[Copyrighted Material Omitted]
Argued
October 15, 1894
Appeal, No. 15, Oct. T., 1894, by defendant, from order of
C.P. Washington Co., Aug. T., 1887, No. 51, discharging rule
to open judgment. Affirmed.
Rule to
open judgment.
The
following opinion was filed by McILVAINE, P.J.:
"UNDISPUTED
FACTS.
"(a)
William F. Smith, the petitioner, at the beginning of this
controversy, was a resident of Greene county, Pennsylvania.
F. G. Kammerer was a resident of Chicago, Ill., a member of
the Board of Trade, and as such bought and sold grain and
pork on commission. He did business in the name of F.G
Kammerer & Co. These parties were not personally acquainted.
In January, 1886, William F. Smith wrote to F.G. Kammerer &
Co., about trading on the Board of Trade, and in his letter
inclosed a note of introduction from J. C. Smith, an
acquaintance of F. G. Kammerer, who lived at McKeesport, Pa.
On January 19, 1886, after a letter and a telegram or two had
passed between the parties as to the state of the market, Wm.
F. Smith sent to F. G. Kammerer the following letter:
"'DEAR
SIR:
"'Yours
of the 14th received; also telegram in reference to May wheat
and pork. I inclose you draft on N.Y. from my bank at
Waynesburg, Pa., which you may place to my account. If you
have not bought as advised by telegram, buy me five thousand
(5000) bushels May wheat at 84 cts, and as much below as you
can, and hold until I advise you to sell. You have a good fat
margin to hold on. Will put up more if necessary, don't
sell at a loss but advise me by telegram. I will go to Boston
to-morrow. You telegraph there. Yours truly,
"'WM.
SMITH.
"'P.S.
-- Draft is for ($1,000) one thousand. WM. SMITH.'
"F.
G. Kammerer bought the 5000 bushels of wheat as directed, and
for about fourteen months continued to act as Mr. Smith's
broker on the Board of Trade; sometimes he bought and sold on
orders received from Mr. Smith by wire, and at other times on
orders received from him in person, as he spent part of the
time in Chicago. I give a few of the telegrams, taken at
random, from the large number of exhibits returned by the
examiner:
"'Jan.
20, 1886.
"'If
May wheat is lower buy five thousand bushels. Wire.'
"'Feb.
1, 1886.
"'Will
be in Chicago on Thursday. If I do anything before I come
will wire you. Buy the five thousand wired you on the 29th at
85.'
"'Feb.
2, 1886.
"'Buy
twenty-five thousand May corn at forty; will be there
Thursday. Answer, Benwood, W. Va., Price.'
"During
the fourteen months, F.G. Kammerer & Co. bought and sold, on
the orders of Wm. F. Smith, 1,370,000 bushels of wheat,
25,000 bushels of corn and 12,000 barrels of pork, worth
about one and a quarter million dollars. He received from
time to time, including the note in question, less than
$13,000 to pay commissions and losses on sales, and paid him
less than this sum at different times on gains on sales. No
other money or valuable consideration passed between them on
account of the purchases and sales of this wheat, corn and
pork. None of the wheat, corn or pork bought was ever
delivered to Smith, and he never delivered any to those who
purchased. The amount of wheat, corn and pork bought by
Kammerer & Co. for Smith equalled the amount sold by him for
Smith, and Smith was credited with the gains on sales and
charged with the loss on sales. The accounts rendered were in
the following form: I give two, taken at random from the
exhibits returned by the examiner:
"'Account
purchase and sale of 40,000 wheat by F.G. Kammerer & Co.,
Chicago, for account and risk of Wm. F. Smith, Waynesburg,
Pa.
No.
5830.
Feb'y 8, Sold 40 M. May wheat, 85 1/4
|
$34,100.00
|
Contra.
|
Jan'y 9, Bot 5 M. May wheat 82 7/8
|
4143.75
|
Jan'y 21, Bot 5 M. May wheat 84
|
4200
|
Febry 3, Bot 5 M. May wheat 85
|
4250
|
Febry 5, Bot 25 M. May wheat 83 7/8
|
20958.75
|
33,562.50
|
Gain
|
537.50
|
Coms.
|
50.00
|
Net gain
|
$487.50
|
E. &
O. E. Chicago, Feb. 8, 1886.'
"'Account
purchase and sale of 25,000 bushels of wheat by F.G. Kammerer
& Co., Chicago, for Account and Risk of Wm. F. Smith,
Waynesburg, Pa.
No.
6206.
June 21, Sold 25 M. Aug. wheat 75 1/8
|
18,781.25
|
Loss
|
62.50
|
Com's
|
31.25
|
Net loss
|
93.75
|
E. & O.
E. Chicago, June 21, 1886.'
"In
buying and selling this wheat, corn and pork, F.G. Kammerer &
Co. dealt with other members of the Board of Trade, and their
accounts were kept and settled daily in accordance with the
rules and regulations of the board. Smith was not a party to
the settlements Kammerer made of his purchases and sales from
and to other brokers, and Smith did not know from whom the
purchases were made, or to whom the sales were made. On the
board Kammerer dealt in his own name, and each day made
settlements through the Board of Trade clearing house. Sec. 1
of rule 14 of the Board of Trade provides as follows: 'A
member of the association may act as a broker only between
other members. A broker shall reveal the name of his
principal when a transaction is made, if demanded, otherwise
he may not be considered and treated as a broker but as a
principal.'
"(b)
On Oct. 6, 1886, Wm. F. Smith was behind in his account with
Kammerer & Co. $2,700; that is, to keep his margin up to what
was required by the rules of the board he needed $2,700 to
save the November wheat he then had from being sold. To pay
this $2,700, and to provide a margin for future deals, F.G.
Kammerer & Co. took from Wm. F. Smith a note for $6,500, at
60 days, payable to F.G. Kammerer & Co., with warrant of
attorney authorizing the confession of judgment for that sum
by an attorney in any court of record, in favor of the holder
of the note. At the same time, and to secure the payment of
this note, he took from Wm. F. Smith an assignment, first, of
a mortgage given by Wm. Lippencott on a tract of land in
Greene county, Pennsylvania, and ten accompanying notes for
about $4,500; second, of a judgment note of Adamson and Hoge
for $2,100. The proceeds of this $6,500 note was credited to
Smith's account. On Feb. 2, 1887, he paid $500 on the
note, and on Feb. 10, 1887, he paid $1,000. On or about March
1, 1887, he stopped dealing with F.G. Kammerer & Co., and
they had a final settlement and adjustment of their accounts,
which showed that F.G. Kammerer & Co. owed Smith $487.50;
this amount was, on March 8, 1887, credited on the $6,500
note to which we have referred.
"(c)
On May 16, 1887, J. F. McFarland, Esq., a member of our bar,
as attorney for Wm. F. Smith, to No. 51 Aug. Term 1887, of
this court, confessed judgment against him and in favor of H.
C. Champlin for the sum of $4,957.55, the balance shown to be
due and unpaid on this $6,500 note, -- H. C. Champlin
claiming to be 'the holder of the note.' Judgment was
also entered on July 21, 1887, in this court to No. 296 Aug.
Term, 1887, on the Adamson and Hoge note for $2,100 and
accrued interest, less the credits. The mortgage of Wm.
Lippencott and assignment thereof were duly recorded in
Greene county, Pennsylvania, and on Aug. 2, 1887, a scire
facias was issued out of the court of common pleas of that
county to foreclose it.
"On
June 1, 1887, Wm. F. Smith filed his petition in this court
and the rule we are now considering was issued.
"On
Sept. 3, 1887, Wm. F. Smith filed his bill in the court of
common pleas of Greene county, sitting in equity, against F.
G. Kammerer et al., for the purpose of having the assignment
of the Wm. Lippencott mortgage and notes and the assignment
of the Adamson & Hoge $2,100 note and the $6,500 note, given
by him on Oct. 6, 1886, to F.G. Kammerer & Co. canceled, on
the ground that the assignments and note were given in a
gambling contract, and were therefore void.
"All
proceedings, at the request of the parties, on the present
rule, were suspended until the Greene county equity case
should be finally determined, it being agreed that the
testimony taken in the equity case could be used on the
hearing of this rule.
"The
master in the equity case recommended the dismissal of the
plaintiff's bill for the reason that the court had no
jurisdiction of the Illinois parties, who appeared de bene
esse, nor of the judgments in Washington county, and that Wm.
F. Smith, being in pari delicto with F. G. Kammerer (if the
note and assignments were given in a grain gambling
transaction), and the contract, so far as the assignment of
the mortgage was concerned, being executed, had no standing
in a court of equity. The court concurred in the
recommendation of the master, and decreed the dismissal of
the bill. On appeal the Supreme Court affirmed this decree:
Smith v. Kammerer, 152 Pa. 98.
"DISPUTED
FACTS.
"Wm.
F. Smith was examined in his own behalf and testified that he
had a contract with Kammerer that he was to trade on margins
and was not to take 'the stuff itself;' that he told
him that he did not want to receive or handle any grain, but
wished to deal in the differences, the fluctuations of the
market, to buy 'risks and margins;' that Kammerer
said he would fix that, and that that was the proper way to
speculate. He says that he 'told Kammerer that he did not
have enough of money to pay for any quantity of wheat but
that he would put up money as margins only.' He says this
is the contract he had with Kammerer.
F. G
Kammerer was examined and positively denied such a contract.
He says that he, as Smith's agent, bought wheat, corn and
pork on the Board of Trade, as Smith ordered it bought, that
his contract with those from whom he bought, under the rules
of the board, was such that the delivery of every bushel and
barrel of it was contemplated and could have been demanded
when...
