Browne v. Thorn

• Citation: 272 F. 950
• Decision Date: 15 April 1921
• Docket Number: 5602.
• Parties: BROWNE v. THORN et al.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

272 F. 950

BROWNE v. THORN et al.

No. 5602.

United States Court of Appeals, Eighth Circuit.

April 15, 1921

James B. McDonough, of Ft. Smith, Ark., for plaintiff in error.

Joseph E. Johnson, of Atlanta, Ga., L. C. Going, of Memphis, Tenn and Ben Cravens and Ira D. Oglesby, both of Ft. Smith, Ark for defendants in error.

Before SANBORN and HOOK, Circuit Judges, and JOHNSON, District Judge.

JOHNSON District Judge.

This litigation arose out of dealings on the New Orleans Cotton Exchange. Plaintiffs were brokers and members of the exchange. They allege in their complaint that between January 24 and February 1, 1917, they bought and sold for defendant at his request, on said exchange, 2,000 bales of cotton for delivery in the month of May following; that in these transactions they advanced and paid out for him a large sum of money, for which sum they have demanded judgment. Upon the trial, verdict and judgment were in favor of plaintiffs, and defendant has brought the case to this court for review, and prays a reversal of the judgment on account of errors alleged to have occurred at the trial.

This is the second time the case has been in this court. At the first trial in the court below a verdict was directed for the defendant, and a judgment entered dismissing the action. The judgment of the trial court was reversed by this court, and a new trial granted. Thorn v. Browne, 257 F. 519, 168 C.C.A. 469. At the second trial plaintiffs had judgment, and the defendant is now the plaintiff in error.

The great majority of the 143 specifications contained in the assignment of errors of the defendant relate to questions considered and disposed of in the former decision of the case. It is settled law in this jurisdiction that:

'A legal proposition once considered and decided in a given cause by an appellate court may not be again questioned in that court on a subsequent writ or appeal to review a subsequent trial of the same case on the same issues and evidence. Such propositions are res adjudicata between the parties to that suit and their privies and constitute the law of the case. ' Town of Fletcher v. Hickman, 208 F. 118, 125 C.C.A. 346.

Upon the second trial the lower court could not do otherwise than follow the decision of this court and apply the rules of law announced therein, and that decision is equally binding upon this court at this time. As stated in Balch v. Haas, 73 F. 974, 20 C.C.A. 151:

'A judgment rendered by an appellate court in a given case is conclusive on the parties thereto, and * * * an appellate court, like a nisi prius court, is powerless to review or revise its own judgments after the lapse of the term at which they were rendered, except in cases of fraud. Another form of stating the doctrine is that propositions of law which were considered and decided on a first appeal become the law of that particular case, and, whether right or wrong, must be adhered to on a second appeal.'

The defendant has assigned as error the refusal of the court below to direct a verdict in his favor. The ground upon which it is claimed this instruction should have been given, remaining open for our consideration, is that the transactions alleged in the complaint were gambling ventures; that is to say, the pretended purchases and sales of cotton were mere wagers on the fluctuation of the market, to be settled according to the differences between the contract and the market prices.

The plaintiffs resided at New Orleans; the defendant, at Ft. Smith, in the state of Arkansas. The business was conducted by telegrams and letters between the parties. Plaintiffs had no interest in the purchases and sales they were directed to make, other than as defendant's brokers. Notwithstanding the vehemence of counsel for the defendant, we do not think the correspondence of the parties indicates that the transactions were not intended to be legitimate. The contracts were fair on their face and presumptively lawful, and the defendant having asserted that they were wagers upon the fluctuations of the market, and mere gambling transactions, the burden was on him to prove it. Clews v. Jamieson, 182 U.S. 461, 21 Sup.Ct. 845, 45 L.Ed. 1183. In discussing this same defense, this court, in Wilhite v. Houston, 200 F. 390, 118 C.C.A. 542, says:

'The character of such exchanges, their legitimate relation to the business world, and their operations are described in Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236, 25 Sup.Ct. 637, 49 L.Ed. 1031, where some of the aspects of the case at bar which counsel deem sinister find adequate explanation. The plaintiffs had no interest in the sales and purchases they were directed to make, other than as defendant's brokers; and this relation, as between them, was not affected by the fact that in executing defendant's orders the plaintiffs assumed the position of principals toward those they dealt with. Clews v. Jamieson, 182 U.S. 461, 481, 21 Sup.Ct. 845, 45 L.Ed. 1183. An order from a customer to a broker, to be executed upon a board of trade contemplates conformity to the rules and customs which prevail there. Bibb v. Allen, 149 U.S. 481, 489, 13 Sup.Ct. 950, 37 L.Ed. 819. The rules of the boards of trade at Kansas City and Chicago prohibited gambling transactions.

'As regards their legality the sales and purchases of grain in the Chicago market were governed by the law of Illinois; those in the Kansas City market, by the law of Missouri. Berry v. Chase, 77 C.C.A. 161, 146 F. 625; Edwards Brokerage Co. v. Stevenson, 160 Mo. 516, 61 S.W. 617. In Illinois a contract of sale or purchase of a commodity for future delivery is void if both parties intended it as a wager upon the market movements to be settled by differences, but not if only one of them has that intention. That is the general rule in the absence of statute. In Missouri

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