Board of Trade v. L. A. Kinsey Co.

BAKER, Circuit Judge, after stating the facts as above, delivered the opinion of the court: 1. We deem it unnecessary to determine from the evidence whether the percentage of trades in which actual deliveries were made was 5 or 25. The finding of the one figure or the other would not prove what proportion of the remaining no-delivery transactions were gambling. Of these, an indeterminate number were “hedging contracts.” If we felt called upon by the necessities of this decision to give a definite opinion of hedging, the record might well lead us to find that hedging is a manufacturer’s or merchant’s insurance against price fluctuation of materials, and no more damnatory than insurances of property and life, which in one sense are wagers that the property will not be destroyed during the term, and that the life will not fail in less than the expectancy in the actuaries’ tables. The remainder of the no-delivery transactions were “speculative.” But speculation is not unlawful. One may buy any sort of property to hold for a rise, one may contract to buy or sell property not in possession or in existence at the time, and lawful contracts may lawfully be canceled and settled in advance of the time of performance. If a contract, lawful in form, is entered into, it is lawful in fact even though one of the parties never intended to perform his part of it; that is, the intent that the lawful form shall cover a sham must be mutual to make it a sham. We think the court’s conclusion that, because in 95 per cent, of the trades no deliveries were in fact made, it was intended that in those cases deliveries should not be made, and that the parties in 19 instances out of 20 were using the forms of lawful contracts to cover mere wagers on the future prices of commodities, is not warranted by the facts in the record. The “direct” and “ring” methods of settlement between members might cancel, out nine-tenths of the bids back and forth between the members as agents, and yet every contract may have been perfectly legal and enforceable between the principals, and every principal satisfied by receiving a “substitute” contract. If a seller intended not to deliver, but to settle on differences if prices rose, the buyer who entered into the contract in good faith, and who desired’to receive the property, could not force the seller to deliver. [513] In every such case there would be no delivery, but the buyer would have a valid cause of action. Undoubtedly gambling was going on in the exchange hall, but it was contrary to appellant’s by-laws. Appellant was chartered by Illinois for a lawful and useful purpose, and the association adopted and promulgated suitable by-laws and rules. We think the record fails to show that the dominant feature of the members’ dealings was unlawful, much less that appellant, as a creature of the state, was violating its charter, or was particeps criminis in what gambling the members carried on. We do not, however, attach very much importance to the preponderating character of the transactions in the exchange hall, because, in our opinion: 2. The real subject-matter of the suit is the property right in the news, in the reports of prices. Even if it were true that 95 per cent, of the dealings in the exchange hall were wagers, the prices are the same for the transactions that are not wagers, and the quotations sent out show the figures at which honest dealers may-secure contracts. Millers, grain buyers, elevator companies, govern their dealings by the market prices made in appellant’s exchange hall. The news therefore serves, or, at least, is capable of serving, a useful purpose. So it seems to us immaterial what proportion of the transactions are wagers, since the prices made in the transactions are the prices that farmers and shippers can get, and since the news of the prices and the dissemination thereof are valuable to the community. News may be an object of lawful ownership though nine-tenths of the things reported be unlawful. 3. Nor should the property in this case (the news, the continuous quotation of prices) be adjudged contraband because it is susceptible of bad uses as well as good. Gamblers in Indiana may settle their bets on prices according to appellant’s quotations, and this quite irrespective of the fact, if it were the fact, that 95 per cent, of the transactions in appellant’s exchange hall were lawful; just as Indiana grain dealers may make and settle their honest contracts on the basis of appellant’s quotations, regardless of the fact, if it were the fact, that 95 per cent, of transactions reported were gambling. It seems to us, therefore, that the news, as news, is not without the pale of protection, and that the moral quality is chargeable solely to the user. 4. The property concerned in this suit not being contraband, should appellant be denied the writ of injunction, even if it were true that appellant permits gambling in its exchange hall? We think not. Suppose this noncontraband news were collected and disseminated by the Associated Press. If that company were complainant and “clean-handed,” its right to an injunction, the case being proper in other respects, would not be doubted. But if complainant were a gambler or a thief, what then? We think our answer has been sufficiently stated in Fuller v. Berger, 120 Fed. 274, 56 C. C. A. 588: “Equity is not concerned with the general morals of a complainant; the taint that is regarded must affect the particular right asserted in his suit. * * * If the defendant can do no more than show that the complainant [514] has committed some legal or moral offense which affects the defendant only as it does the public at large, the court must grant the equitable remedy and leave the punishment of the offender to other forums.” In this case the appellees, citizens of Indiana, have never had any dealings with appellant respecting the quotations; they have not been misled or deceived by appellant in any way; and they certainly are no more concerned with or affected by appellant’s violations of the common law or of the penal laws of Illinois than the general public. In reaching our conclusion, we have given respectful consideration to the cases of Board of Trade v. O’Dell Commission Co. (C. C.) 115 Fed. 574; Board of Trade v. Donovan Commission Co. (C. C.) 121 Fed. 1012; Board of Trade v. Ellis (C. C.) 122 Fed. 319; Christie Grain & Stock Co. v. Board of Trade (C. C. A.) 125 Fed. 161 — and regret that we are unable to concur therein. We have been aided by the opinion of Judge Hook at circuit (116 Fed. 944) in support of his decree in the Christie Case, which was reversed in 125 Fed. 161. The decree herein is reversed, with the direction to enter a decree in appellant’s favor in conformity to the prayer of the bill.