Turner v. Board of Trade of City of Chicago

• Decision Date: 14 June 1917
• Docket Number: 2462
• Citation: 244 F. 108
• Parties: TURNER v. BOARD OF TRADE OF CITY OF CHICAGO.
• Court: U.S. Court of Appeals — Seventh Circuit

244 F. 108

TURNER v. BOARD OF TRADE OF CITY OF CHICAGO.

No. 2462

United States Court of Appeals, Seventh Circuit.

June 14, 1917

Appeal from an order denying application for temporary injunction to restrain the Board of Trade of the City of Chicago from proceeding to examine

The respondent, a corporation organized under and by virtue of an act of the General Assembly of the state of Illinois approved February 18, 1859 (Priv. Laws 1859, p. 13), issued a membership certificate to appellant. Since appellant became a member, he has paid all assessments levied against him, and until shortly prior to the commencement of this action, has enjoyed all the privileges which belong to a member of the respondent corporation.

On November 6, 1916, appellant was served with notice that charges had been preferred against him, a copy of which was attached to the notice, and which charge read as follows 'The undersigned, chairman of the membership committee hereby complains of John B. Turner * * * and charges him with a violation of section 4 of rule 10 of the rules of the Board, in that he did upon his oath willfully make misstatements and did suppress facts before said committee to secure his acceptance by the directory as a member of this association, and that he did become a member on June 9 1914.'

The notice fixed a date and place for hearing the charges thus preferred. Pending the hearing, application was made to the court to restrain the board of directors of the respondent corporation from examining the charges or acting thereon. From an order denying this application for an injunction this appeal is taken.

Five of the twelve sections of respondent's charter read as follows:

'Section 1. That the persons now composing the Board of Trade of the City of Chicago, are hereby created a body politic and corporate, under the name and style of the 'Board of Trade of the City of Chicago,' and by that name may sue and be sued, implead and be impleaded, receive and hold property and effects, real and personal, by gift, devise, or purchase, and dispose of the same by sale, lease, or otherwise (said property so held not to exceed at any time the sum of two hundred thousand dollars); may have a common seal and alter the same from time to time; and make such rules, regulations, and by-laws from time to time as they may think proper or necessary for the government of the corporation hereby created, not contrary to the laws of the land.'

'Section 4. The said corporation is hereby authorized to establish such rules, regulations, and by-laws for the management of their business, and the mode in which it shall be transacted, as they may think proper.'

'Section 6. Said corporation shall have the right to admit or expel such persons as they may see fit, in manner to be prescribed by the rules, regulations, and by-laws thereof.'

'Section 11. Said corporation may inflict fines upon any of its members, and collect the same, for breach of its rules, regulations, or by-laws; but no fine shall exceed five dollars. Such fines may be collected by action of debt, before a justice of the peace, in the name of the corporation.'

'Section 12. Said corporation shall have no power or authority to do or carry on any business excepting such as is usual in the management of boards of trade or chambers of commerce, or provided in the foregoing sections of this bill.'

Respondent has adopted many rules and regulations for the conduct of its business and for its government. In proceeding to examine appellant, it was acting under section 4 of rule 10, in force when appellant became a member, and which is as follows: 'If any applicant shall intentionally or willfully misstate or suppress any fact or be guilty of any other fraudulent or dishonest act to secure his acceptance as a member, and thereafter and thereby become a member, the membership committee shall upon the discovery of such misconduct, immediately report the same to the board of directors, which, after due notice to such member of the time and place of such hearing, shall investigate such charges, and if such member shall be found guilty, the board of directors shall declare such membership forfeited.'

Jacob Ringer, of Chicago, Ill., for appellant.

Henry S. Robbins, of Chicago, Ill., for appellee.

Before BAKER and EVANS, Circuit Judges.

EVANS Circuit Judge (after stating the facts as above).

Appellant's contention is that section 4 of rule 10 is ultra vires, and that a court of equity should interfere by injunction to prevent the enforcement of a rule of a corporation where the penalty prescribed for violation thereof deprives the offending member of a valuable property right. In other words, he challenges respondent's authority to forfeit the money value of a member's seat on the Board of Trade, although he concedes the power of the respondent to expel the member holding the certificate.

Respondent is organized under the laws of the state of Illinois. As a general rule, the construction which the highest court of a state has given to a statute of a state becomes a part thereof and should be read into it. Douglass v. County of Pike, 101 U.S. 677, 25 L.Ed. 968.

The Supreme Court of Illinois has frequently construed the statutes under which the respondent is organized. People v. Board of Trade, 45 Ill. 112; People v. Board of Trade, 80 Ill. 134; Pitcher v. Board of Trade, 121 Ill. 412, 13 N.E. 187; Board of Trade v. Nelson, 162 Ill. 431, 44 N.E. 743, 53 Am.St.Rep. 312; Green v Board of Trade, 174 Ill. 585, 51 N.E. 599, 49 L.R.A. 365; People ex rel....