The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1909-07-21
mo FUTURE CONTRACTS"
THAT is THE DECISION OF
JUDGE BRAWLEY.
"A Gambling Contract Disguised Un.
der the Form of Legitimate Busi-
ness is None the Less obnoxious"
says the Court i'm Reversing Ref
eree's Holding i'm Grcenville Case

eree's Holding i'm Grcenyille Case
charleston, July 17.-In an opinion
filed in the United States District
Court yTferday, Judge William II.
BraWley refused to allow a claim for
luture' contracts for cotton on the
ground that the contracts were and
arc intended to be speculative for de-
ferred delivery of spot cotton. "A
gambling contract disguised under
the form of legitimate business is
none the less obnoxious says judge
Brawley.
The question came before Judge
Brawley in the matter of Aetna Cot
ton Mills bankrupt, ex parte Knight
fancey Co. A claim was made
against the mills for about $4,000 on
cotton contracts, and being first re-
terred to Referee Julius II. Heyward
the referee allowed the claim and a
petition was made to Judge Brawley
to review the order of the referee. The
case was argued before Judge Braw-
ley, who after consideration.
reversed the referee and disallowed
the claim.
Following is Judge Brawley's opin-
ion in part:
This Is petition to review the or
der of the referee, allowing a claim
OF Knight. Yancey & CO. The claim
Is for a balance alleged to be due
upon an account for losses sustained
upon certain contracts for the future
delivery Of cotton. There are four
&C ntracts for the sale of $50 bales
each. dated June 2, 1905, and in form
are for the sale of $50 bales of cotton
deliverable at Union, S. c., the first
being for delivery in October, the 9TH
ers for delivery in November. De-
cember and January respectively, the
price being fixed at 80 points on jan
uary delivery in New York, the price
tosbe called at buyers option on any
day, prior to September Is, 1905, the
seNer has the option to fix. the price
within five days thereafter.
Upon the face of the contracts, IT
is apparent that provision is made for
a speculation In cotton. BY the terms
Of paragraph 3, the buyer has the op-
ticn on any day prior to September
2G. to put the cotton to the seller al
% 3-4 points on January delivery in
New York and by paragraph 8 the
put the CALI to be repeated one or
more times at buyers option, prior
to September 25, and by paragraph
cash settlements to be made on
each put based on an average weigh,
OF 500 pounds per bale. On these puts
and calls, It is not pretended that ac-
tuai cotton was to be delivered or re-
served. and what was actually done
was what presumably was intended
to be done at the time the contracts
were made, and what in terms they
permitted to be done. That is to say
Sartor, as president of the cotton
mills, exercised his option to put this
cotton as provined In the contrac:
within less than a month after the
contracts were executed, and as the
result OF that Operation nearly $11,-
600 was lost by the Aetna Company,
settled in part by payments in cash
and in part by notes given in July,
1905, which have since been paid and
what Sartor contends was intended to
be a settlement in full of the con-
tracts.
II am of the opinion that the pre-
ponderance of the testimony is that
these contracts were and were intend
ed to be speculative for deferred de-
livery of spot cotton. The fact that
the parties had actually settled diff
ferences arising out Of the put trans
action, and that the cotton to be de-
| livered was not actually delivered.
tends to show that at the inception
Of the contract the parties intended
to settle the differences and not deal.
| In actual cotton. A gambling con-
tract disguised under the form of le-
| gitimate business is none the less OBJ
noXiOus.
1T does not seem that any Of the
| cases referred to by the referee are
controlling here. They are based upon
| contracts which differ essentially from
| those now under consideration AMI
the facts are different.
II am Of the opinion that the ref
cree was in error in allowing the
claim, and his order is set aside and