratuity fund. “ The referee is of opinion, therefore, that judgment should be entered upon the case stated for the defendants, and enters judgment accordingly.” Exceptions were filed to this report, which the referee overruled, and the plaintiff took this writ and alleged, that the referee erred in entering judgment for the defendants.