White v. Barber

• Decision Date: 05 December 1887
• Citation: 8 S.Ct. 221,123 U.S. 392,31 L.Ed. 243
• Parties: WHITE v. BARBER. (Two Cases.)
• Court: U.S. Supreme Court

8 S.Ct. 221

123 U.S. 392

31 L.Ed. 243

WHITE v. BARBER. (Two Cases.)

December 5, 1887.

The first one of these cases is an action at law brought on the tenth of May, 1883, by James B. White against George M. Barber, in the superior court of Cook county, Illinois. The declaration demanded the sum of $15,000, and declared on the common counts. The defendant pleaded non assumpsit. In June, 1883, the cause was removed by the defendant into the circuit court of the United States for the Northern district of Illinois. At the trial, in February, 1884, there was a verdict for the defendant, followed by a judgment for him, to review which the plaintiff has brought a writ of error. There was a bill of exceptions, the whole of which is, in substance, as follows:

The plaintiff introduced the following evidence:

James B. White, the plaintiff, testified that now, and during the time in question, he resided at Fort Wayne, Indiana, engaged in the business of dealing in general merchandise; that in 1879, and prior thereto, one A. S. Maltman, of Chicago, acted as his agent in purchasing and forwarding merchandise of various kinds. 'About September, 1879, desiring to do some trading on the board of trade, Chicago, I asked Maltman to recommend some good responsible broker on the board of trade, through whom I could do business; that Maltman recommended the defendant, who then, and during the time in question, was a broker residing in Chicago, and doing business on the board of trade; that thereupon I commenced trading on the board, sending my orders at first to Maltman, who communicated them to the defendant; that about December, 1879, I came to Chicago, made the acquaintance of defendant, and thereafter did business directly with him; that I continued to do business with defendant during the years 1879, 1880, 1881, and 1882, buying and selling on the board, through the defendant, as broker, corn, wheat, oats, pork, and other commodities, and that about April 19, 1882, I had a settlement with defendant, in which all previous dealings were adjusted; that up to this time the transactions which I had made through defendant on the board amounted to $105,000 in 1879, $1,718,000 in 1880, $640,000 in 1881, and $672,000 in 1882; that in November or December, 1879, and at other times prior to the settlement in April, 1882, I had conversations with the defendant in which I told defendant that I was a merchant in Fort Wayne, and did not want it known that I was engaged in speculating on the board of trade in Chicago, as it might affect my credit, and that the account could be kept in the name of A. S. Maltman; that I considered it a hazardous business, but was willing to gamble provided I could have a fair show; that I wanted my deals placed with responsible parties, so that I could get my money when I made it; that I didn't want any of the property, but meant simply to do a gambling business; that defendant told me [plaintiff] that he knew what I wanted; that Maltman had explained my situation and business; that he would deal only with responsible parties, and the deals should be settled so as to get the profits or losses; that defendant told me [plaintiff] that not one bushel in a million that was bought and sold on the board was legitimate business; that a few of the large houses did some legitimate business, but most of it was simply trading in differences; that he [defendant] did nothing but business of the latter kind; that he dealt mostly for himself; that he did a good deal of 'scalping,'—deals made and closed the same day, on the turn of the market; that he did not let his deals run over night; that, up to April, 1882, I [plaintiff] never delivered or received any of the property so sold or bought, nor was anything ever said by defendant to me about receiving or delivering the property or making arrangements to do so; that, from time to time defendant rendered statements to me [plaintiff] showing the deals made, the price per bushel, or, in case of pork, the price per 100 lbs., at which the commodity was bought and sold, the difference in dollars and cents, the commissions charged, and the total debit or credit passed to my account; that all the deals made were in form contracts for future delivery, in which the seller had the option of delivering at any time during some future month; that up to April, 1882, all trades made by defendant for me [plaintiff] had been settled or closed by counter-trades prior to the month in which delivery could be made; up to April 19, 1882, no commodities had been delivered to or received on these trades, nor had any suggestion or requirement on the part of Mr. Barber to deliver been made; that defendant never reported to me the names of the parties with whom trades were made on my account, and that I never knew or inquired who such parties were; that, after the settlement in April, I commenced selling wheat for July delivery, and by the last of May had sold, through defendant, 100,000 bushels for that delivery, which are the trades in question in this case; that there was a corner in July wheat, and the price was forced up ten or twelve cents; that on the last of July I came to Chicago, had an interview with defendant in the morning, in which he [defendant] proposed to make a tender of No. 2 red winter wheat, the kind sold being No. 2 spring wheat; that No. 2 red winter is intrinsically more valuable than No. 2 spring, but that on the last of July the former stood at 98 cents per bushel, and the latter at $1.35 to $1.37; that I [plaintiff] knew of the tender, and I did not object; that I met defendant later in the day, and was informed by him that he had borrowed warehouse receipts for ten thousand bushels No. 2 red winter wheat, and had made a tender of the same to the several parties to whom he had sold the wheat, and that such tender was in every case declined, and that said tender was made under the following rules of the board of trade, viz.: 'On contracts for grain for future delivery, the tender of the higher grade of the same kind of grain as the one contracted for shall be deemed sufficient, provided the higher grade of grain tendered shall not be of a color or quality that will depreciate the value of the other, if mixed.'

'Prior to December, 1879, I bought, through defendant, 100,000 bushels of corn for December delivery. I came to Chicago, and defendant told me the deal had gone against me $4,500, and he said I had to close it that day. The loss was that amount, and I paid it that day. No corn was delivered on either side. In January, 1880, I sold, through Barber, 20,000 bushels of wheat. My profit was $400. I did not take the profit, but sold more, and the deal went against me $2,000, and I paid it up. I then commenced buying, and made $600 on March wheat bought in January. I commenced selling wheat in March, 1880, and made a good deal of money for a few months; recovered losses in April, and commenced selling May wheat. The May options took a sudden start up, and I lost $8,000, and I paid it. It was expressly stated by me to Barber that I wanted no property. He knew that. He said, 'Certainly, I know that,' and that the deals should be settled on the margins,—on the profits. Up to April, 1882, nothing had been delivered by me or received by me, nor had there been any suggestion or requirement on defendant's part to deliver made; on the other hand, it was never expected to handle the property, but merely to trade in the different deals. Up to the close of the July deal, 1882, no demand had been made on me by Barber for the delivery of wheat or corn, or any other commodity. That I received the following statement of account from defendant about the day of its date,

(which was read in evidence:)

'"CHICAGO, October 30, 1882.

'"1882.

October 30. By balance, being diff. between price,. $11,412 50

"I have 100 M July spring wh't sold for you, and the settling price of same as fixed by board of trade, (1.35,) including coms., 1/4c.'

'That the item of $12,000 balance in said account consisted of money advanced and paid to the defendant; that the item, 'July 3rd, by draft, $3,000,' consisted of $3,000 money paid the defendant by means of a draft.'

Plaintiff testified, further, that 'on April 2, 1883, I served the following notice upon the defendant, by delivering to him a copy thereof. The defendant read the notice, admitted he had the money in his hands, but declined to pay it over.' The notice was offered in evidence, and is as follows:

'To G. M. Barber, Esq.: In a statement made by you, dated October 30, 1882, of deals made on my account on the board of trade, Chicago, you acknowledge a balance in your hands of $11,412.50 in my favor, being, so the statement says, the difference between price you sold 100 M July wheat for me and the selling price of same as fixed by the board of trade, $1.35, including your commission of 1/4 cent. Now you are hereby notified that I claim all contracts for sale of said wheat to be illegal and void, and forbid you to pay over any part of said money or balance to any one, and I further demand the immediate payment thereof to myself.

JAMES B. WHITE.

'Dated Chicago, April 2, 1883.'

On cross-examination plaintiff testified that, during all the time he traded through defendant, Maltman continued to some extent to act as his agent in the business with defendant; that he received some profits debited to him in the statement offered in evidence; that defendant complied with his orders, so far as he knows; that he didn't think defendant had anything to do with the corner in wheat; that he (plaintiff) had nothing to do with the appointment of a committee by the board to fix a selling price for July wheat; that he knew what was going on, and talked with A. M. Wright and other members of the board of trade about the deal, but did not enter into any agreement or arrangement with the other brokers similarly situated to the defendant in regard to legal...