[Copyrighted Material Omitted]
Proceeding in the district court for St. Louis county to
forfeit the corporate franchise of the Duluth Board of Trade
and to restrain it and its officers from further transacting
business under its rules, on the ground that they violate the
anti-trust statute (Laws 1899, p. 487, c. 359.) The case was
tried before Dibell, J., who made findings and ordered
judgment in favor of the defendants. From the judgment
entered pursuant to the order, plaintiff appealed. Affirmed.
In this
proceeding the state seeks to forfeit the corporate franchise
of the Duluth Board of Trade, and to restrain it and its
officers from further transacting business under the present
rules on the ground that they violate the anti-trust statute
of the state. The appeal is by the state from a judgment in
favor of the defendants, and the record presents the question
whether the conclusions of law are justified by the findings
of fact. The facts stand conceded. It appears that the Duluth
Board of Trade was incorporated January 31, 1881, under
chapter 20, p. 35, Laws 1868, and now has and exercises the
powers conferred by G.S. 1894, §§ 2982-2984,
inclusive. The Minnesota Farmers' Exchange is a
corporation organized under the laws of the state of
Minnesota, having its office and principal place of business
at Minneapolis, with power to own and operate mills for the
manufacture of flour and other mill products, and to deal in
grain, farm and dairy products, live stock, meats,
agricultural implements and machinery, coal, lumber, and
other articles.
The
city of Duluth is one of the important terminal grain markets
in the Northwest, and in the immediate vicinity thereof are
found elevators, flour mills, and proper equipment for
handling and marketing grain and other farm products. The
board of trade does not buy, sell, or in any way deal in
grain. Not more than twenty per cent. of those holding
membership in the board are engaged in the grain or milling
business at Duluth. Some are engaged in banking, marine
insurance, and vessel agency business at Duluth, while others
are engaged in the grain and other business outside of
Duluth. The board merely furnishes facilities and
conveniences for the transaction of the grain business, and
to that end procures for its members information as to crop
conditions and the grain markets of the world. It owns a
building, of the value of $500,000, in which there is an
exchange room, where actual trades are made and posted, and
where grain is bought and sold. Persons engaged in the grain
commission business, and others connected with vessel
agencies and marine insurance, have their offices in this
building. Two classes of commission men -- those who sell for
the owner grain coming into Duluth, and those who buy for the
consumer at Duluth or Superior, or for transportation to
lower lake ports or for foreign exchange -- transact business
on the floor of the board of trade. Practically all the grain
bought and sold at Duluth is bought and sold on the board of
trade, although some little grain, used for local
consumption, is handled elsewhere.
The
memberships in the board of trade, which originally cost
$1,000 each, have all been disposed of, and are now held by
various individuals. They are subject to sale, and the owners
may become members of the board of trade upon certain terms
and conditions prescribed by the board. The Minnesota
Farmers' Exchange never applied for membership in the
Duluth Board of Trade, and neither the board nor its officers
or members in any manner conspired or combined to prevent the
Minnesota Farmers' Exchange from having its grain handled
or dealt in on the board, by threatening to boycott any
member who might venture to handle its grain, or otherwise.
Rule 27 of the board of trade provides that regular sessions
shall be held from 9:30 a.m. to 1:15 p.m. daily, except
Saturday, when trading shall cease at 12 o'clock noon,
and that no firm, member, or corporation shall buy or offer
to buy, sell or offer to sell, any grain or seed on track, by
sample or to arrive, except during such trading hours and on
the floor of the exchange.
The
state charges that the board and its officers have violated
the anti-trust statute by adopting and enforcing what is
known as Rule 26, which is as follows:
"The
following rates of commission are deemed to be just and
reasonable:
"GRAIN
ETC.
"Section
1. Receiving and selling on arrival, to arrive, or for some
future month's delivery: Wheat, barley, rye, and flax, 1
cent per bushel; Durnum wheat, 1 cent per bushel; corn and
oats, 1/2 cent per bushel; mill stuffs, 50 cents per ton;
ground feed, 50 cents per ton; hay, 50 cents per ton, except
that the minimum charge on hay shall be $5 per car. On sales
to arrive, where delivery is not made, one-half of the above
commission shall be charged.
"Sec.
2. Buying and shipping in cars in lots of less than 5,000
bushels: wheat, barley, rye, and flax, 1 cent per bushel;
corn and oats, 1/2 cent per bushel. In lots of 5,000 bushels
or more, not less than 1/2 cent per bushel.
"WAREHOUSE
RECEIPTS.
"Sec.
3. Buying lots of not less than 5,000 bushels, 1/4 cent per
bushel; no charge for selling same receipts. Selling
warehouse receipts, lots not less than 5,000 bushels, 1/4
cent per bushel; lots less than 5,000 bushels, 1/2 cent per
bushel.
"FOR
FUTURE DELIVERY.
"Sec.
4. Buying and selling, 1/8 cent per bushel on lots of 5,000
bushels or more, and 1/4 cent per bushel on lots of less than
5,000 bushels. Where delivery of warehouse receipts is made
on such contracts, 1/4 cent per bushel.
"Sec.
5. Between members of the Duluth Board of Trade, the rates of
commission may be arranged without restriction.
"Sec.
6. In addition to the above there shall be charged such
legitimate expenses as are necessarily incurred in caring for
the property and guarding the interests of both consignor and
consignee, including interest on advances. Interest shall be
charged on all advances made to country shippers or members
of other exchanges.
"The
minimum rate to be fixed each year during August, for one
year, by a committee of three, appointed by the president.
Nothing in this rule shall be so construed as to prevent any
special arrangement between consignor and consignee, by which
a higher rate of commission, or interest, may be charged in
special cases.
"Sec.
7. Every member of the association, and every person, firm
and corporation, admitted to trade, or to do business
therein, who shall charge less than the regular rates of
commission, and interest, established by the rules of the
association; or shall assume, or rebate any portion of the
same, or shall, with intent to evade in any way, directly or
indirectly, the regular rate of commission, established by
the rules of the association; or shall with intent to cut, or
to evade in any way, directly or indirectly, the regular
rates of commission established by the rules of the
association, purchase, or offer to purchase, any grain, or
seed on track, at any railway station outside of and for
delivery at the city of Duluth, or Superior, or who shall
purchase, directly or indirectly, for his own account or
otherwise, from any person not a member of the association,
any grain, seed, or other commodity, dealt in upon the board,
without charging and deducting from the purchase price the
regular rates of commission and interest, if any, established
by the rules of the association; or shall make or report any
false or fictitious sales or purchases; or shall resort to
any method of accounting, directly or indirectly, in
violation of or contrary in purpose and effect to a strict
adherence to the regular established rates of commission of
the association, or shall, with intent to evade the regular
rates of commission established by the rules of the
association, directly or indirectly pay or give, or offer so
to do, any money, or other consideration of whatsoever
nature, to any person, to procure or influence shipments or
consignments of grain or seed in any form, or shall with
intent to cut or evade in any way, directly or indirectly,
the regular rates of commission established by the rules of
the association, make use of any shift or device whatsoever,
shall be deemed guilty of violation of the rules of the
association establishing rates of commission, and, on
conviction thereof, shall be fined by the association not
less than $1,000 nor more than $2,000, as the board of
directors may determine, such sum to be paid into the general
fund of the association.
"Sec.
8. Any member of the Duluth Board of Trade, who shall become
the agent of, or who shall handle grain on commission, or
otherwise, for any person, firm, or corporation, when such
person, firm, or corporation is known to be buying or
handling, or has attempted to buy or handle, grain for less
rates of commission than provided in this rule, such member
shall be considered as having violated this rule, and be held
subject to the penalties prescribed.
"Sec.
9. Any charge of the violation of the foregoing provisions,
or any part thereof, shall be by complaint in writing, filed
with the secretary of the association. The party charged
shall be summoned by written notice from the secretary, and
shall appear before the board of directors of the
association, who shall investigate and try the charge.
"Sec
10. The board of directors shall offer a reward, not
exceeding $1,000, to any person who shall furnish evidence
that does convict any member of the Duluth Board of Trade, or
any firm, corporation, or party admitted to trade or to do
business in the Duluth Board of Trade, of a violation of the...
