Smith v. Bowen

EIDSON, Associate Justice. Appellants brought this suit in the court below against F. N. Bowen and H. T. Williams & Co., to recover the sum of $3,848.50, alleged to be balance due from appellee Bowen to said H. T. Williams & Co., on two written contracts for the sale of certain cotton by the said Bowen to the said H. T. Williams & Co., and which contracts had been assigned by the latter to appellants. Appellee Bowen pleaded, as a bar to recovery by appellants, that one of the considerations for the sale of the cotton to which said contracts related was illegal in that it consisted of the agreement of the said H. T. Williams & Co. to purchase for appellee Bowen two cotton futures, May contracts for 100 bales of cotton each, and carry the same for Bowen with the right, on his part, to select any day between the dates of the respective deliveries of said cotton and April 20th, 1905, and that, upon the day so selected, said Williams & Company agreed to sell said future cotton contracts on the Hew York future market, and to render Bowen an account sales thereof; and, if upon *224 said sale, after deducting 100 cents per 100 pounds on the cotton delivered October 10th, 1904, and 115 cents per 100 pounds on the cotton delivered under the other contract, said Williams & Co. realized a sum of money less than the amount they had paid Bowen for the cotton sold and delivered by him to them, then Bowen was to make good the deficiency; but, on the other hand, if after making said deductions, Williams & Company realized more than the amount they had paid to Bowen for the cotton sold and delivered to them by him, then they were to pay Bowen the profits of the transaction in futures over and above the amount they had paid him on the sale of the spots. And that the agreement of Williams & Co. to purchase and carry these future contracts for Bowen was one of the inducements causing him to enter into the contracts for the sale of the spot cotton and was one of the considerations therefor; that in the buying and selling of .said May future contracts in the New York market, there was no intention on the part of either said H. T. Williams & Go. or said Bowen that there would be any actual delivery of the cotton represented by said contracts. There was a verdict and judgment in favor of appellee Bowen and against H. T. Williams & Co. in favor of appellants for the amount sued for. Upon a trial of the case the court below, over the objections of appellants, admitted testimony in support of the above plea of appellee Bowen, and appellants, by various assignments, have predicated error upon this action of the trial court. Appellants’ contention that said testimony was irrelevant and immaterial is without merit, as proof that the contract is based in whole or in part upon an illegal consideration, is a good defense against its enforcement. The rule that the plaintiff can recover if he can make out his case without proving as a part of his cause of action the illegality of his contract, does not apply in a case of this character where the appellee claims the actual transaction to be illegal and different from that claimed by the appellant, which presents a question of fact for the jury to determine. If the transaction was as claimed by the appellants, they were entitled to recover, and the court so charged the jury, but if it was as claimed by appellees, it was based in part upon an illegal consideration, and therefore could not be enforced; and the evidence admitted did not simply show a different or independent transaction, but that the transaction was, in fact, not as claimed by appellants, but as claimed by appellee Bowen. A part of the consideration of the contracts upon which, the suit is based being illegal, this illegality could not be affected by appellants or their assignors giving credit to appellee of the amount the cotton was worth according to future quotations on the New York Cotton Exchange. The rule that a written instrument sued upon can not be varied or contradicted by proof of a contemporaneous parol agreement does not apply in cases of this character. If the consideration, or one of the considerations, upon which the transaction is based is illegal, it may be shown by parol testimony. (Wiggins v. Bisso, 92 Texas, 222; Reed v. Brewer, 90 Texas, 149; Sanger v. Miller, 26 Texas Civ. App., 111.) The 8th paragraph of the court’s charge was proper, in view of the pleadings of appellee and evidence in support thereof, to which reference has been made. The court having in another paragraph charged *225 the jury to find for appellants against appellee Bowen in the event they found the money paid by H. T. Williams & Co. to him was a loan, it was unnecessary to specifically instruct the jury that they must find that such, money was paid in payment for the cotton, and not as*a loan, before they could find in favor of appellee Bowen on his plea as to the illegality of one of the considerations for the sale of the cotton. The illegal consideration pleaded as a defense to the action consisting in the agreement of H. T. Williams & Co. to buy May future contracts for appellee, the question as to whether or not such agreement was made was material to the issue pleaded, and it was not error for the court below to refuse the appellants’ special charge No. 12. Paragraph 8 of the court’s charge submitted to the jury for their determination issues pleaded and in support of which there was evidence which authorized a finding in appellee Bowen’s favor; and if appellants desired a more specific instruction upon such issues, they 'should have requested same. It was not necessary that the agreement which constituted the illegal consideration pleaded should be shown to have been performed in order to render the contract based upon it invalid and unenforceable. The illegality inherent in the agreement constitutes its vice and renders it invalid as a consideration upon which to predicate a contract. Appellants’ special charge No. 8 was properly refused, as there was no evidence tending to show an intention to make an actual delivery of the cotton embraced in the future contracts. The agreement implies that there was no actual delivery of cotton intended, as it was to buy future contracts and not cotton for future delivery. (Logan v. Norris, 17 Texas Ct. Rep., 115.) For reasons already stated, appellants’ seventeenth and eighteenth assignments of error are overruled. The charge quoted in appellants’ nineteenth assignment of error was properly refused, as it was a peremptory charge as to the amount of the recovery directed; and, besides, the main charge was sufficient on the subject to which the special charge related. The court’s charge as to the burden of proof was proper. It instructed the jury that the burden of proof was upon the plaintiffs to make out their case by a preponderance of the evidence, and that as to the issue of illegality of the contracts, the burden of proof was on the defendant Bowen. There was no error in admitting the testimony of the witness Williams as to his system and method of doing business, which tended to show that the rule was not to deliver the cotton in making settlement of cotton future contracts, as such testimony tended to support appellees’ allegation that there was no intention to deliver the cotton on the contracts claimed to have been bought for him. Under the charge of the court the jury necessarily found that the money paid to Bowen by Williams & Go. was not a loan in order to arrive at their verdict in favor of appellee Bowen. The charge of the court which required the jury to believe from the evidence that one of the considerations of the contract sued upon was illegal, implied that before they could so find they must believe that *226 both parties agreed to and understood such consideration: hence it was not necessary to give to the jury the special charge Ho. 9 requested by appellants. Appellants have embraced in their brief a number of other assignments of errors, which w’e have carefully considered, but do not deem it necessary to discuss them in detail. In our opinion none of them present reversible error. As already indicated, the verdict of the jury is amply supported by the evidence as shown by the record. In our opinion no reversible error has been pointed out, and the judgment of the court below will therefore be affirmed. Affirmed. Writ of error refused.