Connor v. Black

Citation24 S.W. 184,119 Mo. 126
PartiesConnor et al., Appellants, v. Black, Appellant
Decision Date23 December 1893
CourtUnited States State Supreme Court of Missouri

Appeal from Clark Circuit Court. -- Hon. B. E. Turner, Judge.

Reversed and remanded.

R. D Cramer and Edward Higbee for Connor Brothers, appellants.

The court erred in giving defendant's instruction number 5. Cameron v. Durkheim, 55 N.Y. 425, 436 to 439 "Black Friday" case; Howard v. Smith, 56 Mo. 314; Cockrell v. Thompson, 85 Mo. 510; Taylor v. Penquite, 35 Mo.App. 389; Kent v Miltenberger, 13 Mo.App. 503. (2) The ruling of the court is anomalous. P. P. Connor had bought this 40,000 bushels of oats with his own money, at thirty-seven cents. It was his private property: he did not hold it in trust for respondent even at that price. As well charge plaintiffs with all losses as the losses on this 40,000 bushels. If the plaintiffs had really bought the 100,000 bushels for themselves while pretending to act as respondent's brokers, then the whole loss should fall on them. If, as an independent transaction, respondent had instructed plaintiffs to buy 40,000 bushels of grain for him, and they had sold him their own grain, he could restore the grain and repudiate the transaction. Brookman v. Rothschilds, H. L. 5 Bligh. (N. S.) 165, cited in Dos Passos on Stockbrokers, foot of page 224. (3) The court erred in overruling plaintiffs' motion for a new trial. (4) The judgment should be reversed and judgment entered in this court for the amount claimed by plaintiffs with interest.

McKee & Jayne and John D. Smoot for George Black, appellant.

(1) The petition does not state facts sufficient to constitute a cause of action, and this is fatal on appeal. Furnishing Co. v. Wallace, 21 Mo.App. 128; Honovun v. Pottery Co., 9 Mo.App. 595; Section 2039, R. S. 1889. (2) The court erred in admitting in evidence the copies of the deeds of trust in favor of John B. Mudd, trustee, and also the chattel mortgage from George Black to Clay Black. (3) The court erred in giving instructions numbers 2, 5, 6 and 7, offered by respondent, for it was proven that appellant had no oats on hand to deliver at the time he arranged with respondents to sell for him; and knowledge of purchaser that no oats was to be delivered, was not required. Laws, 1887, p. 172; Laws of 1889, p. 98; R. S. 1889, secs. 3834, 3835, 3836, 3837, 3739, 3931, 3932, 3933, 3934, 3936; Crawford v. Spencer, 92 Mo. 498; Law of the Produce Exchange, secs. 189, 190, 199, 206, 210. (4) The court erred in refusing instruction number 10 offered by appellant, for if respondents and appellant did not intend any oats was to be delivered on the contract of sale, it was a gambling contract on their part, and if money was paid thereon, by appellant, to respondents, within three months next before the beginning of this suit, appellant was entitled to recover it back. McGrew v. City, 4 S.W. 38; Floyd v. Patterson, 10 S.W. 526; R. S. 1889, sec. 5209; Crawford v. Spencer, 92 Mo. 498; Crockrell v. Thompson, 85 Mo. 510; Irwin v. Williar, 110 U.S. 499; R. S. 1889, secs. 3931, 3932, 3933, 3934, 3936, 3834, 3835, 3836, 3837, 3839; Acts of 1889, p. 98; Acts of 1887, p. 172; Jones v. Shale, 34 Mo.App. 302; Taylor v. Penquite, 35 Mo.App. 389. (5) The verdict of the jury was against the evidence, and should have been set aside, for respondents acted as the agent of both buyer and seller, in sale and purchase of oats. 2 Pomeroy's Equity, sec. 950; Chapman v. Currie, 51 Mo.App. 40; Dos Passos on Stock Brokers, pp. 213, 215, 280. (6) The court erred in refusing to sustain appellants motion for a new trial; and, also, his motion in arrest of judgment, for therein the court's attention was called to all the foregoing points relied on and errors complained of.

OPINION

Burgess, J.

While there have been two transcripts of the record filed in this case, there is in fact but one case wherein George Black appeals from the judgment against him in favor of plaintiffs, and the plaintiffs appealed from the same judgment and also the judgment against them in favor of Clay Black. The cases, for convenience, will be considered together.

On the seventeenth day of July, 1890, and for several years previous thereto, plaintiffs were partners doing business as brokers and commission merchants in the city of St. Louis, buying and selling grain and hay on commission, and were members of the merchants' exchange in said city. That on said day they, as brokers, sold for, and on account of, defendants and at their request, one hundred thousand bushels number 2 mixed oats at thirty cents per bushel to the following responsible purchasers, to wit: Linebarger & Co., five thousand bushels; J. W. Warren & Co., five thousand bushels; Schseiner, Flack & Co., ninety thousand bushels; all to be delivered in regular elevators in the city of St. Louis on any day in the month of September, 1890, at the option of the defendants.

The petition alleges and the proof tends to show that said oats were sold under the custom of brokers and rule of the said merchants' exchange; that it is, and then was, the custom of brokers in said city, and in accordance with the rules of the said merchants' exchange for the brokers to sell the goods in their own name, without disclosing the name of their principal, and if the principal failed to deliver the goods according to the contract, then the brokers are liable to the purchasers and compelled to deliver the goods sold during the optional time, or upon waiver of actual delivery to pay the difference between the market and contract price; and that this may be done the brokers are authorized by said rules and custom to purchase like goods at the market price for account of their principal, and make delivery thereof, or to settle as aforesaid, and charge the same so paid out in settlement, to the principal; that, under the custom and rules and the understanding of the parties, it was a part of the contract between plaintiffs and defendants that upon these sales so made by plaintiffs for defendants, the defendants were to keep a margin of cash in plaintiffs hands for their protection in case of a raise in the market of the grain sold, from and after the date of said sales until the end of the optional time for the delivery thereof, above the price at which it was sold, and if the market price should be above the price at which it was sold, then upon notice thereof and demand of sufficient margin from defendants, if they failed forthwith to put up the margin sufficient to protect plaintiffs, then plaintiffs were no longer bound to carry said contracts, but might at their pleasure close out the contracts by buying and delivering, during the said optional time, at the market prices, the oats which defendants had sold and not delivered, or settle with the vendees in cash at such price, and the difference in price was to be charged to defendants.

That said customs and rules were well-known to and assented to by defendants at the time of said sales and formed part of the contract between plaintiffs and defendants, and said oats were sold under said customs and rules for defendant's account; that shortly after said sale the market price of said oats rose and continued to steadily advance from day to day; that in accordance with said rules and customs, at plaintiffs' demand, defendants put up in plaintiffs' hands, margins on said sales as follows: July 19, 1890, cash, $ 1,000; July 28, 1890, cash, $ 2,000; July 29, 1890, cash, $ 2,000.

That on or after July 31, 1890, the market price of said oats rose so high as to absorb all of said margins, and plaintiffs so notified defendants and demanded further margins; that the price continued to advance on each subsequent day and defendants repeatedly promised plaintiffs to pay sufficient margins, but failed to put up any more than as above stated. That on August 6, 1890, the market price of oats had so advanced that if defendants were then to buy to fill their said contracts there would be a heavy loss on the transaction.

That defendants then refused to put up any further margins and directed plaintiffs to close out said transaction and to buy one hundred thousand bushels of such oats on the St. Louis market for delivery in September, 1890, and fill their said contracts. That plaintiffs accordingly bought number 2 mixed oats at the prices following on the open market at regular market prices, to wit:

Fifteen thousand bushels at thirty-nine cents per bushel, $ 5,850; ten thousand bushels at thirty-nine and one-fourth cents per bushel, $ 3,925; seventy-five thousand bushels at thirty-nine and one-half cents per bushel, $ 29,625.

That said purchases were made with the knowledge, direction and consent of defendants, and plaintiffs delivered said oats in fulfillment of said contracts of sale, and in so doing necessarily paid out and advanced for account of defendants in excess of $ 5,000 margins, so put up in plaintiffs' hands as aforesaid, the further sum of $ 4,400 and earned their customary brokerage, justly chargeable against defendants, the further sum of $ 125.

Plaintiffs prayed judgment for $ 4,400 and brokerage to the amount of $ 125 with the interest.

Clay Black's answer was a general denial. George Black, in his answer, admitted that plaintiffs were copartners, doing business as commission merchants, and were members of the merchants' exchange, and that he instructed them to sell one hundred thousand bushels number 2 mixed oats at call in the chamber of commerce under the rules of said exchange at thirty cents per bushel, but denied all other allegations in plaintiffs' petition.

The answer also avers, that defendant on July, 1890, instructed plaintiffs to sell one hundred thousand bushels number 2 mixed oats as aforesaid; that...

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