The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-05-20
LEGALITY OF OPTIONS.
An Important Decision in Favor of q
Brokerage House.

Washington, May 19.-Printed opinions
in the cases decided by the United States
supreme court on its last days sitting are
being filed from day to day. One very
significant case bearing pointedly upon
the question of the legality of dealings in
options has Just been made public. The
rase was that of b. S. Bibb, plaintiff in
error, against Richard H. Allen & Co, on
appeal from the Middle district of Ala
bama. The defendants in error, citizens
Of New York and Tennessee and doing
business in the city of New York as
brokers, commission merchants and cot
ton factors brought suit to recover 500, 900
as commissions for services and money
advanced on sales for future deliveries
according to the rules and regulations of
the New York Cotton Exchange. One Of
the pleas entered by the defendants was
that the work performed by the plaintiffs
was the making of eleven wagers on the
price of cotton, and that the money paid
| by the plaintiffs was in settlement of
losses of those wagers, and the statute
of the state Of New York against
wagers, bets and gambling transactions
was set out On this point Justice Jack
son, who delivered the opinion of the
NOuLUs Sdlus UPON tlb dhSlkIliltilu OF
error, which presents question whether
the transactions in which the parties
were engaged were illegal. because they
were wagering contracts under the New
York statutes against wagerS. bets, etc, g,
the evidence in the case clearly fails to
| made out such defense in entering into
| their arrangement. 1t is shown that
there was no agreement or understanding
| between the plaintiffs and defendants
ff,., cold y
not i'll fact to be actually delivered. In
their correspondence as to the
terms on which the agency was
to be undertaken, the plaintiffs
were distinctly informed that the de-
feudants did a large business for the best
and most reliable people OF their locality
that they would hold their correspondents
responsible for all orders executed as to
margins; that they handled sometimes
! from 5000 to 5000 bales of cotton day.
and that their customers dealt in orders
for from so to 1000 bales at time, and
were entirely responsible. tt was also
testified that there was no understanding
or agreement, either expressed or i'm
piled, between them at the time of enter
! ing upon the transactions, or during their
| progress, that cotton sold for account Of
the principals was not to
be delivered at the time
stipulated in the contracts of sale made
for their account. 1t is not questioned
that if the transactions in which the par
ties are engaged are Illegal they cannot
recover either the commissions for serv-
ices rendered therein or for advances
| and disbursements by him for his princi-
pal, the reason for this rule being that
in such illegal transactions, of which
the agent has knowledge, he is
regarded as particiPs Si ifdinis. which pre-
eludes him from the recovery of either
commissions or services But the facts
of this case do not bring the transaction
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 specu-
| lations. On the contrary, undisputed tes-
timOny establishes that the sales were
not wagers, but that the cotton was to be
| actually delivered at the time agreed
upon. Bibb never disclosed to the plaint-
ifs, as his brokers, that he did not in
tend to deliver the cotton sold through
them for future delivery. In addition to
this it is shown that the rules and regu-
lations of the New York Cotton Exchange
! recognize no contracts except for the sale
| and purchase of cotton to be actually de-
livered. These rules and regulations
impose upon the seller an obligation
to deliver the cotton sold, and
! upon the purchase an obligation to re-
ceive it, except in certain specified cases,
which have no application to the present
case. Consequently the court overruled
this and all other assignments in error,
and aftirms the decision in favor Of the
DlaintiffS -