Western Union Tel. Co. v. Foster

• Decision Date: 21 June 1916
• Citation: 224 Mass. 365,113 N.E. 192
• Parties: WESTERN UNION TELEGRAPH CO. v. FOSTER et al. MACLEOD et al., Public Service Commission, v. WESTERN UNION TELEGRAPH CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

224 Mass. 365

113 N.E. 192

WESTERN UNION TELEGRAPH CO.

v.FOSTER et al.

MACLEOD et al., Public Service Commission,

v.WESTERN UNION TELEGRAPH CO.

Supreme Judicial Court of Massachusetts, Suffolk.

June 21, 1916.

Case Reserved from Supreme Judicial Court, Suffolk County.

Proceedings by the Western Union Telegraph Company against Calvin H. Foster and others, and by Frederick J. MacLeod and others, constituting the Public Service Commission of the Commonwealth of Massachusetts, against the Western Union Telegraph Company and the United Telegram Company. Reserved in the Supreme Judicial Court for the full court. Petition of the telegraph companies dismissed. In the petition by the Public Service Commission, decree ordered enjoining the telegraph companies to comply with the order of the Public Service Commission.

Arthur Lord, of Boston (Rush Taggart, of New York City, of counsel), for Western Union Tel. Co. and others.

Henry S. Robbins, of Chicago, Ill., for Chicago Board of Trade.

Henry C. Attwill, Atty. Gen., and H. Ware Barnum, Asst. Atty. Gen., for Public Service Commission.

P. H. Kelley and J. L. McLean, both of Boston, for respondent Foster.

Walter F. Taylor, of New York City, for New York Stock Exchange.

RUGG, C. J.

These cases arise under St. 1913, c. 784. In substance the petition by the Western Union Telegraph Company and the United Telegram Company seeks a review and annulment of an order of the Public Service Commission, while the Public Service Commission by its petition seeks enforcement of such order. This order is designed to prevent unfair and unjust discrimination by the telegraph companies. The statute confers upon the Public Service Commission ample powers to that end. It also clothes the Supreme Judicial Court with jurisdiction to review, modify, or amend unlawful rulings and orders of the Commission and to enforce its valid orders. Sections 2, 20, 27, 28. The material facts are that the telegraph companies are furnishing to brokers and others in Boston continuous ticker quotations of transactions upon the New York Stock Exchange, which they are enabled to do by means of contracts between the telegraph companies and the New York Stock Exchange. The Stock Exchange is a voluntary association with its place of business in New York. Quotations of sales of stock on the New York Stock Exchange are collected by employés of the Exchange, and, for a substantial consideration, furnished to each of the telegraph companies in New York under contracts which permit them to ‘furnish said quotations or any part thereof, or any information therein contained, to its patrons by means of tickers, or by telegraph or telephone wires and instruments, * * * subject to the limitations, conditions and provisions hereinafter contained,’ one of which is that such quotations shall not be furnished ‘to any subscriber thereof unless the subscribershall have signed in duplicate an application therefor addressed to the telegraph company and the subscriber shall have been approved by the Exchange,’ the intent of which is declared to be ‘only to prevent the unlawful or improper use of such quotations.’ The quotations are collected and delivered almost moment by moment as the sales occur during business hours on the Stock Exchange. The quotations as thus received in New York are transmitted as soon as may be by each of the telegraph companies to its Boston office. Each of the telegraph companies has a main office in Boston, where there are electrical appliances connected by a system of cables and wires under and across public ways with ticker instruments in the offices of its patrons. The quotations received from New York are delivered into the main Boston office in the Morse code over ordinary telegraph wires. Forthwith an employé operating a keyboard causes them to be written simultaneously by means of ticker instruments upon a tape of paper in the office of each patron, where they can easily be read. The result is that the quotations are reported on the ticker as the sales are made and within a brief time thereafter.

Foster applied to each company for this ticker service upon application forms prescribed by the contracts between the Stock Exchange and the telegraph companies, which were transmitted by each company to the Stock Exchange for its approval. The Stock Exchange did not approve the applications and the telegraph companies refused to install the ticker service. Foster thereupon applied to the Public Service Commission to be furnished with the service. He alleged in his petition that he had been engaged for a long time in the stock brokerage business in Boston, and had previously been furnished with tickers, which were removed in 1914; that he had applied for a renewal of the service, and had appeared before the appropriate committee of the New York Stock Exchange on two different occasions, where he had submitted himself to examination and answered all questions asked; that in conducting his business he always has complied with the laws of this commonwealth, and does not desire the quotations and ticker service for any unlawful or improper purpose, but for use in his legitimate brokerage business, which will suffer irreparable injury if he is unable to procure it. These allegations were not denied before the Commission and cannot be challenged seriously here. The Commissionfound that the petitioner was ready and willing to pay the price charged to other patrons of the telegraph companies for ticker service, and to comply with all reasonable rules and regulations, and that the telegraph companies simply had been notified that the Exchange had disapproved the petitioner's applications, without stating any reason. The Commission found that there was no evidence that the petitioner desired the quotations for unlawful or improper use, and that the telegraph companies were guilty of unjust and illegal discrimination in that, without just cause, they denied and refused to supply to Foster the quotations of the Stock Exchange by means of ticker service, and ordered the companies forthwith to remove such discrimination. The cases must proceed upon the footing that these findings of fact are true.

The quotations, when collected and tabulated by the Exchange, constitute its private property. As such they are entitled to every protection afforded by law to any other private property. Like other property they may be kept by their owners to themselves, or sold or distributed to others, or made known to some and denied to others. Their communication to many different persons under contracts does not make them public and is not such a publication as destroys their character as property. Strangers may be restrained from wrongfully obtaining possession of the information, and wrongdoers will be prevented from intermeddling with it. These propositions are not now open to question. Dodge Co. v. Construction Information Co., 183 Mass. 62, 66 N. E. 204,60 L. R. A. 810, 97 Am. St. Rep. 412.

The Stock Exchange has not undertaken to distribute this information itself. It does not deal immediately with those who receive it by means of the ticker service. It has no contractual relation, direct, or indirect, with the users of ticker service. It does not send the quotations to such users. Under its contract it ‘agrees at its own expense to furnish to the telegraph company’ the quotations. The telegraph company in turn is authorized to ‘furnish said quotations, or any part thereof, or any information therein contained, to its patrons by means of tickers,’ or otherwise. One significant feature of this arrangement is that it is made with a common carrier of intelligence, whose facilities for practically instantaneous transmission of the stock quotations throughout the country are of the best. Manifestly the use of the information most advantageous to the Stock Exchange is dependent upon its swiftly coming to the knowledge of those likely to be customers of its members. It seems obvious that the reason for making such contracts with telegraph companies is founded chiefly on their facilities for immediate transmission of the quotations to different parts of the country, facilities possessed by these companies solely because they are performing a quasi public function as common carriers. The persons to whom quotations may be furnished are described in the contract between the Stock Exchange and each of the telegraph companies as ‘patrons' of the telegraph company. That is the exactly correct word to describe the relation contemplated by the contract between the telegraph company and the user of the ticker. The user of the ticker is a customer of the telegraph company. He is not the recipient of messages from the Stock Exchange, nor its customer nor contractee. That is plain from the form of the contract. The transaction constitutes in effect a kind of sale of the quotations from the Stock Exchange to the telegraph company. The Stock Exchange does not use the telegraph company as a means for selling its property to others. It makes a sale directly to the telegraph company. The Stock Exchange receives annually from the telegraph company a large sum of money for the delivery of the information. The sender of ordinary messages is not paid by the telegraph company for sending them. To treat that annual payment as on account of sending messages would constitute a gross preference of the Stock Exchange over the rest of the public sending telegraphic messages. Such an intent cannot be presumed. The amount of the payment to the Stock Exchange, so far as disclosed by the contract, bears no direct relation to the amount which the telegraph company may receive from its ticker service. Plainly it is not the ordinary case of one person sending messages to another by the telegraph for a tariff charge. In this connection the telegraph company is not acting wholly as a common carrier in the conventional sense. It is conducting the business of...