Van Dusen-Harrington Co. v. Jungeblut
| Decision Date | 20 January 1899 |
| Citation | 75 Minn. 298,77 N.W. 970 |
| Parties | VAN DUSEN-HARRINGTON CO. v. JUNGEBLUT. |
| Court | Minnesota Supreme Court |
OPINION TEXT STARTS HERE
Appeal from district court, Ramsey county; Olin B. Lewis, Judge.
Action by the Van Dusen-Harrington Company against N. Jungeblut. From an order for judgment in favor of defendant, plaintiff appeals. Reversed.
The plaintiff corporation, a broker and member of the Chamber of Commerce at Minneapolis, received from defendant an order to purchase 5,000 bushels of May wheat for him, and executed the order according to the usage and custom of the business.
1. Held, from the course of dealing between plaintiff and defendant, stated in the opinion, it conclusively appears that it had implied authority from him to advance money to pay his margins, and continue the deal so made for him.
2. Held, it must be presumed that defendant gave plaintiff authority to make the deal in question according to the usages and customs prevailing in the market in which the deal was to be made.
3. According to such custom, plaintiff had a right, on the failure of defendant to pay margins, to close out the deal by selling the same on the open board of the chamber, which it did, and the deal was purchased by another corporation, some of whose officers are officers of plaintiff. Held, in the absence of any showing that any prejudice resulted to defendant from the fact that the two corporations were thus related, that fact alone is not sufficient to avoid the sale Wilson & Van Derlip, for appellant.
J. F. Fitzpatrick, for respondent.
The plaintiff corporation is a member of the Chamber of Commerce of Minneaplis. On January 11, 1897, plaintiff received from defendant the following letter: Plaintiff executed the order the next day on the open board of the chamber, notified defendant at his place of business in St. Paul to that effect, and requested him to send check for $250. He sent the check the same day,-January 12th,-stating: ‘Inclosed $250, option on 5,000 bushels May wheat.’ On January 28th defendant wrote plaintiff as follows: ‘I note from today's market report that my margins on the purchase of 5,000 bushels of May wheat are exhausted, and herewith inclose check for $150 additional margins.’ May wheat continued to fall until April 7th, when it had fallen to 64 3/8 cents, and plaintiff called on defendant for $400 more margins, which he refused to put up, and on the next day plaintiff closed out the deal for the 5,000 bushels at 65 1/8 cents per bushel, leaving a loss or deficiency below the amount of margins so put up by him of $243.75 and $6.25 commissions, or a total of $250. This action is brought to recover this amount. Defendant did not plead that it was a gambling transaction, and, as he did not set up any such illegality in his answer, was not able to make the defense on the trial. Dodge v. McMahan, 61 Minn. 175,63 N. E. 487. At the close of the trial each party moved that the court direct a verdict in his favor. The judge granted the motion of plaintiff, and ordered a verdict for it for $250. Defendant thereafter moved for judgment notwithstanding the verdict, or for a new trial. The court ordered judgment that plaintiff take nothing, and that defendant recover his costs and disbursements. From this order plaintiff appeals.
1. It is contended by respondent that he never requested or authorized plaintiff to pay out the money for him, and that it should have closed out the transaction as soon as the margins put up by him had run out. The monthly statement sent him by plaintiff January 30th contains the following notice: ‘On all marginal business the right is reserved to close transactions when margins are running out, without giving further notice, and settle contracts in accordance with the rules and customs of the Minneapolis Chamber of Commerce.’ Similar notices were sent in the monthly statements of March and April. It appears by the evidence, that according to such rules and customs, this closing out was done by going upon the open board of the chamber, and selling to the highest bidder the interest of the purchaser (or seller, as the case may be) in the particular deal. Respondent claims that under the above notice plaintiff was bound to act on this rule, and close out the deal when his margins were exhausted. We cannot so hold. The notice merely reserved to plaintiff the right to close it out. We are of the opinion that by the course of dealing between the parties it conclusively appears that plaintiff had implied authority to advance money for defendant in order to keep up and continue the transaction on his part until the time came to settle it in the month of May, unless orders to the contrary were given in the meantime. No money accompanied his order sent January 11th to purchase the wheat. Defendant made the purchase, informed him of that fact, and requested him to send his check, which he did. When he found, on January 28th, by the market report, that his margins had been exhausted, he did not inquire of defendant whether it had closed out or sold out the deal, but assumed that defendant had not, and sent it an additional $150. As we will hereinafter show, it must be presumed that defendant knew the course of dealing on the Chamber of Commerce. It was conceded by defendant on the argument that plaintiff was personally responsible for all loss on this deal to the full extent of the fall in the market, and that, if it did not have on hand a sufficient deposit of plaintiff's money to cover the loss, would have to pay the balance of such loss out of its own funds. It is plain that when defendant sent in the order on January u1th he expected plaintiff to make the deal, and thereby incur liability for loss, without first receiving any deposit at all from him, and it did so make it. Again, after he had put up such a deposit, if, after his margin ran low, the market fell suddenly to a point where the loss would exceed the amount of the deposit, plaintiff might not have an opportunity to go upon the open board of the chamber, and sell out the deal after the amount of such deposit was exhausted, and before the market dropped below the point at which the deposit was exhausted, and thereby prevent loss to itself. Defendant knew all of this. On January 28th he promptly and voluntarily put up additional margins without being asked for them, when he found by the market reports that his margins were exhausted, and yet until April 7th, when plaintiff demanded still more margin after the loss here in question had occurred, he failed to notify plaintiff that he would not pay anything more for carrying the deal.
2. Respondent contends that he employed plaintiff to act as his agent in purchasing wheat for him from some third party, and to carry and continue the contract in that form; that it appears by the evidence that a wholly different contract was made, whereby plaintiff was to become and did become the opposite party to a contract with him to sell him wheat for future delivery; that, while plaintiff was acting as his agent to buy, it attempted to become the opposite party to the contract, and sell to him wheat through itself as such agent. The contract made was of this peculiar kind, and respondent contends that it was so made without his knowledge or consent. We cannot so hold. The Chamber of Commerce is a corporation. Its members meet daily in a certain room at a certain hour, and buy and sell large quantities of grain for both present and future delivery. No one but members are allowed these privileges. While in the great bulk of the transactions the members act as brokers or agents for others, the rules require them to buy and sell in their own names, without disclosing their principals; and this is the uniform custom....
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