Phelps v. Holderness

• Decision Date: 11 June 1892
• Citation: 19 S.W. 921
• Parties: PHELPS <I>et al.</I> v. HOLDERNESS.
• Court: Arkansas Supreme Court

19 S.W. 921

PHELPS et al. v. HOLDERNESS.

Supreme Court of Arkansas.

June 11, 1892.

Appeal from circuit court, Dallas county; CARROLL D. WOOD, Judge.

Action to recover money by John Phelps & Co. against A. S. Holderness. Defendant had judgment, and plaintiffs appeal. Affirmed.

Mark Valentine, for appellants. Met S. Jones and H. G. Bunn, for appellee.

COCKRILL, C. J.

Phelps, a broker, sued Holderness for money advanced and expended by the former at the latter's request. The court found specially that the transaction out of which the suit grew was a wager on the rise and fall of the price of cotton. If that conclusion is sustained by the evidence, there could be no recovery, and the judgment is right. The testimony of Holderness, and the correspondence between him and Phelps, justify the conclusion that Holderness desired to try his fortune in the cotton market, with no intention of selling or buying, receiving or delivering, a bale of cotton and that Phelps viewed the transaction in that light. But there is no direct testimony of the terms of the contract of purchase which Phelps claims to have made for Holderness, and it is argued that, in the absence of proof that Holderness' vendor participated in his illegal design, the contract must be held to be valid. But the assumption that there is no proof of the vendor's participation in Holderness' illegal design, and the conclusion deduced therefrom, are foreign to the controversy. The controversy does not arise between the supposed vendor and Holderness, but between the latter and Phelps. According to the ruling in some of the states, Phelps, upon the evidence adduced, might be said to be Holderness' vendor. Flagg v. Baldwin, 38 N. J. Eq. 229. But treating him as agent, as his counsel does, and Holderness as his principal, the case stands thus, (or, at least, the court might have found that it was thus:) The principal instructs his broker to make a wager for him on the price of cotton. The broker replies that he has followed instructions. A controversy arises between the two. In that case there is no presumption in favor of the broker to the effect that he in fact deviated from his instructions, and entered into a contract for the actual delivery of cotton. Until he has proved the contrary, the fair inference from the facts is that he made a wagering contract for his principal.

We have assumed that the transaction between Phelps and Holderness was a mere cover for a gambling operation. Whether it...