§ 867. Criticising the Management. The rules of a proprietary club provided "that if in the opinion of the committee, or twenty members, who shall certify the same in writing, the conduct of a member is injurious to the character and interests of the club, the committee by a majority of two-thirds present at a meeting summoned for that purpose, may recommend such member to retire, or expel him." The plaintiff wrote a long letter to the committee, calling their attention to certain matters which, in his opinion, required explanation, and suggested certain alterations in the administration of the club, and gave notice that, unless one of the rules was at once altered by the committee, he should himself move for its alteration at the next annual general meeting of the club. The committee simply acknowledged the receipt of this letter, and informed the plaintiff that his proposals could be made and attended to at the next annual general meeting. Whereupon the plaintiff wrote in a tone which the committee considered very discourteous, and accordingly requested him to withdraw the objectionable letter. On his refusing to do so, the committee, in the exercise of the powers given them by the rules of the club, called a committee meeting to consider the plaintiff's conduct, and expelled him from the club, on the grounds that such conduct on the part of a member, if unchecked, would weaken and paralyze their authority to maintain the discipline of the club. The plaintiff filed his bill to restrain the committee from expelling him, charging that the power vested in the committee had been exercised capriciously and maliciously. It was held by Vice-Chancellor Bacon that the court was not justified in interfering between members and the committee, because the power given by the rules had been exercised bona fide, for the welfare of the club, in the opinion of the committee, and there had been no fraud or bad faith in their exercise.1

§ 868. Offenses against Other Members. From what has already been seen,' it will be inferred that offenses against other members of the society will afford no ground of suspension, unless they are of such a character as to amount to violation of the duty of the member toward the society; and this must, of course, depend upon the nature of the society, the nature of the offense, and the time when and place where it is committed. In a mutual benefit society, the fact of one member making charges against another, that he had "assisted as president of the soci

1 Littleton v. Blackburn, 33 L. T. (N. 8.) 641; s. c. 45 L. J. (N. 8.) 219.

2 Ante, § 862.

7

ety in defrauding the society of the sum of fifty cents;" and charging him with " him with "defaming and injuring the same in public taverns," have been held not a sufficient ground of expulsion. In a leading case in Pennsylvania, the charter of an incorporated benevolent society provided that, in order to observe decorum in the society while sitting, there should be no insulting or disrespectful behavior to any of the society; and any member so transgressing, should for the first offense, be fined in the sum of one dollar, for the second, in double that sum, and for the third, be expelled the society. A by-law of the same society provided that "vilifying any of its members" should be a crime against the society, for which the member guilty of it should be punished by removal from office, fine, or expulsion, etc. It was held that the by-law was not invalid, because of the existence of the charter provision, though it was inherently invalid. "My opinion," said Tilghman, C. J., "will be founded on the great and single point on which the cause turns. Is this by-law necessary for the good government and support of the affairs of the corporation? I cannot think that it is. I have considered the case with a mind strongly disposed to give a liberal construction to the power of making by-laws. It is my wish to give all necessary powers for carrying into effect the benevolent purposes of this society, and many others which have lately been incorporated on similar principles. But these powers must not be constrained, or the societies, instead of being protected, will be dissolved. The right of membership is valuable, and not to be taken away without an authority fairly derived either from the charter, or the nature of corporate bodies. Every man who becomes a member looks to the charter; in that he puts his faith, and not in the uncertain will of a majority of the members. The offense of vilifying a member, if in private quarrel, is totally unconnected with the affairs of the society, and therefore its punishment cannot be necessary for the good government of the corporation. So far from it, that it appears to me that taking cognizance of such offenses, will have the pernicious effect of introducing private feuds into the bosom of the society and interrupting the transaction of business. I consider it as a point of very great

1 Com. v. German Society, 15 Pa. St. 251.

importance, in which thousands of persons are, or very soon will be, interested; for the members of these corporations are increasing rapidly and daily. On mature reflection, it appears to me that, without an express power in the charter, no man can be disfranchised, unless he has been guilty of some offense, which either affects the interests or good government of the corporation, or is indictable by the law of the land." It was accordingly held that the by-law was void, and a peremptory mandamus was issued to restore the member to his franchise. In another case in the same State, it appeared that two members of an incorporated club were sitting together in conversation in the bar-room of the club-house; that a third member came in and used insulting language, understood by one of the two to be applied to himself, who thereupon struck the offender;-yet the act was held not such as would justify his expulsion from the club by the members thereof." Mr. Justice Woodward made his decision in this case turn upon the fact that the corporation was the owner of property. He said: "But what is conclusive of this case is, that the corporation possesses property, real and personal, and is at liberty to accumulate more until an annual revenue of $3,000, comes to be enjoyed; and the relator has purchased and paid for the right to participate in that franchise. It is not a joint-stock company at present, for, under its by-laws, no pecuniary profits are divisible among the members; but it may become so, and whether it does or not, the relator has a vested interest in its estate, and cannot be deprived of it by the proceedings that were had against him. On this point the authorities are clear, and without conflict. Nothing but an express power in the charter can authorize a money corporation to throw overboard one of its members. I have shown that the act of incorporation contained no such power. On the contrary, it excluded it; for the proviso reads that nothing herein contained shall be so construed as to authorize said Philadelphia Association and Reading Room to do any other act or acts in their corporate capacity than are herein expressed." 3 The decision is believed to be unsound. Not only most incorporated clubs, but also religious, benevolent

1 Com. v. St. Patrick's Benevolent Soc., 2 Binn. (Pa.) 441, 449; s.c. 4 Am. Dec. 453.

2 Evans v. Philadelphia Club, 50 Pa. St. 107.

3 Ibid. 118.

and other societies formed for ideal purposes, generally own more or less property in which the rights of the members are usufructuary merely. Nevertheless, according to the entire current of judicial authority, such corporations stand upon an entirely different footing from joint-stock corporations, organized for mere pecuniary gain, in respect of the power of expulsion over their members. In the case of a club organized for social purposes, one of the first duties of the member toward the club would seem to be to keep the peace with his fellow-members. While the club might not exercise the power of expulsion over him for a breach of the peace against another member, committed, so to speak, in pais, yet it should seem that it might clearly do so, for a breach of the peace against such a member committed in the club-house itself. It should further be added that upon an appeal to the court in bank the judgment was affirmed by an equal division of the court.

§ 869. Refusal to Submit to Arbitration or to Comply with Award. — As suggested in the previous chapter, the judicial courts have always been jealous of the establishment of private rules or engagements by which persons surrender their right to appeal for justice to the courts of their country; and, as hereafter seen,1 the Supreme Court of the United States has held that a statute of a State requiring a foreign corporation, as a condition of doing business within the State, to enter into an agreement not to remove suits against it from the State to the Federal courts, has been held bad. Upon similar lines of reasoning, courts have refused to uphold an expulsion of a member of a corporation because of his refusal to comply with a regulation requiring differences to be submitted to arbitration, and also because of his refusal to comply with an award made by arbitrators appointed in conformity with the regulations of the corporation. According to the discipline of the Methodist Episcopal Church, by which a society of that church called the African Methodist Episcopal Society was governed, disputes between members were to be settled by arbitration, and any member, who should commence an action at law against another member, was liable to

1 Post, § Ch. 195.

expulsion," except the case be of such a nature as required and justified a process at law." A member was tried upon a charge of having, contrary to the rules and discipline of the society, entered a lawsuit against another member, was found guilty and expelled. In a proceeding by mandamus to compel the society to restore him to his membership, the return set forth that the relator had brought suit against one Howell, a member of the society, in violation of its rules, but did not aver that the case was not of such a nature as required and justified a process at law. It was held that, because of this omission the case was not brought within the exception to the rule, and that the return failed to show lawful grounds for the expulsion of the member. A peremptory writ to restore him to his membership was accordingly awarded. So, the mere fact of a non-compliance with an award made by arbitrators, appointed in conformity with the articles of association of a mercantile exchange, has been held insufficient ground to warrant the expulsion of the member, - the view of the court being that if the defendant [the corporation] has the power and authority to act as an arbitration court under its charter, in relation to all claims of one of its members against another, arising from cotton transactions, its decisions and awards are subject to be reviewed and examined, so far as the legal rights of the parties are concerned, by the judicial tribunals of the State, in the same manner as the awards to other arbitrators are reviewed and examined.2

§ 870. Illustration.- The articles of association of a cotton exchange, contained the following provision: "Any member who shall be accused of willfully violating the constitution and by-laws, or of fraudulent breach of contract, or of any proceeding inconsistent with the just and equitable principles of trade, or of other misconduct, may, on complaint, be summoned before the full board of directors; and if the charges against him be, in the opinion of the board, substantiated, he may, by a vote of not less than two-thirds of the members of the board, be suspended or expelled from the exchange." Another article. provided that all claims of one member against another, arising from cotton transactions, should be subject to arbitration, specified the manner in which the arbitration should be had, and established a board

1 Green v. African Methodist Episcopal Soc., 1 Serg. & R. (Pa.) 254.

2 Savannah Cotton Exchange v. State, 54 Ga. 668, 670.