Hocomb v. Kempner

• Citation: 73 N.E. 740,214 Ill. 458
• Parties: HOCOMB v. KEMPNER et al.
• Decision Date: 21 February 1905
• Court: Illinois Supreme Court

214 Ill. 458

73 N.E. 740

HOCOMB

v.KEMPNER et al. ^*

Supreme Court of Illinois.

Feb. 21, 1905.

Error to Appellate Court, First District.

Bill by Oliver A. Hocomb against Adolph Kempner and others. From a decree of the Appellate Court affirming a decree for defendants, plaintiff brings error. Affirmed.

Judson F. Going (Daniel V. Gallery, of counsel), for plaintiff in error.

Ringer, Wilhartz & Louer, for defendants in error.

CARTWRIGHT, J.

Plaintiff in error filed his bill in the circuit court of Cook county against defendants in error for an injunction restraining them from selling or disposing of a stock certificate deposited by him to secure margins on purchases of wheat. The bill was answered, and the evidence of the respective parties was heard in open court. A preliminary injunction which had been granted was dissolved, and the bill was dismissed. The Appellate Court for the First District affirmed the decree.

In his bill complainant alleged that on January 17, 1902, the defendant McLoraine represented to him that he had purchased on January 7, 1902, through defendant Kempner, a member of the Board of Trade of the city of Chicago, 10,000 bushels of wheat at 83 1/4 cents per bushel, to be delivered in May; that he was unable to furnish sufficient money to secure Kempner with the necessary margin; that he asked complainant to assume the trade and be substituted on the books of Kempner as the holder of the wheat; that complainant consented to the substitution, and delivered to McLoraine a certificate of 20 shares of the capital stock of the United States Steel Corporation as security for the necessary margin; that McLoraine delivered the certificate to Kempner, and received a receipt for complainant; that on February 1, 1902, complainant was informed by Kempner that he was indebted to him in the amount of more than $1,000 in losses upon trades made in his behalf, and that he would sell the certificate unless the money was paid. The grounds for relief set up were that the purchase by McLoraine was colorable only, for the purpose of gambling in the market price of wheat, and was not intended as a purchase in good faith, and his intention was known to Kempner; that McLoraine's representation that he had 10,000 bushels of wheat at 83 1/4 cents per bushel was false; and that complainant never authorized Kempner to make any other trade for him, except that trade.

The following facts were proved at the hearing: Complainant was an electrician employed at the Palmer House, in Chicago. The defendant McLoraine had been in the employ of George H. Phillips, a commission merchant in Chicago, up to the time of the failure of Phillips on January 14, 1902. For about two months before the failure, complainant had been around Phillips' office almost every day, and McLorainehad acted as his agent in trading in grain, through Phillips, with discretion to act for complainant and purchase whenever he saw fit. He had acted as agent for the complainant during that ime, exercising his own discretion, and he made considerable money for complainant. At the failure Phillips was indebted to the complainant about $866. The certificate for 20 shares of capital stock had been deposited with Phillips by the complainant as security for these trades. When the failure occurred, McLoraine controlled the business of a number of customers, and was anxious to retain their business until a resumption by Phillips, which was then expected. To effect that object, he transferred such business as he controlled to the defendant Kempner, who transacted the business without any compensation, to enable Phillips to retain the customers when he should start up again. On January 17th McLoraine told complainant that he had 10,000 bushels of wheat at Kempner's at 83 1/4 cents, and he asked him to take it off his hands. The wheat was then worth from 80 1/2 to 81 1/2 cents per bushel, so that there had been a loss in the wheat, but complainant and McLoraine were expecting a rise. McLoraine had been called upon for a margin, and was not in a situation to furnish it, and complainant agreed that if McLoraine would get the stock certificate deposited with Phillips released, so he could use it, he would take the other trade with Kempner. McLoraine obtained the stock certificate, and delivered it to Kempner, and returned a receipt for it to Hocomb, which stated that it was received as margins on trades. The price of wheat...