Melady v. S. St. Paul Live Stock Exch.

• Decision Date: 11 April 1919
• Docket Number: No. 21132.,21132.
• Citation: 171 N.W. 806,142 Minn. 194
• Parties: MELADY v. SOUTH ST. PAUL LIVE STOCK EXCHANGE.
• Court: Minnesota Supreme Court

142 Minn. 194

171 N.W. 806

MELADY

v.SOUTH ST. PAUL LIVE STOCK EXCHANGE.

No. 21132.

Supreme Court of Minnesota.

April 11, 1919.

Appeal from District Court, Ramsey County; Frederick N. Dickson, Judge.

Action by S. J. Melady, doing business as the Melady Cattle Company, against the South St. Paul Live Stock Exchange. Judgment for defendant on the pleadings, and from an order denying a new trial plaintiff appeals. Order affirmed.

Syllabus by the Court

The question of whether the court erred in striking out portions of a pleading will not be considered on appeal from an order denying a new trial; the pleading having been amended; and no appeal having been taken from the former order.

The board of directors of a live stock exchange incorporated pursuant to the provisions of chapter 138, General Laws of Minnesota for 1883, when acting upon charges against a member of the exchange, are protected by the rule that an action for damages does not lie against one whose acts, however erroneous they may have been, were done in the exercise of judicial authority clearly conferred, no matter by what motives they may have been prompted.

When it is sought to hold a corporation for a tort, the doctrine of respondeat superior applies. If the acts of the board of directors of a live stock exchange, in finding a member guilty of uncommercial conduct, fining him therefor, and suspending him from membership for nonpayment of the fine, did not give rise to a cause of action by such member against them individually or collectively, there is no foundation for an action against the exchange based on an allegation that the fine and suspension were solely due to malice on its part. Thos. C. Dagget, of St. Paul, for appellant.

Moore, Oppenheimer & Peterson, of St. Paul, for respondent.

LEES, C.

This is an action for damages for the alleged wrongful suspension of plaintiff from membership in the South St. Paul Live Stock Exchange. The trial court ordered judgment for defendant on the pleadings, and plaintiff appeals from an order denying a new trial. The pleadings before us for consideration consist of an amended complaint and the answer and reply. A motion to strike out portions of the original complaint was granted, but the order of the court in that respect was not appealed from.

The complaint alleged that defendant was incorporated under the provisions of Gen. Laws 1883, c. 138, relating to chambers of commerce and boards of trade; that it had adopted a rule under which it attempts to exercise judicial functions through its board of directors; and that it asserts that it has the right to fine and suspend its members and prohibit dealings with them while suspended. It is alleged that plaintiff was a member against whom charges of uncommercial conduct were preferred by other members, and that, pursuant to notice, he appeared and presented evidence to show that the charges were unfounded, but that nevertheless the board of directors adopted a resolution finding him guilty and imposing a fine of $250; that, the fine not being paid, he was suspended from membership on July 12, 1917, but was reinstated the following day; and that notice of the action taken was given to all other members. It is alleged that in finding him guilty, imposing the fine, and suspending him from membership, defendant's action ‘was wanton, malicious, and willful, and was taken by the board of directors without just cause for the malicious purpose and intent of injuring and damaging plaintiff in his business, reputation and standing.’

The answer sets forth the rules by which defendant's board of directors are governed in investigating and passing upon charges made against a member. They are admitted by the reply. Plaintiff's counsel, in response to an inquiry made by the court in the course of the opening statement to the jury, admitted that the board had jurisdiction over the proceedings. Thereupon the court intimated that the action would not lie, and defendant moved for judgment on the pleadings, with the result already stated.

1. Reference to the original complaint is made in appellant's brief. We are not at liberty to consider it, in view of the fact that no appeal was taken from the order striking out material portions thereof. Manwaring v. O'Brien, 75 Minn. 542, 78 N. W. 1;Lewis v. Denver & R. G. Rd. Co., 131 Minn. 122,154 N. W. 954.

[2] 2. The statute under which defendant was incorporated empowered it to adjust controversies between individuals engaged in trade and to settle matters submitted for arbitration. The chairman of its board of directors was authorized to administer oaths and cause subpoenas to be issued by the clerk of any court of record for the attendance of witnesses, and the board was authorized to make awards, which may be filed in the office of the clerk of the district court, and upon which the prevailing party may apply to the court for an order confirming the award and directing the entry of judgment thereon. For breach of its rules, a fine may be imposed upon a member with suspension from membership until it is paid.

We think the board of directors of a corporation organized under this statute, when acting upon charges preferred against a member, is a quasi judicial tribunal, and that the directors, individually and collectively, when so acting, are protected by the rule that a civil action for damages does not lie against one whose acts, however erroneous they may have been, were done in the exercise of judicial authority clearly conferred, no matter by what motives such acts may have been prompted. This rule has always applied to judges of courts of general jurisdiction. Stewart v. Cooley, 23 Minn. 347, 23 Am. Rep. 690;Murray v. Mills, 56 Minn. 75, 57 N. W. 324;Bradley v. Fisher, 13 Wall, 335, 20 L. Ed. 646;Pratt v. Gardner, 2 Cush. (Mass.) 63, 48 Am. Dec. 652. It applies to arbitrators (Hoosac & Co. v. O'Brien, 137 Mass. 424, 50 Am. Rep. 323; Jones v. Brown, 54 Iowa, 74, 6 N. W. 140, 37 Am. Rep. 185), and extends generally to all those whose acts are of a quasi judicial nature (Stewart v. Case, 53 Minn. 62, 54 N. W. 938,39 Am. St. Rep. 575;Fath v. Koeppel, 72 Wis, 289, 39 N. W. 539,7 Am. St. Rep. 867;Stevens v. Carroll, 130 Iowa, 463, 104 N. W. 433;Downer v. Lent, 6 Cal. 94, 65 Am. Dec. 489).

The reasons justifying the rule have been...