Henry Clews v. Malcolm Jamieson
Citation | 45 L.Ed. 1183,21 S.Ct. 845,182 U.S. 461 |
Decision Date | 27 May 1901 |
Docket Number | No. 245,245 |
Parties | HENRY CLEWS, Charles M. Foster, and James B. Clews, Petitioners , v. MALCOLM M. JAMIESON, Roland C. Nickerson, Harry F. Billings, et al |
Court | United States Supreme Court |
The petitioners and complainants, being residents of the state and city of New York, commenced this suit in equity in the United States circuit court for the northern district of Illinois against certain of the defendants composing the governing committee of the Chicago Stock Exchange, to recover funds deposited with them in trust, and also to recover damages against other defendants composing the firm of Jamieson & Company, brokers belonging to the exchange, alleged to have been sustained by the complainants by a violation by those defendants of their contract to purchase and pay for certain stock sold them by the complainants. Still other defendants composed the firm of Schwartz & Company, the brokers who effected the sales of the stock for the complainants, no recovery being sought against them. All of the defendants were residents of the state of Illinois. The circuit court after a hearing gave judgment for a dismissal of the bill for want of any privity of contract between complainants and defendants, Jamieson & Company, against whom a money recovery was sought. On appeal the circuit court of appeals for the seventh circuit affirmed the judgment of dismissal, and in the opinion discussed only the question whether or not the contract sued on was a gaming one and in violation of the statute of Illinois on that subject, §§ 130 and 131 of the Criminal Code hereinafter set forth. It held that the contract violated those sections, and that the bill was properly dismissed for want of equity, and it therefore affirmed the decree of dismissal. The complainants thereupon petitioned this court for a writ of certiorari, which was granted, and the case brought here.
No important question arises upon the pleadings, with the exception that it was set up by way of defense that the complainants had an adequate remedy at law, and the facts upon which the defense is rested are sufficiently adverted to in the opinion. The pleadings admit the sales and purchases of stock which were all made subject to the rules of the exchange. The case was referred to a master to take testimony and to report the same to the court with his conclusions thereon, and it was subsequently brought to a hearing upon the master's report and the testimony taken before him and upon a stipulation as to facts, entered into between the parties. The facts reported by the master are, among others, the following:
There has existed in the city of Chicago since the year 1882 a voluntary association known as the Chicago Stock Exchange, composed of brokers having places of business in the vicinity of the exchange, and who are elected to membership therein in accordance with the provisions of the constitution and by-laws; the association is governed by a governing committee composed of the president of the exchange ex officio, and twenty-four members, and every member is required to sign the constitution and by-laws, or assent thereto in writing, and obligate himself to abide thereby and by the rules theretofore or thereafter to be adopted.
Article 17 of the constitution provides as follows:
Article 29 is as follows:
'Any member of this exchange who is interested in or associated with, or whose office is connected directly or indirectly by wire or other method of contrivance with, any organization, firm, or individual engaged in the business of dealing in differences or quotations on the fluctuations in the market price of any commodity or security without a bona fide purchase or sale of said commodity or security in a regular market or exchange, shall, on conviction thereof, be deemed to have committed an act or acts detrimental to the interest and welfare of the exchange.'
Articles 16 and 17 of the by-laws read as follows:
* * * * *
The rules of the clearing house in regard to buying or selling for 'the account' (under which these transactions were had) read as follows:
'Clearing House Bules.
'Sec. 1. Under the following regulations transactions may be made for 'the account' in any securities listed for that purpose dealt in at the exchange.
'Sec. 2. Deliveries of cash, stock, or transactions for 'the account' shall be made on the last day of each month. Provided, however, should the last day of any month occur on a holiday, or on a day when the exchange is closed for business, then in that case deliveries shall be made on the first business day preceding.
'Sec. 3. All purchases and sales 'for the account' shall be entered upon the blanks furnished by the manager sealed for that purpose, and said blanks properly filled out, balanced, accompanied by a proof-sheet, and signed, must be delivered to said manager before 9:45 A. M. It shall be the duty of the manager to compare and examine the statements rendered, and to report, should any errors be found, to the parties making such errors before 12 M., by written notice, which must be called for at the manager's office. Parties in error must at once proceed to adjust the same and correct their statements. All balances due from members as shown by the statements shall be paid by certified check drawn to the order of the bank designated for that purpose, and delivered to the manager before 10:15 A. M.,...
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