102 So. 843 | Miss. | 1925
The appellant is a cotton broker, and the appellee is engaged in the mercantile business, and as an incident thereto buys cotton from producers and sells it on the market. Both parties are located and doing business at Kosciusko. *26
In December, 1919, the appellant purchased from the appellee four hundred bales of cotton, which for reasons unnecessary to set forth could not then be shipped out of Kosciusko and sold in New Orleans, La., for sale in which market it was purchased. The appellee then sold through brokers in New Orleans, on the New Orleans Cotton Exchange, four hundred bales of cotton for future delivery for the purpose of hedging against any loss he might sustain because of any decline in the price of spot cotton before he could sell that purchased from the appellee. This New Orleans sale was by means of two contracts of two hundred bales each, and was made stating the evidence most strongly for the appellant, pursuant to an agreement between the appellant and the appellee made at the time of the purchase of the four hundred bales of cotton by the appellant from the appellee that, if the appellant would purchase the cotton, he might sell an equal amount in New Orleans for future delivery in order to hedge against any decline in the price of that purchased from the appellee, and that the appellee would protect him from any loss that he might sustain on account thereof. The appellant claims that he intended to comply with his new Orleans contracts by delivering to the purchaser therein the four hundred bales of cotton purchased by him from the appellee. No cotton, however, was delivered under these contracts, but they were settled in the usual way by the appellant paying the difference in price arising out of the rise of the market price above that at which he had contracted to sell.
It is manifest from the evidence, which is too voluminous to be here set out, that the actual delivery of cotton under the New Orleans contracts was not contemplated, and that the settlement thereof was in accord with the parties' original intention relative thereto. This being true, these contracts come within the condemnation of section, 2303, Code of 1906 (Hemingway's Code, section 1913), and chapter 118, Laws of 1908 (Hemingway's *27 Code, section 1914 et seq.) Section 2303, Code of 1906 (Hemingway's Code, section 1913), provides:
"A contract for the purchase or sale of a commodity of any kind, to be delivered at a future date, the parties not intending that the commodity is to be actually delivered in kind and the price paid, shall not be enforced by any court; nor shall any contract of the kind commonly called `futures' be enforced, nor shall a contract in this section mentioned be a valid consideration, in whole, or in part, for any promise or undertaking," etc.
It may be true, and for the purpose of this discussion it will be assumed, that the contracts made in New Orleans for the sale of the four hundred bales of cotton were made for the purpose of hedging against any loss which the appellant might have sustained by a decline in the price of cotton before he could sell that which he had purchased from the appellee, and it may be, as counsel for the appellant seem to contend, that such a contract is not a wagering contract, and consequently is valid at common law, although it was the intention of the parties that the commodity therein sold was not to be delivered, but that the settlemen to be made under the contract was the payment of the difference in price of the commodity arising out of the rise and fall of the market price above or below the contract price therefor, but with the common law we have here no concern, for the case is controlled and must be decided by the statute hereinbefore set out.
Affirmed.
