Gettys v. Newburger, 5631.

CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)
Citation272 F. 209
Docket Number5631.
PartiesGETTYS et al. v. NEWBURGER et al.
Decision Date25 March 1921

272 F. 209

GETTYS et al.
v.
NEWBURGER et al.

No. 5631.

United States Court of Appeals, Eighth Circuit.

March 25, 1921


Rehearing Denied June 13, 1921. [272 F. 210] [Copyrighted Material Omitted] [272 F. 211] [Copyrighted Material Omitted] [272 F. 212]

H. L. Stuart, of Oklahoma City, Okl. (W. A. Ledbetter, R. R. Bell, and E. P. Ledbetter, all of Oklahoma City, Okl., on the brief), for plaintiffs in error.

H. G. Snyder and F. B. Owen, both of Oklahoma City, Okl. (Bernard Titche, of New Orleans, La., and Henry E. Asp and W. A. Lybrand, both of Oklahoma City, Okl., on the brief), for defendants in error.

Before SANBORN and CARLAND, Circuit Judges, and LEWIS, District Judge.

SANBORN, Circuit Judge.

Silvan Newburger & Co. was a copartnership, composed of the plaintiffs below, and Gettys & Prescott was a copartnership, composed of the defendants below. The plaintiffs were cotton brokers at New Orleans, and held a seat on the New York Cotton Exchange. The defendants were engaged in the cotton business in the state of Oklahoma. The plaintiffs brought this action to recover a balance of an account between them and the defendants for moneys expended by the plaintiffs in the execution of telegraphic orders of the defendants to them between October 30 and December 12, 1916, to make contracts for the defendants on the New York Cotton Exchange in accordance with the provisions of the Cotton Futures Act of August 11, 1916, and the rules and customs of the exchange for the purchase and sale of cotton to be delivered in March, 1917. The complaint contained allegations of a cause of action for the recovery of the alleged balance of such an account amounting to $8,338.78.

The answer of the defendants was: (1) That they never authorized the plaintiffs to make any of the contracts alleged, except the first one, which was ordered and made on October 31, 1916, for the purchase of 100 bales of cotton, to be delivered in March, 1917, and that this contract was closed out by means of the sale of a like amount of cotton on the same day with a profit; and (2) that the contracts and transactions averred in the complaint were wagering contracts and transactions.

The first issue in the case was whether or not the defendants ordered or authorized the plaintiffs to make the contracts of purchase and sale alleged in the complaint. The defendants admitted that on October 31, 1916, they sent the plaintiffs their first telegraphic order to make for them on the New York Cotton Exchange a contract for the purchase of 100 bales of cotton to be delivered in March, 1917, and that they sent the plaintiffs $500 as a margin to protect them against loss; but they testified that they did this for Mr. Barrett and Mr. Martin, and that they never made or authorized any other orders to the plaintiffs for the purchase or sale of cotton futures. But subsequent telegraphic orders for all the purchases and sales alleged over [272 F. 213] the defendants' firm name, as was the first order, letters over their firm name acknowledging receipt of notices of contracts of sale and purchases of cotton futures, drafts over their firm name which the plaintiffs paid, and telegrams, notices, and letters from the plaintiffs, addressed to the defendants' firm name, were introduced in evidence.

There was evidence tending to prove that Mr. Barrett, for whom the defendants testified they made the first order and put up the first $500 margin, conducted all the transactions, orders, and correspondence in controversy in the defendants' firm name, and there was persuasive testimony on the part of the plaintiffs that they never knew Barrett or Martin as principals in the transactions, but dealt with and relied on the defendants alone. The court submitted to the jury with appropriate instructions the question whether or not under the evidence in the case the defendants authorized Mr. Barrett to make the orders and conduct the transactions for the defendants in their firm name, or gave him such apparent authority so to do that the plaintiffs in good faith and in the exercise of reasonable prudence believed and acted on the belief that the orders and communications over the defendants' firm name were made or authorized by them, and the jury found this issue for the plaintiffs and rendered a verdict in their favor for the alleged balance of their account.

In the course of the trial the plaintiffs introduced in evidence a telegraphic order from the defendants for every contract of purchase or sale in controversy, except for the sale of the last 1,100 bales on December 11, 1916, which were made for the plaintiffs' account, pursuant to the agreement of the parties and the by-laws and settled usages of the New York Cotton Exchange, after, upon demand, the defendants had failed to pay moneys due from them to the plaintiffs, and to deposit the necessary moneys to protect the plaintiffs against loss on the contracts of purchase that the plaintiffs had made or caused to be made on the defendants' orders. The evidence in the case contained plenary proof that the plaintiffs, on the receipt of each order from the defendants, telegraphed to their brokers on the New York Cotton Exchange a like order; that those brokers immediately executed the order in accordance with the provisions of section 5 of the Cotton Futures Act (Comp. St. Sec. 6309d) and the by-laws and settled usages of the New York Cotton Exchange. The written bought and sold brokers' slips evidencing all these transactions thus ordered by the defendants were introduced in evidence. Immediately upon the execution of each order a telegraphic notice thereof, followed by a confirmatory letter, was sent to the defendants, and at the trial these notices were put in evidence. The book account of the plaintiffs was verified by competent witnesses and introduced in evidence.

At the close of all the evidence the court denied a motion of the defendants to instruct the jury to return a verdict in their favor, and instructed them: (1) That there was no controversy as to the regularity or good faith of the transactions, that the only evidence was that the transactions were regular and conformed to the law, that it showed their validity in terms and sustained them, that there was no evidence to show that delivery of the cotton was not in fact intended, [272 F. 214] that the cotton purchases and sales were made in a valid and regular manner and that the jury should so regard them; and (2) that the undisputed evidence was that the plaintiffs' account was correct, and that the jury should regard it as unsatisfied to the extent of the balance thereof, $8,338.78.

The complaints which defendants' counsel make of this trial are: (1) That the court received in evidence the bought and sold written brokers' slips which evidenced the contracts of purchase and sale made in obedience to the defendants' orders, and charged the jury that they were in compliance with the law; (2) that the court instructed the jury that there was no controversy as to the good faith of the transactions, that there was no evidence to show that the delivery of the cotton was not intended, and that the only evidence showed that the transactions were valid in terms and sustained them; and (3) that the court charged the jury that the undisputed evidence sustained the verity of the plaintiffs' account and that the jury should regard it as correct.

The argument of counsel for the defendants in support of their first complaint is that the brokers' slips evidencing the contracts failed to comply with sections 4 and 5 of the Cotton Futures Act of August 11, 1916, c. 313, 39 Stat. 476, Comp. Stat. Secs. 6309d and 6309e, which require each contract to 'be in writing plainly stating, or evidenced by written memorandum showing, the terms of such contract, including the quality of the cotton involved and the names and addresses of the seller and buyer in such contract. * * * Each bale shall, for the purposes of this Act, be deemed to weigh five hundred pounds'--

(1) Because none of the slips gives the addresses of both buyer and seller, but each of them, with so few exceptions as to be immaterial, gives the address of the party to be charged; but the legal presumption and the testimony are that, at the same time that each bought slip was signed, a corresponding sold slip mutatis mutandis was signed by the party to be charged thereby, and that at the time that each sold slip was signed a corresponding bought slip mutatis mutandis was signed by the party to be charged (Thorn v. Browne, 257 F. (8th C.C.A.) 519, 524, 168 C.C.A. 469), and thus the presumption arose that the two corresponding slips which evidenced each contract set forth the addresses as well as the names of the seller and the buyer in each contract.

(2) Because none of the slips states the quantity or price of the cotton bought or sold per pound or bale in dollars and cents, for example, the sold note or slip which Gwathmey & Co., the correspondents in New York of the plaintiffs, took from the sellers evidencing the latter's contract to sell the 100 bales of cotton which the defendants admit they ordered the plaintiffs to buy by their telegram in these words:

'Oct 31, 1916. Frederick, Okla 815 A Oct. 31, 1916
'S. Newberger & Co., New Orleans, La.
'Buy one hundred March NY on opening margin five check by mail
'846 A.

Gettys & Prescott'

-- reads in this way: [272 F. 215] 'New York, 10/31, 1916.

'Sold to Gwathmey & Co., and agree to deliver to them, subject to the by-laws and rules of the New York Cotton Exchange, and subject to the United States Future Act, section 5, 100 B/C Mch Delivery at 1861

'Caldwell, Cosgrove & Co., '96 Cotton Exchange, N.Y. City.'

But, when one sends an order to a broker doing business in an established trade on one of the great public exchanges of the country to buy, sell, or make contracts on such an exchange, he...

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32 practice notes
  • Alamaris v. Jno. F. Clark & Co, 30425
    • United States
    • United States State Supreme Court of Mississippi
    • February 13, 1933
    ...on the day of delivery, that the alleged contract is unenforceable, illegal and wholly void as a gambling transaction. Gettys v. Newburger, 272 F. 209. Intention, at the time of contracting, is the factor that does and will determine whether a contract for future delivery of a commodity is ......
  • Lamson Bros. & Co. v. Turner, 5557.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • December 27, 1921
    ...391, 392, 118 C.C.A. 542; Boyle v. Henning (C.C.) 121 F. 376, 380; Browne v. Thorn (C.C.A.) 272 F. 950, 952; Gettys v. Newburger (C.C.A.) 272 F. 209, 216. As these orders were given to the plaintiff, as the bankrupt's broker, to be executed upon the Board of Trade at Chicago, the legality o......
  • Burke Grain Co. v. St. Paul-Mercury Indemnity Co., No. 10973.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • February 11, 1938
    ...of the Board of Trade were valid and enforceable. The same doctrine was reiterated in the later cases of Gettys v. Newburger, 8 Cir., 272 F. 209, and Solomon v. Newburger, 8 Cir., 35 F.2d 328. These were both cases in which either directly or through a broker one not a member of an exchange......
  • Uhlmann Grain Co. v. Dickson, No. 9119.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • March 21, 1932
    ...43 S. Ct. 36, 67 L. Ed. 171; Board of Trade of Chicago v. Olsen, 262 U. S. 1, 43 S. Ct. 470, 67 L. Ed. 839; Gettys v. Newburger (C. C. A.) 272 F. 209, 218; Browne v. Thorn (C. C. A.) 272 F. 950; Mullinix v. Hubbard (C. C. A.) 6 F.(2d) 109, 114; Wilhite v. Houston (C. C. A.) 200 F. 390; Hoyt......
  • Request a trial to view additional results
32 cases
  • Alamaris v. Jno. F. Clark & Co, 30425
    • United States
    • United States State Supreme Court of Mississippi
    • February 13, 1933
    ...on the day of delivery, that the alleged contract is unenforceable, illegal and wholly void as a gambling transaction. Gettys v. Newburger, 272 F. 209. Intention, at the time of contracting, is the factor that does and will determine whether a contract for future delivery of a commodity is ......
  • Lamson Bros. & Co. v. Turner, 5557.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • December 27, 1921
    ...391, 392, 118 C.C.A. 542; Boyle v. Henning (C.C.) 121 F. 376, 380; Browne v. Thorn (C.C.A.) 272 F. 950, 952; Gettys v. Newburger (C.C.A.) 272 F. 209, 216. As these orders were given to the plaintiff, as the bankrupt's broker, to be executed upon the Board of Trade at Chicago, the legality o......
  • Burke Grain Co. v. St. Paul-Mercury Indemnity Co., No. 10973.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • February 11, 1938
    ...of the Board of Trade were valid and enforceable. The same doctrine was reiterated in the later cases of Gettys v. Newburger, 8 Cir., 272 F. 209, and Solomon v. Newburger, 8 Cir., 35 F.2d 328. These were both cases in which either directly or through a broker one not a member of an exchange......
  • Uhlmann Grain Co. v. Dickson, No. 9119.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • March 21, 1932
    ...43 S. Ct. 36, 67 L. Ed. 171; Board of Trade of Chicago v. Olsen, 262 U. S. 1, 43 S. Ct. 470, 67 L. Ed. 839; Gettys v. Newburger (C. C. A.) 272 F. 209, 218; Browne v. Thorn (C. C. A.) 272 F. 950; Mullinix v. Hubbard (C. C. A.) 6 F.(2d) 109, 114; Wilhite v. Houston (C. C. A.) 200 F. 390; Hoyt......
  • Request a trial to view additional results

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