Wilhite v. Houston

• Decision Date: 28 October 1912
• Docket Number: 3,719.
• Citation: 200 F. 390
• Parties: WILHITE v. HOUSTON et al.
• Court: U.S. Court of Appeals — Eighth Circuit

200 F. 390

WILHITE v. HOUSTON et al.

No. 3,719.

United States Court of Appeals, Eighth Circuit.

October 28, 1912

J. P O'Meara, of Bartlesville, Okl., and W. H. Kornegay, of Vinita, Okl., for plaintiff in error.

Lathrop Morrow, Fox & Moore and Thomas H. Reynolds, all of Kansas City, Mo., and B. B. Foster, of Bartlesville, Okl., for defendants in error.

Before SANBORN, HOOK, and SMITH, Circuit Judges.

HOOK Circuit Judge.

Wilhite complains of a judgment which Houston and Fible obtained against him on an account for disbursements and commissions on sales and purchases of grain. His defense, or rather the only one material here, was that the transactions; that is to say, which the account arose were gambling transactions; that is to say, that it was not intended the grain dealt in should be delivered or received, but that the ventures were mere wagers on the fluctuations of the market, to be settled according to the differences between contract and market prices. Most of the defendant's assignments of error relate to the refusal of the trial court to direct a verdict in his favor, the refusal of instructions asked, and the charge given by the court to the jury. It is not necessary to recite them in detail. They can be disposed of by referring to facts which were either uncontroverted or settled by the verdict in favor of the plaintiffs and to certain principles of law which we think are well established.

The plaintiffs, who are brokers at Kansas City, Mo., acted almost entirely upon telegrams and letters from the defendant and his agent. According to the instructions given them the orders for sales and purchases of the grain were executed on the boards of trade at Kansas City and Chicago. The character of such exchanges, their legitimate relation to the business world, and their operations are described in Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236, 25 Sup.Ct. 637, 49 L.Ed. 1031, where some of the aspects of the case at bar which counsel deem sinister find adequate explanation. The plaintiffs had no interest in the sales and purchases they were directed to make, other than as defendant's brokers; and this relation, as between them, was not affected by the fact that in executing defendant's orders the plaintiffs assumed the position of principals toward those they dealt with. Clews v. Jamieson, 182 U.S. 461 481, 21 Sup.Ct. 845, 45 L.Ed. 1183. An order from a customer to a broker, to be executed upon a board of trade, contemplates conformity to the rules and customs which prevail there. Bibb v. Allen, 149 U.S. 481, 489, 13 Sup.Ct. 950, 37 L.Ed. 819. The rules of the boards of trade at Kansas City and Chicago prohibited gambling transactions.

As regards their legality the sales and purchases of grain in the Chicago market were governed by the law of Illinois those in the Kansas City market, by the law of Missouri. Berry v. Chase, 77 C.C.A. 161, 146 F. 625; Edwards Brokerage Co. v. Stevenson, 160 Mo. 516, 61 S.W. 617. In Illinois a contract of sale or purchase of a commodity for future delivery is void if both parties intended it as a wager upon the market movements to be settled by differences, but not if only one of them has that intention. That is the general rule in the absence of statute. In Missouri the contract is declared void by statute if either party so intends, though the other does not. Cleage v. Laidley, 79 C.C.A. 284, 149 F. 346. Nothing appeared in the correspondence of the parties or their conferences before the controversy arose to indicate that the transactions were...