Bryant v. Western Union Telegraph Co.

• Decision Date: 02 May 1883
• Citation: 17 F. 825
• Parties: BRYANT and another v. WESTERN UNION TEL. CO.
• Court: United States Circuit Court, District of Kentucky

17 F. 825

BRYANT and another v. WESTERN UNION TEL. CO.

United States Circuit Court, D. Kentucky.

May 2, 1883

Arthur Carey and A. P. Humphrey, for complainants.

Rozel Wissenger, for defendant.

BARR J.

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 this board. This is done by the permission of the board, and not as a right which it was 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 the floor of the board, and to report the current transactions of the board, conditional. This condition was that these current reports would not be published to or for the use of any person or organization in the city of Chicago, or elsewhere, that would publicly post the said quotations with a view of making transactions with other persons, based upon such quotations. The notice given defendant by Mr. Randolph was not in the language just quoted, but prohibited the defendant furnishing, after the first of January, 1883, the current quotations of the board to those who carried on the trade or business known as 'bucket-shops.' If the statement of Mr. Randolph gives truly the action of the board of trade, the complainants are of the prohibited class, as the affidavits of both sides concur in stating that they 'publicly post their quotations with a view of making transactions with other persons, based upon such quotations. ' The notice, however, names those who carry on 'bucket-shops' as the persons who are not to be furnished with these market quotations; hence it is material to inquire whether complainants carry on such a business. The complainants exhibit a form of contract which they use in these trades, and insist that it is legal, and that they do a legitimate business and do not carry on a 'bucket-shop.' The defendant, however, insists that the form of the contract exhibited, it legal, is a cover; and complainants' business is really that of betting and taking bets upon the fluctuations of the market prices of grain, produce, etc., and that they do carry on what is commonly known as a 'bucket-shop.'

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 the 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 sell to others for the account of the customer, but is really the odds which the customer gives them in the wager on the future of the market.

It is perhaps true that if the customer keeps his 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 the 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 the state, still if a case of wager is made out none of the state courts will enforce such contracts. Sawyer v. Taggart, 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 complainants 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, but as any other person would be furnished these reports to its members, and the right to them does not in any way pertain 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 BARR, 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 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.'

It may be true that that board 'can give 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 status 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. For 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--...