Clute v. Loveland

Ross, J. — The findings show that during the times mentioned in the record the San Francisco Stock and Exchange Board was, and yet is, a voluntary association, [255]consisting of 'one hundred members, formed for the purpose of dealing in stocks, and buying and selling the same on commission in the city and county of San Francisco. That the Company of Associated Stock-brokers was, and yet is, a corporation organized and existing under the laws of the state, with its principal place of business in the said city. That the said corporation was formed by and is composed of the members of said volunteer association solely, of both of which institutions the defendant in this action was at all times, and yet is, a member. That the members of the association and of the corporation are entitled to an equal share or proportion of its property, effects, and assets; that the only qualification for membership in the corporation is that such member shall be a member in good standing of the volunteer association, and shall sign the constitution and by-laws of the corporation; that the corporation was formed for the purpose of receiving donations with which to purchase" land in the city of San Francisco, upon which to erect a building for the use of its members as stock-brokers, and has no shares or capital stock; that the lot of land described in the complaint was purchased, and the building thereon erected in 1875, with funds belonging to the aforesaid volunteer association, at a cost of more than five hundred thousand dollars, in which building the board has since held its sessions; that each member’s right and title to the property, goods, effects, and assets of the association, and the privilege of participating in the meeting of the board, is represented by what is called and known as a “seat in the San Francisco Stock and Exchange Board.” That by the rules of the board each member has the right to voluntarily dispose of his seat in the same, but the purchaser, before he can participate in the proceedings of the board, must be elected a member thereof. That by the said rules the seat and privilege of every member is deemed and taken to be from the time of his admission, and so [256]long as he continues a member, a continuing security to all members of the board with whom he may deal for the performance of his contracts and the fulfillment of his engagements. That the association is possessed of personal property, a portion of which is money. That the value of a seat in the board at the time of the trial of this action was at least six thousand dollars. That by a provision of the constitution of the board, any member failing to meet his engagements therein shall be suspended until he has settled with his creditors. That the defendant to this action, in January, 1877, was unable to meet his engagements with the members of the board, for which reason his privileges as a member thereof were suspended. That thereafter the plaintiff to this action paid to the members of the board the amohnt of the defendant’s indebtedness to them, and defendant was thereupon restored to his privileges as a member of the board. And it is at this point that the contract between the plaintiff and defendant, which forms the basis of this action, comes in. It was a contract of partnership between the parties, by which they associated themselves together to buy and sell stock on commission, the defendant herein contributing his seat in the board, which for the purposes of the partnership was valued at eighteen thousand dollars, and which by the terms of the agreement was to go back to him at the same valuation at the expiration of the partnership, the term of which was fixed at one year. The contract then proceeds: “Said Clute [the plaintiff herein] has advanced to said Loveland [defendant], for his private purposes and account, the sum of nine thousand dollars, gold coin, and until the same is repaid to him by said Loveland his said advances shall stand in lieu of his part of the capital to be contributed, and he shall have a lien for the same on the seat of said Loveland in said stock board and on certain life policies transferred to said Clute by said Loveland, but all moneys paid by said