L. J. Anderson & Co v. Holbrook

• Decision Date: 14 May 1907
• Citation: 57 S.E. 500,128 Ga. 233
• Court: Georgia Supreme Court
• Parties: L. J. ANDERSON & CO. v. HOLBROOK.

57 S.E. 500

128 Ga. 233

L. J. ANDERSON & CO.

v.HOLBROOK.

Supreme Court of Georgia.

May 14, 1907.

1. Brokers—Accounting—Pleading.

The original petition was subject to demurrer and the proposed amendment did not cure the defects.

2. Gaming—Advances for Gambling Purposes—Right to Recover—Brokers.

If a broker was privy to wagering contracts for fictitious or option futures, and brought the parties together for the very purpose of entering into such illegal agreements, he could not recover for advances made by him on account of his principal in forwarding such illegal contracts.

[Ed. Note.—For cases in point, see Cent. Dig. vol. 24, Gaming, §§ 36-38.]

(Syllabus by the Court.)

Error from Superior Court, Hart County;

H. M. Holden, Judge.

Action by L. J. Anderson & Co., against J. W. Holbrook. Judgment for defendant Plaintiffs bring error. Affirmed.

L. J. Anderson & Co. brought suit against Holbrook for moneys advanced as brokers, and among other things alleged as follows: They were engaged in the business of brokers in the city of Atlanta, and at the request of Holbrook they purchased for him during the months of October, November, and December, 1904, various articles set out in a bill of particulars attached to the petition, containing such items as: "Nov. 16, 10 C. F.

I., 50 ctn. $6.25." "Nov. 30, 3 Dec. Oats, $100.00." "Dec. 12, 25 Jan. Ct'n. $202.50." "Dec. 17, 10 U. P. $5.00." "Dec. 28, 50 Jan. P'k, 10 Jan. Ribs, 1 Ma. Wht $137.88." "Dec. 28, 350 Mch. Ct'n. $3133.75, " etc.— amounting in the aggregate to $5,523.76. Plaintiffs advanced the money or margins for such purchases under an agreement with Holbrook by which he was to reimburse them for such advances, including all margins. After having purchased the articles set out in the petition under the agreement, the markets failed and Holbrook refused to reimburse plaintiffs or to make the necessary advances for margins as he had agreed to do, and as by the custom of the trade he was bound to do. For this reason the transactions were closed out on December 28, 1904, and plaintiffs thereby sustained a loss of $5,523.76. Petitioners alleged that on this amount Holbrook, as shown by their account with him, was entitled to certain credits, set out in a bill of particulars attached to the petition, such as: "Nov. 5, 25 Dec. Ct'n. $2.50." "Nov. 17, Check $250.00." "Nov. 19, 2 May Wht. $21.87." "Dec. 1, 1 May Corn, $3.12." "Dec. 17, 10 St P. $2.50." "Dec. 20, 50 July Ct'n, $15.00, " etc.—amounting in all to $4,883.11, leaving a balance due them of $640.65, with interest thereon from December 28, 1904. Plaintiffs acted bona fide as brokers, the agents of Holbrook, and the contract under which they paid out the money has been fully executed. Upon the trial the defendants demurred to the petition, generally and also specially, on the following grounds: It did not show what articles were purchased for the defendant, the price paid therefor, from whom bought, where bought, when sold, to whom sold, and the price realized therefor. It failed to show what advances were necessary to be made as margins by the defendant. It failed to show what articles were closed out for the defendant, whereby loss was sustained, to whom sold, when and where sold, and the price realized, or what benefit accrued to defendant on account of such purchase. It failed to allege sufficient facts to show what the "custom of the trade" was, or to state that the defendant was familiar with the custom of the trade. Plaintiff's petition does not contain a legal cause of action, because upon its face the contract shows that it involved and was related to what is known as "futures." It was a contract purely speculative in which no actual delivery of the articles bought or sold was intended or contemplated between the parties, and under the laws of Georgia such a contract is illegal and void and contrary to public policy. The plaintiffs moved to amend their petition substantially as follows: The contracts for the purchase of cotton for future delivery were made by the plaintiffs as brokers for the defendant with the O'Dell Company, of Cincinnati, Ohio, and were for the purchase and delivery of the cotton, in the amounts and at the prices stated, in the city of New York at the times stated. When the contracts for the purchase of cotton were made or executed by the plaintiffs, their commissions as brokers were then and there earned. The original margins required by the O'Dell Company to be deposited with them as a condition precedent to the executing of the contracts were furnished by the defendant and the amounts sued forwere subsequently furnished by the plaintiffs "in order to keep the trades afoot"; such amounts being furnished at the request of the defendant "purely as a favor on the part of the plaintiffs." The court rejected the plaintiff's amendment to the original petition, sustained the demurrer, and dismissed the case. Whereupon plaintiffs excepted to the order of the court refusing to allow their amendment, and to the further order of the court sustaining the defendant's demurrer and dismissing the case.

A. G. & Julian McCurry and Anderson & Anderson, for plaintiff in error.

Jas. H. Skelton, for defendant in error.

LUMPKIN, J. (after stating the facts). The original petition was clearly demurrable. Such descriptions of the articles referred to as "10 C. F. I., " "50 C'tn., " "10 U. P., " and "1 Ma. Wh't., " may be quite intelligible to those initiated in the class of dealings involved; but they can hardly be said to plainly and distinctly describe the articles alleged to have been bought The terms of the alleged purchases were not given, nor the prices paid or to be paid for the things bought. The amounts set opposite these various items purported to be the margins advanced by the plaintiffs for the defendant, not the purchase price of the articles. If it should be contended that these figures represent the prices paid or to be paid, then there would be no statement of the amount of margins advanced by the plaintiffs. They sued for the exact balance arising from this account as being the amount due them on account of the advancing of such margins. There was no allegation in the petition as to when the articles were sold or at what price. It stated that the defendant failed and refused to make the proper and necessary advances for margins, etc.; but it was not shown what advances were necessary and proper, nor how the transaction was "closed out." It alleged that such advances of margins were in accordance with "the custom of the trade, " but it failed to show what was the custom or to what trade it appertained. The proposed amendment did not undertake to cover the entire lot of articles mentioned in the account attached to the original petition, but stated only that the contracts for purchase of cotton for future delivery were made with the O'Dell Company, of Cincinnati. It alleged that such contracts were for the delivery of the cotton in the amounts and at the prices stated in the original petition, in the city of New York, at the time stated in the original petition. As already pointed out, no prices were stated in the petition; and this was made clear by the amendment itself, which alleged that "the original margins required by the said O'Dell Company to be deposited with them, as a condition precedent to the making or executing of the said contracts, were furnished by the defendant, and the amount sued for in the above-stated petition are amounts which were subsequently furnished by plaintiffs upon the exhaust of the said margins, in order to keep the trades afoot. It was said that these advances were made purely as a favor on the part of the plaintiffs; but it also appears that, when the contracts were made or executed by the plaintiffs as agents of the defendant, "plaintiffs' commissions as brokers were then and there earned." This amendment did not cure the defects in the original petition, and was properly rejected.

2. A contract for the actual sale and delivery of property at a future time is not illegal; but a contract for the sale of goods to be delivered at a future day, "where both parties are aware that the seller expects to purchase himself to fulfill his...