White v. Erwin

JACKSON, Justice. This is a suit by appellee, C. B. Erwin, to recover $540.62 which he claims as an unpaid balance on the purchase price of wheat he alleges was sold and delivered by him to the appellant, H. E. White, about July 1, 1931. In an opinion on a former appeal, Erwin v. White (Tex. Civ. App.) 54 S.W.(2d) 867, is a sufficient statement of the pleadings of appellee. After the cause was remanded, the appellant filed an amended answer, the allegations of which, in so far as are necessary to the disposition of this appeal, are, in effect, that on and prior to July 18, 1931, the appellant advanced to appellee sums aggregating 15 cents a bushel on 6,388.75 bushels, totaling the sum of $1,150; that on July 18th after said advancements were made, there was a margin of 10 cents a bushel in the wheat at Washburn, Tex., and appellee agreed as a part of the consideration for such advancements that he would protect such marginal deposit of 10 cents a bushel and if the price of wheat on the Chicago market, December option, should decline 10 cents a bushel below the price of July 18th and consume such marginal deposit and ap-pellee failed to protect said deposit, the wheat would automatically be closed out. In the alternative he alleged that on the 18th of July he made a settlement for the wheat theretofore sold and delivered to him under the contract of July 1st, paying the cash advancement of 15 cents per bushel and retaining under the instructions of ap-pellee the 10 cents margin remaining with which it was agreed that he as agent should purchase wheat for appellee, who expressly agreed to protect said 10-cent margin if consumed by a decline in the price of wheat on the Chicago market and, should he fail to do so, agreed that the wheat should be sold out and the contract automatically closed. That on or about October 5th the price of wheat, Chicago December options, declined to the extent that the ÍO-cent margin. per bushel was consumed. Appellee failed to protect said margin and the agreements between appellant and appellee became a closed transaction. These facts are conceded: About July 1, 1931, the appellee and appellant entered into a contract by which appellee sold and delivered to appellant 6,388.75 bushels of wheat at the following prices: 33 cents under the Chicago December option for 1,765.59 bushels; 32 cents under for 3,534.33 bushels, and 31 cents less for 1,086.83 bushels, payment to be made at any time settlement was demanded on or before December 1, 1931. Appellee agreed to pay 1 cent per bushel for elevator charges and a dockage of 1 cent per pound per bushel, which items aggregate $162.37. Appellant advanced to appel-lee on July 6th $125; on the 7th, $275; and on the 18th, $750 — a total of $1,150, for which appellee executed to appellant a receipt in the form of a promissory note. On October 15, 1931, the Chicago December option for wheat was 44% cents per bushel, on July 18th 57% cents and on November 12th appellee requested and was refused a settlement and the Chicago December option on said day was 61'⅛ cents per bushel. In response to special issues submitted by the court, the jury found, in effect, that under the contract of July 1st appellant did not agree to advance any money on the wheat; that after the wheat had been delivered it was understood that the $1,150 advanced amounted to 15 cents per bushel and a margin of 10 cents per bushel remained in the wheat; that appellee did not agree in consideration of the 15 cents per bushel advanced to protect said margin; that the price declined so as to consume the 10-cent margin, and the wheat was sold,because ap-pellee advanced no additional margin. On these .findings judgment was entered thát appellee have and recover $549.62 with in-( terest thereon from November 12, 1931, at the rate of 6 per cent, per annum, together with his cost. *1092 Appellant.contends that tbe trial court .committed reversible error: in sustaining ap-.'pellee’s exception to tbe paragraph, of bis answer in wbicb he pleads in’ tbe - alternative that be settled for tbe wheat, purchased for 15:cents per.,bushel cash and-by ágreement 'retained tbe 10-cent margin with. which, as agent, to. purchase wheat for tbe .appellee’s benefit. Construing tbe allegations to which the ■exception was sustained-, -with’ the othdr'aver-ments in bis answer, most favorable to áp-¡pellant, we conclude that tbe transaction alleged to be a settlement' was an 'agreement for tbe purchase by appellee through ’appellant as bis agent of-wheat on the "Board of .Trade for future delivery:- ■■ . , ■ It is not alleged, if the wheat was- purchased for future delivery," that the contract was “made in accordance with "the rules of any board of trade,- exchange, or similar in-'stitutión, and actually executed on the floor of such board' of trade, exchange,-'or sinf-ilar institution, and performed or discharged ¡according to the rulés ' thereof,” -nor that “such- contracts”- were - “plafee'd < with - or through V regular ' member in good standing’ of a cotton ’exchange, grain exchange, or board of trade,” etc. ' Article’657,'P.' C; 1925. 'Contracts of sale for-future helrtery of grain “without any actual bona fide execution- ánd the carrying "out of such contract upon the floor of such exchange,-board of trade or sim--líar institution, in accordance with thé ruléfe thereof, shall'■’be null and void and unenforceable in any court of this State," and no "action shall be'maintainable -thereon at the suit of any party.” Article 658, P. C. 1925. See, also, article 661, P. C.; Erwin v. White (Tex. Civ. App.) 54 S.W.(2d) 867; Kenedy Merc. Co. v. Ainsworth et al. (Tex. Civ. App.) 258 S. W. 205. This assignment is overruled. By proper assignments the appellant complains of the.action of the court in permitting the appellee to. show by cross-examination of appellant that .at the, previous trial he testified he was acquainted with-the Henderson Grain Company, did business with them; when he bought grain in the way he .bought appellee’s wheat," he purchased futures, for protection; if it -went up he got .the benefit, of the rise in "thé market, ¿nd if it "went down he lost.," This ¡testimony .was admitted over, the obr jections that it was irrelevant, immaterial, not authorized by the pleading, and. was no part of the transaction set .up by appellant as a cancellation and satisfáctión of-the con-, tract of July 1st. • - ■ ’■■■'' i \ ," ■ ." i. The court had, .by sustaining .appellee’s exceptions, eliminated, that, portion-.of ap.pellant’s answer in which he ,set.:!up .san illegal transaction: Neither the petition ‘of ap-pellee, nor the answer of appellant! en which the case was tried, disclosed an illegal transaction or. wagering contract, and. evidence of 'such a "transaction was not admissible. “The rule of pleading is that", if a plaintiff, in or-der "to make out his 'causé of action) is required to show, that.’the'contract sued-upon is, for any reason, illegal, the court will not enforce it, whether pleaded gs:':a defense or not. , But .when the illegality does. not 'áppéar from the contract itself or from "the evidence necessary to prove it, but depends upon extraneous" facts)-the defense" is " new matter, and, to be available, it must-' be pleaded.” Mullin v. Nash-El Paso Motor Co. (Tex. Civ. App.) 259 S. W. 472, 475, writ denied. " This rule controls-pleading and'proving a defense. Had; the testimony"’complained of 'disclosed the-transaction of July- 18th to be illegal,, it-would have been néw mattér and not admissible under a general denial. Blackwell v. General Motors Acceptance Corporation (Tex. Civ. App.) 54 S.W.(2d) 251, and authorities cited. However, such testimony does not sh'ow said contract to be illegal, , since it relates to transactions independent of the one alleged "as a defense. It ■was not admissible. for the purpose of impeachment because on immaterial matters. The admission by the court of certain "exhibits which were confirmations of the purchase and sale of wheat by the Henderson Grain Company for the account of H. 'E. White Grain Company were subject to the objections above discussed, and to the additional objection -" that they disclosed transactions in which appellee was not interested. 17 Tex. Jur. 379, § 131. On the former appeal the allegations of [appellee’s qnswer showed that he was relying on an illegal transaction as a defense, and. the testimony, which' we have held should, have been excluded on" the last trial, was "admissible.under such allegations. The other, assignments presented do not disclose reversible" error. ,. The judgment is reversed, and the cause remanded.