34 Md. 540 | Md. | 1871
delivered the opinion of the Court.
Appleman, a banker and broker in Hagerstown, and Fisher & Sons, bankers and brokers in Baltimore, had dealt together in their business as bankers and brokers, and between whom there existed an open account of their transactions, when, on the 31st of March, 1869, the former, by telegraphic correspondence, conducted mostly in cipher, con-ti’acted to sell to the latter §100,000 gold, short, at $1.31. This amount of gold, at the price agreed on in currency, was credited by Fisher & Sons in account, and carried by them for Appleman, until the 24th of September, 1869, when they, availing themselves of what is claimed to have been their right under the contract, purchased the gold in New York at $1.35, currency, for Appleman’s account to fill his contract, and charged it up to him at that price, and thus closed the transaction; which, of course, resulted in a loss to Apple-man. He now repudiates this latter act of Fisher & Sons, and insists that the gold was unjustifiably and without authority purchased at the price it was; and, treating the contract as still open and executory, he, by letter of the 4th of October, 1869, directed Fisher & Sons to purchase the gold for his account at its then rates, which were from $1.29 to $1.30, and upon their declining to do so, he again, on the 10th of January, 1870, made actual, tender of the gold in Baltimore, and demanded.to be paid the contract price of
Without explanation, the contract, as embodied in the telegrams, is wholly unintelligible. To enable the plaintiff to recover on it, according to his own theory of his rights under it, it became necessary that the terms employed should be elucidated, and the intent and purpose of the parties explained. To do this the plaintiff himself offered and gave evidence of the meaning of the cipher telegrams, and also to explain the meaning of a sale of gold short, as understood among those dealing in that article. From the very terms employed in the contract, it is manifest that it was made with reference to some usage or custom that was then in the contemplation of the parties; and from the plaintiff’s own evidence and correspondence, it is quite plain as to what usage was supposed to apply to and control the contract.
By the evidence offered on the part of the plaintiff, it was shown, that a sale of gold short, according to established usage, means a sale of that which the seller has not, but what he expects to bay in at a lower price than that for which he sells. The seller can order the gold to be bought in at any time, and the buyer can call for the delivery of it when he pleases. That the buyer or seller is entitled to a margin for his security as the gold may rise or fall in the market. This margin must be in money, or its equivalent in securities, and equal to from five to ten per cent, on the price at which the gold is sold, over and above its market price at any time; and such margin must be kept up as the value of gold fluctuates in the market, so that the buyer shall have in hand, .on a rise in price, an amount in money, or its equivalent, sufficient to cover the loss to the seller caused by such rise in gold above the price at which it was sold short, with from five to ten per cent, on the contract price, added to the
The proof, on the part of the defendants, established the existence of the same usage, and the same meaning and interpretation of the contract as that proven on the part of the plaintiff. By the evidence, as offered by them, it is shown that, by the usage, the broker is entitled to demand from the seller a margin of from five to. ten per cent, on the price at which the gold was sold short, in addition to a sufficient amount to cover any loss occasioned by a rise in gold; and that the seller has the right at' any time to deliver the gold sold by him, by ordering the buyer to purchase in the amount for his account; and that the buyer has the right to buy it in on default of margin. That such usage is the same, whether the sale is made by a broker for his principal, or by the principal directly to the broker; and that the delivery is to be made at the place where the gold is purchased. That such usage prevails in Baltimore and New York, but -was not known to prevail in Hagerstown, where the plaintiff resided.
It appears that, on the 22d of September, 1869, demand was made, by Fisher & Sons, of the plaintiff, for margin to the extent of $5,000; gold at that time being sold at $1.42-| in New York, and from $1.37J to $1.40£ in Baltimore; and on the 24th of September, it ran up in New York from $1.50 to $1.62J, but fell again in the latter part of that day to $1.33, while in Baltimore sales were made at the Gold Board at $1.50.
It was because of the alleged default of the plaintiff in not furnishing the required margin, that the gold was purchased at $1.35 in New York on the 24th of September; and the main question presented on this appeal is, to what extent was the usage admissible for the purpose of explaining and amplifying the contract as embodied in the telegrams, and determining the rights and duties of the parties under it.
In Bryan vs. Lewis, R. & Mood., 386, Lord Tebideedesí said, that he had always thought, and should continue to think, until he was told by the House of Lords that he was ^ wrong, that if a man sells goods, to be delivered on a future day, and neither has the goods at the time, nor has entered into any prior contract to buy them, nor has any reasonable expectation of receiving them by consignment, but means to go into the market and to buy the goods which he has contracted to deliver, he cannot maintain an action upon such contract. Such a contract amounts, on the part of the ven-v dor, to a wager on the price of the commodity, and is attended with the most mischievous consequences. And upon a subsequent occasion, according to the report as given in Chitty on Contr., 2d Ed., 332, the same learned Judge ruled, that “if two persons enter into a contract under the semblance of a sale of goods, not intending really to buy or sell the commodity, but merely as a gambling speculation, and to pay the difference of the market price on a particular day, like a lime bargain in the stocks, such a contract is illegal and void at common law, and no action will lie to enforce if.” But this ~ salutary doctrine, however much its absence may be regretted , in view of what is daily occurring, no longer obtains in the : Courts either of England or this country. In the case of Hibblewhite vs. McMorine, 5 M. & Weis., 462, the case of Bryan vs. Lewis, was expressly overruled, and it was there held, that a contract for the sale of stock, to be delivered at a future day, was not invalidated by the fact that at the time of the contract, the vendor neither had the stock in his possession, nor had entered into any contract to buy it, nor had any reasonable expectation of becoming possessed of it by the time
*^There being no question as to the legality of the contract, it is insisted by the plaintiff that the contract for the sale of the gold by telegram is not affected by the usage proven to exist in Baltimore, and not in Hagerstown, where the seller resided, and that it should be construed without reference to usage, and, therefore, all evidence in regard to usage, existing only in Baltimore, should be excluded. ^
To maintain this proposition would, as we have said, leave the contract in an unintelligible form, and neither Court nor jury would be able to understand the meaning of the parties. To give the contract effect at all, resort must be had to what the parties had in view at the time, as the means of ascertaining their rights and liabilities. Whether the usage prevailed in Hagerstown, is wholly immaterial, the question being, whether the parties contracted with reference to the usage existing in Baltimore, and intended that their contract should be governed by it. It would certainly have been competent to them, by express reference, to have adopted the usage in Baltimore as' determining the nature of the contract, and we think it equally clear that if it be done by implied or tacit understanding, it is as much obligatory upon the parties as if
It is true that where the party is sought to be bound by a particular usage, and the only evidence of the intention of the parties to adopt it, as applicable to their contract, is the fact of its existence, such usage must be clearly shown to be general and uniform, so as fairly to give rise to the presumption that the parties were acquainted with it, and intended to contract with reference to it. “But when their knowledge or intentions are established by other direct or circumstantial pjroof, their contract will be governed by the usage, however local or partial, in reference to which it is proved or presumed to have been made.” 1 Duer on Insurance, 258; Merchants’ Mutual Ins. Co. vs. Wilson, 2 Md., 217; Foley & Woodside vs. Mason, 6 Md., 50; Gabay vs. Lloyd, 3 B. & Cr., 793. And in this case, we think, the evidence deducible from the correspondence that took place between the parties, their business relations, and general conduct and mode of dealing, was sufficient to warrant the jury in finding as matter of fact that the plaintiff was acquainted with the usage proved, and intended to contract with reference to it. Indeed, his own testimony leaves but little room for doubt on the subject.
Where the gold was deliverable, that, wo think, is settled by the contract of the parties. Ordinarily, where there is no place designated by the contract, the articles sold are to be delivered at the place where they arc at the time of sale. The rule upon the subject, however, is greatly dependent upon the nature of the article sold, and the circumstances of the parties. But here, from the nature of the contract, it is plain that it never was intended that the seller should actually deliver the gold at Hagerstown. He tells us himself that such was not the intention of the contract. He says in his testimony, that when ho sold the gold short to the defendants, it was not intended that he should deliver it and receive the price, but that the contract was to be closed and delivery effected by his order to the defendants to buy in the gold for his account. That they were to buy it, and pay or receive the difference between the buying and selling prices, and that the performance of the contract could be demanded at the option of either party. And it was in accordance with this understanding that he ordered the purchase of the gold on the 4th of October, and afterwards made tender of it to the defendants in Baltimore, instead of notifying them of his readiness to deliver at Hagerstown..
We think the Superior Court Was right in overruling the plaintiff’s objection to the admissibility of the evidence taken under the commission to New York. It was both competent and pertinent in one aspect in which the case was presented, though quite immaterial in the other.
It follows, of course, from what we have said, that the Superior Court was light in its ruling as to the admissibility of the evidence of usage; and that it ivas also right in refusing to grant the first of the plaintiff’s prayers, as that prayer sought to ignore and exclude from consideration all question of usage, so far as the same might affect the contract adversely to the plaintiff.
The Court was equally right in refusing to grant the plaintiff’s second prayer, as by that all question of the usage prevailing in Baltimore, if not also existing in Hagerstown, was excluded, notwithstanding the parties might have contracted with especial reference to the local usage of Baltimore.
The plaintiff’s third prayer was also properly refused, first, because it left to the jury to find what usage would be binding on the plaintiff; that being a question of law for the
The fourth prayer of the plaintiff was equally erroneous as those preceding it, and was therefore properly refused. It was based upon the theory that the gold was deliverable at Hagerstown, and not in Baltimore, and that before the plaintiff could be in default in regard to the margin to be placed in the hands of the defendants, demand should have been made for the performance of the contract at the former place; and that no usage in Baltimore could affect the performance of the contract. This, as we have said, was not in accordance with the intention of the parties.
As the fifth prayer of the plaintiff was originally presented, it was clearly erroneous, but as modified by the Court, when read in connection with the instructions granted on the part of the defendants, it was free from objection, and the Court was right in granting it in its modified form. The amount of margin, we think, was to be fixed and regulated by the price of gold in Baltimore, and not the prices that prevailed in New York, if there was in fact a real difference in the prices of the article at the two places. The contract makes no reference to the New York market as the criterion, nor do we perceive any reason why that market should be preferred to the one equally open and accessible to the parties in Baltimore. In the absence of some stipulation to the contrary, it should be presumed that the market price in the place where the contract was to be performed was intended.
As to the plaintiff’s sixth prayer, the Court was right in rejecting that also. If the defendants were justified in purchasing the gold on the 24th of September, the plaintiff could have no right to complain that the defendants did not actually receive it until the 2d of October, as the delay was at their risk, and not that of the plaintiff; lie was discharged from
-Having thus disposed of the plaintiff’s prayers, we deem it sufficient to say that we find no error in those granted on the part of the defendants. They fully and correctly instructed the jury upon the whole case before them; and we think that in the fifth prayer of the plaintiff as modified, and the second prayer of the defendants, the plaintiff’s rights were as fairly placed before the jury as he could have reasonably required.
Upon review of the whole case we are of opinion that the judgment appealed from should be affirmed on both appeals.
Judgment affirmed.