Adler v. Searles

• Decision Date: 10 April 1905
• Court: Mississippi Supreme Court
• Parties: ALFRED A. ADLER ET AL. v. CHARLES J. SEARLES

38 So. 209

86 Miss. 406

ALFRED A. ADLER ET AL. v. CHARLES J. SEARLES

Supreme Court of Mississippi

April 10, 1905

April 1905

FROM the circuit court of Warren county, HON. GEORGE ANDERSON Judge.

Searles the appellee, was plaintiff in the court below; Adler and others, partners, the appellants, were defendants there. From a judgment in plaintiff's favor defendants appealed to the supreme court. The defendants were in business in New Orleans; plaintiff, in Vicksburg. Plaintiff, being in New Orleans, was requested by defendants to pay a third party $ 1,000, which plaintiff did, but no entry thereof was ever made on plaintiff's books. Some time after the payment one of the defendants was in Vicksburg and demanded a settlement of the plaintiff, whereupon plaintiff, unmindful for the time of the thousand-dollar payment made in New Orleans, settled with defendants according to plaintiff's books, paying them something over $ 1,500. After this, the New Orleans payment being recalled, plaintiff sued defendants for the $ 1,000 overpaid by mistake.

The defendants sought to defend on the ground that the business between the parties, out of which the mistaken payment sprang, was the buying and selling of cotton futures, and therefore illegal gambling transactions, condemned by Code 1892, § 2117.

Affirmed.

T. C Catchings, for appellants.

The authorities are practically unanimous to the effect that a broker who negotiates gambling contracts cannot recover for commissions and advances thereon. See 14 Am. & Eng. Ency. Law, p. 640, and cases cited in note.

Counsel for appellants offered to prove that the account between them and appellee would show that he was charged with commissions growing out of gambling contracts, which amounted in the aggregate to more than $ 1,000 claimed to have been overpaid him. The court would not permit any inquiry as to the amount of these commissions. We submit that this was clearly erroneous; for, as we have said, appellee's own case necessarily involved an examination of every item in the account and a casting out of all improper items. It was sought to be shown by appellee that these commissions had already been paid to him, and that, these transactions being dosed, the parties would not be disturbed. If the court, however, will carefully read appellee's testimony, it will see that no money was ever paid by appellant to appellee for these commissions. He deposited from time to time certain sums to cover what are denominated as "margins"--that is to say, to insure persons with whom he contracted against loss by reason of the fluctuations of the market. His account was credited with these deposits and with such profits as may have accrued to him in the course of his dealings. On the other hand, his account was charged with the broker's commissions and with such losses as might have been incurred. This was all simply bookkeeping, and no payment was made for anything, commissions or otherwise, until a balance was finally struck and the account settled.

The trial judge held that appellant could not be permitted to inquire into sums charged him as commissions, as that would be to permit him to recover back money lost by him in executed gambling transactions.

In view of the fact that appellee's action necessarily placed in issue each item of the account, and that in order to maintain his contention of an overpayment he must prove the correctness and legality of each item of the account, we submit that the court's ruling was erroneous. By bringing suit to recover back the sum claimed as an overpayment, appellee assumed the burden of proving that by giving to appellants all proper credits and making against them only proper and legal charges they had boen, in fact, overpaid. It was, we submit, entirely competent for appellee to respond that he had not been overpaid, because the account contained illegal and erroneous charges against him.

The record shows that if appellants had been permitted to make this proof, it would have developed that so far from them having been overpaid they werre, in fact, underpaid. This case comes squarely within the rule recognized by all courts, that no recovery can be had when the plaintiff must put in evidence an illegal contract.

McLaurin, Armistead & Brien, for appellee.

Appellant contends that there was an overpayment of gambling transactions. The record presents simply a case where the appellants had been paid by mistake money which they had no right on earth to receive; that after all future speculations, as contended for by appellants, had been closed up and finally discontinued--a long while after this, in attempting to settle with the plaintiff, they received $ 1,000 more than they were entitled to receive. Surely it cannot be held as the law that, if, indeed, a person is speculating in futures, and $ 37.50 is due him by the broker if the broker should pay him $ 1,000 too much by mistake, such person shoud receive the money, pocket the same, and then say: "Because I have heretofore bought futures through you, which transactions have been wholly closed up, when you have attempted to settle with me you paid me too much and you can't recover it back." We submit, if the court please, that after the future dealings, if such they may be called from this record, had been finally closed, but showed a balance due Adler &...