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National League of Commission Merchants of United States v. Hornung

Supreme Court of New York, Appellate Division

December 29, 1911


Page 356

APPEAL by the plaintiff, the National League of Commission Merchants of the United States, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Erie on the 29th day of May, 1911, upon the decision of the court, rendered after a trial at the Erie Trial Term before the court without a jury, dismissing the complaint upon the merits, and directing the restoration of the defendant to membership in the plaintiff corporation.


August Becker and Foster B. Turnbull, for the appellant.

Frederick Haller, for the respondent.


The plaintiff, a membership corporation, was incorporated in the State of Illinois in March, 1893. It consists of commission merchants, about 380 in number, and its purpose is set forth in its certificate of incorporation as follows: 'The object for which it is formed is mutual aid in business, promotion of the best interests of shippers and receivers, and to promote good feeling among all its members with a special outlook for their welfare, and to foster and encourage by all lawful and proper means and in a fraternal and friendly spirit by organized effort their welfare.'

Branch leagues of the plaintiff were formed in several cities and one in the city of Buffalo early in 1908. The defendant became a member of the plaintiff in 1894 and of the Buffalo branch when it was established.

Page 357

In 1898 the plaintiff adopted an emblem or trade mark, which was duly registered, and was designed for the exclusive use of its members, and it was extensively used by them on their stationery in their correspondence and was regarded as a valuable right or privilege.

Article 18, section 4, of the constitution and by-laws of the plaintiff provides: 'In the event of any dispute, or difference, arising between a party not a member of the League and a member of any Branch League, the party not a member may demand a trial of the case before the Arbitration Committee of the Branch of which the other party is a member, and it shall be the duty of said Arbitration Committee within thirty days to take up the matter and within ninety days report their decision to both of the parties interested.'

In case either party is dissatisfied an appeal may be taken to the branch league, where a new trial is to be had, and a further appeal is permitted by the aggrieved party to the national executive committee, which is a committee of the parent organization and is composed of one member elected by each branch league. The party not a member must declare, however, in writing his willingness to abide by the decision of this final tribunal, and a retrial does not seem to be required on this final appeal. By section 5 of article 18 of the constitution refusal of a member to submit a disputed account to the arbitrament of the branch league is to be followed by his expulsion from the plaintiff.

In 1908 a claim against the defendant was presented by Loomis & Son, of Victor, N.Y. , to the Buffalo branch league for a sum alleged to be due to them for a quantity of potatoes sold to him. The gist of the demand was that the sale had been made and the defendant refused without cause to accept the potatoes, and the claimants sold them at a loss, for which they sought to hold the defendant liable. The matter was submitted to the arbitration committee, consisting of three members of the branch league, and a trial was had, the defendant being represented by counsel, and a decision in writing signed by the three members of the committee was rendered in favor of Loomis & Son for seventy dollars and thirty-one cents damages, and ten dollars fees of the stenographer who took and

Page 358

transcribed the minutes of trial. The decision recited succinctly the grounds for the conclusion reached, and they appear to be reasonable and to justify the determination arrived at. The defendant appealed to the branch league, where a retrial was had, the defendant again giving testimony in his behalf, his counsel participating, and the decision was again in favor of the claimants for the full amount claimed, with twenty dollars stenographer's expenses, which, by the written stipulation of both parties, were to be paid by the defeated party. The defendant thereupon appealed to the national executive committee, which body considered the appeal; and the proof shows that during the consideration there was a division among the members of this tribunal and eventually by ballot it was decided in January, 1909, to allow one-half of the sum claimed, each party to pay one-half of the stenographer's charges. The claimants had in writing consented to accept and abide by the decision of this executive committee, and did so. The defendant refused to accept the decision or pay the sum awarded to the claimants. Notice of the decision was transmitted to the branch league, of which the defendant had notice, and also of the proceeding for his expulsion, and he appeared before the local body and was heard when the matter of his expulsion was up for consideration. He was finally expelled from the plaintiff. He continued, however, to use the emblem of the plaintiff in his business and threatened to persist in such use, and this action was commenced to restrain him from ...

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