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Opinion of the Court.

The counterclaim which is incorporated with the answer alleges that the plaintiff, not being able to get the quotations from the defendants', either "purloins" the quotations from the defendants or gets them from one who does. When received it uses them for the purpose of "bucketing" orders or enabling "bucket shops" to do so elsewhere. It asks an injunction against the plaintiff's continuation of this practice.

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).

[1, 2] Under Equity Rule 30 (201 Fed. 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 Fed. 405, 407; Hogg v. Hoag (C. C.) 107 Fed. 807, affirmed 154 Fed. 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, [683] it will entertain all controversies touching claims upon it The case turns upon an analysis of the pleadings with an eye to this principle.

[3] 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

Opinion of the Court.

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 relief demanded in the counterclaim will be ancillary to a complete disposition of the controversy in the bill.

It appears to me that it is. The defendants' whole defensive pleading is that they have the right to refuse the quotations, and that if they can establish it they should be immune in its enjoyment from unlawful attack by the plaintiff. The decree on the bill will establish their right against any attack by suit; that on the counterclaim against attack in pais. There is no reason, if the defendants can establish their right by the decree, why the plaintiff should not be forbidden from impairing the value of the decree by tortious interference. A decree under the counterclaim would do no more than secure to the defendant the complete enjoyment of a decree on the bill. It is in every sense ancillary to a complete disposition of the original controversy. Therefore it is not necessary that there should be any independent federal jurisdiction.

[4] Thus the question arises on the merits. The defendants' affidavits show reason to assume that the plaintiff has

Syllabus.

been copying, or causing to be copied, the quotations from blackboards of the defendants' customers, and these affidavits are unanswered. If so, the cases support the defendants in their position. Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031; McDearmott Com. Co. v. Board of Trade, 146 Fed. 961, 77 C. C. A. 497, 7 L. R. A. (N. S.) 889, 8 Ann. Cas. 759 (C. C. A. 8); Board of Trade v. Price, 213 Fed. 336, 130 C. C. A. 302 (C. C. A. 8).

Therefore the defendants are entitled on this showing to an injunction forbidding the plaintiff from taking their quotations for distribution among its customers. This protects the status quo until after hearing it can be determined whether the defendants are engaged in an unlawful conspiracy.

Motion granted.

JACK v. ARMOUR & CO. ET AL.

(Circuit Court of Appeals, Eighth Circuit. July 20, 1923.)

[291 Fed. Rep. 741.]

1. COURTS 347-SUFFICIENCY OF PETITION MAY BE ATTACKED BY MOTION TO STRIKE.—Under Comp. St. Neb. 1922, § 8673, authorizing motions to strike pleadings from the files, as construed by the Supreme Court of the state, and which applies in actions at law in the federal courts in the state, a petition may be stricken on motion if it fails to state a cause of action.a

2. [742] MONOPOLIES 28-PETITION IN ACTION FOR DAMAGES UNDER ANTITRUST ACT HELD NOT TO STATE CAUSE OF ACTION.-In an action under Sherman Anti-Trust Act, § 7 (Comp. St. § 8829), authorizing recovery for violation of the act by "any person who shall be injured in his business or property," a petition which alleged a combination and conspiracy by defendants in violation of the act to monopolize the business of buying and selling live stock and the distribution of fresh meats, and that by reason thereof plaintiff had been injured in his business of raising, buying and selling live stock in the amount of $25,000, but which failed to allege any facts showing in what manner or to what extent he was injured by the alleged acts of defendant, held not to state a cause of action.

• Syllabus copyrighted, 1923, by West Publishing Co.

Opinion of the Court.

In Error to the District Court of the United States for the District of Nebraska; Thomas C. Munger, Judge.

Action at law by John W. Jack against Armour & Co. and others. Judgment for defendants, and plaintiff brings error. Affirmed.

F. L. Bollen, of Lincoln, Neb. (C. A. Sorensen, of Lincoln, Neb., on the brief), for plaintiff in error.

J. A. C. Kennedy, of Omaha, Neb. (Kennedy, Holland, DeLacy & McLaughlin, of Omaha, Neb., on the brief), for defendants in error.

Before SANBORN, Circuit Judge, and BooтH and FARIS, District Judges.

FARIS, District Judge.

Plaintiff in error, as plaintiff below, sued defendants in error, at law, for treble damages averred to have accrued to him from defendants, by reason of alleged violations by defendants, of the provisions of the Act of July 2, 1890, commonly called the "Sherman Anti-Trust Act" (Comp. St. §§ 8820-8823, 8827-8830), and the amendments thereto. The trial court sustained a motion of defendants to strike plaintiff's petition from the files, and he brings error.

[1] But two questions are presented. One of these arises in limine, and questions the correctness of the court's action in striking plaintiff's petition from the files. The other question is whether, conceding the correctness of the procedure, the petition before the court was insufficient as a matter of law. It is elementary that the federal District Courts in civil actions at law follow the practice and procedure of the states in which such courts are held. If the action taken below, in striking the plaintiff's petition from the files, was warranted by the Civil Code of Practice of the State of Nebraska, as that Code is interpreted by the Supreme Court of Nebraska, then it follows that the practice here adopted by the trial court was proper.

12822°-24—VOL. 9- 66

Opinion of the Court.

In a late case decided by the Supreme Court of Nebraska (Ferson v. Armour & Co., 192 N. W. 125) it was said:

"Plaintiff's fourth petition not only violated established rules, but it was filed in contempt of court. In a situation like this defendants are not limited to the statutory method of attacking the petition by motion to strike out improper matter or to make allegations more definite and certain. (Comp. Stat. 1922, § 8673.) It may be stricken from the files, if fatal defects extend to the pleading as a whole, or if plaintiffs in filing it ignored an order of the court."

[743] The section of the Civil Code of Nebraska, cited and construed by the Supreme Court of that state and here relied on as warranting the striking of the petition from the files, reads thus:

"Motions to strike pleadings and papers from the files may be made with or without notice as the court or judge shall direct." Section 8673, Comp. Stats. of Nebraska of 1922.

While, of course, the above language of the Nebraska statute settles the question of the power of the court to strike a pleading from the files, it does not settle the question as to the conditions and situation in which the use of the power may be properly exercised. The Supreme Court of Nebraska does, however, settle that question by saying that a petition "may be stricken from the files if fatal defects extend to the pleading as a whole.”

It follows then that if fatal defects extend to the petition of plaintiff as a whole in the case at bar, the action of the trial court was warranted. The language used by the Supreme Court of Nebraska seems to mean that if no cause of action is stated in the petition, it may properly be stricken from the files. A similar, or at least analogous, practice is common in other Code states. Motions to strike out a pleading are often used to perform the office of a demurrer, and when so used are regarded as demurrers, Shohoney v. Railroad, 231 Mo. loc. cit. 148, 132 S. W. 1059, Ann. Cas. 1912A, 1143.

It follows then that the point of procedure raised is a mere corollary of the other question mooted on the record. If upon an examination of that question it shall develop that the petition was not fatally defective, then it was error to

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