Floyd v. Patterson

• Decision Date: 04 December 1888
• Citation: 10 S.W. 526
• Parties: FLOYD <I>et al.</I> <I>v.</I> PATTERSON.
• Court: Texas Supreme Court

Page 526

10 S.W. 526

FLOYD et al.v.

PATTERSON.

Supreme Court of Texas.

December 4, 1888.

Appeal from district court, Smith county; FELIX J. McCORD, Judge.

Action for money by J. P. Patterson against S. S. Floyd, J. Leopold, and others. Verdict and judgment for plaintiff, and defendants appeal.

Clark, Dyer & Bolinger, for appellants. Whitaker & Bonner, for appellee.

GAINES, J.

Appellant Leopold was engaged in business in the city of Tyler as a broker in grain and other produce, or as the agent or partner of his co-appellants, who had their principal place of business in Houston, and were either brokers or dealers in such commodities. The principal business was in contracts for the delivery of produce at a future time, in which it was contemplated that the commodities should not be delivered, but only that the profit or loss on the transactions should be paid. On January 28, 1887, appellee placed an order or made a contract with Leopold, who was purporting to act for Floyd & Co., for the delivery in May of 100,000 bushels of wheat. Leopold gave him a slip, which read as follows: "Confirmed Orders. TYLER, TEXAS, Jan'y 28th, 1887. J. Leopold, agent for S. S. Floyd & Co., future brokers in grain, provisions, cotton, and stocks. Bought, acct. J. P. Patterson, 100,000 May wheat. [Signed] J. LEOPOLD." One thousand dollars was paid at the time as a margin, which was increased by additional demands to $7,000, when the trade was "closed out." There was a net profit to appellee in the transaction of $625. Floyd & Co. transmitted the sum of $7,625 to Leopold, to be paid in settlement of the transaction. He paid appellee a small part of the sum due him, leaving a balance still due of $6,762. Appellee brought this suit against appellants jointly to recover this sum, alleging that Leopold was the agent, and also the partner, of Floyd & Co. in the transaction, and that in the deal Floyd & Co. acted as brokers, and as such had received of their principals the sum sued for in satisfaction of plaintiff's demand. The defendants denied the agency, and also the partnership; and also that Floyd & Co. acted for any third party in the transaction, or received any money from any third party on plaintiff's account. The plaintiff obtained a verdict and judgment for the full amount of his demand against all the defendants.

We will proceed to the consideration of the main question in the case. This is presented by appellants' assignment of error, that the verdict of the jury is contrary to evidence, "for the reason that the evidence, without contradiction or conflict, shows that the contract which the plaintiff is seeking to enforce in this action was a wager or gambling contract," etc. According to the testimony, the original transaction is clearly such as has been denounced by this court as being contrary to public policy, and therefore such as cannot be enforced. Seeligson v. Lewis, 65 Tex. 215. Counsel for appellee concede the proposition that the original contract will not support an action, but maintain that Floyd & Co. were merely acting as brokers in the transaction. It is well settled that a contract for the future delivery of stocks, produce, or other merchandise, in which an actual delivery is not contemplated, but only a payment of the difference between the contract price and the value of the article at the time agreed upon as the date of delivery, is a mere wagering contract, which will not support an action. But if the transaction has been completed, and another grows out of it collateral to it, dependent upon a new consideration, the new contract is not vitiated by the taint of the old one, and will be enforced. "It has been observed that the test whether a demand connected with an illegal act can be enforced is whether the plaintiff requires any aid from the illegal transaction to establish his case." Gilliam v. Brown, 43 Miss. 641, citing Simpson v. Bloss, 7 Taunt. 246; Roby v. West, 4 N. H. 290.

It is accordingly held that when one, as agent of another, has received money growing out of an illegal contract, he can be made to pay it over at the suit of his principal. In the case above cited (Gilliam v. Brown) the testator of the defendant, as the agent of the plaintiff, took the latter's cotton to Memphis during the war, and sold it there, as was conceded, in violation of law, and received the proceeds. The plaintiff was held entitled to recover.

In Beeston v. Beeston, L. R. 1 Exch. Div. 13, the court held that the plaintiff could recover on a check given by the defendant to plaintiff for moneys received by defendant, for winnings on bets made by defendant with third persons, as agent of plaintiff.

In Owen v. Davis, 1 Bailey, 315, the defendant received a note in settlement of the joint winnings of plaintiff and himself at cards. He transferred the note in payment of a gambling debt of his own to a third party, who received payment of the maker at a discount. The plaintiff was held entitled to recover one-half of the amount which was actually paid by the maker of the note.

In these cases, and in many similar ones, which need...