Summary
Appeal from an order of the circuit court for Milwaukee-county: Wabeeh D. TaRRastt, Circuit Judge.
The appeal is from an order dissolving a temporary injunction. The action of the court was based upon the pleadings and supporting affidavits. The substance of the complaint is-as follows: The defendant is a corporation duly organized under the laws of Wisconsin. It possesses power to make and enforce by-laws not inconsistent with its charter or the law of' the land. Its governing board consists of nine directors. Such board possesses power to investigate complaints against members for violations of its rules and by-laws and to discipline such members, if found guilty, in the manner prescribed in-such by-laws. The declared objects of the corporation are:
“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.”
Among the by-laws of the corporation are the following:
Rule 4, sec. 10: “It shall be the duty of the board of directors to examine charges against any member of the association, when made in writing to the president or secretary,, by any other member or members, and if the party accused shall be found guilty of improper conduct of a personal character in the rooms of the association; of a violation of the-rules, by-laws or regulations of the association; of making or reporting any false or fictitious purchases or sales; of any-act of bad faith; of any attempt at extortion; of any act contrary to the spirit which should govern all commercial transactions ; or of any other dishonorable or dishonest conduct, he-shall be censured, suspended, or expelled by the board of directors, as it may' determine from the nature and gravity of the offense committed. It shall be deemed an offense against the rules of the Chamber of Commerce for any person to act as a broker or commission merchant, or to buy or sell any grain or other property for an agent or employee of any telegraph company doing business in the city of Milwaukee, and upon complaint, in writing, of a member of the Chamber of Commerce or any officer or agent of any telegraph company, charging such offense against any member of this association, the board of directors shall investigate such complaint; and if the member accused shall be found guilty, he shall be censured, suspended, or expelled, as the directors may determine, in the manner prescribed in this section.”
Eule 4, sec. 13: “All charges, excepting as to violations under sec. 9 of rule XI, made to the board of directors against any member of the association for any default, misconduct or offense, shall be in writing, and shall state the default, misconduct or offense charged, and the same shall be signed by one or more members of the association or by a business firm, one or more of whose members shall be members of the association.”
Eule 4, sec. 14: “Xo member shall be censured, suspended, or expelled under this rule without an examination of the charges against him by the board of directors, nor without having an opportunity of being heard in his own defense. Xo examination shall take place until the member accused shall have had six days’ prior notice of examination served on him, or fifteen days’ prior notice mailed to him in case he has no place of business or residence in the city of Milwaukee. All such notices must be accompanied by a copy of the charges against him, in writing. Such notice may be served upon the accused personally by the secretary, or any assistant, or it may be left at the ordinary, place of business or residence of the accused; or it may be mailed as above, in either of which cases the notice shall be considered sufficient, and the examination may proceed, whether the accused be present or not.”
Eule 4, sec. 27: “Any member of the Chamber of Commerce who shall be interested or associated in business with, or who shall act as tire representative of, or who shall knowingly ex-eeute any order or orders for the account of any organization, firm, or individual engaged in the business of dealing in differences on the fluctuations in the market price of any commodity without a bona fide purchase and sale of property, with intent for an actual delivery, shall be deemed guilty of unmercantile conduct, which renders him unworthy to be a member of the association; and upon complaint to and conviction thereof by the board of directors, he shall be expelled from membership in the association.”
Rule 12, sec. 1: “The president of the Chamber of Commerce shall at the first meeting of the board of directors after the annual election in each year, or as soon thereafter as practicable, appoint a committee of five to serve for one year, or until tlieir successors shall have been appointed and qualified, to be known as the Committee on Membership, whose duty it shall be to examine all applications for membership; and any male person of legal age wishing to become a member of this association shall present an application in writing, signed by a member, either through the secretary or the chairman of the committee on membership, and a majority of said committee being satisfied that said applicant should be admitted as a member, the name of said applicant shall be placed on the bulletin board of the exchange room, at least ten days prior to any meeting of the board of directors. During the time that the name of such applicant is thus posted, any member in good standing may file with the secretary in writing, signed by such member, objection to the admission of such applicant as a member, and if seven or more members object to the election of such applicant, he shall be ineligible for election; but if no member, or less.than seven members object to his election, the secretary shall report the name of such applicant to the board of directors. The board of directors shall vote by ballot upon the election of every applicant thus proposed for membership, and if there be seven ballots in his favor and not more than two ballots appear against him, he shall be declared elected, and upon signing an agreement to be governed by the charter, rules, and by-laws of the Chamber of Commerce, and paying an initiation fee of five thousand dollars, together with the annual or other assessment then due, or on presentation of a certificate of unimpaired or unforfeited membership, duly transferred, and paying the transfer fee of fire dollars, • lie shall become a member of the Chamber of Commerce.
“Members hereafter (after May 4, 1899) admitted will not be entitled to participate in the Gratuity Fund unless qualified under the requirements prescribed in the rules relating thereto.”
Eule 12, sec. 2: “Before any membership can be transferred under the provisions of this rule, notice of, or application for, such transfer shall have been posted upon the bulletin of the exchange room for at least ten days; when, if no objection shall hare been made on account of any unsettled ■contracts, claims, demands, or complaints against the holder of such membership, it shall thereupon be assumed that the membership is unimpaired; and after transfer of membership no subsequent complaint, claim, or demand against the former holder shall impair such membership so transferred and in' the hands of an innocent party. But such transfer of membership shall not entitle the member to whom the same shall be transferred to participate in the Gratuity Fund, unless qualified under the requirements of the rules relating to said fund. The notice or application for transfer shall state the name of the person to whom it is proposed to be made. Objections to tire transfer must be in writing, signed by the party objecting, and filed with the secretary, and the party objecting shall also, on tire day of filing the same, serve a copy of Iris objections upon the applicant for transfer. The board of directors shall, upon hearing the parties, determine the sufficiency of such objections. In case any membership shall be transferred in violation of any of the foregoing provisions, such transfer shall be null and void.”
Eule 12, sec. 1: “Every member shall be entitled to receive a certificate of membership, bearing the signature of the president and secretary, and the seal of the corporation, which certificate, if the membership it represents be not impaired or forfeited under the rules and by-laws of the association, and if the member holding it have no unadjusted or unsettled claims or contracts outstanding against him, held by members of the Chamber of Commerce, shall be transferable upon the books of the association tó any person duly elected a member, upon the payment of five dollars, and any unpaid assessment due tbereon. Tbe certificate of membership of a deceased member shall be transferable in like manner by bis-legal representative.”
For many years certificates of membership in the corporation have been freely bought and sold and transferred by assignment, and the formalities indicated in the quoted rules -have not been regarded as material, nor has any attempt been made to enforce the same except in the event of the holder of an assigned certificate applying to be elected a member of the corporation. The uniform custom has been to regard the transfer of a member’s certificate as terminating his connection with the corporation. In May, 1902, plaintiff' purchased in the regular course of business and took an assignment of a membership in the association, paying $910 therefor. Such proceedings were thereafter duly had that he was elected a member of the association and a certificate, in due form, was issued to him in place of his assigned certificate. Since that time plaintiff has paid all his dues to. the-corporation and obeyed all its by-laws. He is a member of the firm of Edwards, Wood & Co., a firm composed of Robert TI. Edwards, Forest B. Wood, and himself. The firm has-always been engaged exclusively in the business of commission brokers, dealing for their customers in stocks, bonds, grain,, produce, and provisions for future delivery, and in cash grain, and plaintiff has been exclusively engaged in transacting its business. August 16,1902, plaintiff sold and assigned his certificate of membership in the usual way, to E. L. Brown, then a member of the association, and a member of the firm of I. G. Andrews & Co. August 20, 1902, Brown-deposited said certificate with the defendant, together with the required fee for the issuance of a new certificate, and requested such transfer as provided in sec. 7, rule 12, and at the same time requested defendant to take the necessary steps to that end, required by sec. 2 of rule 12. The association has unjustly refused to honor such request. I. G. Andrews,, at the time plaintiff assigned his certificate as aforesaid, was and still is a member of the association. At such time there was not, nor is there now, any unsettled claims of any kind against plaintiff or Edwards, Wood & Co., or any member thereof, in favor of defendant or any member thereof, nor has any complaint been lodged against plaintiff under sec. 2 of rule 12 aforesaid, or otherwise. September 4, 1902, E. J. Furlong, Harry Berger, and Walter Stern, assuming to act as members of a committee on market reports, filed with the board of directors of the association a paper falsely charging plaintiff, or the firm of Edwards, Wood & Co., with making or reporting false or fictitious purchases or sales in violation of sec. 10, rule 4, and of having been guilty, on or about July 9, 1902, of dealing in differences on the fluctuations in the market price of a commodity without a Iona, fide purchase or sale for actual delivery, in violation of said sec. 27 of rule 4. September 6, 1902, plaintiff received a copy of such paper, with a notice that a hearing on such charges would be had by the board of directors of the association September 25, 1902, •at 3 o’clock p. m. Such paper contained the following:
“To the Board of Directors of the Ghamber of Commerce ■of the Gity of Milwaukee—
“Gentlemen: The undersigned hereby complains of Lewin A. Wood, a member of the Chamber of Commerce of the City of MilwavJcee, and makes the following charges against him:
“First: That the said Lewin A. Wood, or the firm of Edwards, Wood & Co., of which he is a member, was on, about, or prior to July 9, 1902, guilty of making or reporting false or fictitious purchases or sales in violation of sec. 10 of Rule IV of the rules of the Chamber of Commerce of the City of Milwaukee.
“Second: That the said Lewin A. Wood, or the firm of Edwards, Wood & Co., of which he is a member, was on, about, or prior to July 9, 1902, guilty of dealing in differences on the fluctuations in the market price of a commodity without a bona fide purchase or sale for an actual delivery, in violation of sec. 2% of Kule IV.”
Since tbe plaintiff assigned bis certificate of membership be has, according to custom, regarded bis connection with tbe association as terminated. He challenges tbe jurisdiction of tbe board to try him on charges for violating tbe by-laws of the corporation after assigning bis certificate of membership and parting with tbe ownership thereof. Tbe board of directors of the association are prejudiced against plaintiff, have prejudged tbe matters upon which they propose to sit as judges, and are incapable of giving plaintiff an impartial trial in respect thereto. Plaintiff and his firm are extensive dealers throughout a large territory. Their reputations as business men are a valuable asset. The threatened trial, if allowed to take place, regardless of the result thereof, will injure the good name of plaintiff and his firm irreparably. When plaintiff assigned his certificate he intended to wholly retire from the association, as its officers well knew. The committee,' styling itself a “Committee on Market Reports,” that filed the charges, is not recognized by, and is wholly unknown to, the corporation charter and its rules and by-laws. All of the acts of the officers of the association and its committee on market reports embarrassing the efforts of plaintiff and his assignee to have the certificate of membership transferred upon the books of the corporation to such assignee, are parts of a scheme to forfeit plaintiff’s certificate of membership to the corporation. The directors of defendant, unless restrained by the court, will, on September 25,1902, at'3 o’clock p. m., in form try and condemn and sentence plaintiff, and forfeit his certificate, thereby causing him irreparable damage.
The decision prayed for is to this effect: Eirst, that the sale and assignment of plaintiff’s certificate to E. L. Brown terminated plaintiff’s membership in the association; second, that such membership is unimpaired and that plaintiff is entitled to have the same transferred to E. L. Brown or to such other member of said defendant as said Brown or the firm of I. G. Andrews & Co. may direct; third, that defendant and its officers and board of directors have no jurisdiction to try plaintiff upon tbe charges filed; fourth, that plaintiff is entitled to have defendant and its officers, and each and all of them, enjoined from attempting to exercise any jurisdiction over plaintiff in respect to the charges filed against him, and to a temporary injunction in respect to such matters pending the litigation.
The answer, so far as concerns the question here raised,— in addition to numerous admissions covering the'allegations of the complaint as to the membership of plaintiff in the defendant corporation, the by-laws of the corporation, the assignment by plaintiff of his certificate, the conduct of the association in respect thereto, the filing of charges against plaintiff, and his impending trial thereon, and denials on information and belief,' — was this in substance: The by-lfiws of the corporation, in addition to.those mentioned in the complaint, that are material to this litigation, include these:
Buie 4, sec. 1: “All the financial and business concerns of the association shall be managed and conducted (in accordance with the charter and rules of the association) by and under the direction of the board of directors; and no- moneys shall be paid except on its vote on each sum proposed to be paid. It shall be the duty of the board of directora to inquire into matters affecting the welfare of the association, or the business interests of the city of Milwaukee, and to report upon the same to the association, together with such recommendations as to rules and regulations, rates of commission and charges, as may be deemed advisable. The board of directors shall, annually, on the second Monday in April of each year, or as soon thereafter as may be practicable, appoint three standing committees, of five members each, to act respectively as supervisors of flour inspection, of grain inspection and weighing, and of inspection of provisions and cooperage, and such other committees, inspectors, gaugers, weighers, measurers, and other officers or servants, not otherwise provided for, as in its opinion may be for the best interests of the association.”
Rule 4, see. 11: “It shall be the duty of the board of directors, in case any grave offense, committed by any member of the association against the good name or dignity thereof, shall come to its knowledge, either by public rumor ór report, to cause a preliminary or informal investigation to be made by a committee of its members into the truth or falsity of such rumor or report. If such committee, after investigation, shall deem such rumor or report sufficiently well founded, it shall so report to the board of directors, with charges, whereupon the person thus implicated shall be notified in the manner provided in section fourteen (14) of this rule, to appear before the board of directors, and, if found guilty, he shall be censured, suspended, or expelled. A majority of a quorum sitting at a regular, special, or adjourned meeting of the board of directors, shall be sufficient to censure, but to suspend or expel a member of the association for any offense enumerated in this or the foregoing section, it shall require an affirmative vote of two thirds'of the members present, in which case it shall require at least six affirmative votes to suspend or expel.”
The corporation ’customarily had a standing committee, appointed each year, known as the “Committee of the Board of Directors on Market Reports.” For the year commencing the second Monday of April, 1902, the persons who signed the charges filed against plaintiff were members of such committee. In their capacity as members of the corporation and of such committee they filed the charges against plaintiff mentioned in the complaint, in the regular way. The alleged proceedings taken by the corporation and its officers in respect thereto were regular in all respects, being in conformity with the by-laws of the corporation, and for the purpose of giving plaintiff a fair and impartial hearing. About August 26, 1902, a notice was duly posted that application had been made for transfer of plaintiff’s membership in the association to Warren E. Stacks. Within the time allowed by the rules of the association therefor objection was duly made to such transfer, pending the investigation of the charges against plaintiff theretofore filed. Upon such objection being made the application was withdrawn and no application was thereafter made for a transfer of such membership. The effect of the pending charges against plaintiff and the objection to the transfer of his membership was to impair such membership and render it nontransferable.
Allegations of the answer on material points were corroborated by affidavits. Some- supporting affidavits were also presented on behalf of plaintiff.
Upon the verified complaint a temporary in junctional order was obtained. Upon the pleadings and supporting affidavits such order was set aside, and plaintiff appealed.
They contended, inter alia, that the alleged conduct upon which the charges are based was not in the rooms of the exchange, nor in any way connected with the defendant, and plaintiff is not amenable to the defendant therefor. The rules and by-laws do not purport to apply to .such conduct, and if they, do they are void. Flint v. Pierce, 99 Mass. 68; Ireland v. Globe M. Co. 21 E. I. 9; 3 Clark & M., Priv. Corp. § 6385, p. 1941; Stale ex rel. Graham v. ■Chamber of Commerce, 20 TVis. 63; Comm. v. St. Patrich Ben. Soc. 2 Binn. 441; People ex rel. Gr-iy v. Medical Soc. 24 Barb. 570; Carian v. Father Mathew U. B. Soc. 3 Daly, 20; Kolff v. St. Paul F. Exch. 48 Minn. 215. It is in contravention of the law of the land that the prosecutor shall also act as judge. Murdock v. Phillips Academy, 12 Pick. 263— 265; People ex rel. Meads v. Alpha Lodge, 13 Mise. (U. Y.) ■687.
They argued, among other things, that the complaint states no cause of action in equity. To make out a case for an injunction it must appear that there is at least a reasonable probability, not merely a bare possibility, that a real injury will occur if the writ is not granted. Sage v. Fifield, 68 Wis. 546 ; Home Ins. Co. v. Nobles, 63 Fed. 642; Truly v. Warner, 5 How. 141; Lorenz v. Waldron, 96 Cal. 243; 16 Am. & Eng. Ency. of Law (2d ed.) 361. One court cannot entertain jurisdiction of an action upon the ground that another court of competent jurisdiction will decide wrongly or improperly. Wolfe v. Burle, 56 N. Y. 1Í5; West v. Mayor, 10 Paige, 539. Acting within its jurisdiction, the board of directors has over its. members the judicial authority of a court. Dicicenson v. Chamber of Commerce, 29 Wis. 45; State ex rel. Cuppel v. Milwaukee Chamber of Commerce, 47 Wis. 670; Belton v. Hatch, 109 FT. Y. 593; Bartlett v. L. Baailett & Son Co. 116 Wis. 450, 93 FT. W. 473. The same presumption of fairness and impartiality must therefore be indulged in its favor as in favor of a court. Flo case is cited and we have found none where a court has asserted its equitable powers, to enjoin an impartial hearing before another tribunal under the rules of such an association. It is settled doctrine that 'a suit in equity for such purpose is not maintainable. Thomas v. Musical M. P. Union, 121 FT. Y. 45-57; Hurst v. N. Y. Prod. Exch. 100 FT. Y. 605, 1 Cent. Rep. 260; Gregg v. Mass. Med. Soc. Ill Mass. 194. The board had jurisdiction, although the transactions complained of do not appear to be with members and in the chamber. Dickenson v. Chamber of Commerce, 2-9 Wis. 45; People ex rel. Thacker v. N. Y. Comm. Asso. 18 Abb. Pr. 271 — 279; Haebler v. N. Y. Prod. Exch. 149 FT. Y. 414, 44 FT. E. 87. Members of the association, although members also of the board of directors, may make charges. Green v. Board of Trade, 174 Ill. 585, 51 FT. E. 599.
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
