Burke v. Biggers

CCHARLES F. CLAIBORNE, JUDGE. This-is a suit for a Balance due on several tráns-actionsfor^ sale and purchase of cotton for future delivery. The plaintiff averred that he was domiciled in ennessee; that he was an active member of the New Orleans otton Exchange; that the defendant Biggers is domiciled in Georgia; that in the month of November 1916 plaintiff was employed by Biggers to make purchases and sales of cotton on the Cotton Exchange of New Orleans; that plaintiff carried out these orders through Hayward, Howard & Co., Cot-ton Brokers on said Exchange; that these transactions resulted in a loss of $1354.44 to the defendant herein.who refuses to pay for the / same. Defendant was cited through a curator and the attachment of his property in the hands of a garnishee. The curator ad hoc denied all the allegations of' the petition. The case was fixed for trial, and after all the evidence on both sides had been introduced, it was continued for argument for another day. A short time before the argument, the curator filed a supplemental answer in which he pleaded that the transactions between the plaintiff and the defendant were "future transactions” "'whereby it was not intended that respondent should make or receive actual- delivery of the cot-tan", and that said .transactions were illegal in the states of Tennessee and Georgia. The plaintiff argued that this Court could not consider this supplemental answer because it altered the substance of the original answer. The plaintiff also objected to the introduction of any evidence tending to prove a mere future or 7^1-gaieing transaction, V/e do not deem it necessary to pass upon thjzfse objections, as we do not find the defense estaolished. [527] The evidence is that the defendant, while in Georgia., on several occasions, telephoned to the plaintiff at his office in Chattanooga, to buy or sell for hirn^in Hew Orleans, a certaii number of bales of cotton; that the plaintiff wired the orders to Heyward, Howard & Co., Cotton Brokers in Hew Orleans, members of its Cotton Exchange/and dealing under its rules; that Heyward, Howard & Co. would accept the order, and enter it upon their books in the name of the plaintiff for account of the defendant; that when the order was executed^Heyward, Howard & Co. would wire to plaintiff, who, in turn, would inform the defsn-dant^by letter^of the sale or purchase made by Heyward, Howard & Co. for his account, in the manner following: Mr. W. B. Biggers, Ringgold, Ga. Dear Sir, On your order over the tSephone, Hayward, Howard & Co. sold one March at 1920 for your accouit.tc. Yours very truly, B. B. & B• Hovember 11th, 1916. Mr. W. B. Biggers, Ringgold, Ga. Dear Sir, On your order over the phone to buy 3 March on the close, Heyward, Howard lc Co., bought 3 March B/C at 20.28 to close 3 shorts for your account. Yours very truly, B• B ■ & B. Hovember 24th, 1916. The defendant is charged with six transactions, and each one is notified to him in the manner above indicated. It is evident that these contracts of purchase and sals were made by Heyward, Howard & Co. upon the floor of the Cotton Exchange in Hew Orleans, in the name of, and for account of, and as agents of, the defendant, and that the cotton was to be delivered, and the contract performed^in Hew Orleans. They weretlsrs-fore Louisiana contracts^to be governed by the laws and jurisprudence of Louisiana^ and by the rules of the Hew Orleans Cotton Exchange. [528] A purchase of movables in another state to he delivered in this State is a Louisiana contract. 36 A., 359; 21 A., 412, 728; 47 A., 135; 1651; 106 La., 730. "It is a well settled rule that where a contract is to he performed in another place than that where it is made, its validity is to he governed-hy the law of the pla^e of performance". 17 La., 589; 22 A., 418; C. C., 10; 41 A., 1048; 51 A., 1733. Where the sale between the parties was in Hew York-with the intention that it he consummated in Hew Orleans it is a Louisiana contract. 10 A., 728; 111 La., 801. According to the testimony of James D. Heyward, a member of the firm of Heyward, Howard & Co., these sales and purchases were actual transactions. This witness says: "The custom of the Exchange in doing business with brokers in the interior is that they solicit business in their own names, being members of the -Exchange, sending it to brokers on the floor of 1iie exchange for execution for account of their customers. The members in this case are Estes, Burke, and Burke being lifrble to the broker to whom they sent the orders, to the local brokers here.,in the exchange for any losses, x x x this balance of $1354.44 shown on this statement was paid to our firm by Estes, Burke and Burke; the loss having been made by Mr. Biggers through Estes, Burke, and Burke^s orders, x x x When they sent these orders it wide for account iff Biggers as explained to you. It is always the case of a man in the country when he sends an order he says for whose aooount. We keep a general account of the parties sending the order identifying each order as instructed by them for whose account it isl It is not the buying or selling of cotton for future delivery which is illegal; on the contrary such a contract is valid. The illegal contract is the one where neither party is obligated to buy or sell, or to deliver or receive^the actual cottcn.; or, in the language of t&e act, "where the intention of the parties is not to make an honest and bon a [529] fide delivery"; but where, on the contrary, the intention and obligation of each party is only to settle on the basis of the difference in price on a future date agreed upon; in other words, a wager on what the market price of cotton will be on a certain future date. 37 A., 814; 39 A., 1076; 46 A., 315; Act 16 of 1898 p 20. The trial judge gave judgment in favor of the plaintiff for the amount claimed by him less $300. The defendant appealed. The plaintiff and appellee has answered the appeal praying for an amendment of the judgment for the full amount claimed by him. We think the judgment of the District Court correct. The account sued on is prepared by Heyward, Howard is Co. and represents their claim against the plaintiff for the transactions for account of the defendant. We are satisfied that the account is correct as between them. But as between the plaintiff and defendant it is not correct. Defendant testifies that plaintiff drew on him for $300; he says; "I paid his draft with the draft on Heyward, Howard & Co. I just drew a draft on Heyward, Howard & Co. for $300, and took up the draft that he made on me". This is not denied and appears to have been an oversight. Judgment affirmed. June 14th, 1920.