17 F. 825 | U.S. Circuit Court for the District of Kentucky | 1883
This cause is here by removal from the Louisville chancery court, and is now submitted on the motion of the defendant' to dissolve the injunction granted by the chancellor. This injunction was granted upon the ex parte motion of complainants, and cannot have the same weight-with me as if granted upon notice and a hearing. The state practice seems to be to grant injunctions without notice, and almost as a matter of course, if the petition sets out sufficient prima facie grounds. The particular thing complained of by complainants is the removal of a “ticker” in their office, and a consequent withdrawal of the reports of the daily transactions which take place on the Chicago Board of Trade. The Chicago Board of Trade is a private corporation, and can give or withhold from the public its transactions. It may give these transactions to the public through such agents or upon such conditions as the board may deem advisable. The defendants, through their agents, were and are reporting the daily markets upon this board. This is done by the permission of the board, and not as a right which it has without such permission. The' defendants, therefore, in regard to these reports of the daily prices' on the board, obey the properly expressed will of the board of trade. The duty of a telegraph company to the public in its business of telegraphing is not in this case. Neither is the question of whether or not a telegraph company can go into the business of news-gathering, and, having gathered news, which is common to the public, in the sense that all have a right to gather it, and then transmit it by means of its telegraph lines to some, and refuse it to others who are willing to pay the same rate and be governed by the same regulations as those who receive the news, before me for consideration.
The relations which telegraph companies bear towards the public may be such as to prevent any discrimination in the distribution of such news. Upon this subject I express no opinion, but it seems to be quite clear that a merchant, or a number of merchants and dealers organized into a corporation, can give to a reporter the terms of their private transactions, to be transmitted to others, upon any conditions they may choose to impose, even to the extent that these transactions shall not be transmitted to others dealing in the same goods or commodities. These transactions on the board of trade are private transactions, in the sense that the general public are not entitled to them, except by the permission of the board. The directors of the board of trade, in November, 1882, made the permission to defendant to be on
There is filed with one of the affidavits a pamphlet issued by complainants, explaining their business and urging the public to deal with them. From this pamphlet and the affidavits filed by the parties I find that complainants’ course of dealing is about this:
The complainants never buy or sell for present delivery, but always deal in futures and upon margins. Whenever the required margin is placed in the hands of complainants, they will buy or sell, as customers desire, grain, etc., at the last quotation of the Chicago Board of Trade. This is always for the next or succeeding month’s delivery, and the deal is taken by the complainants themselves. The customer must always keep his margin good, and that without notice, and if any time before the time fixed for the delivery the market in Chicago goes against the customer to the extent of his margin, the trade is closed and the complainants take the margin and the customer is not personally liable, the extent of his loss being his margin. If, however, the market should go in favor of the customer, he may call for a settlement at any time and without regard to the maturity of his contract, and he is then paid the difference between che then market price and the price at which he bought or sold, less a sum which is called by complainants “a commission. ” This sum, which is one-fourth of a cent on each bushel of grain which is alleged to be bought or sold, is not a commission, as the complainants always take the deal themselves, and do not pretend to buy or
It is perhaps true tnat! if the customer Beeps ms margin good, so that he cannot be closed out, and does not exercise his right to settle upon the basis of the difference in the prices of the grain, etc., he can demand a compliance with the contract and a delivery, but if the course of business between the complainant and their customers is to settle their alleged contract by a payment of the differences-in the -market rates, the fact that a customer may, under certain circumstances, require an actual delivery, does not relieve the complainants from, the charge of carrying on a “bucket-shop.” It is the general course of a man’s business which defines and classifies it. If “bucket-shop” means a place where wagers are made upon the fluctuations of the market prices of grain and other commodities,' then I think the evidence shows tne complainants keep such a “shop,” and are of the class which defendants are prohibited from furnishing the-market quotations of the Chicago Board of Trade. This is gambling, and a very pernicious and demoralizing species of gambling, which a court of equity should not protect even if the board of trade had not taken the action it has. It is true that this kind of gambling, has not yet been made criminal by the statute law of t-lie-state, still if a case of wager is made out none of the state courts will enforce-such contracts. Sawyer v. Tagaart, etc., 14 Bush, 727. Gambling on the fluctuation in the market prices of stocks, grains, etc., is against the public policy of the state, though it may not be a crime punishable by fine or imprisonment.
The complainants, in the bill which they have tendered, allege another ground for this injunction, and that is their membership of the Board of Trade of Chicago. I am inclined to the opinion that if the complainants’ rights as members of the board have been violated, they must seek a remedy against that corporation, and have none against the defendant. But, if wrong in this, I do not think this ground will avail, because this record does not show that their rights as members of that board have been infringed or violated. The eom'plainants were furnished the reports of this board by means of a “ticker” at their place of business in this city, not as members of the-board of trade, but as any other person would be furnished them. The board of trade do not furnish qr cause to be furnished these reports to its members, and the right to them does not in any way per? tain to the membership of the board, and is entirely distinct from it.
The injunction should be dissolved; and it is so ordered.
May a board of trade, or other similar association, lawfully discriminate in furnishing quotations of its ruling prices? Judge Babb, in deciding the principal case, seems to imply that it may so discriminate. “ The Chicago Board of Trade,” says he, “ is a private corporation, and can give or witlihc'd
It may be true that that board “ can gi ve or withhold from the public its transactions,” or that “ it may give these transactions to the public through such agents or upon such conditions as the board may deem advisable;” but it is doubtful whether its right so to do results from its stains as a private corporation. Private corporations are not, simply because they are private corporations, exempt from performing their duties to the public in a lawful and proper mode, any more than private individuals are. Por example, the law prohibits one who carries for the public from discriminating unjustly as to whom he will carry, or as to the prices he will charge for the service. This rule of law is as compulsory upon private corporations—for example, railway companies, who are common carriers—as it is upon private individuals. All are equally within its meaning. It is obvious, therefore, that the duty of the Board of Trade of Chicago, or of any similar institution, as to disseminating its quotations of prices, cannot be determined by reference merely to its status as a private corporation.
Perhaps it will aid somewhat in determining the rule of law governing the board of trade in distributing its quotations of prices to examine the nature of the service it performs, and to settle definitely, if possible, for whom that service is rendered.
The service consists in placing within reach of almost every one in the business world the quotations of prices that rule upon the markets of the board. By telegraphing these quotations far and wide, the board informs farmers what prices they may get for their wheat, corn, and grain, where such prices will be paid, and by whom. By the same means the board informs consumers where they may buy wheat, corn, flour, and grain; what the supply on hand is; how much must be paid for a given quantity; and who has it to sell. The board stands as a middle-man between the producing and the consuming public. Tt serves both classes of the public by furnishing each with the information it desires, if or is this service gratuitous. The board is paid for it in the profits which accrue to its members from their purchases from producers and their sales to consumers. A moment’s reflection makes clear that a service is rendered, viz., tiro furnishing of information, and that it is rendered for somebody, viz., for the public.
There being a service performed for the public, the next question is, what rule of law governs the performance of that service? Unquestionably there must be some rule, else the conduct of the board in performing the service may be purely arbitrary, and subject only to, regulation by its own caprice or will, with or without regard to right or wrong —a condition of things hardly to be credited. There is undoubtedly a rule. It is the same rule that governs every service performed for the public, namely: All services which any person, natural or artificial, undertakes to render the public must be performed impartiaPy for all, and without undue preference or unjust prejudice towards any. In support of this rule see the American cases in note.
There must be, in nerforming public services, no unjust, unreasonable discrimination between persons. This is the rule governing all who serve the public, no matter what may be the nature of the service they render, nor what may be the political or legal status of the servant. He may be a private person or a public person, a natural person or a corporation. The question to be answered is: Is the service rendered for the public ? If it is, it must be performed alike for all who are similarly situated. Governments themselves in the.United States cannot discriminate unequally and unreasonably among their citizens. Still less may corporations, which are but the creatures of government, so discriminate.
It results from these principles that the Chicago Board of Trade, or any other similar association undertaking to serve the public with information, cannot lawfully single out one person or firm and unreasonably deny to them the information which it holds itself ready to furnish to all the rest of the business world.
/These views derive some support from a decision by Chancellor Tuxey, of Chicago,
“ The board of trade does not profess to be engaged in a moral reform movement, nor is its action aimed solely at the
“ It is evident that if the managers can dictate that the quotations shall not be furnished this complainant, they may cut off from receiying the same every merchant, commission house, broker, banker, or other persons outside the board, and might, if they thought proper, dictate that only one man in Hew York city—Jay Gould or Keene—should be permitted to receive them by telegraph. In such case there would be but little difficulty in obtaining a monopoly in the dealing in and brokerage of grain and other commodities.
“What forestalling of the market might take place, and what gigantic monopolies might be built up in commercial centers, where values are determined by the ruling prices on the Chicago Board of Trade. Heither the establishing of monopolies nor the destroying of competition is looked upon with favor by the courts.
« The corporation known as the Chicago Board of Trade was organized more than a quarter of a century ago, by a few merchants of this city, for their own convenience in the transaction of their business. By reason of the wonderful development of the country tributary to Chicago as a commercial center,
“ This market on the floor of the board of trade stands in ‘ the gateway of commerce.’ The members on the floor of the board of trade take‘toll,’by way of commission, upon four-fifths of the wheat and other products of the great north-west—an empire in itself. These products—such is the course of trade—must, whether the owners desire it or not, pass through the board of trade market. A membership of the board, which confers the privilege of participating in the taking this ‘ toll,’ is worth $10,090. It can make no difference in principle whether this ‘ toll ’ is taken by the corporation or by the members, the result to the public is the same.
“It may be true that neither the courts nor the legislature can interfere with its control of its own floor, or with the right of the board to discipline its members. But I am clearly of the opinion that the business transacted upon the floor of the hoard of trade is ‘ affected with a public interest ’ to an extent which would authorize the legislature, and the courts in the absence of legislation, to prohibit the hoard of trade exercising any discrimination as to who shall receive from the telegraph companies these market quotations, or as to what telegraph companies shall be allowed facilities for distributing the information to the public. It is opposed to the very spirit of its charter that it become a monopoly or a close corporation.”
This is not denying to the hoard of trade the right to keep its transactions entirely secret from the public, if it choose to do so. Whether or not this may he done may he questionable; but it is not necessary to discuss the point, since the board desires, not secrecy, but discrimination. ISor is it oven saying that the board may not make a just discrimination as to who shall be furnished with its prices. It is only unjust, unreasonable discrimination which is within the prohibition of the law. Just and reasonable discrimination is proper. A railway company must furnish transportation equally for all; hut it may eject or refuse to carry one who persists in gambling on the train, just as it may put off or decline to take a man with the small-pox; and if it he clearly established that a business man or firm uses quotations furnished by the board for a gambling purpose exclusively, the board might justifiably and lawfully refuse to furnish him its prices, as was eommendably decided in the principal case.
The criterion by which it is to he determined whether the transaction is gambling or not, is the intention of the parties. If they intend an actual bona, fide sale and delivery it is a lawful transaction, and this although a settlement may be made finally by a payment of differences. But not so if they in fact intend merely to bet upon the turns of prices. Then the transaction is gambling, and as such all acts and contracts in furtherance of it- are illegal.
Another point may be suggested. A telegraph company is a' public corporation, exercising public franchises,—e. g., eminent domain,—and serving the public in all ways for which it is competent. It is ah agent of the public. As a part of its business it collects, in the various cities and places to which its lines run, information of ruling market prices. This information it transmits over its lines, and sells it to such of the public as desire to buy it. Now, when the board of trade admits the reporters and' operators of a public agent to its rooms, and allows them to take and transmit quotations of prices, does not the hoard -make a publication of its prices to the public, which entitles the public to use them without restriction? Is not the giving of such prices to an agent of the public a publication of them for the benefit of the public ? If it publishes its prices to the world, can it say that certain persons shall not avail themselves of them? The publication is not copyrighted. Can the board restrict the use of published quotations by the public any more than an author who has no copyright can, after publication, restrain the subsequent publication of his work by'all who choose to print it?
Again, the telegraph company is a “public servant.”
Judge Blodgett, of the United States circuit court, northern district of Illinois, holds views somewhat variant from the foregoing. “ The material question, as it seems to me,” says he, “ is whether the hoard of trade is obliged to allow reporters of the telegraph company on the floor of its exchange for the purposes of collecting and transmitting reports of the market therefrom. Complainant insists that the public have a right to the information afforded by these market reports, and that because the two defendants are corporations, the board of trade is obliged to allow reporters on its floor, and the telegraph company is obliged to transmit such reports to whoever requires them, and is
These views are, in some respects, unsound. As previously pointed out, the duty of the board of trade, or any other person or company, in dealing with the public, cannot always be determined solely by reference to the status of the person or company as being private or public. It is true that duties to the public may result from the public character of the company or person, but it is equally true that such.duties may be imposed upon a person or company that is private; witness the duty not to discriminate unjustly laid upon private companies, and even individuals, who are engaged in common carriage. It is the nature of the service, and the fact that it is rendered for the public, and not the political or legal status of the servant, that brings him or it within the rule of law prohibiting unjust discrimination, and it cannot be concluded that because “ the board of trade is a private corporation,” possessing no power of eminent domain, and exorcising no public franchise, “ that no such duties are charged upon it toward the public as have heretofore been
Nor is the dissemination of its prices a matter of compliment indulged in by the board. It is a matter of business,—a service rendered to the public which is productive of ample profit to the board, accruing from the purchases and sales made by its members,—transactions to which the dissemination of its prices is highly essential.
Further, it is not true that to allow an expelled member of the board to receive quotations by telegraph is to give him “ all the benefits of a membership from which he has been excluded by, perhaps, his own misconduct.” He is still deprived of his right to buy and sell in the markets of the board from which he is excluded; a privilege worth many times more than the information as to the ruling prices is worth.
• The better view appears to be that the board of trade may keep its proceedings entirely secret, if it chooses; but if it undertakes to make them public it must serve all alike, and impartially, in giving information of them.
Can a telegraph company lawfully refuse to furnish a person with an instrument known as a “ ticker,” by means of which these quotations are disseminated ?
The custom of the board< of trade has been to allow reporters and operators of the telegraph companies' upon the floor of its business apartments during business hours, in order that they may ascertain the ruling prices and telegraph them wherever the telegraph reaches. If the telegraph company and its reporters and operators be considered in the light of agents of the board, their duty as to distributing this information is undoubtedly the same as the duty imposed by the law upon their principal. They cannot discriminate unjustly any more than the board itself. But if the telegraph company and its employes be considered apart from the board, an interesting question presents itself.
Is it the duty of a telegraph company to collect and transmit information? On thisipoint Judge Blodgett says: “The further reason which was urged in behalf of the telegraph company, that it is no part of the duty of the telegraph company to transmit information, seems to be cogent and forcible. If they volunteer to follow that class of employment, they are bound, perhaps, to do it with fidelity while their contract continues; but whenever they terminate their contract, no person can compel them to enter into another, or to continue it when they wish it terminated.”
It may he true that it is not the duty of a telegraph company to collect information—to become a public collector of nows; and it may also be true that it is their privilege to withdraw entirely from such a business. But it is not withdrawing from the business to refuse to furnish one person with information collected for and furnished to all others of the public who desire it. This is discrimination in business, not retirement from it; and if the telegraph company undertake that duty at all, it is difficult to see why it should not perform it in the manner prescribed by law; and admitting that the telegraph company stands in the position of a private person who buys and sells goods, it may be questioned, in the light of the well-known Granger decisions,
These questions may seem almost absurd to one accustomed to regard property subject absolutely to the control of the owner. But with modem capital and facilities for combination, many staples are passing into the control of men who., as corporate bodies, deal with the public as a single individual. For example, the entire oil producéis monopolized by the Standard Oil Company. The manufacture of tacks is entirely controlled by the Central Tack Company. Wall paper is also monopolized by a pool. There is hardly a branch of business but has its monopoly, of whom the public must buy or go without supplies. It can hardly be admitted that the common law is so deficient in principle as to leave the public without remedy in case of a refusal of these monopolies to supply it, without unjust discrimination and upon reasonable terms. The business of telegraphing, and all its incidents, is also in the hands of a monopoly. In dealing with the public it must obey the same rules as are applied to railway companies and other public servants.
It may be conceded that telegraph companies are not strictly common carriers because they do not have tangible possession of goods to be carried.
Finally, may be noted the case of State ex rel. v. Bell Telephone Co.
It was decided that, notwithstanding this agreement with the patentee, and not withstanding his monopoly of the invention patented, it having been leased by him for public purposes to a telegraph company, that company must furnish instruments for the use of whoever desired them, it being a public servant, and, as such, possessing no right to discriminate unreasonably as to whom it would provide with its instruments. This appears to be the correct view.
Chiuago.
Adelisebt Hamilton.
McDuffee v. Railroad, 62 N. H 448 5 N. E. Ex. Co. v. M. C. R. Co. 57 Me. 188; Bennett v. Dutton, 10 N. H. 481: Sanford v.Railroad Co 21 Pa.St. 378: C., B. & Q. R. Co. v. Parks, 18 Ill. 460; Audenried v. P. & R. Co. 68 Pa. St. 370; C. & N. W. R. Co. v. People, 56 Ill. 365; Messenger v. Penn. R. Co. 7 Vroom, 407; Cumberland Valley Co's Appeal, 62 Pa. St. 218; Camblos v.P & R. R. Co. 4 Brewst, 563. 622; Vincent v. C. & A. R. Co. 49 Ill. 33; Shipper v. Penn. R. Co. 47 Pa. St. 338; Stewart v. Eric & W. T. Co. 17 Minn. 372; McCoy v. C.,I., St.L. & C. R. Co. 13 Fed. Rep 7; Hays v. Penn. Co. 12 Fed. Rep. 309; Express Co. Cases, 10 Fed. Rep. 210, 869.
Pickford v. G. J. R. Co. 10 Mees. & W. 399; S. C. m Equity, 3 Eng. R. & C. Cas. 538; Baxendale v. G. W. R. Co. 14 C. B. (N. S.) 1; Baxendale v. G. W. R. Co. 16 C.B. (N. S.)137; Sutton v. G. W. R. Co. 3 H. & C. 800: Baxendale v. L. & S. W. R. Co. L.R.1 Exch. 137; S.C.4 H. & C. 130; Palmer
Public Grain and Stock Exchange v. W. U. T. Co., Circuit Court of Cook county, May, 1883.
That this is the law, see Cobb v. Prell, 15 Fed. Rep. 774; Melchert v. Am. U. Tel. Co. 11 Fed. Rep. 193; Bruce’s Appeal, 55 Pa. St. 91; Smith v. Bouvner, 70 Pa. St. 325; Maxton v. Gheen, 75 Pa. St.
state ex. rel. v. Bell Telephone Co. 11 Cent. Law J. 350.
Svpra.
See, also, New England Exp. Co. v. M. C. R. R. 57 Me. 188, 198; McDuffee v. Railroad 52 N. H. 455; Sandford v. R. R. Co. 24 Pa. St. 378.
Met. Gr. & St. Exchange v. Board of Trade, 15 Fed. Rep. S50.
Met. Gr., etc., v. Board of Trade, 15 Fed Rep. 850.
Cincinnati Com. Gaz., April 8,1833.
Munn v. Illinois, 94 U. S. 113 et seq.
Baldwin v. U. S. Tel. Co. 1 Lans. 137; 54 Barb. 505 ; 6 Abb. Pr. (N. S.) 405; Leonard v. N. Y., etc., Tel. Co. 41 N. Y. 344; Aiken v. Telegraph Co. 5 S. C. 358; Grennell v. W. U. Tel. Co. 113 Mass. 299; Breese v. U. S. Tel. Co. 43 N. Y. 132.
36 Ohio St. 480