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BIBB v. ALLEN.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA.
No. 269. Argued April 28, 1893. Decided May 10, 1893.
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.
By the agreed use of 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 sentence will be read as a part of the message, viz., this sale has been made subject to all the by-laws and rules of our cotton exchange in reference to contracts for the future delivery of cotton," the rules and regulations which were authorized to be made by the statutes of New York, under which the exchange was incorporated, entered into and formed a part of the transactions in this case. Contracts for the future delivery of personal property which the vendor does not own or possess, but expects to obtain by purchase or otherwise,
Statement of the Case.
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 defence 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 & Company, 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 declaration or complaint was in the usual form, and contained but a single count for work and labor done, services rendered, and money paid out and expended by the plaintiffs during the month of December, 1886, at the instance and request of the defendants, to the amount of $20,023.50, which, with interest thereon, was averred to be past due and unpaid. The defendants answered separately. Neither of them de
Statement of the Case.
nied the existence of a partnership between them, but both defended upon the merits. The answer of the defendant Hopkins consisted of two pleas: (1) non-assumpsit; (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
After issue joined on the pleas, the defendant Bibb, by leave of the court, filed a sixth plea, setting up that on November 10, 1886, the plaintiffs, as special agents for him, sold 10,000 bales of cotton by various contracts, as a speculation, and for future delivery in New York, and averred that the plaintiffs by their gross negligence and unskilfulness made said contracts in such forms that all of said contracts, under the laws of the State of New York, were unlawful and void, and not binding on any one of the parties to said contracts, or either of them, in this, that in and by the statute law of New York, in force at the time said contracts were made, it is declared that "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." It was further averred that no note or memorandum of any of the contracts of sale, made by plaintiffs for defendant, was made in writing and signed by the parties to be charged thereby, that no part of said
Statement of the Case.
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.
Upon the trial of the cause before the court and a jury, the court, after stating to the jury that there was no evidence in the case upon which a verdict for the defendant Bibb could rest, on the ground that the contract sued on was a gambling contract and therefore void, further instructed them that "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."
To the instruction that if they believed the evidence they should find a verdict for the plaintiffs against him for the account sued on and interest, the defendant Bibb excepted. The jury returned the following verdict: "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 he was not a partner of B. S. Bibb." Upon a return of this verdict the defendant Bibb objected to a judgment being rendered against him thereon, for the reason that the complaint and pleadings and said verdict did not authorize a judgment against him. No other ground of objection was stated or interposed. The court over
Argument for Plaintiffs in Error.
ruled his objection, and entered judgment against him for the amount found by the jury, to which Bibb excepted. The present writ of error was prosecuted by him to reverse that judgment.
Mr. E. W. Pettus, (with whom was Mr. George H. Craig on the brief,) for plaintiffs in error.
The deposition of Richard H. Allen should have been suppressed. It was attempted to be taken according to the laws of Alabama instead of pursuant to the statutes of the United States. The alleged commission was issued to George H. Carey instead of to George H. Corey, the commissioner named in the notice served upon counsel for defendants. For these and other reasons a motion to suppress the deposition was made "before the trial commenced."
Whether the New York Cotton Exchange was incorporated or was a mere voluntary association was immaterial to any question in this case. The admission in evidence of the statutes of New York under which it was organized, together with the rules and regulations pursuant to which the business of the Exchange was conducted was therefore error. Nor did it matter that the transactions in question were conducted in accordance with the then prevailing course of business of the Exchange. The attempt was to prove a custom or course of business of a merely temporary character. United States v. Buchanan, 8 How. 82. Custom or course of business cannot change the law, nor make a contract valid, which the statute declares void.
The "slip contracts" admitted in evidence could not and do not constitute a sufficient note or memorandum in writing to satisfy the statute of frauds of the State of New York. They do not contain in themselves the whole of the contract. Wright v. Weeks, 25 N. Y. 153; Williams v. Morris, 95 U. S. 444, 454, 456. The contract to be valid need not necessarily be contained in one writing, but when contained in more than one writing such writings cannot be connected by parol evi