C. H. Albers Commission Co. v. Spencer

Citation103 S.W. 523,205 Mo. 105
PartiesC. H. ALBERS COMMISSION CO. v. SPENCER et al.
Decision Date29 May 1907
CourtUnited States State Supreme Court of Missouri

A member of an exchange sold to other members thereof wheat for future delivery, subject to the rules of the exchange, providing that the board of directors thereof on the application of a party in interest should fix the value of any commodity for marginal purposes, and, on parties failing to adjust their claims under a contract on which margins had been deposited, the party claiming the deposit might apply to the board for orders for payment thereof. Pursuant to the rules of the exchange, the member deposited in a bank a specified sum to secure the performance of his contract of sale. He brought suit in equity for the cancellation of the contract and for the recovery of the deposit, on the ground that the other members had cornered the wheat market and had forced the price up to a fictitious amount. Held, that he could not invoke the aid of equity without first seeking relief by proceeding in the manner prescribed by the rules of the exchange.

2. MONOPOLIES — RESTRAINT OF TRADE — STATUTORY PROVISIONS — APPLICABILITY.

A contract made in Missouri to be performed there for the sale of wheat for future delivery is not affected by the federal anti-trust act of July 2, 1890 (26 Stat. 209, c. 647 [U. S. Comp. St. 1901, p. 3200]), though the buyer made other purchases of wheat through Chicago agencies, the wheat to be delivered in Missouri; the latter contracts also being Missouri contracts, to be performed there.

3. SAME — RELIEF IN EQUITY — DAMAGES — RECOVERY — STATUTES.

Rev. St. 1899, §§ 8978-8981 [Ann. St. 1906, p. 4157], denouncing agreements to control the price of goods, authorizing the Attorney General to take action to prevent a violation of the statute, and giving a person injured by the unlawful act a remedy by suit for damages wherein he may recover threefold the damages sustained, gives a person damaged by those guilty of violating section 8978 a remedy by civil action, and a court of equity has no jurisdiction except to prevent dissipation of property in case of fraud, insolvency, etc.

4. SAME.

A member of an exchange sold to other members wheat for future delivery, subject to the rules of the exchange, and he deposited in a bank a specified sum to secure the performance of his contract. Subsequently there was a contest between the seller and the buyers with respect to determining the price of the wheat at the time of delivery, and the seller succeeded by purchases of wheat in large quantities in cornering the market and fixing the price. Held, that the buyers were not guilty of violating Rev. St. 1899, § 8965, denouncing combinations to fix prices, etc.

5. EXCHANGES — RULES — VALIDITY.

A rule of an exchange providing that the directors thereof shall fix the value of any commodity for marginal purposes, and, where contracting parties fail to adjust their respective claims under a contract on which margins have been deposited, the party claiming the deposit may apply to the board, who shall have power to direct the payment of such portion of it as may appear to be due under the rules of the exchange, etc., is a valid rule, and will be enforced.

Appeal from St. Louis Circuit Court; Horatio D. Wood, Judge.

Consolidated actions by the C. H. Albers Commission Company against Corwin H. Spencer and others. From the judgments for defendants, plaintiff appeals. Affirmed.

Barclay & Fauntleroy, for appellant. Judson & Green, for respondents.

VALLIANT, J.

This is a suit in equity. There were five suits of the same nature and in reality between the same parties, but, the real defendants having acted in the transactions involved by different agents or brokers, those were also made parties defendant, and for that reason separate suits seemed advisable. The only defendants having any real financial interest in the suits are the executors of the will of Corwin H. Spencer (one of the original defendants, who has died since the appeals were taken) and John T. Milliken, and therefore, for brevity, they will hereinafter be called the defendants. The St. Louis Merchants' Exchange and the individuals composing its board of directors, and the National Bank of Commerce, are also parties defendant, but, when it becomes necessary in this opinion to mention either of them, the mention will be by name. When the five suits came on for hearing, they were by agreement of the parties consolidated and tried as one.

The plaintiff and the defendants at the time of the transactions involved were members of the St. Louis Merchants' Exchange, and the transactions were conducted on the floor of the Exchange and subject to its rules. The controversy grows out of sales by the plaintiff to the defendants during the fall of 1903 of No. 2 red winter wheat, to be delivered on any day, at the option of the plaintiff, during the month of December, 1903. The plaintiff, under the rules of the Exchange, to secure the performance of its contracts, deposited in the National Bank of Commerce certain sums of money to cover what is called in the language of the Exchange "margins." All during the month of December the market price of No. 2 red winter wheat was higher than the price at which the plaintiff had sold it to defendants, and the plaintiff failed to deliver it according to contract. Therefore, according to the strict terms of the contract, the defendants were entitled to receive from the bank the moneys deposited as margins. But by the terms of the certificate of deposit the money was payable to defendants only on the indorsement of both parties to the contract, the seller and the buyer, or under order of the board of directors of the Exchange. The plaintiff refused to indorse the certificate of deposit, and, apprehending that the board of directors of the Exchange would make the order, filed these suits in equity, alleging that the defendants had entered into an unlawful combination or conspiracy, whereby they had cornered the No. 2 red wheat market and forced it up to an unreasonable and fictitious price, in violation of the statute law of the United States and that of the state of Missouri, and praying that the plaintiff's contracts be canceled, that the board of directors be enjoined from ordering the moneys deposited for margins to be paid to defendants, and enjoining the bank from paying the same. On filing the bills, temporary injunctions issued as prayed, after which answers were filed and the causes came on for hearing on motions to dissolve the injunctions. On a very elaborate hearing apparently of all the points in dispute, during which evidence was introduced that covers over 700 printed pages of the record in this court, the trial court sustained the motions and dissolved the injunctions, but did not dismiss the bills for the reason, as stated in the order dissolving the injunctions, that other than injunctive relief was sought. From the order dissolving the temporary injunctions the plaintiff appealed, and plaintiff also moved the trial court to continue the injunctions in force pending the appeal, which the court refused, and plaintiff excepted.

The main proposition on which the plaintiff relied at the trial was that the defendants had by combination and conspiracy cornered the market, and forced the price of the wheat up to an unreasonable and fictitious figure. The sales in question were made by the plaintiff at various dates, running through September, October, and November, 1903, at prices ranging from 80 to 84 cents, and they aggregated more than 300,000 bushels. The prices of the wheat during December ranged from 90 to 93 cents, and closed on the 31st of that month at 92 cents, so that there was a wide margin on the contracts in favor of defendants.

The trial judge made a very careful review and summary of all the evidence in the case, a copy of which is in the record, in which he says that there can be no doubt but that there was a corner in No. 2 red winter wheat, but he does not lay the blame therefor to the buyer any more than to the seller. It was influenced as well by those who thought the price was too high and would decline (of whom was the plaintiff), and therefore speculated by selling short, as by those who thought it would advance (of whom were the defendants) and speculated by buying long. Both parties were buying or selling, as in their respective judgments the market would go up or go down. There was nothing more praiseworthy or blameworthy in the conduct of one than of the other. There is no more merit in depressing the market to the disadvantage of the farmer, who has wheat to sell, than there is in advancing it to the disadvantage of the miller, who comes to buy. There is nothing in the evidence to indicate that either the plaintiff or the defendants were in the market for any other purpose than their own gain, and there is no suggestion of fraud attached to either. We have said that the trial court, though finding that a corner existed, did not attribute its existence to the buyers more than to the sellers, and we think the court was right in that conclusion. The first tendency of selling short is, of course, to depress the market; but after sales for future delivery in great quantities have been made, and crop conditions and market conditions indicate that there will be a considerable rise in the market price, those large outstanding contracts of sales for future delivery signify to those who have the commodity for sale that there must come a demand in the market to meet those contracts, and they stiffen in their demands. Then the efforts on the part of those who have sold short to buy against the day of the maturity of their contracts excite the market, and when that condition comes, if those who have previously been purchasers have purchased to such an extent that there is not enough of the commodity...

To continue reading

Request your trial
28 cases
  • State v. Duluth Board of Trade
    • United States
    • Supreme Court of Minnesota (US)
    • May 7, 1909
    ...made by a seller of grain to sell to purchasers a certain amount of grain to be delivered in the future. Albers v. Spencer, 205 Mo. 105, 103 S. W. 523, 11 L. R. A. (N. S.) 1003. A contract to run for eight years, whereby an owner of a bed of fire clay agreed to erect a plant and operate it,......
  • State v. Duluth Bd. of Trade
    • United States
    • Supreme Court of Minnesota (US)
    • May 7, 1909
    ......Persons engaged in the grain commission business, and others connected with vessel agencies and marine insurance, have their offices in ...Albers Com. Co. v. Spencer, 205 Mo. 105, 103 S. W. 523,11 L. R. A. (N. S.) 1003. A contract to run for ......
  • State ex Inf. McKittrick v. Wymore, 35738.
    • United States
    • United States State Supreme Court of Missouri
    • September 28, 1938
    ...v. Woods, 233 Mo. 357; Nance v. Kearbey, 251 Mo. 387; Chandler v. Railroad Co., 251 Mo. 600; Stanton v. Thompson, 234 Mo. 7; Commission Co. v. Spencer, 205 Mo. 105; State ex rel. v. Trust Co., 108 S.W. 102; State ex rel. v. Ross, 245 Mo. 45; Osagera v. Schaff, 240 S.W. 124; Carlisle v. Mo. ......
  • State ex inf. McKittrick v. Wymore
    • United States
    • United States State Supreme Court of Missouri
    • September 28, 1938
    ...... acts, which may also be crimes, the commission of the acts. works a forfeiture, and conviction of the crime is not a. prerequisite for quo ...Railroad Co., 251 Mo. 600; Stanton. v. Thompson, 234 Mo. 7; Commission Co. v. Spencer, 205 Mo. 105; State ex rel. v. Trust. Co., 108 S.W. 102; State ex rel. v. Ross, 245. Mo. 45; ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT