Coffe v. Wilhite

• Citation: 1916 OK 198,56 Okla. 394,156 P. 169
• Decision Date: 15 February 1916
• Docket Number: Case Number: 6218
• Parties: COFFE & CARKENER v. WILHITE.
• Court: Supreme Court of Oklahoma

1916 OK 198

156 P. 169

56 Okla. 394

COFFE & CARKENER v. WILHITE.

Case Number: 6218

Supreme Court of Oklahoma

Decided: February 15, 1916

Syllabus

¶0 1. GAMING--Dealing in Futures--Sufficiency of Evidence. Evidence examined, and held to establish clearly and unmistakably that the transactions involved in the contract upon which recovery is sought constituted "dealing in futures" such as are denounced by the statutes of this state.

2. COURTS--Comity--Foreign Contracts--Enforcement. This state is not obligated by any principle of comity to recognize and uphold as valid contracts made in another state which are violative of our penal statutes, or obnoxious to our express public policy; and, regardless of the validity of such contracts in the state where made, the courts of this jurisdiction will refuse to aid in their enforcement.

B. B. Foster, W. H. H. Piatt, and Thomas R. Marks, for plaintiffs in error.

W. H. Kornegay, for defendant in error.

BLEAKMORE, C.

¶1 This action was commenced in the district court of Washington county on August 29, 1912, by the plaintiffs in error against the defendant in error to recover a balance alleged to be due upon an open account for advances made and services rendered by plaintiffs for defendant. The itemized account attached and made a part of the petition is as follows:

"Kansas City, Mo., Aug. 4, 1910.

"Ola Wilhite, Bartlesville, Okla. in Account with Coffe & Carkener, 101-02 Exchange Bldg., Kansas City, Mo.

"Debits.

July 25, 1910, bought 30,000 bu. Dec. corn at .64 3/4 $ 19,425.00

July 25, 1910, bought 20,000 bu. Dec. corn at .60 12,000.00

July 25, 1910, to commission 37.50

July 25, 1910, to commission 25.00

$ 31,487.50

"Credits.

June 24, 1910, by sold 10,000 bu. Dec. Cgo. .58 $ 5,800.00

June 24, 1910, by sold 10,000 bu. Dec. Cgo. .58 1/8 5,812.50

June 25, 1910, by check 500.00

June 27, 1910, by sold 10,000 bu. corn, (Dec. Corn)

K. C. 53 5/8 5,362.50

June 27, 1910, by check 300.00

July 12, 1910, by sold 10,000 bu. Dec. cn. Cgo. .56 3/4 5,675.00

July 12, 1910, by sold 5,000 bu. Dec. cn. K. C. .51 3/4 2,587.50

July 12, 1910, by sold 5,000 bu. Dec. cn. K. C. .52 2,600.00

July 18, 1910, by draft 500.00

July 20, 1910, by Ck. 300.00

July 20, 1910, by draft 450.00

$ 29,887.50

Balance due $ 1,600.00

"Interest at 6 per cent. from Aug. 4, 1910."

Defendant answered by way of denial, and alleged:

"The defendant says that, if at any time the plaintiffs did buy any corn and did render any services for the defendant, said buying of said corn and rendering of said services was for the purpose of gambling on the Board of Trade of Kansas City, Mo., and that the plaintiffs intended to gamble on said board, and the defendant intended to gamble on said board, and that no records of said transactions were kept as required by the laws of the State of Missouri, and the plaintiffs in this case were running a bucket shop in Kansas City, Mo., at the time of the transactions referred to, and were engaged in the practice of buying and selling options, and in furtherance of their designs and in violation of the laws of the State of Missouri, in violation of the laws of the United States, and in violation of the laws of the State of Oklahoma, the transactions relied upon were had, and it was the purpose of the defendant and of the plaintiffs both to gamble on grain."

¶2 The answer was later amended by setting forth certain provisions of the statute of the State of Missouri, but the same were not introduced in evidence. At the close of the evidence on behalf of plaintiffs, a demurrer thereto was sustained, and judgment rendered for defendant. This action of the court is assigned as error. Plaintiffs were commission brokers and members of the Board of Trade of Kansas City, Mo., and Chicago, Ill. The defendant is a resident of this state. The transactions involved in the account sued on consisted entirely of the purchase and sale of corn on the Board of Trade at Kansas City and Chicago, made by the plaintiffs, upon instructions of defendant. The testimony is voluminous, and we shall refer only to portions thereof showing the general character of the transactions which form the basis of this action. One of the plaintiffs testified:

"A. Well, Mr. Wilhite was short of this corn, and towards the latter part of the month of July, contrary to his expectations, the corn market commenced to advance, and as it did so he remitted and we made drafts on him to supply the needed margin on this account, and he took care of them very promptly, and we assumed that he would continue to do so if necessary. We had nothing to the contrary to indicate that he would not. Now on--The corn market commenced to get very excited along about that time, and on, for instance, on July 20th, the closing price of December corn at Chicago was 59 3/4 cents to 7/8, and Kansas City 55 5/8. These figures I am reading, you can verify by the price card there, and on the next day it closed at 59 3/4 to 7/8 in Chicago. That was up 1 1/4 cents or 3/4 to 7/8 in Chicago, and in Kansas City it closed 57 1/4 to 3/8, which was up about 1 1/2 cents, and that was the day on which we made draft on Mr. Wilhite for $ 1,200.

"On July 22d, the corn market broke. It went down as much as it went up the day before, and a little bit more--closed at 59 3/8 to 3/4 in Chicago, and 55 3/8 in Kansas City. On July 23d, which was Saturday, it closed at 60 3/4, 1/4 to 3/8 and 56 3/8 to 1/2 in Kansas City. On that day I had a conversation with Mr. Wilhite over the 'phone, and he explained about this draft having gone to protest, and he gave me an order that in case Kansas City December corn went to 57 1/8 we were to buy to this Kansas City December corn an equal amount to what he had sold, and in case Chicago December corn went to 61 1/8 we were to buy in an equivalent amount to what he was short in that market which I believe was 30,000 bushels.

"Now the price of corn had not reached that figure as embodied in those orders on Saturday, July 23d. In the meanwhile this draft had been protested, and Saturday was a short day, the market closing at 12 o'clock, that left something like about a net credit of $ 437 in order to protect this open line of corn. So there wasn't anything we could do except to watch the market and, if necessary, buy corn in at that order price. Now, from Sunday, over Sunday the weather was extremely hot, and the market went into one of those convulsive conditions such as I have rarely seen--unfortunate for everybody concerned in this, and the market opened up in Chicago on Monday morning from 62 to 65 cents, that was up all the way from 1 3/4, cents to 4 3/4 a bushel. In Kansas City it opened from 59 3/4 to 60 cents. That was up 3 to 4 5/8 cents a bushel. There was nothing for us to do but execute these orders at the best possible price we could get, and we did so with the result of this account for which we are bringing this action. * * * Q. Did you know Mr. Wilhite had any corn? A. I didn't know anything about Mr. Wilhite. I assumed maybe he had. He was represented to me as a gentleman who had more or less property; I didn't know. Q. Did you make any inquiry, to ascertain whether he had any corn? A. No, sir; I did not. * * * Q. Now, what are you to do for that 1/8 cent? I believe you are charging say $ 60. What do you do for Wilhite for that 1/8 cent? A. I was to go in on the floor and make this sale for his account, and I was to buy it in whenever he ordered me to buy it in, and if I did so that would complete the transaction, and for which we would charge him 1/8 cent per bushel. Q. When he puts up this margin, what are his rights about closing the transaction on any market day? A. He has the privilege to do that whenever he elects. Q. To do so? A. Yes, to order me to do so. Q. Yes. And if he elects so to do, how do you close it for him? A. By making a purchase in the same way; in the same manner that I made the sale. Q. By another? A. Buying a similar contract, contract to buy similar grain. Q. And to keep sufficient margin to buy that makes these--and to keep up sufficient margins to buy, it is that he makes these deposits, is it, and puts up your commission for so doing? A. Yes, sir. Q. Well, after you have bought on the market an offset to this stuff that Mr. Wilhite is supposed to have sold to you, then the matter is closed, as I understand it? A. Yes. Q. And if there is a profit to Mr. Wilhite, you send it to him? A. Yes, sir. * * * Q. If you had closed out on the 23d, he would have lost merely what he put up. A. Not quite what he put up; it would have been closed on the basis of the closing market that night. Then he would have lost what he put up less $ 437.50. Q. How much margin in all did you get Wilhite to put up? A. $ 2,050. Q. And you are now suing for $ 1,600 more? A. Yes."

¶3 Plaintiff also stated that the Board of Trade maintained a clearing house similar to that employed by banks, and, as illustrative of its operation, testified:

"A. I may have 100,000 bushels of December corn bought for A., B., C., and D. and I might have 150,000 sold for E., F., G., and H. Therefore my net result would be that I owe the clearing house 50,000 corn, or the difference between the closing price and the price at which these trades were made. Q. So that at night you know just where you stand on every one of these trades, and it is adjusted so that you can clean up on the market every day. A. Yes, it is brought up to the closing market each night, but when final delivery day comes, and all these trades that have not been eliminated or bought in or sold out, as the case may be, the net result is what I have got to reckon with, unless-- Q. Is it not a fact-- A. Let me finish my question. And I have got to deliver or fulfill these contracts to the clearing house if they are sold, or I must stand up and take what they will deliver to me, and, if I don't do it, in either case there are penalties provided under our rules. Q. Now, let me see if I understand it. Every night, you have a

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