plus after all other claims allowed have been paid in full.1

Claims between partners, members of the Exchange, do not share in the proceeds of the membership of one of the partners until after all other claims allowed are paid in full.2

The membership of a deceased member is disposed of by the Committee on Admissions.3

A member suspended for insolvency, who did not settle within one year, voluntarily transferred his membership, in blank, to the Committee on Admissions, which sold it. Notwithstanding a prior assignment by the member's firm the proceeds were held primarily applicable to the payment of debts to members and their firms arising from transactions within the Exchange.

Matter of Seymour, Johnson & Co., 37 Misc. 264.

1Art. XV, Sec. 5. 'Art. XV, Sec. 6.

'Art. XV, Sec. 7.

The claims of members that are to be satisfied out of proceeds of the sale of a decedent's seat are claims between members arising on the floor of the Exchange, and do not include a claim arising out of transactions had with a non-member who afterwards became a member.

Bernheim v. Keppler, 34 Misc. 321.

A creditor member is entitled, besides the receipt of dividends out of the sale of a membership, to prove, as against mere general creditors, for the whole of his original claim, provided he does not receive more than his full claim.

Matter of Seymour, Johnson & Co., 37 Misc. 264.

Persons having claims against a member or ex-member of the Exchange who might submit the same to the Committee on Admissions pursuant to the constitution may be precluded from doing so by their own acts or omissions, and may be enjoined from so doing by a court of competent jurisdiction.

In re Currie (C. C. A.), 185 Fed. 263.

O'Dell v. Boyden (C. C. A.), 150 Fed. 731.

Bankruptcy proceedings were instituted in Michigan against a member of the New York Stock Exchange. The bankrupt was indebted to Hayden, Stone & Co. in an amount secured by pledged collateral. How much of the collateral would be available to them was doubtful. The trustee in bankruptcy took proceedings to compel the Stock Exchange to pay over to him the proceeds of the sale of the seat. Hayden, Stone & Co. had propounded their demand to as much of the

The membership of a member expelled or becoming ineligible for reinstatement may be disposed of by the Committee on Admissions.1

The expulsion or suspension of a member does not affect the rights of creditors who are members of the Exchange or of firms registered thereon.2

When a member is in debt to another member, the death of the latter or the transfer of his membership does not affect his right, or that of his firm or estate to share in the proceeds of the membership of the debtor member.3

Insolvency.

A member who fails to comply with his contracts, or is insolvent, or who is a partner of a registered firm in such a position, must immediately inform the President in writing and prompt notice must be given to the Exchange. He thereby becomes suspended until, after settlement with his creditors, he is reinstated.1

When the President ascertains that a member or his firm has failed to meet engagements or is insolvent collateral as they could get in the Michigan courts, and contemporaneously asserted their right to the whole or part of the proceeds of the sale of the seat before the Committee on Admissions. It was held that they had a right to do so and the trustee's application was denied. In re Currie (C. C. A. ), 185 Fed. 263.

1Art. XV, Sec. 8.

'Art. XV, Sec. 9.

'Art. XV, Sec. 10.

'Art. XVI, Sec. 1.

A rule requiring a broker to report his default in complying with his stock contracts has been held to apply only to contracts for the purchase or sale of stocks on the board.

Rorke v. San Francisco Stock Exch. Bd. 99 Cal. 196.

and has neglected to comply with these provisions he announces to the Exchange the insolvency of such person or firm.1

On the failure of a suspended member to settle with his creditors and apply for reinstatement within one year from the time of suspension, his membership is disposed of by the Committee on Admissions. The time of settlement may be extended by the Governing Committee, by a two-thirds vote of members present, for periods not exceeding one year each.2

When a suspended member applies for reinstatement he must furnish a list of his creditors, a statement of the amounts originally owing, and the nature of the settlement made in each case. After notice of the proposed consideration of his application posted for three days, and his presenting satisfactory proof of settlement, the Committee on Admissions ballots for him. Failing an approving vote of two-thirds of the entire committee, the applicant is entitled to be balloted for at any five subsequent meetings within one year of suspension, or such extended time as is granted by the Governing Committee. If rejected on the sixth ballot, the applicant may appeal to the Governing Committee, who may reinstate him on an affirmative vote of not less than twenty-five members. On a member's failure to make such applications, or if rejected by the Governing Committee, his membership may be disposed of.3

Art. XVI, Sec. 2. "Art. XVI, Sec. 3.

'Art. XVI, Sec. 4.

Under these sections, when a member is suspended, the rights of other

Whenever the Governing Committee determines that a member's or a firm's failure is due to reckless or unbusinesslike dealing, such member or partner or partners may, by two-thirds vote of existing members of the Governing Committee, be declared ineligible for reinstatement.1

A complete list of creditors and amounts due must be filed with the Secretary by every suspended member within thirty days after suspension.2

Expulsion and Suspension.

The penalty of expulsion may be inflicted, and the period of suspension determined, by a vote of a majority of the members of the Governing Committee; and the penalty of expulsion or of ineligibility of a suspended members in the proceeds of his seat do not become fixed immediately, unless the seat is then sold. If the period of settlement is extended for successive yearly periods until the member's death, the Committee on Admissions are to determine the rights of creditors in accordance with the provisions of the constitution relating to the distribution of the proceeds of sale after the death of a member, and not as these provisions stood at the time of his suspension.

Haight v. Dickerman, 18 N. Y. Supp. 312.

"Debts" means debts contracted among members as such. Bernheim v. Keppler, 34 Misc. 321, 324.

1Art. XVI, Sec. 5.

'Art. XVI, Sec. 6.

The right of a voluntary association to provide, in its constitution or by-laws, expulsion as a penalty for an infraction or disobedience of its laws is well settled.

Nat. League of Com. Merchts. v. Hornung, 148 App. Div. 355. Expulsion for indictable offenses can take place only after a conviction by a jury, but where the offense is against the member's duty as a member he may be expelled on trial and conviction by the corporation.

Leech v. Harris, 2 Brewst. (Pa.) 571.

The court will not examine upon the merits the question decided by the Governing Committee and resulting in a member's expulsion. It will only reverse the committee's decision when there is a total absence

and has neglected to comply with these provisions he announces to the Exchange the insolvency of such person or firm.1

On the failure of a suspended member to settle with his creditors and apply for reinstatement within one year from the time of suspension, his membership is disposed of by the Committee on Admissions. The time of settlement may be extended by the Governing Committee, by a two-thirds vote of members present, for periods not exceeding one year each.2

When a suspended member applies for reinstatement he must furnish a list of his creditors, a statement of the amounts originally owing, and the nature of the settlement made in each case. After notice of the proposed consideration of his application posted for three days, and his presenting satisfactory proof of settlement, the Committee on Admissions ballots for him. Failing an approving vote of two-thirds of the entire committee, the applicant is entitled to be balloted for at any five subsequent meetings within one year of suspension, or such extended time as is granted by the Governing Committee. If rejected on the sixth ballot, the applicant may appeal to the Governing Committee, who may reinstate him on an affirmative vote of not less than twenty-five members. On a member's failure to make such applications, or if rejected by the Governing Committee, his membership may be disposed of.3

1Art. XVI, Sec. 2.

Art. XVI, Sec. 3.

'Art. XVI, Sec. 4.

Under these sections, when a member is suspended, the rights of other