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Opinion of the Court.

actions 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, 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


These rules, which were authorized to be made by the statute of the State of New York, under which the Exchange was incorporated, enter into and form part of the contracts of sale in this case. The defendants in one of their earliest communications to the plaintiffs informed them that they would use in their telegraphic correspondence what was known as 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

Opinion of the Court.

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, Am. 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, 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. "A person may make a contract for the sale of personal property for future delivery which he has not got. Merchants and traders often do this. A contract for the sale of personal property which the vendor does not own or possess, but expects to obtain by purchase or otherwise, is binding if an actual transfer of property is contemplated. A transaction which on its face is legitimate cannot be held void as a wagering contract by showing that one party only so understood and meant it to be. The proof must go further, and show that this understanding was mutual — that both parties so understood the transaction. If, however, at the time of entering into a contract for a sale of personal property for future delivery it be contemplated by both parties that at the time fixed for delivery the purchaser shall merely receive or pay the difference between the contract and the market price, the transaction is a wager, and nothing It is not sufficient for the defendant to prove that Irwin & Davis never understood that they were to deliver wheat in fulfilment of the sales made for them by the plaintiffs. The presumption is, that the plaintiffs expected Irwin & Davis to execute their contracts, expected them to


Opinion of the Court.

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


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.

Opinion of the Court.

After agreeing upon the terms in which the business should be transacted, and the use of Shepperson's code of cipher, B. S. Bibb & Company, on November 9, 10, and 11, 1886, telegraphed orders to the plaintiffs to sell for them in the aggregate 10,000 bales of cotton for January and February delivery. These despatches were sent according to the form of Shepperson's code, and directed the sales for delivery for account of designated names such as "Albert," "Alfred," "Alexander," "Amanda," " Andrew," " Winston," etc., which names were intended, and understood, to represent the firm name of B. S. Bibb & Company. Thus, under date of November 9, 1886, B. S. Bibb & Company telegraphed to plaintiffs: "If bureau report is considered favorable to-morrow sell for January delivery 1000 bales cotton account Albert. Sell for February delivery 1000 bales account Alfred. Sell for January delivery 1000 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 1500 bales cotton account Winston. Keep us thoroughly posted."

These despatches, 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 by-laws 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 by-laws and rules in reference to the future delivery of cotton.

The plaintiffs executed these orders promptly as they were received. In the execution of the orders they made what are called "slip contracts" in duplicate, one copy signed by the purchaser being delivered to the plaintiffs, and the other, signed by the plaintiffs as brokers, being given to the purchaser. There were nineteen sales of cotton to various per

Opinion of the Court.

sons named in these "slip contracts," which were in the following form:

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Buyer, Zerega & White.

On contract, subject to rules and regulations
of New York Cotton Exchange.
Twenty-five hundred bales cotton.

Jan. 1 delivery.

Price 8.99.

× 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.

In addition to the "slip contracts," in the form described above, delivered by the plaintiffs to the purchasers of the cotton sold, and received by them from the buyers of cotton, the sales were entered upon the books of the plaintiffs in conformity with such contracts. These "slip contracts" show upon their face that the purchaser named therein bought cotton, sold for account of the name adopted to represent B. S. Bibb & Company; they gave the price, and the number of bales, and the time of delivery; they were in the form prescribed by the rules and regulations of the Cotton Exchange, and constitute bought and sold notes, which, taken together, as they should be, constitute a sufficient memorandum in writing of the contract between the brokers, or their principal, and the purchasers of the cotton, to meet the re

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