New York Cotton Exch. v. Hunt

McCAIX, District Judge (after stating the facts). Unless there ¿s some question raised here which distinguishes this case from the case of the Board of Trade of Chicago v. Christie Grain & Stock Co., 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031, it seems to me that this preliminary injunction must issue. In order to determine this question, I shall notice the causes assigned in defendant’s answer why the writ should not issue, which were not presented or considered in the Christie Case, somewhat in the order in which they are set out above. 1. Do the laws of Tennessee, regulating the conditions under which a foreign corporation shall transact business, or own property, in this state apply in this case? The complainant is a foreign corporation and has not registered its charter with the Secretary of State or in any county in Tennessee. I am unable to find anything in- the bill or answer, or exhibits thereto, that indicates that it owns property^ or that it is, or has been, doing business in Tennessee within the [517] meaning of the statute regulating foreign corporations in. this state. Norton v. Union Bank & Trust Co. (Tenn. Ch. App.) 46 S. W 544; Milan Milling & Mfg. Co. v. Gorten, 93 Tenn. 590, 27 S. W. 971, 26 L. R. A. 135; Eastern Bldg. & Loan Ass’n v. Bedford (C. C.) 88 Fed. 7. All the complainant seeks to accomplish is to have this court protect it in its right to make and enjoy the fruits of a contract entered into in New York between it and certain telegraph companies, and to enjoin, the defendant from destroying that right, partially or wholly, by wrongfully obtaining the use and benefit of complainant’s property without its consent, and in violation of a New York contract made with 'the telegraph companies. If a citizen of Tennessee should go to New York and wrongfully get possession of the property of a New York corporation, and bring it to Tennessee, and proceed to use and enjoy the benefit of it, could it be seriously insisted that said corporation would be repelled from -the courts in this state, if it should institute a suit here to recover the property or to enjoin the party from the use thereof, upon the ground that it was a foreign corporation, and had not registered its charter as provided by the laws of Tennessee? I think not. Neither would it be repelled for that cause, if it should seek to enforce a New York contract in a Tennessee court. 1 do not think that the Tennessee statutes relating to foreign corporations apply in this case. 2. Tt is insisted with much earnestness and plausibility that the suit pending in the state court, wherein the defendant here and others are complainants against the Western Union Telegraph Company, is a bar to this suit, and this court cannot properly issue the writ of injunction prayed for herein, under section 720 of the Revised Statutes of the United States [U. S. Comp. St. 1901, p. 581.] Section 720 is as follows: “The writ of injunction shall not be granted by any court of the 0nited. States to stay proceedings in any court of a state, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.” In discussing this section, in considering an application for an injunction. Judge Taft said: “It is settled that the pendency of a suit in a state court is no bar to a suit upon the same subject-matter in this court.” Bank of Kentucky v. Stone (C.C.) 88 Fed. 398, and cases there cited. Moreover, the parties to this suit aré not the same as the parties to the suit in the state court referred to. Nor is the relief sought the same. There the defendant in this case, and others, seek to restrain the Western Union Telegraph Company (not a party to this suit) from removing one of its tickers from defendant’s office, and to enjoin the telegraph company from discontinuing its continuous cotton quotation service. Here the New York Cotton Exchange seeks to restrain the defendant, who is one of the complainants in the case in the state court, from receiving and using its continuous cotton quotations. Now, it is perfectly clear to my mind that the granting of an injunction in this case will in no way interfere with the proceedings [518] in the state court, and that suit can be prosecuted to a final judgment, just as if this case had never been brought and did not exist. If the prayer for an injunction is granted in this case, we may say with Judge Taft in Bank of Kentucky v. Stone, supra: We do not enjoin any suit at all by our.order; all we do enjoin is the defendant from receiving and using complainant’s continuous cotton quotations, as prayed for in the bill. That does not require the defendant to disobey the order of any other court, or restrain his prosecution of a suit therein. Nor is the right of complainant to a restraining order, if it is otherwise entitled to it, affected by the fact that in the contract made with the telegraph company it is provided that: “In cases brought against the telegraph company, the exchange may defend by its own counsel, and at its own expense, in the name of the telegraph company.” It seems to me that this language means that the cotton exchange may take that course, if it chooses to do so. But it does not follow that, if the exchange does not choose to pursue that course, it thereby forfeits the right to go into a court of its own selection and prosecute its own suit in its own way to a final judgment. 3. Under the third cause assigned why the relief prayed for should not be granted, counsel for defendant points out that, by one clause of the contract between the complainant and the telegraph companies, it is provided that: “The telegraph company, however, shall not he required to remove any ot its tickers or wires, or to discontinue service furnished by auy other means, which are under restraint by injunction of the courts during the pendency of such injunction.” I cannot agree with able counsel in his interpretation of this clause. ' They insist, as I understand, that this language means that the cotton exchange contracted with the telegraph company, in substance, that it would not object to the telegraph company furnishing, nor to such party receiving and using, its continuous cotton quotations until the suits wherein injunctions were procured against removing the tickers, etc., were finally determined, and such injunctions dissolved; and that the telegraph company is authorized to continue the service in such cases, just as long as the injunction proceedings'are operative and in force. It seems to me that a more natural interpretation would be that the cotton exchange would not seek to hold the telegraph company liable, or to cancel its contract with it, where the telegraph company permitted the ticker to remain, and continued to furnish the cotton quotations, under the circumstances as stated in the clause of the contract quoted. Evidently, this paragraph was inserted in the contract of July 14, 1903, to protect the telegraph company against liability to the cotton exchange when conditions should arise similar to those now under consideration. The cotton exchange is not seeking in this suit to have the telegraph company remove the ticker from the office of the defendant, or discontinue the service to him; but, on the other hand, the complainant is allowing the telegraph company to work out its own salvation in that behalf in the case pending against it in the chancery court of Shelby county. [519] Passing for the moment the fourth and fifth contentions of defendant, as stated above, I will proceed to the sixth cause, which is, in substance, that prior to July 14, 1903, the time when the new agreement was entered into between the complainant and the telegraph company, and in March, 1899, the defendant made a contract in writing with said telegraph company, by which said company was to furnish defendant these continuous cotton quotations for $25 per mouth, and he was receiving these quotations under that contract when the new agreement or contract was made between the complainant and the telegraph company, July 11, 1903. And defendant insists that the contract of July 14, 1903, between the cotton exchange atid the telegraph company, in no way affects his rights under the contract of March, 1899, between defendant and the telegraph company. And that the latter is still in force, and should not be canceled by order of the court so long as he complies with the terms thereof. By examination of the contract between defendant and the telegraph company of March, 1899, it appears that it is a 'monthly contract, and that one of the conditions is that the telegraph company may discontinue the service thereunder at any time without tiotice, when, in its judgment, any breach of the conditions shall have been made by the defendant. But, if this condition was not imposed, and the contract being by the month, could not the telegraph company discontinue the service at the end of any month, on giving reasonable notice thereof of its intention to do so? If the quotations are property — and it has been so decided by the United States Supreme Court' — and if, as defendant insists, they belong to the telegraph company, would it not have the right to say to whom it would sell them, and when it would discontinue to sell them to a given party? But, aside from this, in the Christie Case, supra, market quotations similar to those involved in this case were held to be property, and belonged to the party collecting them, and such party has the right to control them, and, to that end, such party could by contract say who should distribute them, and limit their distribution to such parties as the owner sees proper, and on such reasonable terms as it may impose. This record shows that, at the time this contract between the defendant and the telegraph company was made, the telegraph company was exercising the privilege of distributing these quotations to whomsoever it pleased, by the grace of the cotton exchange. Does it follow, therefore, that the cotton exchange, the owner of the property, is precluded from terminating this free privilege of the telegraph company to distribute the exchange’s qtiotations, when to do so would be greatly to the exchange’s interest, because the telegraph company had made contracts such as the one made with the defendant, which is without end of days, if the defendant is correct in his insistence? I think not. If the telegraph company has made such a contract with the defendant as he insists, then the telegraph company, and not the cotton exchange, which was not a party to that contract, should answer to the defendant for any breach thereof on its part. The cotton exchange is in no way affected by the contract between defendant and the telegraph [520] company, and is not bound thereby. And its existence in no way affects the right of the complainant' to limit the distribution of its quotations. I have given due consideration to the remaining causes assigned why the injunction should not issue, and I am unable to find anything thát differentiates this case in any material matter from the case of Board of Trade of Chicago v. Christie Stock Co., 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031. _ _ _ _ It is true that the facts in this case differ from that in some details which appear to me to be immaterial, but the principle announced in that case applies with equal force here, and, on the authority of the Christie Case, I am constrained to grant the preliminary injunction, as prayed for, modified as follows: The defendant Clarence P. Hunt will be restrained from either acting in his own behalf, or as a member of any firm, or as an agent or officer of any other person, firm, or corporation, and also each and every of the agents, employés, and servants of said defendant, from receiving, using, selling, or distributing, directly or indirectly, such quotations of complainant as are sent out at intervals of less than 15 minutes, and from aiding, abetting, or assisting, directly or indirectly, any person, firm, or corporation in receiving, using, selling, or distributing said quotations until the further orders of this court. Before the issuance of this writ of injunction, the complainant will enter into a bond in the sum of $5,000, with good and approved security, conditioned as provided by law. The same order will be entered in the case of New York Cotton Exchange v. Albert D. Duncan and J. Reiser, No. 602, Equity Docket.