Norris v. Logan

• Court: Texas Court of Appeals
• Writing for the Court: Eidson
• Citation: Norris v. Logan, 94 S.W. 123 (Tex. App. 1906)
• Decision Date: 07 March 1906
• Parties: NORRIS et al. v. LOGAN et al.<SMALL><SUP>*</SUP></SMALL>

94 S.W. 123

NORRIS et al. v. LOGAN et al.^*

Court of Civil Appeals of Texas.

March 7, 1906.

On Rehearing, April 18, 1906.

Appeal from District Court, Bell County; John M. Furman, Judge.

Action by Jesse L. Norris and others against W. R. Logan and others. From a judgment for defendants on their counterclaim, plaintiffs appeal. Reversed and dismissed.

A. P. Taylor, Winbourne Pearce, and Jno. B. Durrett, for appellants. A. L. Curtis, for appellees.

EIDSON, J.

Appellants brought this suit in the court below, alleging for cause of action as follows:

"(2) That heretofore, to wit, on the 8th day of July, 1904, and long prior to that day, and ever since that time, plaintiffs were engaged in the business of buying and selling cotton, both for immediate and future delivery, and the defendant firm of Sanger & Ettleson was at that time and still is engaged in the cotton brokerage business in the regular course of which, for consideration paid in commissions, the said firm procured for their customers contracts for the purchase and sale of cotton in bales to be delivered in the future. That in said transactions the said customers furnished said firm with money to make the necessary cash payments to secure and perform said contracts, and the same were made and performed entirely by and in and the name of said firm for the use and benefit of the said customers, and the said firm received the profits or paid the losses arising from the said transaction as the case might be, and accounted with the said customers for the same. That the defendant W. R. Logan was the agent of said firm and manager of its business in the city of Temple, Bell county, Tex., with full power and authority to receive money, and make all contracts for said firm in connection with its said brokerage business.

"(3) That the defendants for the use and benefit of plaintiffs made certain contracts of sale of cotton in bales for future delivery as follows: On the 6th day of July, 1904, defendants sold for plaintiffs 100 bales of cotton to be delivered at New Orleans, La., in December, 1904, at the price of 9.20 cents per pound, basis middling; on the 7th day of July, 1904, defendants sold for plaintiff 100 bales of cotton to be delivered at New Orleans, La., in December, 1904, at a price of 9.30 cents per pound, basis middling; and on the 17th day of August, 1904, defendants sold for plaintiffs 100 bales of cotton, to be delivered at New Orleans, La., in December, 1904, at a price of 9.46 cents per pound, basis middling; and on the 19th day of August, 1904, defendants sold for plaintiffs 100 bales of cotton, to be delivered in New Orleans, La., in December, 1904, at a price of 9.51 cents per pound, basis middling. That at the time of each of the aforesaid sales plaintiffs then and there each time paid to defendant the sum of $100, aggregating the sum of $400, of which amount $15 of each $100 was paid to defendants as their commissions for making said sales for plaintiffs, and $85 of each $100 was paid to and deposited with defendants, to be used by them as margin for plaintiffs, to insure the delivery of said cotton according to the terms of said contracts of sale, and that after the dates of said contracts, at divers times, plaintiffs, at the request of defendants, paid and deposited with defendants other sums of money, aggregating the sum of $300, to be used by defendants for plaintiffs as margins upon said contracts of sale as aforesaid. That the said contracts of sale were made by the defendants through the New Orleans Cotton Exchange, as members of same and were made in name of defendants, but the same were made for the use and benefit of plaintiffs, and the money furnished to defendants, as aforesaid, was used by defendants to make the cash payments necessary to secure and preserve the said contracts, and that the purchasers of said cotton under said contracts were and are unknown to plaintiffs.

"(4) Plaintiffs further allege that when said four contracts of sale mentioned in the third paragraph of this petition matured in December, 1904, cotton was worth 6.40 cents per pound, basis middling, in New Orleans, and that defendants closed and settled the said contract at that price by collecting and receiving from the purchasers of said cotton the difference between the value of the said 400 bales of cotton at that contract price of same and at 6.40 cents per pound, amounting to $6,000; that defendants thereby became liable and bound to account to plaintiff for the said sum of $6,000 so collected and received by them upon settlement of said contract, and for the sum of $640 deposited with them as margins upon said contracts by plaintiffs as aforesaid; but, though often requested, defendants have failed and refused, and still fail and refuse, to pay the same or any part thereof, to plaintiffs' damage in the sum of $6,640.

"(5) Plaintiffs further allege that the defendants are setting up and claiming in bar of plaintiffs' cause of action as herein set out that it was the agreement and understanding by and between plaintiffs and defendants that the plaintiffs were to at all times keep a sufficient amount of money as a margin deposited with defendants to fully protect and guaranty by plaintiffs the faithful performance by them of their said contracts, and that they were to keep not only the losses paid as they accrued on such contracts, to be determined by the market price of December cotton at the New Orleans Cotton Exchange for December delivery at New Orleans, but, in addition thereto, they were also to keep an additional amount of money as a margin, to wit, the sum of $400, or $1 per bale, to guaranty any further losses that might arise thereto, the uncertain fluctuations of the market price of such December New Orleans cotton, and that the defendants had and reserved the right under said agreement without notice to close said transaction upon plaintiffs' failure to fully comply with all terms of said agreement, but defendants say that plaintiffs failed to comply with such agreement, and requested defendants to furnish some money to carry said contract for them as long as they would, and plaintiffs agreed that they would pay over to defendants, on demand, at any time, any loss that plaintiffs might incur and be required to pay by reason of so advancing such money and keeping plaintiffs in the market, and agreed that said defendants might at their option close said contract at any time when they might be unwilling to risk any further advance on same, and defendants further claimed that after the sale of the cotton as agreed by the plaintiffs, the market price of same continued to advance until plaintiffs had a net loss on their contract above all margins deposited by them in the sum of $1,895, and the defendants, being unwilling to advance further money to make any further risk in carrying said contract and in pursuance of said agreement, and also of another agreement made with plaintiffs on or about the 25th day of August, 1904, closed the said contract for the plaintiff by buying the same in through the New Orleans Cotton Exchange at the market price, to wit, 10.68 cents per pound, and by hedging said contract by the purchase of 400 bales of said option of December New Orleans, which then and there had the effect of closing said contract at 10.68 cents per pound, and that plaintiffs became thereby indebted to defendants under their agreement in the sum of $1,895; that said cotton continued to advance thereafter until it went to 11 cents per pound; that, if the same would have been carried further, there would have been an additional loss from said contracts of more than $600.

"Defendants claim that plaintiffs agreed both at the time of making the said contracts, thereafter, and at the time the same were closed, that the same might and should be closed at defendants' option, as they were closed, and that plaintiffs agreed and promised in consideration that said advance be made by the defendants and such contracts carried as they were that they would pay said defendants the amount of such loss, to wit, $1,895, and such defendants further claim that they have, in fact, paid out to the parties entitled thereto the profits made by them and the losses incurred by plaintiffs, to wit, the sum of $1,895. Plaintiffs further allege and show the court, and plead in the alternative, that if defendants did, as claimed by them, close out and settle the said contract before the maturity thereof at a loss, and failed to keep and preserve the same until the maturity thereof, the same was done without the authority, consent, or agreement of plaintiffs, and in violation of an expressed contract made by defendants with plaintiffs, which said contract was as follows: That on or about the 29th day of August, 1904, the plaintiffs had furnished the sum of $400 to the defendants to be used as margins on said contracts as aforesaid; that the price of December cotton delivered at New Orleans, La., had advanced until the said four contracts represented a loss to plaintiffs of about $1,500; that the defendants were responsible to the New Orleans Cotton Exchange or the brokers through whom the defendants did their business at New Orleans, La., for the faithful payment of the amount, and that on said last-named date, at the special instance and request of defendant, and in consideration of their agreement to continue to protect plaintiffs' said contract, by advancing the necessary margins to carry the said contracts to their maturity to said December, 1904, plaintiffs agreed that the said contracts be continued in their names, and agreed to be liable and responsible, and pay to defendants all losses that might be occasioned by reason of the carrying of said contracts to their maturity in December, 1904; that, in this connection, defendants represented to plaintiffs that they were on the right side of the market, and that if they would keep the said contracts they would...