Before admission to the privileges of membership, the person elected must sign the constitution. By such signature he pledges himself to abide by the same and by all subsequent amendments.1

Dues and Fines.

The Exchange is supported by dues of $100 per year, payable semi-annually.2

If in arrears for three months a member may be suspended. If dues are not paid at the end of one year, the Committee on Admissions is authorized to dispose of the membership.3

Transfer of Membership.

Transfer of membership is made on approval of twothirds of the Committee on Admissions. Notice of the proposed transfer must be posted on the bulletin ten days prior to transfer.4

1Art. XIII, Sec. 5. 'Art. XIV, Sec. 1.

'Art. XIV, Sec. 2.

A member of a voluntary unincorporated exchange, who was illegally expelled for failing to pay dues, is bound, within a reasonable time after obtaining knowledge of his expulsion, to assert his rights; otherwise, he will be deemed to have assented to the expulsion.

Konta v. St. Louis Stock Exchange, 189 Mo. 26 (where a member of the St. Louis St. Exch. was expelled when memberships therein were worthless. He waited over a year, when a membership was worth $7,500, before attempting to assert his rights).

'Art. XV, Sec. 1.

A seat on the N. Y. Stock Exchange is property within the meaning of the Tax Law (then L. 1896, ch. 908, Art. 10), and subject to the inheritance transfer tax prescribed by Article 10 of the Tax Law, upon the death of the owner and its devolution to his personal representatives, Matter of Hellman, 174 N. Y. 254.

All contracts subject to the rules of the Exchange made by a member proposing to transfer his seat mature on

But it is not personal property within Sec. 2, subd. 4, of that Tax Law, and is not subject to the annual tax thereunder.

People v. Feitner, 167 N. Y. 1.

A seat is not a "personal privilege" merely.

In re Hurlbutt, Hatch & Co., 135 Fed. 504, 507, following Sparhawk v. Yerkes, 142 U. S. 1.

The Stock Exchange cannot be compelled to admit to membership the purchaser of a seat, and a purchaser who is admitted takes the seat subject to the constitution and rules of the Exchange.

Hyde v. Woods, 94 U. S. 523 (San Francisco St. Exch.); Page v. Edmunds, 187 U. S. 596; People v. Feitner, 167 N. Y. I; In re Hayes, 75 N. Y. Supp. 312, 321.

A membership in the N. Y. Stock Exchange can only be transferred under the rules of the Exchange and by consent of the Committee on Admissions.

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

A seat cannot be transferred without the consent of the association, and a forced sale of the seat would not give the purchaser the right to occupy the seat.

Shannon v. Cheny, 156 Cal. 567.

There can be no sale of a seat except in subordination to the rules of the Exchange. The privilege of transacting business on the Exchange has been defined as "a personal privilege of being and remaining a member of a voluntary association with the assent of the association.'

Lowenberg v. Greenbaum, 99 Cal. 162.

Shannon v. Cheney, 156 Cal. 567.

On the insolvency of a firm one of whose partners is a member of the Exchange, the membership passes to the assignee in bankruptcy. The fact that the Stock Exchange continues to regard the insolvent member as a member in no way injures the assignee, and an action by him to restrain the insolvent member from using the seat and to compel him to assign and transfer it to the plaintiff is unnecessary.

Platt v. Jones, 96 N. Y. 24.

McCabe v. Lawrence, 51 N. Y. Super. Ct. 219.

In re Hurlbutt, Hatch & Co. (C. C. A.), 135 Fed. 504.

Similarly, a purchaser from the trustee is in a position to apply to the Exchange to have his rights recognized, either in his own person, or he may apply to have another person accepted as a member. The recognition of another person by the Exchange as a member entitled to the seat through transfer by the insolvent member after his assignment is no bar to his application, which is his first step, and injunctive relief before wrongful refusal of the Exchange to admit him will be denied him. McCabe v. Emmons, 51 N. Y. Super. Ct. 219.

A right of transfer of the seat of a bankrupt member of the Philadelphia Stock Exchange passes to his trustee in bankruptcy, the bankrupt

the tenth day of posting of notice; no further contracts may be made by him pending approval by the committee. This rule also applies to cases where a having no unsettled accounts with members of the exchange at the time of filing his petition in bankruptcy; and the trustee is entitled to sell the seat as part of the bankrupt's assets. This right is subject to the approval by the proper authorities of the Exchange to the transfer to any given person.

In re Page (C. C. A.), 107 Fed. 89.

The bankruptcy court may compel the member to execute a transfer of the seat to his firm's assignee in bankruptcy.

In re Hurlbutt, Hatch & Co. (C. C. A.), 135 Fed. 504.

A membership in the Exchange has a pecuniary value, constituting property, to which an equitable right may be given by an assignment. But it cannot in fact be transferred except by the substitution of a new member in accordance with the rules of the Exchange. Therefore, on the bankruptcy of a member, his membership passes into the possession of his trustee as assets of his estate, notwithstanding any previous assignment, although it may be subject to the equities of the assignee and its transfer and conversion into money can then only be effected pursuant to orders of the bankruptcy court.

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

"There may be property belonging to this body, derived from the payment of dues or fines, or consisting of the furniture of the room where the board meets; but the possession of it is a mere incident, and not the main purpose or object of the association. A member has no proprietary interest in it, or a right to any proportionable part of it upon withdrawing. He has merely the enjoyment and use of it while he is a member, but the property remains with and belongs to the body while it continues to exist."

White v. Brownell, 2 Daly, 329, 356.

A seat or membership in the N. Y. Stock Exchange undoubtedly is property for certain purposes, but even then it is property of a peculiar nature.

McCabe v. Emmons, 51 N. Y. Super. Ct. 219, 225.

A seat in the Philadelphia Board of Brokers is not property in the eye of the law, and cannot be seized in execution for debts of the members. Thompson v. Adams, 93 Pa. St. 55.

A membership in the N. Y. Stock Exchange is personal to the holder, and is evidenced by no certificate.

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

A seat on the Boston Stock Exchange may be pledged for indebtedness.

Nashua Savings Bank v. Abbott, 181 Mass. 531.

This is due to a specific rule to that effect, and in this regard the Boston Stock Exchange differs from the N. Y. Stock Exchange.

membership is disposed of by the Committee on Admissions.1

Upon transfer voluntarily or by disposition of the Governing Committee or the Committee on Admissions, the proceeds thereof are applied in the following order: 1. Payment of all fines, dues, assessments, and charges of the Exchange against the transferor.

2. Payment of creditors, members of the Exchange, or firms registered thereon, of all filed claims arising from contracts subject to the rules of the Exchange, as allowed by the Committee on Admissions. If insufficient to pay claims allowed in full, the proceeds are applied pro rata.

3. The surplus, if any, is paid to the transferor or to his legal representatives on the execution of a release.2 All unmatured debts or other obligations, arising out of contracts subject to the rules of the Exchange, become due and payable, immediately prior to the transfer.3

A Stock Exchange seat is not such a collateral as may be sold by the pledgee. The way in which it could be accomplished would be to report the failure of the member to meet his obligations to the Stock Exchange, whereupon he might be suspended for a year and for such further time as the governing board in its discretion might give. The seat cannot be sold by individuals. It is not transferable like a stock or bond; membership in the Exchange is the right to participate as a member in a voluntary private organization. The courts cannot force a person upon the Exchange.

Ketcham v. Provost, 141 N. Y. Supp. 437.

1Art. XV, Sec. 2.

2Art. XV, Sec. 3.

Art. XV, Sec. 4.

"All contracts, debts, etc., shall become due and payable," means current contracts, debts, or obligations between members, and originating between them in their membership capacity. Claims long since accrued would not, first, have to be declared due and payable.

A member forfeits all right to share in the proceeds of a membership by failing to file claim prior to the transfer, subject to his right to be paid out of any sur

Bernheim v. Keppler, 34 Misc. 321, 324.

Cochran v. Adams, 180 Pa. St. 289, is to the same effect.

Construing this article it was held that the present Article XV, Sec. 7, relating to the disposition by the Committee on Admissions of a seat on death, and Article XV, Sec. 3, relating to the disposition of the proceeds of a seat whether transferred voluntarily or by the Exchange, appear to cover the former Section 4 of Article 13.

Claims of members of the Exchange mean claims arising from transactions between members as such, and do not include a claim arising out of a transaction between the claimant and the deceased member prior to the latter's admission to membership in the Exchange.

Bernheim v. Keppler, 34 Misc. 321.

See also Cochran v. Adams, 180 Pa. St. 289.

A general assignment by an insolvent member does not affect the contractual rights of members of the Exchange in the seat. Dividends paid them out of the sale of the seat are not to be deducted in estimating their right to dividends out of the assigned estate.

In re Hayes, 75 N. Y. Supp. 312.

A member suspended for insolvency transferred his membership in blank to the Committee on Admissions, who sold it. The proceeds of the seat, notwithstanding the prior general assignment made by the member's firm, were primarily liable for the payment of the debts contracted by him and it to members of the Exchange, and also for such debts due to the firms of members of the Exchange.

In re Hayes, 75 N. Y. Supp. 312.

The court observed that in respect of the facts of the case, the constitution was ambiguous in not expressly providing for the distribution of the proceeds of the membership of a member suspended for insolvency, who voluntarily agreed to transfer his membership (p. 316). It was held that usage might be proven to give the effect intended, where a debt was due to a member's firm.

In re Hayes, 75 N. Y. Supp. 312.

A rule of an Exchange providing that claims due to members from a defaulting member may be collected by an Exchange and applied to debts due other members is invalid, as in violation of the bankruptcy law.

Cohen v. Budd, 52 Misc. 217. (Consol. St. Exch.)

A., not a member, furnished the money with which R. became a member of the Philadelphia Board of Brokers. R. died. A. claimed that he was the equitable owner of the seat and entitled to the proceeds in preference to debts due by R. to other members of the Exchange. A.'s claim was denied, he being an entire stranger, unknown to the board. Thompson v. Adams, 93 Pa. St. 55.