Moore v. New York Cotton Exch.

• Decision Date: 17 March 1923
• Parties: MOORE v. NEW YORK COTTON EXCHANGE et al.
• Court: U.S. District Court — Southern District of New York

291 F. 681

MOORE v. NEW YORK COTTON EXCHANGE et al.

United States District Court, S.D. New York.

March 17, 1923

Henry W. Taft, of New York City, and Henry S. Robbins, of Chicago Ill., for the motion.

John M Coleman, of New York City, opposed.

LEARNED HAND, D.J. (after stating the facts as above).

Under Equity Rule 30 (201 F. v, 118 C.C.A. v), there would concededly be no objection to the counterclaim if substantive jurisdiction existed. However, there is not the necessary diversity of citizenship between the plaintiff and the defendants, and therefore the counterclaim will lie only if ancillary to the main controversy; the rule being incapable of extending the constitutional jurisdiction of the District Court. The question therefore is this: Is it necessary to a complete disposition of the subject-matter of the bill and to the protection of the rights involved, if the defendants are correct that the counterclaim should be entertained? This is the result of the cases. Stillman v. Combe, 197 U.S 436, 25 Sup.Ct. 480, 49 L.Ed. 822; Raphael v. Trask, 194 U.S. 272, 24 Sup.Ct. 647, 48 L.Ed. 973; Cleveland etc., Co. v. Galion, etc., Co. (D.C.) 243 F. 405, 407; Hogg v. Hoag (C.C.) 107 F. 807, affirmed 154 F 1003, 83 C.C.A. 677 (C.C.A.2). The same reasoning lies at the basis of the common rule that when a court has custody of a res, it will entertain all controversies touching claims upon it. The case turns upon an analysis of the pleadings with an eye to this principle.

The bill rests upon a tort, the refusal of the defendants to furnish the quotations to the plaintiff in pursuance of an unlawful agreement to suppress competition. The right of the defendants to withhold its quotations for other reasons is necessarily conceded, but it has no right to make its refusal a step in a scheme to monopolize the business of dealing in cotton. The answer admits the refusal, but denies that it is a step in any such agreement. It asserts the defendants' right to withhold the quotations from this plaintiff because of other reasons.

Thus if the defendants succeed, the decree will either expressly or by implication declare that the defendants have the right to withhold the quotations and that the plaintiff has no right to receive them. On the assumption that the defendants will succeed, the counterclaim asks that this right be protected from the plaintiff's tort of 'purloining' the quotations from the defendants' customers. The counterclaim goes upon the legal hypothesis that when the defendants have given the quotations to a customer under agreement that he shall use them only for himself, it is a tort for another to use them in his own business. Whether or not they be right is not for the moment the question, but only whether that...