Peet v. Hatcher

Decision Date08 January 1896
Citation21 So. 711,112 Ala. 514
PartiesPEET ET AL. v. HATCHER ET AL.
CourtAlabama Supreme Court

Appeal from chancery court, Russell county; John A. Foster Chancellor.

Bill by J. D. Peet & Co. against B. T. Hatcher and others to foreclose a mortgage, in which a decree dismissing the bill was reversed, without a written opinion being filed. Defendants petition for a rehearing. Denied.

Norman & Son, for appellants.

Chilton & Thorington, J. W. Foster, and Peabody, Brannon & Hatcher for appellees.

HEAD J.

This is a bill filed by the appellants to foreclose a mortgage executed by the appellee B. T. Hatcher and his wife to one C P. Ellis, on the 26th day of June, 1885, on certain lands therein described, situate in Russell county, Ala., to secure a note executed by him to the said Ellis, in the sum of $10,000, payable on the 1st day of November, 1885. In the fall of 1883, the complainants, Peet & Co., were cotton brokers in the city of New Orleans, engaged in buying and selling cotton futures for customers, on the New Orleans Cotton Exchange, of which they were members. They operated for stipulated commissions of so much per bale, and made advances for their customers, to keep up their contracts when so agreed upon. Said C. P. Ellis was then the agent of Peet & Co. Respondent B. T. Hatcher was a cotton warehouseman, residing and doing business in the city of Columbus, Ga. At the time mentioned (fall of 1893), Ellis and Hatcher met in Columbus, and an arrangement was made between them, by which Peet & Co. were to buy cotton features for Hatcher, in New Orleans, and make advances for him when necessary to keep up his contracts. Accordingly the purchases began, and continued until the latter part of 1885. When the note and mortgage in controversy were executed, June 26, 1885, if the then-existing contracts had been closed, Hatcher was largely in arrears to Peet & Co. for commissions and advances; and he being about to depart for Europe, on an extended business trip, Peet & Co. desired security for the present arrearages, and to cover future losses which might develop during his absence in Europe, a continuation of the business of buying being contemplated. Ellis visited Columbus to attend to the matter, and thereupon this note and mortgage were executed to afford the desired security. The note was at once indorsed by Ellis, and, with the mortgage, was delivered by him to Peet & Co., on his return to New Orleans. The business relations between the parties continued, as we have said, until the latter part of the year 1885, when it was ascertained that Hatcher's indebtedness amounted to over $17,000. It is attempted to be maintained, as a defense to the present bill, that the execution of the note and mortgage was a private transaction between Hatcher and Ellis, had upon consideration of a personal loan of $10,000 then made by Ellis to the former, in the shape of a check for that sum drawn by Ellis in Hatcher's favor, on Peet & Co., which it was agreed by Ellis that Peet & Co. would honor, and place the amount to his (Hatcher's) credit on their books; that the check was given, and forwarded to Peet & Co., who failed to give credit for the amount; wherefore it is contended that the consideration of the note and mortgage failed. This defense finds no satisfactory support in the evidence. It is shown to our entire satisfaction that the use of Ellis' name in the papers, and the drawing of the check by him, were suggested either by Ellis or Hatcher (whose respective accounts of the matter are given in their depositions), and were observed as a mere form. Hatcher's account is substantially that Ellis suggested it to conceal the gambling nature of the transaction. Ellis says Hatcher suggested it to prevent injury to his credit, he supposing that such injury might follow a general public knowledge that he was dealing so largely in cotton speculations, which fact would be indicated by the use of the names of New Orleans cotton brokers. It is immaterial to determine which of these versions is the correct one, for the result is the same under either. The evidence leaves no reasonable doubt that there was at the time no thought or intention on the part of either of a personal loan of $10,000, or any other sum, by Ellis to Hatcher, but that the securities were executed for the sole use and benefit of Peet & Co., upon the consideration we have above stated. We would reach this conclusion upon the answers to the bill and testimony of Hatcher alone.

The defense mainly relied on is that the dealings between Hatcher and Peet & Co. were gambling transactions, such as the courts will not enforce. It is pleaded and insisted that those transactions were governed by the laws of Georgia, where the arrangement under which they were had was entered into by Hatcher and Ellis, the latter acting for Peet & Co., by force of which laws the contracts made, in the purchase of cotton, were mere wagers, and void. It is settled by the decision of this court in Hawley v. Bibb, 69 Ala. 52, in a case precisely like the present, except that the dealings were on the New York, instead of the New Orleans, Exchange, that the contract under which the cotton dealings were to be had, as to its validity, was governed by the laws of the state wherein it was to be performed (in that case the state of New York); and, as the statutes of that state were not pleaded and introduced, it was held that the validity of the contract was to be determined by the principles of the common law, which were presumed to obtain in the state of New York. But we do not presume the existence of the common law in the state of Louisiana. It is only in those states having a common origin with our own, or populated by citizens coming from states having such a common origin, that the presumption of the existence of the common law therein obtains here. 1 Brick. Dig. p. 349, § 9; 3 Brick. Dig. p. 122, § 1; Drake v. Glover, 30 Ala. 382. Louisiana is not one of those states. Castleman v. Jeffries, 60 Ala. 380; Norris v. Harris, 15 Cal. 226. There is in the present record no pleading or proof bringing before us any local law of Louisiana. In this state of the case, following the intimations of the court in Castleman v. Jeffries, 60 Ala. 380 (section 3 of the opinion), Telegraph Co. v. Way, 83 Ala. 542, 4 So. 844 (section 16 of the opinion), and Drake v. Glover, 30 Ala. 382, we held in the former opinion delivered in this cause, in substance and effect, that whatever the law of Louisiana might be, in the absence of pleading and proof to the contrary, contracts made there would be presumed to be lawful, and being so, under the influence of Hawley v. Bibb, supra, they furnished a valid consideration of a contract made and to be performed in another state, to wit, in the state of Georgia. There was no local law of Georgia before us altering the principles of Hawley v. Bibb. Since our former decision, the case of Kennebrew v. Machine Co. (Ala.) 17 So. 545, came under our consideration. It was an action for the price of a machine sold the defendant, in Louisiana. The question was whether there was an implied warranty that the machine was suitable for the purposes for which it was sold. The law of Louisiana was not introduced. Declaring what was said to the contrary in Castleman v. Jeffries, supra, to be dictum opposed to the overwhelming weight of authority, we said that it is "almost universally held that where there is no proof of the law of another state, nor judicial knowledge of the origin of such state which would raise up a presumption that the common law prevails there, it will be presumed that the law of the forum in which the issue is being tried is the law of that state, on the question under consideration." We cited many authorities in support of the principle. The law touching implication of warranty in such a sale, as we understood it to obtain in Alabama, was applied to the sale in question. We still think that decision is sound, and supported by the weight of authority; and we adhere to it. It will be applied, though our law be statutory. It may be well said that, as we judicially know no other law of the case than our own, the parties litigant, by failing to produce the lex loci contractus, impliedly agree that it is the same as the lex fori, be the latter common law or statute. Thus, it may be regarded as settled in this state that when a contract made in a state or country wherein we cannot presume the existence of the common law is sought to be enforced in the courts of this state, and the lex loci is not produced, we will apply to it our own law.

But in the present case there is yet the distinguishing characteristic,-which, in the view we at first took of the case, we did not consider it necessary to discuss,-that the cotton contracts made in New Orleans, and here assailed as wagers, are not sought directly to be enforced. They were not even contracts entered into by and between the parties litigant, but money paid and services rendered by the complainants as the retained brokers of the respondent, who now assails them, in the creation and furtherance of the contracts, and form the consideration of the promissory note which was made by the respondent to the complainants, in the state of Georgia, by its terms payable at a designated bank in the state of Georgia, and which is now sought to be enforced by the foreclosure of the mortgage given to secure it, executed in Georgia, upon lands situate in this state. The questions then arise, is the obligation of the note and mortgage governed by the law of Georgia? If so, what is that law, and what its effect upon a note founded upon such a consideration, assuming that the cotton contracts were in fact wagers? If valid and enforceable under the laws of...

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