Bibb v. AllenBibb v. Allen
- Reporters:
- , , ,
- Before:
- Jackson
after stating the case, delivered the opinion of the court:
Thе plaintiff in error has filed nineteen assignments of error, which may be grouped under five heads or propositions, viz.: (1) that the court erred in overruling the motion to suppress the deposition of.the witness Richard H. Allen; (2) that the court erred in admitting as evidence the statutes of New York, under which the New York Cotton Exchange was incorporated, and the rules and regulations of the Exchange, together with the parol testimony that the transactions in
The questions thus presented may be properly considered in the order stated, under the’ facts disclosed by the bill of exceptions. The motion to suppress the deposition of the witness Bichard H. Allen was based on the ground that no commission was issued out of the court, or by the clerk thereof, authorizing George H. Corey, as commissioner, to take the deposition ; and, secondly, that neither of the defendants or their attorneys received any notice of the time and place of taking the’ deposition, or of the residence of-either the witness or the commissioner by whom the deposition was taken. These objections to the deposition are clearly not well taken, for several reasons: It is shown by thе record that on April 7, 1888, a notice was issued and served on the defendants that plaintiffs would take the deposition of the witness Allen, whose place of business was stated in the notice to be 31 and 33 Broad Street,-New York city; and that George H. Corey, whose place of business was 60 Wall Street, in that city, would be suggested as commissioner to- take such deposition; and that a copy of the interrogatories to be- propounded to the witness was attached to the notice. It further appears that at that time the defendant Bibb objected to a commission being issued to take the deposition- on the interrogatories to be propounded by the plaintiffs, basing hls objection on the ground that the notice did not give the residence of the witness and of the commissioner, and on the further ground that no sufficient affidavit for the taking of the deposition had been filed, which objections were manifestly insufficient, inasmuch as the place of business of both the witness and the commissioner was stated, and an affidavit was filed by the attorney for the plaintiffs which showed
But, aside from this, the motion to suppress the deposition came too late. As already said, the commission to take the deposition of said Allen was issued April 18, .1888. The deposition was taken before the proper commissioner on May 17, 1888, and, after transmission to the clerk of the. court, was by him published, under a general order of the court, May 29, 1888. The May term of the court was then in session, and continued in session until July 8, 1888. The November term commenced on the first Monday of that month. During all that time the defendant Bibb made no objection to the deposition, and gave no notice that he would move to suppress it, but waited until January 10, 1889, the day set for the trial of the cause, when, after a motion for a continuance, then made, had been overruled, he, for the first time, moved to suppress the deposition. If the deposition was in any respect open to irregularities, the motion to suppress it,’ under the circumstances, came too late. Such motions should be made before the case is callеd for trial, so as to afford opportunity to retake
The next assignment of error relied on is in the action of “the court admitting in evidence the statutes of New York under which the New Yolk Cotton Exchange was organized, together with the rules and regulations of that body TJt&der and in pursuance’of which the transactions in question were conducted. This evidence was clearly competent and. relevant, because the contracts entered into between Bibb & Company and the plaintiffs contemplated that the business which the plaintiffs would transact for their principals would be under, and in aсcordance with, the rules and regulations of the New York Cotton Exchange. It was. proper, therefore, to show that this Cotton Exchange was a lawful body, organized for lawful business purposes, and had power to make such, rules and regulations as might be deemed necessary and proper to carry out the purpose of its organization. It is clearly shown that B. S. Bibb & Company knew that the plaintiffs did business as cotton factors in that Exchange, and in accordance with those- rules and regulations, and that,’in acting as their agents in the sale of cotton for future delivery, they would transact the business through that Exchange, and in accordance with its rules and regulations. It was, therefore, germane to the issues in the case, and was both -competent and relevant to prove that the contract bеtween thparties had been carried out on the part of the plaintiffs in the mode and according to the methods contemplated by the parties. Peabody v. Speyers, 56 N. Y. 230, 236; Nickalls v. Merry, L. R. 7 H. L. 530, 542.
It is settled by the weight of authority that where a principal sends an order to a broker engaged in an established market or trade, for a deal ip that trade, he confers authority upon the broker to deal according to any well-established usage in such market or trade, especially when such usage is known
Upon the third assignment of error, which presents the question whether the transactions in which the parties were engaged were illegal, because they were wagering contracts under the New York statute against wagers, bets, etc., the evidence in the case clearly fails to make out such a defence. In entering into their arrangement, it is shown by the correspondence and by other testimony in the case that there was no agreement or understanding between the plaintiffs and defendants that the cotton sold for future delivery was not in fact to be actually delivered. In their correspondence as to thе terms on which the agency was to be undertaken the plaintiffs were distinctly informed that the defendants did a large business for the best and most reliable people of their locality; that they would hold themselves personally responsible for all orders sent, and hold their correspondents responsible for all orders executed as to margins; that they handled, sometimes, from 3000 to 5000 bales of cotton a day“, and that their customers dealt in orders for from 500 to 1000 bales at a time, and were entirely responsible. It was also testified by both the plaintiffs and defendant Bibb that there was no understanding or agreement, either express or implied, between them at the time of entering upon the transactions or during their progress, that the cotton sold for account of the principals was not to be deliverеd at the time stipulated in the contracts of sale made for their account. It is not questioned that if the transactions in which the parties are engaged are illegal, the agent cannot recover either commissions for services rendered therein, or for advances and disbursements by him for his principal, (Story on Agency, §§ 330, 344, and authorities cited,) the reason for this rule being that in such illegal trans
But the facts of this case do not bring the transactions in question within the operation of that principle, for the evidence set out in the bill of exceptions fails, to show that either party to the transactions intended the same as wagering or gambling speculations.- On the contrary, the undisputed testimony establishes that the sаles were not wagers, but that the cotton was to be actually delivered at the time agreed upon. Bibb’s own statement of the transactions does not disclose the fact that they were intended, even on his part, as gambling or wagering speculations. He certainly never disclosed to the plaintiffs, as his brokers, either in their correspondence or in their verbal communications, that he did not intend to deliver the cotton sold through them for future delivery. In addition to this, it is shown that the rules and regulation of the New York Cotton Exchange recognized no contract^ except for the sale and purchase of cotton to be actually delivéred: These rules and regulations impose upon the seller the obligation to deliver the cotton sold, and upon the purchaser the obligation to receive it, except in certain specified cases, which have no’ application to the present case.
These rules, which were authorized to be made by the statute of the State of New York, under which the Exchange was incorporated, enter into and form part’ of the contracts of sale in this case. The defendants in one of their earliest communications to the plaintiffs informed them that they would- use in their telegraphic correspondence what was known as Shepperson’s code, which provided that “unless otherwise stated as agreed, it is distinctly understood that all orders sent by this chapter are to be subject in every respect to the by-laws and rules of the market where executed; ” and further, that “ with every telegram sent by- this table the following sentеnce will be read as a part of the message, viz., this sale has been made subject to all the by-laws and rules of
It is well settled that contracts for the future delivery of merchandise or tangible property are not void, whether such property is in existence in the hands of the seller, or to be subsequently acquired. 2 Kent’s Com. 468, and authorities cited in notes; Benjamin on Sales, Am. ed. §§ 81, 82. It is further well settled that the burden of proof is upon the party who seeks to impeach such transactions by showing affirmatively their illegality.
Roundtree
v. Smith, 108 U. S. 269;
Dykers
v. Townsend, 21 N. Y. 57;
Irwin
v. Williar, 110 U. S. 499, 507, 508. In this latter case the trial court charged the jury that “ the burden of showing that the parties were carrying on a wagering business, and were not engaged.in legitimate trade or speculation, rests uрon the defendant. On their face these transactions are legal, and the law does not, in the absence of proof, presume that the. parties are gambling. “A person may make a contract for-the sale of personal property for future delivery which he has not got. Merchants and traders often- do this. A contract for the sale of personal property which the vendor does not own or possess, but expects to obtain by purchase or otherwise, is binding if an actual transfer of property is contemplated. A transaction which on its face is legitimate cannot be held void as a wagering contract by showing that one party only so understood and meant it to be. The proof must go further, and show that - this understanding was mutual— that both parties so understood the transaction. If, however, at the time of entering into a contract for a sale of personal property for future delivery it be contemplated by both parties that at the time fixed for delivery the purchaser shall merely receive or pay the difference between- the contract and the market price, the transaction is a wager, and nothing more. . . . It is not sufficient for the defendant to prove that Irwin & Davis never understood that they were to deliver wheat in fulfilment of the sales made for them by the plaintiffs. The presumption is, that the plaintiffs expected Irwin & Davis to execute their contracts, expected them to
This court approved that charge as a correct statement of the law upon the subject of what constitutes a wagering contract. It is directly in point here, for the evidence fails to-show not only that Bibb & Company intended it as a wagering contract, but it fails to show also that the plaintiffs so understood it. The testimony establishes that the plaintiffs-did not, in fact, so understand it.
It further appears that in the memorandum, or “ slip contracts ” of sale actually made by the plaintiffs for the account-of Bibb & Company, thе sales were described as made “ subject to the rules and regulations of the New York Cotton Exchange.” Under these circumstances we are of opinion that the testimony fails to establish that the contracts, in question were wagering transactions, and therefore void. The testimony is so clear to the contrary that the court below, under the settled rules of this court, was certainly justifiable-in not submitting that question to the jury ; for if it had been submitted, and the jury had found that the contracts were wagers,- it would have- been the duty of the court. to set-aside their verdict. There is no merit in this assignment of error.
It is next urged, on behalf of the plaintiff in error, that the contracts for the sale of’ the cotton were void under the statute; of frauds of the State of New York, because there was no-sufficient note or memorandum in writing of the transactions signed by the parties to be charged thereby. We are- of opinion that this, contention cannot be sustained under the facts of the case.
These despatches, as well as others of a similar character of later dates, meant “sell for January or February delivery the designated number of bales. on account of B. S. Bibb & Company,” and had attached to them, by -the express terms of Shepperson’s code, the understanding and agreement, already quоted, that the orders were to be subject in every respect to the by-laws and rules of the Cotton Exchange of New York,- with the additional terms read into the telegrams, and as a part thereof, the stipulation that the sales were to be subject to said by-laws and rules in reference to the future delivery of cotton. - - - .
The plaintiffs executed these orders promptly as they were received. In the execution of the orders they made what are called “ slip contracts ” in duplicate, one copy signed by the purchaser being delivered to the plaintiffs, and the other, signed by the plaintiffs as brokers, being given to the purchaser. There were nineteen sales cpf cotton to various per
“New York, Nov. 10,1886.
“ B 10, ac. Albert.
10 “ Alexander.
5 “ Andrew.
Seiler,--.
Buyer, Zerega & White.
On contract, subject tо rules and regulations of New York Cotton Exchange.
Twenty-five hundred bales cotton.
Jan. 1 delivery.
Price 8.99.
x Per Z. & White, seventy-five.”
These contracts differed only in date, in the name of the purchaser, in the quantity of cotton sold, and the price thereof. As each sale was thus made, it was reported promptly by the plaintiffs to- the defendants, both by letter and by telegram, giving price, and stating that the orders to sell were executed. So that the defendants were kept accurately advised of each transaction made in pursuance of their order.
In addition to the “ slip contracts,” in the form described above, delivered by the plaintiffs to the purchasers of the cotton sold, and received by them from the buyers of cotton, the sales were entered upon the books of the plaintiffs in conformity with such contracts. These “ slip contracts ” show upon their face that the purchaser named therein bought cotton, sold for account of the name adopted to represent B. S. Bibb
&
Company; they gave the price, and the number of bales, and the time of delivery; they were in the form prescribed by the rules and regulations of the Cotton Exchange, and constitute bought and sold notes, which, taken together, as they should be, constitute a sufficient memorandum in writing of the contract between.the brokers, or their principal, and the purchasers of the cotton, to meet the re
In this latter case this court, speaking by Mr. Justice Harlan, said: “ The principle is well established that a complete contract binding under the statute of frauds may be gathered from letters, writings and telegrams between the parties relating to the subject matter of the. contrаct, and so connected, with each other that they may be fairly said to constitute one paper relating to the contract.” So in Benjamin on- Sales,. (Am. ed. § 296,) after a review of the authorities, both English and American, it is stated: “ The bought and sold notes, when they correspond and state all of the terms of the bargain, are complete and sufficient evidence to satisfy the statute ; even though there be no entry in the broker’s book, or, what is equivalent, only an unsigned entry.” Goom v. Aflalo, 6 B. &. C. 117; Sievewright v. Archibald, 17 Q. B. 104, 115 Thompson v. Gardiner, 1 C. P. D. 777. Such, too, is the rule in New York, as shown by the earlier cases of Peltier v. Collins, 3 Wend. 459; Davis v. Shields, 26 Wend. 341.
The bought and sold notes in question in this case, called “ slip contracts,” when read in the light of the rules and regulations of the Cotton Exchange, and considered in connection with thp letters and telegrams between the parties, constitute a sufficient note or memоrandum in writing of the transactions-to satisfy the requirements of the statute of frauds. It is no-valid objection to these “ slip contracts,” executed in duplicate, thkt the sales purported to be made on account of “ Albert,”’ “ Alfred,” “ Alexander,” “ Amanda,” and “ Winston,” etc.,, which names were adopted-by the defendants, and which represented them and their account. Parol evidence was clearly competent to show that these fictitious names, which defendants had adopted, represented them as the partiesyfor whose account the sales were made.
But aside from this, and independent of the question whether the bought and sold notes, called the
“
slip contracts,” consti
“We know of no principle on which the agent can be deprived of a right to his commissions and advances in the execution of his agency for a principal- on the ground that, he has not avoided a contract which was not in strict conformity with the statute of frauds, in the absence- of - any instruction or instructions from the principal not to comply therewith. Contracts not in conformity with the statute.-are’ only-voidable and not illegal, and an agent.may, .therefore,-.execute’ such voidable contracts without being chargeable with- either fraud, misconduct, or disregard of the principal’s rights. If the statute of frauds was not complied with, .in making the sale-contracts in the. present case, we do not see that the defendant was in a position to take advantage thereof, or that such want of compliance with the statute, after the contracts were executed, would constitute any. defence to the action. The suit was not brought on these contracts of. sale, which the plaintiff in error claims were voidable under the New. York, statute of frauds. It is an action by the .agents, against their principal to recover for work and labor performed, and money-paid out at the principal’s instance and request, and in,the settle
. It is another general proposition, in respect to the relation between principal and agent, that a request to undertake an agency or employment, the proper execution of which does or may involve the loss or expenditure of money On the part of the agent, operates as an implied request ón the part of the principal, not only to incur such expenditure, but also as- a promise to repay it. So that the employment of a broker to sell property for future delivery implies not only an undertaking to indemnify the broker in respect to the execution of his agency, but likewise implies a promise on the part of the principal to repay or reimburse him for such losses or expenditures as may become. necessary, or may result from the performance of his agency. Bayley v. Wilkins, 7 C. B. 886; Smith v. Lindo 5 C. B. N. S. 587. Where a speciаl contract remains executory the plaintiff must sue upon it. When it has been fully executed according to its terms and nothing remains to be done but the payment of the price, he may sue upon’ the contract or in indebitatus assumpsit and rely upon the common counts. In either case the contract will determine the rights of the parties. Dermott v. Jones, 2 Wall. 1, 9. These general principles have a direct application to the case under consideration upon the facts disclosed by the record.
The decision in
Irwin
v.
Williar,
110 U. S. 499, cited by plaintiff in error, is not in conflict with the views above expressed, nor does that decision properly apply to the facts in this case. The judgment of the court below in that case was reversed for error in the charge of the court upon the point that the act of one partner, in buying and selling grain for future delivery was binding upon the other partner who had not authorized, sanctioned or known of the
transactions;
In the case of
Perin
v.
Parker,
126 Illinois, 201, 211, where the transactions were similar to those in question here, it was said by the Supreme Court of Illinois: “ Parker, as agent for Perin, and acting under his orders, sold the corn for Perm, and, under the rules of the board of trade and the custom of the Chicago market, he was personally- bound to- the purсhasers on these contracts of sale. Parker and- Perin were dealing with reference ‘to such rules and such custom, with which they were both perfectly familiar. The rules of the board of trade provided, that on time contracts purchasers should have the right to require of sellers ten per cent margins, based upon the contract price of the property bought, and further security, from-time to time, to the extent of any advance in the market value above said price. The price of corn had been rapidly advancing since the date of the sales. Parker either had deposited margins upon the contracts, or was liable to be called on for the ten per cent and jhe -additional margins by the persons to whom he had sold the corn. The evidence does not seem to disclose whether or not the purchasers had either received or called for margins. Even if they had not, yet there was an existing legal right in them to call on Parker for margins, and a legal liability upon the latter, within the next banking hour thereafter, to deposit the margins called for, and also, within that time, deposit
This brings us to the consideration of the last assignment of error, viz., Whether under the pleadings and proofs a judgment was properly rendered against the defendant Bibb alone, after a verdict had been given finding that Hopkins was not a partner. On this question we entertain no doubt whatever. The action was agаinst the partnership carried on under the name of B. S. Bibb
&
Company, the complaint alleging that B. S. Bibb and Thomas H. Hopkins were the partners composing that firm. The proof showed, however, that Hopkins was not a partner, but only a clerk, and that the business done in the name of the firm of B. S. Bibb & Company was that of B. S. Bibb alone.. In support of this objection to the judgment against him, counsel for Bibb rely upon the case of
Walker
v.
Mobile Marine Dock and Mutual Ins. Co.,
31 Alabama, 529, 531. That was an action against three defendants as the joint owners of a steamboat. They made no objection to the complaint, but interposed a plea of the general issue. On the trial the proof showed that but two of the defendants were owners of the boat, and a verdict and judgment was accordingly rendered against those two and in favor of the other defendant. On a writ of error, the two defendants against whom the judgment was rendered sought a reversal on the ground that under the pleadings no judgment could be rendered against only two of them; and that, inasmuch as the proof disclosed a liability on the part of only two, when the complaint Avas made against three, the action should have been discontinued; but the Supreme Court ruled otherAvise, and held, as stated in the headnote or syllabus of the case, that “ where the complaint shows a substantial cause of action, and no objection was interposed to it in the primary court, a misjoinder of causes of action is not available on error.” It is true that, in the opinion of the court in that case, reference is made to § 2156 of the then code of the State, which allowed plaintiff to recover against one or more defendants, and it Avas stated that that section should not be so construed as to au
In the present case there is no variance because of the fact that‘Hopkins was not a member of the firm against whom the plaintiffs below were seeking relief, especially when no objection was made to any misjoinder; and in the objection to the entry of judgment upon the verdict, which he interposed, Bibb did not state any ground on which he rested the objection. But whatever may be said of the case of Walker v. Mobile Dock Co., which was decided in 1858, since that time new codes have been adopted, (1876 and 1886,) under the provisions of which, as construed by the later decisions of the Supreme Court of Alabama, it admits of little or no question that, in a suit, like the present, against an alleged partnership, in respect to which the liability is both joint and several, the failure to recover against one of ‘the alleged partners cannot defeat a right to recover against the other, who did business aloné in the firm name.
In the case of Clark v. Jones, 87 Alabama, 474, 482, it was. said by the Supreme Court of the State: “ It is further objected, that proof of demand against a partnership, of which defendant is a member, does not authorize a recovery on a complaint which counts on an account stаted between plaintiffs and defendant- individually, and for goods sold to htm alone. This question’should be regarded as res adjuclicata in this State. Under the statute, which, declares. ‘ any one of the associates, or his legal representative, may also be sued for the obligation of all,’ it has been uniformly held, that a partnership creditor may sue one of the members of the firm, for a debt contracted in the partnership name, whether by account or otherwise, and declare upon the demand as his individual liability; ” citing Code of 1886, § 2605; Duramus v. Harrison, 26 Alabama, 326; Hall v. Cook, 69 Alabama, 87.
In
Smith
v.
Straub,
41 Kansas, 7, 10, the Supreme Court of
In Rutenberg v. Main, 47 California, 213, it was held, in an action against several partners where the complaint averred a joint contract made by all the defendants, and the answer denied the contract but did not set up a misjoinder of parties defendant, that the plaintiff should not fail as against all of the defendants, but should have judgment against those who thé proof showed had joined in the contract, while the others should have judgment in their favor. Gillam v. Sigman, 29 California, 637; Gruhn v. Stanley, 92 California, 86; Pomeroy on Remedies and Remedial Rights, §§ 433, 434.
. At common law the objection for misjoinder should be made by answer or plea in a way so as to give the plaintiff a better writ; but at common law where two or more parties are sued as partners, and there is no denial of the partnership,
The several errors assigned for reversal of the judgment below are, in our opinion, not well taken, and that judgment is accordingly
Affirmed.