Court Opinion

ID: 8764250
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:19:06.881678+00
Date Added: 2024-06-11T17:01:46.070591
License: Public Domain

PHILIPS, District Judge.
An exception to a bill of complaint is in some respects like a demurrer. If it go to the whole bill, and any part of it be good, the exception cannot be sustained in part and overruled in part, but the whole exception must be overruled. So, if an exception be taken to a whole paragraph, any part of which is good and sufficient, the exception must be denied as a whole.
Exception 1. This exception goes’to the whole of paragraph 1. This paragraph contains the essential averments of diverse citizenship essential to confer jurisdiction on this court over the controversy. The exception must therefore be overruled.
Exception 2. The matter sought to be expunged by this exception contains a recitation of the objects of the complainant corporation, doubtless as defined by its charter. As such it is material to show the objects, purposes, and powers of the corporation. The exception is overruled.
Exception 3. This exception goes to the recitations of the powers conferred upon the complainant corporation as deduced from its charter. This xception is overruled.
Exception 4. No matters should be alleged, even by way of recitation, in a bill of complaint, which are not material, on which an issue *245can be made and evidence taken to support it, as essential to the cause of action. The number of the members of the complainant corporation, and the cost of its building and the maintenance and conducting thereof, and how this necessary fund is raised, and the worth of a membership in the exchange, and the character of the persons who may be admitted thereto, are quite immaterial, and are not essential to the maintenance of this bill by the complainant. The exception is sustained.
Exception 5. This exception goes to a part of the same paragraph; but, as it goes to the allegation that such purchases and sales are made only during market hours, the exception is too broad, and must therefore be overruled.
Exception '6. The recitations in this part of paragraph 3 as to the number of persons throughout the United States engaged in the grain and provision business who pay the telegraph companies large sums of money, and the amounts realized by the complainant for quotations given to said companies, might be quite immaterial to sustain the right of action on the part of the complainant. But the portion sought to be expunged by this exception alleges the peculiar character and kind of property the complainant has in the quotations furnished to the telegraph companies, and that this property interest will be impaired or lost if the telegraph companies or others are allowed to receive or take the same without right, surreptitiously or otherwise. The underlying basis of complainant’s claim is that it has a property right and interest in said quotations which the law will protect, and, when invaded and injured by the alleged misconduct of the defendants, becomes the subject of protection by appeal to the courts. As the exception goes in part to matter which is good, the whole exception must be overruled.
Exception 7. This exception goes to another portion of the same paragraph, and is overruled for the same reason.
Exception 8. This exception goes to the whole of paragraph 4 of the bill. This paragraph sets out, with perhaps some unnecessary detail, the manner of the operation of the complainant Board of Trade, or exchange, and the way in which the information of the operations and markets of the board are distributed and conveyed through the telegraph companies throughout the country, and the time occupied in the dissemination of this information. This is not- immaterial matter, for reasons so palpable, in view of the method of transacting the complainant’s business and the importance of persons not members of the association obtaining the information which constitutes the property of the complainant within the given period, as not to require discussion. This exception is overruled.
Exception 9. This exception goes to the whole of paragraph 5 of the bill. The matters recited in the first part of this paragraph tend to show how the Western Union Telegraph Company, and the Postal Telegraph Cable Company, through which information of the quotations of the markets given out by the complainant exchange were conveyed in violation of good faith under the licenses given by the complainant to said telegraph companies, by the latter surreptitiously giving out such information for hire to persons other than members of *246the board of exchange, to its great detriment; that by such means what are known as “bucket shops,” with which some of the defendants, who are alleged to have been the promoters of the defendant National Board of Trade of Kansas City, were connected, and which concerns were wholly dependent upon thus obtaining this information through the telegraph companies-for their business existence; and that these abuses had become so serious as to bring into discredit and disrepute the business character of the complainant, whereby the complainant and its members were deprived of many customers and large sums of money in emoluments and commissions, which would otherwise come to them, but for such discredit cast upon them, and that thereby the complainant was embarrassed and hindered in fulfilling and carrying-out the objects for which it was organized, necessitating" the termination of such licenses to said telegraph companies, which was the occasion of the institution of regulations by it to prevent the sale and distribution of such quotations by the telegraph companies, and to that end expressed said regulations in a written contract to be signed by the telegraph companies distributing said quotations, obligating the telegraph companies not to give or sell such quotations to any so-called “bucket shop,” or to any other telegraph company, and by reason whereof neither of said telegraph companies were, after August 1, 1900, and prior to April 1,1901, entitled to or did receive or distribute said market quotations. In view of the subsequent allegations of the bill, showing that out of this condition of affairs originated -the contract between the complainant and the telegraph companies, it must be conceded that the matter of inducement which led up to the regulations imposed by the complainant and said contracts are not immaterial. This exception is therefore overruled.
Exception 10. This exception goes to the whole of paragraph 6 of the bill. This paragraph sets out the relations of the complainant with the Cleveland Telegraph Company and the Chicago & Milwaukee Telegraph Company, an,d its regulations and contracts with them. I am unable to perceive the connection of this matter of history with the issues involved in this case; there being no claim that the defendants are in any wise connected with such telegraph companies, or that they are asserting any right or doing any act which in any wise'infringes upon or affects the relations between the complainant and these defendants. This exception is sustained.
, ‘Exception 11. This exception goes to the matter of pleading the contract between the various telegraph companies and the complainant. The bill incorporates in hsec verba the printed contract in extenso, even down to the printed names of the signatures and the attestation thereof. This is violative of rule 26 of the equity rules, which requires that bills shall be expressed in brief and succinct terms, “and shall contain no unnecessary recitals of deeds, documents, contracts, or other instruments, in hsec verba.” This is a wholesome rule of pleading. It is intended to prevent the unnecessary verbiage of contracts and deeds, which are rather formal, than substantial. The substantive effect of said contracts could well be expressed in one-fourth of the space occupied by the infinite recitations and details of this printed *247contract. The exception to this part of the paragraph is well taken, and the pleading should be reformed in this respect.
Exception 12. This exception goes to the remaining part of paragraph 7. It is to be conceded that the allegation in this portion excepted to — “that your orator is willing to make like contracts with any telegraph company desiring to have and distribute said quotations”-*^ is quite impertinent, as its willingness to make contracts with any telegraph company could hardly present issuable matter on which testimony could well be taken; but the vice of the exception is that it goes to other matter in that part of the paragraph which is not wholly immaterial, and it must therefore be overruled.
Exception 13. This exception goes to a part of paragraph 8 of the bill, and the court is of opinion it is well taken. It is quite immaterial that no person or corporation is receiving market quotations from any of the telegraph companies without having executed the written agreement specified in said contracts. The issue here is whether ihe defendants have such contracts or are complying therewith, or whether they have licenses to use the quotations of the complainant company. Whether or not other persons have such licenses or contracts, or are complying therewith, do not concern these defendants. This exception is therefore sustained.
Exception 14. This exception goes to the allegation in said paragraph 8 that none of the defendants herein haye delivered to any of said telegraph companies a contract therefor in the forms set out. This exception must be overruled, as it goes to the very gist of'the cause of action as to whether or not these defendants have the requisite contracts with or licenses from the complainant.
Exception 15. This exception goes to that part of paragraph 8 which alleges that the defendants have not acquired the right to receive said quotations under any contract with the telegraph companies, and that they are not entitled to receive such quotations from any of the telegraph companies, nor from any person to whom any of said telegraph companies are furnishing said quotations. This is unquestionably material, and the exception must be overruled.
Exception 16. This exception goes to the whole of paragraph 9 of the bill. This paragraph recites that, after the execution of said contracts between the complainant, and the telegraph companies, certain persons, after April, 1901, conducting so-called “bucket-shops,” were obtaining the quotations of the complainant company in a surreptitious manner, without contract with or license from said companies; and thereupon certain injunction suits were instituted in different courts over the country, some of which were against some of the present defendants, which suits were successfully prosecuted against them. The best test of the materiality of such an issue as this would be, would the record of the proceedings in said suits be competent evidence against the defendants on the hearing of this bill of complaint? The objection to their admissibility would readily occur that the proceedings and judgments were res inter alios acta — arising on a different state of facts, in proceedings to which some of the defendants here concerned were not parties, and which proceedings could not be plead*248ed as res adjudicata. It might be — at least the court will not here undertake to say — that the history of the antecedent litigation touching the improper use of the quotations furnished b) the complainant, if known, to the defendants, would be competent evidence on the alleged fraudulent scheme and device of the defendants in organizing the National Board of Trade of Kansas City. If competent for such purpose, it would be mere matter of evidence, which should not be set out in the bill of complaint. This exception must be sustained.
Exception 17. This exception goes to that part of paragraph 10 of the bill which alleges that the complainant is informed and believes that the said Christie, Christie Grain & Stock Company, McDearmott, McDearmott Commission Company, Miner, and Celia Commission Company, having been enjoined from receiving, using, or exhibiting the quotations of the complainant, conceived the purpose of evading said injunctions by counterfeiting and simulating the complainant’s quotations, and induced the other defendants to co-operate with them in simulating said quotations. As this allegation is predicated upon the injunction proceedings set out in the preceding paragraph, and is mere matter of evidence on the quo animo of the defendants in organizing the National Board of Trade of Kansas City, it is unnecessary to plead it, and the exception is sustained.
Exception 18. This exception goes to that part of paragraph 10 of the bill which alleges,, in substance, the existence of the Kansas City Board of Trade, and what it was designed to accomplish, and what it did, and what it represented. This, it seems to me, is quite immaterial to the essential issues involved in this controversy between the complainant and the defendants. It is quite impertinent, and the exception must be sustained.
Exception 19. This exception goes to that part of paragraph 10 of the bill which alleges that there were no business conditions justifying or giving rise to any trading in grain or provisions in Kansas City which contemplated or involved delivery in Chicago, or of grain or provisions located in Chicago, or to the dissemination of quotations of prices in such transactions. It is not perceived how such matters concern the defendants, or why they are essential to the maintenance of the complainant’s cause of action. This exception is sustained.
Exception 20. This exception goes to that part of paragraph 10 which charges that, to carry out the illegal purpose of counterfeiting and indirectly getting the benefit of the complainant’s quotations, the defendants, other than the National Board of Trade of Kansas City, co-operating with other persons, on or about the 1st day of June, 1905, organized the defendant National Board of Trade of Kansas City, and rented a building at Kansas City to maintain a commercial exchange, etc. This allegation is not immaterial, as it bears upon the history and purposes of the organization of said National Board of Trade of Kansas City and its pretensions. This exception must be overruled.
Exception 21. This exception also goes to paragraph 10, and that part thereof which sets out the purposes and aims of the defendants to obtain the continuous quotations of the complainant company in *249fraud of its rights. This is the very meat of this controversy, and the exception must lie overruled.
Exception 22. This exception also goes to another portion of paragraph 10 of the bill, which alleges that in order to overcome the legal obstacles, and to simulate the quotations of the complainant, the defendants, by pretension, assert that the transactions made in the exchange room of the National Board of Trade of Kansas City are for future deliveries, etc., in the city of Chicago, or the delivery of warehouse receipts issued by Chicago warehouses. This is a part of the exposition and delineation of the methods pursued by the defendants, which enabled them to violate the claimed property rights of the complainant company, and as such is by no means impertinent matter. This exception is overruled.
Exception 23. This exception goes to that portion of paragraph 10 which charges that the biddings and offerings of the defendants through said National Board'of Trade are not bona fide; that their contracts for the purchase and sale of grain and provisions are not real; that they do not contemplate or intend to make real deliveries in Chicago, or of property in Chicago; and that said pretenses of deliveries, etc., are adopted by defendants to conceal the real purposes of their pretended trading, etc. This is so obviously pertinent to the issues involved as not to need discussion, and the exception must be overruled.