Source: https://supreme.justia.com/cases/federal/us/149/481/
Timestamp: 2019-04-19 04:43:52+00:00

Document:
Motions to suppress depositions for irregularities should be made before the case is called for trial, so that opportunity may be afforded to correct the defects or to retake the testimony.
A variance between the notice and the commission to take depositions such as misspelling the commissioner's name in the latter, affords no valid ground for the suppression of the depositions.
Where a principal sends an order to a broker doing business in an established market or trade for a deal in that trade, he thereby confers upon the broker authority to deal according to any well settled usage in such trade or market, especially when such usage is known to the principal, and is fair in itself, and does not change any essential particular of the contract between the principal and the broker, or involve any departure from the principal's instructions, provided the transaction for which the broker is employed be lawful in character and is not violative of good morals or public policy.
In an action by A., a cotton broker doing business on the New York Cotton Exchange, against B. for moneys claimed to be due for advances and commissions on account of various transactions for B. in selling as his agent cotton for future delivery, it was not error to admit in evidence the statutes of New York under which the said Cotton Exchange was organized, together with the rules and regulations of that body in pursuance of which the transactions in question were conducted, it appearing that B. knew that A. when acting as his agent, would transact the business through that Exchange, and in accordance with its rules and regulations.
"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 bylaws and rules of the market where executed,"
"with every telegram sent by this table, the following sentence will be read as a part of the message, viz., 'this sale has been made subject to all the bylaws and rules of our Cotton Exchange in reference to contracts for the future delivery of cotton,'"
are valid if at the time of making the contract, an actual transfer of the property is contemplated by at least one of the parties to the transaction.
Slip contracts, in the form prescribed by the rules and regulations of the Cotton Exchange, constitute bought and sold notes, which, taken together, as they should be, afford a sufficient memorandum in writing between the brokers, or their principal, and the vendee of the cotton to satisfy the requirements of the statute of frauds.
The defense of the statute of frauds cannot be set up against an executed contract.
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 also implies a promise on the part of the principal to repay or reimburse him for such losses or expenditures as may become necessary or result from the performance of the agency.
B. and H. being sued as partners, and it appearing from the proof that H. was not a partner but merely a clerk, no objection to the misjoinder having been made by either of the defendants, judgment for the whole amount was properly entered against B., a substantial cause of action having been established.
The case of Irwin v. Williar, 110 U. S. 449, distinguished.
The defendants in error, citizens of the States of New York and Tennessee and doing business in the City of New York as brokers, commission merchants, and cotton factors under the firm name and style of Richard H. Allen & Co., brought this action of assumpsit in February, 1887, against the plaintiff in error and one Hopkins, citizens of Alabama, as partners under the name of B. S. Bibb & Company, to recover the sum of $20,023.50 with interest, which was claimed as commissions for services rendered, and money paid and advanced by them for and at the request of the defendants in selling, for their account, and as their agents, cotton for future delivery according to the rules and regulations of the New York Cotton Exchange, in the City of New York.
the existence of a partnership between them, but both defended upon the merits. The answer of the defendant Hopkins consisted of two pleas: (1) nonassumpsit; (2) that the plaintiffs did not do the work and labor or pay the money mentioned in the complaint at his instance or request. The defendant Bibb filed an answer containing five pleas, the first two of which were the same as those interposed by Hopkins. His third plea was a general denial of the allegations of the complaint, while the fourth and fifth averred that the work and labor performed by the plaintiffs, as set forth in their declaration, was the making of eleven wagers for him on the price of cotton, and that the money paid by the plaintiffs for him was in the settlement of the losses of those wagers, and in each of these pleas the statute of the State of New York against wagers, bets, and gambling transactions was set out.
"every contract for the sale of any goods, chattels, or things in action, for the price of $50 or more, shall be void unless (1) a note or memorandum of such contract be made in writing, and be subscribed by the parties to be charged thereby; or (2) unless the buyer shall accept and receive a part of such goods, or the evidences, or some of them, of such things in action; or (3) unless the buyer shall at the time pay some part of the purchase money."
cotton was accepted by the buyer, and no part of the purchase money was paid therefor. The plea further alleged that on December 30, 1886, the plaintiffs, without the request of the defendants, but voluntarily, settled said void contracts, and paid to the buyers of the cotton under such contracts large sums of money, and concluded with the averment that, without this, the plaintiffs never did any work, or paid any money, for the defendant.
"the defendant Bibb did not in his testimony deny the correctness of the account sued on, but did say that the plaintiffs were liable to him for their failure to execute his subsequent orders to them to sell, for future delivery, some twenty-two thousand bales of cotton, as shown in the evidence in this cause, but, there being no claims by him in this suit against the plaintiffs on account of such failure to execute such orders,"
"I charge you that if you believe the evidence, you should find a verdict for the plaintiffs against the defendant Bibb for the amount of the account and interest."
The court further charged the jury: "This case is made out as to defendant B. S. Bibb, and it is your duty to find a verdict against him for the account sued on and interest."
"We, the jury, find for the plaintiffs against the defendant Bibb, and assess the damages at $22,476.38, and we find for the defendant T. H. Hopkins on the ground that we find he was not a partner of B. S. Bibb."
his objection and entered judgment against him for the amount found by the jury, to which Bibb excepted. The present writ of error is prosecuted by him to reverse that judgment.
question between the parties were conducted in accordance with those rules and regulations; (3) that the contracts for the sale of cotton for future delivery were gambling contracts within the meaning of the New York statute against wagers, bets, etc.; (4) that said contracts were invalid under the statute of frauds of the State of New York, and (5) that under the pleadings, no judgment could be rendered against the defendant Bibb alone.
proper ground for taking the deposition. Without invoking the action of the court upon these objections, the defendant Bibb filed cross-interrogatories to those propounded by the plaintiffs, and on April 18, 1888, a commission was regularly issued to said George H. Corey, as commissioner, to take the deposition on the interrogatories and cross-interrogatories filed in accordance with the terms of the notice served upon the defendants. The record further shows that the deposition was actually taken in pursuance of the commission thus issued, and was in all respects regular and in proper legal form. The clerk of the court, in issuing the commission, addressed it, however, to George H. Carey, Esq., 60 Wall Street, New York City, instead of to George H. Corey, but that was purely a clerical mistake in making out the commission, and in no way misled the defendant or affected his rights. He had been notified of the place of taking the deposition, and had been given the true name of the commissioner, and the slight variance in the commission which issued was not material, and furnished no valid ground for the suppression of the deposition. Keene v. Meade, 3 Pet. 1, 28 U. S. 6.
the testimony or correct defects in the taking of the deposition. Howard v. Stillwell & Bierce Mfg. Co., 139 U. S. 199, 139 U. S. 205, and cases cited. The same rule of practice prevails in Alabama. De Vendal v. Malone, 25 Ala. 272, 278; Birmingham & Union Ry. Co. v. Alexander, 93 Ala. 133. This assignment of error is therefore without merit.
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 York Cotton Exchange was organized, together with the rules and regulations of that body under 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 accordance 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 between the parties 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.
to the principal, and is fair in itself, and does not change in any essential particular the contract between the principal and agent, or involves no departure from the instructions of the principal, provided the transaction for which the broker is employed is legal in its character and does not violate any rule of law, good morals, or public policy. We are of opinion, therefore, that the assignment of error based upon the admission of this testimony is not well taken.
of which the agent has knowledge he is regarded as particeps criminis, which precludes him from the recovery of either commissions or advances. Irwin v. Williar, 110 U. S. 499, 110 U. S. 510.
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 sales 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 regulations of the New York Cotton Exchange recognized no contracts except for the sale and purchase of cotton to be actually delivered. 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.
our Cotton Exchange in reference to contracts for the future delivery of cotton.'"
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, Amer. 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, 24 N.Y. 57; Irwin v. Williar, 110 U. S. 499, 110 U. S. 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 upon 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.
deliver the amount of grain sold, and before you can find that the sales were gambling transactions, and void, you must find from the proof that the plaintiffs knew or had reason to believe that Irwin & Davis contemplated nothing but a wagering transaction, and acted for them accordingly. If the plaintiffs made sales of wheat for Irwin & Davis for future delivery understanding that these contracts would be filled by the delivery of grain at the time agreed upon, Irwin & Davis were liable to the plaintiffs, even though they meant to gamble, and nothing more."
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, the 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.
"If bureau report is considered favorable tomorrow, sell for January delivery 1,000 bales cotton account Albert. Sell for February delivery 1,000 bales account Alfred. Sell for January delivery 1,000 bales account Alexander. Sell for January delivery 500 bales cotton account Andrew. Act promptly if favorable."
So, under date of November 10, 1886, they telegraphed: "If market opens as high or higher tomorrow, sell for January delivery 1,500 bales cotton account Winston. Keep us thoroughly posted."
These dispatches, 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 quoted, that the orders were to be subject in every respect to the bylaws 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 bylaws and rules in reference to the future delivery of cotton.
"New York, Nov. 10, 1886."
"On contract, subject to rules and regulations"
"of New York Cotton Exchange."
"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.
of the statute of frauds. Peabody v. Speyers, 56 N.Y. 230, 236-237; Newberry v. Wall, 84 N.Y. 576, 580; Butler v. Thomson, 92 U. S. 412; Beckwith v. Talbot, 95 U. S. 289; Ryan v. United States, 136 U. S. 68, 136 U. S. 83; Bayne v. Wiggins, 139 U. S. 210.
"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 contract, and so connected with each other that they may be fairly said to constitute one paper relating to the contract."
"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 books, or, what is equivalent, only an unsigned entry."
Goom v. Aflalo, 6 B. & C. 117; Sievewright v. Archibald, 17 Q.B. 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 the letters and telegrams between the parties, constitute a sufficient note or memorandum 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, that 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 parties for whose account the sales were made.
"no rule of law which prevents a party from performing a promise which could not be legally enforced, or which will permit a party morally but not legally bound to do a certain act or thing, upon the act's or thing's being done, to recall it to the prejudice of the promisee on the plea that the promise, while still executory, could not, by reason of some technical rule of law, have been enforced by action."
Newman v. Nellis, 97 N.Y. 285, 291.
the agent is employed is illegal or contrary to good morals and public policy. Addison on Contracts § 636; Story on Agency §§ 339, 340, and cases cited in notes. Thus, in Beach v. Branch, 57 Ga. 362, where an agent had sold cotton for account of another and was obliged to refund the purchase money to the purchaser on account of false packing by the principal, he was allowed to recover the amount so paid from the principal.
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 on 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 special 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. Dermont v. Jones, 2 Wall. 9. These general principles have a direct application to the case under consideration upon the facts disclosed by the record.
"if a call for margins (which the plaintiff in error was to put up) is not responded to promptly, there is to be no carrying on our part (Richard H. Allen & Co.), but that the cotton is to be closed out at our discretion,"
of their contracts with the parties to whom the cotton had been sold and by the rules and regulations of the exchange, of which they were members. If they had failed "to cover" or to comply with such contracts, they would have been liable to expulsion from the Exchange. The cotton which they bought "to cover" these contracts was purchased at the market price, and the difference between that price and the price of 10,000 bales previously sold for Bibb & Company amounted to $19,273.50, which, with the plaintiff's commissions of $750, constituted their claim against B. S. Bibb & Company, for the recovery of which the suit was brought. Under these facts, which are uncontroverted, it is clear that the rule laid down in Irwin v. Williar has no application to this case.
with the secretary of the Board, or the parties calling for such deposits, duplicate certificates of deposit, signed by the treasurer of the Board, or an authorized bank."
"when 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."
a recovery upon a cause of action not embraced in the pleadings or which was inconsistent with the complaint, but that it authorized a judgment in favor of some of the defendants where the proof did not show the absence of a right to recover against the remaining defendants upon the pleadings.
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 alone in the firm name.
"It is further objected that proof of demand against a partnership of which defendant is a member does not authorize recovery on a complaint which counts on an account stated between plaintiffs and defendant individually and for goods sold to him alone. This question should be regarded as res adjudicata in this state. Under the statute, which declares 'any one of the associates, or his legal representatives, may also be sued for the obligations of all,' it has been uniformly held that a partnership creditor may sue one of the members of a 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 1886, § 2605; Duramus v. Harrison, 26 Ala. 326; Hall v. Cook, 69 Ala. 87.
"It may be true under the common law practice that in a suit against a partnership firm, no judgment could be rendered against an individual member of that firm, but our statute provides that all contracts shall be construed as joint and several, and it also provides that in all cases of joint obligations and joint assumptions of copartners or others, suits may be brought or prosecuted against any one or more who are so liable. This action was instituted under the theory that there was a partnership. The plaintiff in error filed her answer under oath denying the partnership, and if the proof fixed a liability on any one of the parties, judgment could be rendered against such party individually."
In Rutenberg v. Main, 47 Cal. 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 the proof showed had joined in the contract, while the others should have judgment in their favor. Gillam v. Sigman, 29 Cal. 637; Gruhn v. Stanley, 92 Cal. 86; Pomeroy on Remedies and Remedial Rights §§ 433, 434.
and no plea alleging a misjoinder, it is doubtful whether, after verdict, such an objection could be taken. But however that may be, under the modern codes, including that of Alabama, no such objection can be made after verdict. In this case, the plaintiff in error did business under the name of B. S. Bibb & Company, and he should not be heard, when sued as a partner of that firm, to say that he alone composed the firm, and was therefore not liable because joined with another defendant who was not a member.

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