of appeals. It was held that the failure of a member to comply with an award rendered upon such an arbitration, against his protest that the exchange had no jurisdiction of the matter in issue, was not such misconduct as would authorize his expulsion. The opinion in this case does not seem to rest upon any sound foundation. The articles of association appear to have been the fundamental law of the corporation, its charter. They constituted the compact between its members, into which every member entered when he became a member, and the expulsion appears to have taken place strictly in accordance with that compact. No sound reason is given by the court for its conclusion.

66

§ 871. Appealing to the Judicial Courts.- Where the charter of a corporation declared its purpose, among other things, to be to adjust controversies between its members, and to establish just and equitable principles in the cotton trade;" and gave it power to make all proper and needful by-laws, not contrary to the constitution and laws of the State of New York or of the United States ;" and "to admit new members and expel any member, in such manner as may be provided by the bylaws;" and the by-laws provided for the expulsion of members for improper conduct, but did not state what should be considered . as such; and there was in the charter or by-laws no express authority to determine who was the owner of a right to a membership in dispute,- it was held that, in the case of a dispute as to the right to a membership, one who had been a member claiming the right to retain his membership against another party claiming to have acquired it, was not guilty of improper conduct in appealing to the judicial courts for an injunction upon the corporation to prevent a sale of his seat. The case was that the relator was in default upon a contract, and the by-laws provided that in such a case his membership should be disposed of by sale, and it was so disposed of, and he sued out a writ of injunction restraining the sale, and because of his thus appealing to the judicial courts his membership was declared forfeited; and it was held that he was entitled to be reinstated by mandamus.2

1 Savannah Cotton Exchange v. change, 8 Hun (N. Y.), 216, 219. State, 54 Ga. 668. Compare Belton v. Hatch, 109 N. Y.

2 People v New York Cotton Ex

193.

§ 872. Negligence, Misconduct in Office, or any Other Reasonable Cause. The foregoing decisions, with relation to social clubs, are based upon the analogy of a decision rendered in 1850 by Lord Langdale, M. R., in a case where the court was applied to to reinstate certain directors of a joint-stock partnership, who had been expelled under the following circumstances: The expulsion took place at a meeting of the company regularly convened. Resolutions were passed, removing the directors in question for misconduct. The resolutions were based upon a provision of a deed of settlement of the company, to the effect that such a meeting might remove any director "for negligence, misconduct in office, or any other reasonable cause." It was held, on a motion to set aside the proceedings of expulsion, and also for the election of new directors and for an injunction to restrain the new directors from acting,- that the expression "reasonable cause," in the deed of settlement did not refer to such cause as, in a court of justice, would be held reasonable, but only to such a cause as should be deemed reasonable to the shareholders assembled at a meeting duly convened, and therefore that the court had no jurisdiction to interfere. Nor, where no case of direct fraud was proved, to determine whether the decision of the meeting had or had not been unduly influenced by unfounded statements made by persons taking an active part in the proceedings. As this may be deemed in some sense a leading case by reason of its being the foundation of the law relating to the expulsion of the members of social clubs, it will be profitable to set out the reasoning of Lord Langdale in his opinion. He said: "Now the 27th clause of the deed provides that an extraordinary general meeting specially called for the purpose may remove from his office any director or auditor for negligence, misconduct in office or any other reasonable cause.' The argument for the plaintiffs rested on the allegation that the general cause of removal referred to in the clause, being expressed to be reasonable, prevents the power referred to from being a power to remove at pleasure arbitrarily or capriciously, and made it requisite that the proceedings for exercising the power should be in its nature judicial, and that the reasonable cause should be such as a court of justice would consider good and sufficient. If this argument could be sustained, all proceedings at such meeting would be subject to the review of the courts of justice, which would have to inquire whether the cause of removal which was charged was in their view reasonable, whether the charges were bona fide brought forward, whether they were substantiated by such evidence as the nature of the case required, and whether the conclusion was come to upon a due consideration of the charge and evidence. But the deed is silent as to these matters, and the question is whether any such power of control in the courts of justice is to be

inferred from the words 'reasonable cause' contained in the 27th clause; whether the expression reasonable cause' contained in such a deed of a trading partnership can be held to be such a cause, as upon investigation in a court of justice must be held to be bona fide founded on sufficient evidence and just; or whether it ought not to be held to mean such cause as, in the opinion of the shareholders duly assembled, shall be deemed reasonable. We think the latter is the true construction and effect of the deed. In a moral point of view, no doubt, every charge of a cause of removal ought to be made bona fide, substantiated by sufficient evidence, and determined on a due consideration of the charge and evidence; and those who act on other principles may be guilty of a moral offense; they may be very unjust, and those who (being present at the meeting) are innocently misled by the statements made to them, have no doubt a just right to complain that they have been led to concur in an unjust act. But the question is, whether by this deed the shareholders duly assembled at a general meeting might not, or had not a right to, remove a director for a cause which they thought reasonable, without its being incumbent upon them to prove to this or any other court of justice that the charge was true and the decision just, and that the case was substantiated after a due consideration of the evidence and charge. We cannot take upon ourselves to say that in the case of a trading partnership like this, this court has, upon such a clause in the deed of partnership, jurisdiction or authority to determine whether, by the unfounded speech of any supporter of the charge, the shareholders present may not have been misled or unduly influenced. All such meetings are liable to be misled by false or erroneous statements, and the amount of error or injustice thereby occasioned can rarely, if ever, be appreciated. This court might inquire whether the meeting was regularly held, and in cases of fraud clearly proved, might perhaps interfere with the acts done; but supposing the meeting to be regularly convened and held, the shareholders assembled at such meeting may exercise the powers given them by the deed. The effect of speeches and representations cannot be estimated, and for those who think themselves aggrieved by such representations, or think the conclusion unreasonable, it would seem that the only remedy is present defence by stating the truth and demanding time for investigation and proof, or the calling of another meeting at which the whole matter may be reconsidered. The plaintiffs objecting to this meeting and considering it illegal, protested against it, but abstained from attending, and therefore made no answer or defense to and required no proof of the charges made against them. The adoption of this course was unfortunate, but does not afford any grounds for the interference of this court. We are far from thinking that the charges made by Mr. Snell against the plaintiffs and Mr. John

son were well founded. He appears to have made a very exaggerated, and in some respects an unfounded statement; and in the present state of the evidence, if the question were, whether the charges were well founded, we might think it our duty to say that they are not. But as the real question is whether the shareholders at the meeting had not a right to remove directors for such causes as to them seemed reasonable, and as we think that on the true construction of the deed, they had such right, we are of opinion that the order granting an injunction ought to be discharged." 1

§ 873. Expulsion of Members of Incorporated Medical Societies. Following the decision of Lord Mansfield in Rex v. Mayor of Liverpool, it has been held by the New York Court of Appeals, that the only common law grounds of expulsion on which a medical society, incorporated under the statutes of that State, can expel a member, are these: 1. A violation of duty to the society, as a member of the corporation. 2. Offenses as a citizen against the laws of the country. 3. A breach of duty in respect alike to the corporation and the laws. And that the only statutory ground of expulsion was the presentment of a formal charge by a two-thirds vote of the society, and a conviction by the county court" of gross ignorance or misconduct in his profession, or of immoral conduct or habits." It was further held that the code of medical ethics, adopted by the bylaws of a county society, is obligatory on the members alone, and its non-observance, previous to membership, furnishes no legal cause for expulsion. A member of the Massachusetts Medical Society was tried and unanimously expelled upon a charge of "gross immorality," the grounds of the case being that for a large sum of money he had relinquished his practice to another member of the society, had gone out of the State for a year or more, and then had returned and broken his contract with such member by resuming his practice. This fact was substantially admitted, and the accused had full opportunity of being heard in his defense. The society, under its by-laws, the validity of which were not challenged, had power to expel a member for (among other things)" any gross and notorious im

3

1 Inderwick v. Snell, 2 Mac. & G. 216, 221.

2 2 Burr. 732.

People v. Medical Soc., 32 N. Y. 187, 194.

morality. The court refused to restore him by mandamus, proceeding upon the view that such a case had not been shown as to warrant the exercise of that extraordinary power. Mr. Chief Justice Shaw said: "The medical society, both by its charter and by-laws, had jurisdiction to inquire into and pass judgment upon the conduct of its members, and, in a proper case, to expel a member; and, gross immorality' in a professional transaction, having a tendency to bring the profession into dishonor before the community, if distinctly charged and proved, may be of such character as to justify the exercise of their power. The proceedings appear to have been conducted with deliberation, and several opportunities were given to the petitioner to be heard before the committee and the counselors, and the vote of expulsion was unanimous. Without saying that the court would in no case afford its authority by writ of mandamus to restore a member wrongfully expelled from such society, we cannot perceive, upon examination of the proceedings, any evidence of haste or prejudice against the petitioner, or that the society came to a wrong decision, or acted in violation of the petitioner's rights. "1 It seems that the doctrine of twice-in-jeopardy does not apply to a proceeding to expel a member from a medical society. Accordingly, it has been held that such a society is not precluded from preferring charges against one of its members by the fact of having once refused to prefer the same charges. The mere fact that the member has been tried upon an indictment for the charge in a court of criminal jurisdiction and acquitted, does not deprive the medical society of jurisdiction to try him upon a charge of having committed the same offense, in so far as it affects his right of membership in the society, and affords no bar to an inquiry under the statute for the purpose of depriving him of his right to practice physic and surgery. A statute which undertakes to regulate, by some general provision, the practice of physic and surgery within the State, and which, with a view to the moral character as well as the learning and skill of the members, gives to county medical societies the right

1 Barrow v. Massachusetts Med. Soc., 12 Cush. (Mass.) 402, 409.

2 Re Smith, 10 Wend. (N. Y) 449. 3 Ibid.