205 U.S. 322 (1907), 314, Hunt v. New York Cotton Exchange

Docket NºNo. 314
Citation205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. 821
Party NameHunt v. New York Cotton Exchange
Case DateApril 08, 1907
CourtUnited States Supreme Court

Page 322

205 U.S. 322 (1907)

27 S.Ct. 529, 51 L.Ed. 821

Hunt

v.

New York Cotton Exchange

No. 314

United States Supreme Court

April 8, 1907

Submitted March 4, 1907

APPEAL FROM THE CIRCUIT COURT OF THE UNITED

STATES FOR THE WESTERN DISTRICT OF TENNESSEE

Syllabus

Quotations of prices on an exchange, collected by the exchange, are property and entitled to the protection of the law, and the exchange has the right to keep them to itself or have them distributed under conditions established by it. Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236.

In a suit brought by an exchange to enjoin defendant from receiving quotations from the telegraph company to which it has given the right to distribute them, and from using the same, the value involved is not merely the amount which defendant pays the telegraph company, but the right of the exchange to keep the control of the quotations and protect itself from competition which is the object of the suit, and if the testimony shows, as it does in this case, that such right is worth more than $ 2,000, the circuit court has jurisdiction, so far as amount is concerned, and when the plea presents such an issue, the burden is on appellant to show that the amount involved is less than the jurisdictional amount.

Page 323

The fact that defendant has, in another action in the state court, and to which the exchange was not a party, obtained an injunction against the telegraph company enjoining it from ceasing to deliver the quotations, does not deprive the circuit court of jurisdiction of the suit by the exchange under § 720, Rev.Stat., the parties and the purpose not being the same.

144 F. 511 affirmed.

This is a bill in equity brought by the New York Cotton Exchange, a New York corporation, against appellant, a citizen of Tennessee, in the circuit court of the United States for the Western District of Tennessee to enjoin him from receiving and using the quotations of sales made upon the exchange. The case is here on questions of jurisdiction, and only a synopsis of the principal facts alleged is necessary.

[27 S.Ct. 530] The exchange is a private corporation under the laws of New York, with 450 members, and owns in the City of New York a building for the use of its members, and conducts therein, on every business day, cotton sales for present and future delivery, the transfers aggregating many million bales of cotton annually. The purchases and sales for future delivery are permitted to be made and are made only during market hours and by open viva voce bidding, and the knowledge of the prices thus made has become a species of property of such value that telegraph companies pay large sums of money to the exchange for the privilege of receiving instantaneously the quotations and distributing the same to customers and many persons in the United States who are engaged in the cotton commission business. Such persons are willing to pay and do pay the telegraph companies therefor, and the exchange realizes from the distribution of the quotations through the telegraph companies large sums of money annually. The quotations are such peculiar kind of property that their value depends upon the power of the exchange to confine the transmission and distribution thereof to such telegraph companies and their distributing agencies as will contract therefor with the exchange, and that, if any person or corporation is permitted to promptly acquire the quotations surreptitiously or

Page 324

by theft, or without paying the exchange therefor, such person or corporation can promptly give the same to numerous other persons, and the telegraph companies contracting with the exchange would thus be put at a disadvantage in competition with such persons so obtaining the quotations without pay for them, and would thereby be deterred from continuing to pay the exchange the prices provided in the contracts with the telegraph companies. The manner of collecting and distributing the quotations is detailed, and yearly the cost to the exchange, it is alleged, is $4,500. Prior to 1893, the exchange permitted the telegraph companies to gather the quotations through their own employees upon the floor of the exchange building, and to distribute them without any effective restrictions upon the persons entitled thereto, with the result that many persons used the same in conducting so-called "bucket shops," by reason thereof the bucket-shop evil assumed such large proportions and became so serious as to materially affect the legitimate transactions upon the floor of the exchange, and its members were deprived of many customers. The exchange therefore found it necessary to terminate such right or license of the telegraph companies, and to that end made contracts with them. The contracts are attached to the bill. It is enough to say of them that, under them, the companies receive the quotations under the condition not to furnish them to any persons, firms, or corporations who, or which, may be directly or indirectly engaged in the promotion or maintenance of bucket shops or other places where such continuous quotations are used as a basis for bets or other illegal contracts based upon fluctuations of the prices of cotton dealt in on the exchange. Nor shall the companies directly or indirectly furnish the quotations to any person, firm, or corporation, whether members of the exchange or not, until such person, firm, or corporation shall have submitted an application in writing to the exchange in such form as it shall provide, and until it has approved of the application. The exchange has power to revoke its approval. In such event, the companies shall cease

Page 325

to furnish the quotations, and, if they have installed tickers or wires in the office or place of business of such person, firm, or corporation, they shall immediately remove the same. This, however, they are not required to do, "or to discontinue service furnished by any other means, which are under restraint by injunctions of the courts during the pendency of the injunction." In case of an application once approved and afterwards disapproved by the exchange and a suit be commenced against the companies on account of the discontinuance of the quotations, the exchange shall defend such suits at its expense and pay all fines, penalties, etc., to which the companies may be subject. In cases where an application has not been approved by the exchange, suits against the companies for refusal to furnish the quotations shall be defended at the expense of the companies, which shall use diligent efforts to secure the removal of injunctions. If the suit shall be brought against the exchange, it shall defend at its own cost. For the purpose of protecting the companies against the use of quotations originating on the exchange by parties not entitled to them, the companies may prosecute suits in their own name or that of the exchange to prevent or stop such competitive use.

The Western Union Telegraph Company has to pay the exchange for the quotations $13,584 per annum in equal installments of $1,132 at the close of each month. The form of the application is attached to the contract.

It is alleged that all persons receiving the quotations have made applications in the form set out, except in a few instances where persons who were receiving quotations from the companies prior to the execution of the contracts have, since the execution thereof, secured temporary injunctions (the exchange [27 S.Ct. 531] not being a party to the suits) to enjoin the companies from withholding or withdrawing the quotations, on the ground that such persons were not required to sign such applications or secure the approval of the exchange.

The defendant, Clarence P. Hunt (appellant), has not made application to either of the companies or the exchange, nor

Page 326

has the exchange consented to his receipt of the quotations. On July 14, 1903, he was receiving from the Western Union Telegraph Company the quotations, and the company on said day notified him of the contract between it and the exchange, and that, under said contract, the company would be required to and would cease furnishing the quotations. Hunt declined to make an application, but in lieu thereof, on July 31, 1903, filed in the Chancery Court of Shelby County, Tennessee, a petition against the company to enjoin it from ceasing to furnish him said quotations. An ex parte injunction was issued. The company then filed its answer, and, the cause coming on for final hearing on bill and answer, decree was entered for it. The supreme court of the state reversed the decree without deciding the merits, for the reason that the chancery court should not have decided the cause on bill and answer, but should have awaited the taking of evidence. The cause is now pending, and the injunction is still in force, and that by reason thereof only the company is furnishing Hunt the quotations. And it is alleged

that such authorized receipt and use of said quotations by said defendant is calculated to and in time will, if not entirely stopped, seriously impair the value to your orator of its quotations, and that, if even one person within the jurisdiction of this Court be allowed to secure such quotations without restrictions as to the use thereof which your orator imposes as aforesaid, such person can furnish them to all the bucket shops and other persons within the United States desiring them, and thus entirely defeat the efforts of your orator to prevent their use in bucket shops as a basis of their illegal bets, and materially impair the right of your orator to derive a revenue from the distribution of said quotations.

It is further alleged that there is no adequate remedy at law, and that "the amount involved and matters in dispute, exclusive of interest and costs, is much more than the sum of $2,000." An injunction was prayed. A preliminary injunction was issued. 144 F....

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126 practice notes
  • 151 F.2d 743 (3rd Cir. 1945), 8679, John B. Kelly, Inc. v. Lehigh Nav. Coal Co.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Third Circuit
    • October 4, 1945
    ...jurisdiction is to be tested by the value of the object or right to be protected against interference. Hunt v. New York Cotton Exchange, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. 821; Bitterman v. Louisville & Nashville R. Co., 207 U.S. 205, 28 S.Ct. 91, 52 L.Ed. 171, 12 Ann.Cas. 693; Berrym......
  • 228 B.R. 293 (N.D.Ala. 1998), 98-BU-1211, Glover v. Midland Mortg. Co. of Oklahoma, Inc.
    • United States
    • Federal Cases United States District Courts 11th Circuit Northern District of Alabama
    • December 7, 1998
    ...L.Ed. 648 (1897)]; McNeill v. Southern R. Co.[,] 202 U.S. 543, 558 [26 S.Ct. 722, 50 L.Ed. 1142 (1906)]; Hunt v. New York Cotton Exch.[,] 205 U.S. 322, 336 [27 S.Ct. 529, 51 L.Ed. 821 (1907)]; Bitterman v. Louisville & N.R. Co.[,] 207 U.S. 205, 225 [28 S.Ct. 91, 52 L.Ed. 171 (1907)]; Be......
  • 78 F.2d 398 (9th Cir. 1935), 7455, New York Life Ins. Co. v. Kaufman
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Ninth Circuit
    • May 13, 1935
    ...to the deprivation of or extinction of a contract. Mutual Life Ins. Co. v. Thompson (D. C.) 27 F.2d 753; Hunt v. New York Cotton Exchange, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. The fact that Kaufman was alive and litigating at the hearing, a year after the filing of the bill, warranted the i......
  • 11 F.2d 887 (D.Neb. 1925), 217, Mutual Oil Co. v. Zehrung
    • United States
    • Federal Cases United States District Courts 8th Circuit District of Nebraska
    • April 7, 1925
    ...v. Louisville & Nashville R.R., 28 S.Ct. 91, 207 U.S. 205, 225, 52 L.Ed. 171, 12 Ann.Cas. 693; Hunt v. N.Y. Cotton Exchange, 27 S.Ct. 529, 205 U.S. 322, 336, 51 L.Ed. 821; Glenwood Light Co. v. Mutual Light Co., 36 S.Ct. 30, 239 U.S. 121, 126, 60 L.Ed. 174; Packard v. Banton, 44 S.Ct. 2......
  • Request a trial to view additional results
122 cases
  • 151 F.2d 743 (3rd Cir. 1945), 8679, John B. Kelly, Inc. v. Lehigh Nav. Coal Co.
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Third Circuit
    • October 4, 1945
    ...jurisdiction is to be tested by the value of the object or right to be protected against interference. Hunt v. New York Cotton Exchange, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. 821; Bitterman v. Louisville & Nashville R. Co., 207 U.S. 205, 28 S.Ct. 91, 52 L.Ed. 171, 12 Ann.Cas. 693; Berrym......
  • 228 B.R. 293 (N.D.Ala. 1998), 98-BU-1211, Glover v. Midland Mortg. Co. of Oklahoma, Inc.
    • United States
    • Federal Cases United States District Courts 11th Circuit Northern District of Alabama
    • December 7, 1998
    ...L.Ed. 648 (1897)]; McNeill v. Southern R. Co.[,] 202 U.S. 543, 558 [26 S.Ct. 722, 50 L.Ed. 1142 (1906)]; Hunt v. New York Cotton Exch.[,] 205 U.S. 322, 336 [27 S.Ct. 529, 51 L.Ed. 821 (1907)]; Bitterman v. Louisville & N.R. Co.[,] 207 U.S. 205, 225 [28 S.Ct. 91, 52 L.Ed. 171 (1907)]; Be......
  • 78 F.2d 398 (9th Cir. 1935), 7455, New York Life Ins. Co. v. Kaufman
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Ninth Circuit
    • May 13, 1935
    ...to the deprivation of or extinction of a contract. Mutual Life Ins. Co. v. Thompson (D. C.) 27 F.2d 753; Hunt v. New York Cotton Exchange, 205 U.S. 322, 27 S.Ct. 529, 51 L.Ed. The fact that Kaufman was alive and litigating at the hearing, a year after the filing of the bill, warranted the i......
  • 11 F.2d 887 (D.Neb. 1925), 217, Mutual Oil Co. v. Zehrung
    • United States
    • Federal Cases United States District Courts 8th Circuit District of Nebraska
    • April 7, 1925
    ...v. Louisville & Nashville R.R., 28 S.Ct. 91, 207 U.S. 205, 225, 52 L.Ed. 171, 12 Ann.Cas. 693; Hunt v. N.Y. Cotton Exchange, 27 S.Ct. 529, 205 U.S. 322, 336, 51 L.Ed. 821; Glenwood Light Co. v. Mutual Light Co., 36 S.Ct. 30, 239 U.S. 121, 126, 60 L.Ed. 174; Packard v. Banton, 44 S.Ct. 2......
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3 books & journal articles
  • Butler, Pierce
    • United States
    • West's Encyclopedia of American Law Be
    • January 1, 2005
    ...Missouri, Page 200 Butler's dissented opinion argued for the constitutionality of the state's action (Missouri ex rel. Gaines v. Canada, 205 U.S. 337, 59 S. Ct. 232, 83 L. Ed. 208). Butler also dissented in several decisions in the 1930s in which the Court struck down JIM CROW LAWS that kep......
  • Transitory real‐time property rights and exchange intellectual property
    • United States
    • Journal of Futures Markets Nbr. 23-9, September 2003
    • September 1, 2003
    ...215(1918), Justice Louis Brandeis argues: “The only other case in this court which relates to this subjectis Hunt v. N.Y. Cotton Exchange, 205 U.S. 322, 27 Sup. Ct. 529. While the opinion there refers theprotection to a general property right in the quotations, the facts are substantially t......
  • The sensitivity of trading to the cost of information
    • United States
    • Journal of Futures Markets Nbr. 40-10, October 2020
    • October 1, 2020
    ...of data feedschedules.21See Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236 (1905) and Hunt v. New York Cotton Exchange, 205 U.S. 322 (1907).2For instance, over 400 petitions challenging market data and access fees were filed with the SEC in the 2‐year period during which Pet......
1 provisions
  • Practice and procedure: Market information fees and revenues; public dissemination,
    • United States
    • Federal Register December 17, 1999
    • December 9, 1999
    ...of the information.\53\ \52\ Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236 (1905); Hunt v. New York Cotton Exchange, 205 U.S. 322 (1907); Moore v. New York Cotton Exchange, 270 U.S. 593 (1926). Many years have passed since these cases were decided. They are discussed in thi......