American Live-Stock Comm'n Co. v. Chicago Live-Stock Exch.

• Decision Date: 31 October 1892
• Citation: 143 Ill. 210,32 N.E. 274
• Parties: AMERICAN LIVE-STOCK COMMISSOION CO. v. CHICAGO LIVE-STOCK EXCHANGE et al.
• Court: Illinois Supreme Court

143 Ill. 210

32 N.E. 274

AMERICAN LIVE-STOCK COMMISSOION CO.

v.CHICAGO LIVE-STOCK EXCHANGE et al.¹

Supreme Court of Illinois.

Oct. 31, 1892.

Appeal from appellate court, first district.

Bill for injunction brought by the American Live-Stock Commission Company against the Chicago Live-Stock Exchange and H. D. Rogers. Defendant Rogers suffered default. The Chicago Live-Stock Exchange obtained decrees dismissing complainant's bill, and also awarding damages sustained by reason of suing out the preliminary injunction, both of which decrees were affirmed by the appellate court. Complainant appeals. Affirmed.

Magruder, J., dissenting.

William Brown

, for appellant.

Miller, Starr & Leman, (John S. Miller, of counsel,) for appellee.

The other facts fully appear in the following statement by BAILEY, C. J.:

This was a bill in chancery brought by the American Live-Stock Commission Company against the Chicago Live-Stock Exchange and H. D. Rogers, for an injunction. A preliminary injunction having been issued, the Chicago Live-Stock Exchange appeared and demurred to the bill, and, the demurrer being overruled, it filed an answer, and entered its motion to dissolve the injunction. Said motion, being heard on bill, answer, and the affidavits filed by the respective parties, was sustained. The defendant then filed its suggestion of damages, and upon the evidence adduced the court awarded the defendant damages sustained by reason of suing out the injunction in the sum of $1,250, and rendered its decree therefor, and also entered a decree dismissing the bill at the complainant's costs, for want of equity. Both decrees have been affirmed by the appellate court on appeal, and the present appeal is from said judgment of affirmance.

The facts, as alleged in the bill, so far as they need be stated, are these: The Chiago Live-Stock Exchange is a corporation organized under the laws of this state, March 13, 1884, by certain commission merchants engaged in the business of buying and selling live stock for others on commission, and was organized in the interest of commission merchants and dealers in live stock at the Union Stock Yards, a public live-stock market in Cook county, Ill. Upon the organization of said exchange, the commission merchants and buyers of live stock at the Union Stock Yards became and are now members thereof, and the members of the exchange have combined and confederated in order to control the selling of the live stock which may arrive at said market, and, by reason of such combination, it has become impossible for one not a member of the exchange to sell live stock in said public market; for, while the rules of the exchange allow its members to buy from owners of live stock, the usage of owners not to accompany their stock, and their lack of acquaintance with purchasers and dealers, and of familiarity with the methods of dealing, render it necessary to employ a representative to sell their stock; and, by the rules of the exchange, such representative must be a member thereof, as purchasers will buy of no others than members or the owners of stock. In the year 1889 there were shipped to the Union Stock Yards, and sold in said market, 3,023,281 cattle, 123,968 calves, 5,998,526 hogs, 1,823,469 sheep, 79,926 horses, makinga total of 11,117,170 head of live stock, said live stock having been reised and forwarded to the Union Stock Yards by the farmers of Illinois, Wisconsin, Michigan, and other states and territories, whereby the live-stock market at said stock yards has become and now is the largest market of live stock in the world. Said exchange, shortly after its organization, adopted a body of rules and by-laws which, in 1889, were codified into a system. Of these rules, rule 8 fixed the qualifications and mode of admission of members, and rule 9 established certain minimum rates of commissions to be charged by members for selling live stock. The bill alleges that the rates of commission thus fixed are unjust and unreasonable to those engaged in raising live stock, and who are compelled by circumstances to ship the same to said market, that market having long since become a public market, the prices upon which to a great degree fix the value of live stock throughout the United States; that, under the alleged purposes for which said corporation was formed, its members have joined and confederated together to coerce persons sending stock to said stock yards to pay an unreasonable price to them for selling, or to prevent such stock from being sold until a member of the exchange should be employed to sell the same at unreasonable rates of commission; that a great proportion of the live stock shipped to said market is purchased by four persons or firms, at least to such an extent that their refusal to purchase from an individual or firm renders it impossible for such person or firm to sell stock in said market, and each of said buyers is a member of the exchange, and submits to and is bound by its rules and regulations, and will refuse to purchase from persons who are not in harmony with the exchange, and will refuse to trade with or purchase from persons or corporations when forbidden to do so by the exchange.

The bill further alleges that this condition of things existed on the 1st day of January, 1889, and had so existed for a number of years prior thereto, and that a large number of stock producers in the states and territories aforesaid, feeling the grievances to which they were and had been subjected, conferred together as to the best means of relief from the oppressions aforesaid, and determined to organize and form a corporation for the purpose of selling their own stock, by having their corporation become a member of the exchange, so as to handle and sell their own stock on said public market; and after selling such stock as might be consigned to it by its shareholders and others, and charging the regular commissions therefor, to relieve its shareholders of such excessive charges by returning to them, by way of dividends, all sums their corporation should receive in excess of the expense of such handling and selling; that in pursuance of such arrangements, and in the interest of said stock producers, the American Live-Stock Commission Company was organized, under the laws of this state, March 2, 1889; that after its organization its board of directors appointed H. D. Rogers its manager at Chicago, and gave him authority to attend to its business, and see to receiving such live stock as might be consigned to it, and sell the same for said company, in accordance with the rules and by-laws of the exchange; that, in order to sell live stock at the stock-yards market, it was found to be necessary for the complainant corporation to become a member of the exchange, and for the purpose, and under that necessity, it caused its manager to purchase from the legal holder thereof a certificate of membership, and caused the same to be transferred to its manager, and for which it paid the sum of $100, and thereupon its manager signed an agreement to abide by the rules, regulations, and by-laws of the association, and all amendments that might in due form be made thereto, in conformity with the requirements of rule 8 of said exchange; and thereupon the exchange, at the complainant's request, took up said certificate so purchased and issued to Rogers, as such manager, to be held by him in trust for the complainant, a new certificate of membership, admitting him, under the description of ‘H. D. Rogers, Manager,’ to full and regular membership and standing in the exchange.

It is further alleged that, by virtue of such membership, Rogers represented the complainant, as its manager, in the exchange, selling stock and doing other necessary business for it, until December 14, 1889, when the office of manager was abolished, whereupon Rogers resigned, and Eli Titus was appointed general manager of the complainant; that Rogers afterwards, and about January 5, 1890, having ceased to act for the complainant, assigned said certificate of membership in blank and delivered it to the complainant; that afterwards, and on or about January 18, 1890, without the knowledge or consent of the complainant, he surreptitiously and secretly abstracted said certificate from the complainant's desk, and now has the same, and refuses to surrender it to the complainant, and threatens to hold it and enjoy the privileges of membership in the exchange which it affords, as though he was the owner thereof; that the complainant has requested the exchange to issue to its general manager a duplicate certificate, and thereupon the exchange investigated the complainant's claim, and admitted that it was the owner of said certificate, but refused, and now refuses, to issue to the complainant such duplicate, or any other evidence of its right to membership in the exchange; that the exchange now threatens to deny the complainant the privileges of the exchange, and to notify its members to refuse to purchase live stock from the complainant, and to expel the complainant from membership, and has conspired with Rogers to have him withhold said certificate, and thus deprive the complainant of its rights therein.

The bill further alleges that the object of the complainant's organization was to enable its shareholders, all of whom are feeders of live stock and shippers of the same to said market, to procure the sale of such live stock at reasonable cost and under favorable circumstances, and, to the end that this might be done at the lowest cost, it has offered to and has sold on said market live stock for other producers, and has made the charges therefor in strict accordance with the rules of the exchange, and, after making such charges and collecting the same, at the end of the year it had earned, as the result of its services, after deducting all expenses, the sum of $40,493.83, and thereupon, in December, 1889, it proceeded to declare a dividend,...