Birmingham Trust & Savings Co. v. Currey

57 So. 962, 175 Ala. 373, 1911 Ala. LEXIS 429

• Court: Supreme Court of Alabama
• Decided: December 21, 1911
• Status: Published

Opinion

SAYRE, J.

Appellant, having lost its case and suffered judgment for costs in the court below, undertook to execute a supersedeas as provided by section 2873 of the Code rather than security for costs only as provided by section 2872. This supersedeas is defective in two particulars: Thomas R. Roberts, who was one of the parties defendant to the judgment, is not named among the obligees. The sureties are not named in the body of the bond. No notice was taken of these defects at the time of the submission; but. now appellees urge in their brief that the appeal ought to be dismissed by this court ex mero. Besides taking issue bn the propriety of the proposition thus advanced, appellant has lodged with the clerk an affidavit showing that said Roberts was dead at the time the judgment was rendered, and offers to the court through the same agency a sufficient supersedeas bond in all respects regular as to form. These efforts to present a better record come .too late, and, so far as the suggestion of the death of Roberts is concerned., that should have been made in the trial court. Appellees’ suggestion, if meritorious at all, is likewise too late. The bond, though defective, is not ineffectual, and the objection to it should have been so timed as to afford appellant an opportunity of curing its defects.— Code, §§ 2885-2886, and cases cited in the annotations to section 2885.

This action was brought by appellant as indorsee of a promissory note executed by the defendants to J. F. Hooper, and by the latter negotiated to the plaintiff. The defense was rested upon the alleged illegality of the ■consideration, taking the form, to state it generally, that the obligation sued upon arose out of gambling iiansactions in cotton futures by the defendant Currey. The other defendants joined in the note as sureties. Pleas 10, 12, and 13, the issues made by which were submitted to the jury, and the sufficiency of which is questioned ou this appeal, will be set out by the reporter in his statement of the case. However defective these pleas may be, we are to consider only that ground 'Of objection to them taken in the court below and renewed here as a reason for reversal. Something is said in the brief .to the effect that'material facts are averred in the way of recital only, but we think the criticism may be said to be hypercritical at best, and we find nothing of it in the demurrer. The objection to be considered briefly is that defendants have failed to aver that it rvas mutually understood and agreed between the parties to the contracts for the sale of future delivery cotton that there was to be no delivery in fact. The language of plea 12, to deal with that as fairly illustrative of the rest, is that.it was not “contemplated or intended by either of the parties * * * that the actual cotton would be delivered,” but it was “contemplated and intended by all of said parties that, when the time for delivery arrived, differences would be settled by paying or receiving the difference between the price when sold and the price at the time of delivery.” The argument seems to seize upon the word “contemplated” in the plea as if used to indicate that the parties had in view a discharge of the obligation of the contract between them by the payment of differences as a mere contingency, a method of settlement which the parties might in the then future lawfully agree upon if in the beginning they had a bona fide contract for actual delivery. That is a permissible use of the word, and it expresses the mind -of the Supreme Judicial Court of Massachusetts when it said in Barnes v. Smith, 159 Mass. 344, 34 N. E. 403: “But a mere expectation on the part of plaintiff and of the defendant,” who were parties in that court to an issue identical Avith that here in hand, “that the purchaser of shares would be willing to adjust the transactions on the basis of receiving or paying differences Avhen there was no agreement or understanding to that effect, or to the effect that the plaintiff should protect the defendant from being called on to make or accept any actual deliAperies of shares, would not be sufficient to render the contract illegal.” So, also, in respect to Chicago Board of Trade v. Christie, 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031, where this language Avas used: “The fact that contracts are satisfied in this Avay by set-off and the payment of differences detracts in no degree from the good faith of the parties, and, if the parties knoAv AAdien they make such contracts that they are likely to have a chance to satisfy them in that way and intend to make use of it, that fact is perfectly consistent Avith a serious business purpose and an intent that the contract shall mean what is says.” The court added: “There is no doubt, from the rules of the Board of Trade or the evidence,' that the contracts made betAveen. the members are intended and supposed to he binding in manner and form as they are made.” But “contemplation” also signifies “purpose” or “intention more definitely, and the purport of these pleas, in which contemplation and intention are conjoined, is that the parties mutually contemplated and intended in the beginning that their transactions should be adjusted by the payment of differences only. That intention rendered the contracts unlawful alike in New York and Alabama. — Hawley v. Bibb, 69 Ala. 52; Perryman v. Wolffe, 93 Ala. 290, 9 South. 148; Allen v. Caldwell, 149 Ala. 293; 42 South. 855; Story v. Solomon, 71 N. Y. 420; Embrey v. Jemison, 131 U. S. 336, 9 Sup. Ct. 776, 33 L. Td. 172. Demurrers to these pleas were properly overruled.

Plea 13 alleges that defendant Currey contracted with J. F. I-Iooper to purchase cotton for future delivery through Norden & Co., brokers in New York, there being no intention on the part of defendant, Hooper, or Norden & Co., that the cotton should be delivered. The replication avers that Norden & Co. purchased from Weld & Co. and others, and that the sellers “did not know of and participate in the alleged unlawful purpose of Currey.” The theory of the replication is that the contracts of sale were between the New York sellers and the defendant Currey, and that the concurring unlawful purpose or intention of both parties is necessary to render these contracts unlawful. The proposition of law involved in this contention is not denied in its proper application. But the pith of the plea is that defendant employed Hooper to procure for him contracts with others which were to be settled by the payment of differences only; Hooper advancing money or credit for that purpose. If Hooper, under this employment, procured contracts which could be settled only by the actual delivery of cotton on the demand of either party, Hooper, or those through whom he acted, if they contracted, in their own names, assumed the burden of such contracts. He could not work a change in the nature of Currey’s obligation without his assent. The contracts which, according to the plea, Hooper agreed to procure for Currey, being denounced by statute alike in New York and Alabama, the contracts between Hooper and Currey to the end of their procurement was unlawful also, and the former cannot recover commissions or money advanced for their furtherance. What' may have been the nature of the contracts with these parties into which Hooper entered.for the purpose of executing his agreement with Currey as matter of substantive law is immaterial to the parties to the present litigation. At best, it is a mere evidential, circumstance corroborative of plaintiff’s version of the facts. — Irwin v. Williar, 110 U. S., 499, 4 Sup. Ct. 160, 28 L. Ed. 225; Embrey v. Jemison, supra; Harvey v. Merrill, 150 Mass. 1, 22 N. E. 49, 5 L. R. R. 200, 15 Am. St. Rep. 159; Fareira v. Gabell, 89 Pa. 91; Rogers v. Marriott, 59 Neb. 759, 82 N. W. 21; Kennedy v. Stout, 26 Ill. App. 133; Jamieson v. Wallace, 167 Ill. 388, 47 N. E. 762, 59 Am. St. Rep. 302. We find nothing.to the contrary in White v. Barber, 123 U. S. 392, 8 Sup. Ct. 221, 31 L. Ed. 243, cited by appellant. In that case it was determined in the trial court, and on appeal it was assumed as a fact, that the contracts involved were not .intended to be wagering speculations. Nor do we see that the cases of Bluthenthal v. McWhorter, 131 Ala. 642, 31 South. 559, and Oxford Co. v. Quinchett, 44 Ala. 487, or the authorities cited in connection with them, stand in the way of our conclusion. Conceding that, to disable himself to recover money lent, the lender must do something more than simply advance the money with a knowledge of the. unlawful purpose for..which, it is wanted, that, to have that .effect he must promote the enterprise more directly, the averment here, we note, is in effect that plaintiff’s assignor, if he kept within the limits of his authority, if he procured such contracts as he was expected to procure, as we must assume he did, actually staked the money on the result of unlawful contracts.

In plea 10 plaintiff’s assignor is not shown to have been a party to the transactions out of which arose the liability sought to be enforced. The averment is that A. B. Hooper used the name of plaintiff’s assignor, and that “part of the consideration of the note sued on was and is commissions charged by the said A. B. Hooper for his services as a broker in negotiating and consummating said transaction,” all the parties to which, to state the further effect of the plea, intended it for a gambling transaction. The demurrer to the replication, which averred that the note was executed by the defendant to plaintiff’s assignor to reimburse him for money of his used in the transaction, was no doubt susstained on the idea that whether plaintiff’s assignor did or did not know the illegal nature of the transaction, and though, if ignorant, he was entitled to have his money, yet, when he accepted and sued on a note securing unlawful commissions along with the rest, he adopted the transaction as a whole. The note was tainted with illegality. It was impossible to say which part of the consideration induced the promise; and defendant’s demurrer to the replication was properly sustained. — Folmar v. Siler, 132 Ala. 297, 31 South. 719; Pettit v. Pettit, 32 Ala. 288.

It appeared without conflict that A. B. Hooper, son of plaintiff’s assignor, J. F. Hooper, assisted his father in carrying on the latter’s business, which in general was banking, and the transactions in controversy were negotiated by him in his father’s name. There was no question about A. B. Hooper’s agency to procure for customers contracts for the purchase or sale of cotton for future delivery, nor was anything said of commissions in pleas 12 and 13, so that, under these pleas and the undisputed facts, the only questions at issue were whether A. B. Hooper and Currey mutually intended that the contracts to be negotiated in New York shoulbe wagers, and, if so, whether plaintiff’s assignor had knowledge of that fact. As tending to establish defendant’s contention in respect to these issues, he was permitted to show that in other transactions involving the purchase for future delivery of cotton and ribs, some of them between Hooper and Currey, others between Hooper and other parties, there had never been any actual deliveries, and that settlements had been made in those instances by the payment of differences only. To these rulings exceptions were duly reserved, and they are assigned for error. When this case was here on a former appeal (160 Ala. 370, 49 South. 319, 135 Am. St. Rep. 102), it was ruled that in determining J. F. Hooper’s knowledge of the nature of the transactions it was competent to show similar transactions with others had with his knowledge and consent. Unquestionably the validity of every separate transaction is to be determined upon its own facts. But it does not follow that the admissibility of every evidential circumstance must be tested by its own intrinsic probative force without regard to its relation with other evidence in the case. “It is the bearing, not the independent force of the particular fact or circumstance, upon which its relevancy depends.” — Nelms v. Steiner, 113 Ala. 562, 22 South. 435. It is to be observed, also, that the former pronouncement in this case had nothing to do with the manner of proving the intrinsic illegality of contracts for future delivery, but touched only upon the method of fastening upon the principal notice of the illegality of contracts negotiated by his agent; such illegality being assumed in the statement. It related to the relevancy of. a course of dealing between principal and agent as going to show the agent’s general authority, and the principal’s knowledge of what his agent had done in a particular case. The questions now presented, both by objections to evidence and by charges seeking to limit the field in which such evidence should operate, are different. The authorities are in conflict as to whether other and distant transactions between the same parties are admissible upon the question of the legality of such contracts as are involved in this suit. We think the correct rule is to be found stated in Crandall v. White, 164 Mass. 54, 41 N. E. 204, a case of the same general character as this, as follows: “It is a general rule that separate and distinct acts unconnected with those in suit are not admissible for the purpose of raising an inference that a party did the particular things which he is charged with doing. But we think in this case that the transactions objected to were of such a nature and were so connected with those in suit, and so near to them in .time, that they might fairly be regarded as having some tendency to show that the defendant White had reasonable cause to believe that no intention existed actually to perform the contracts which form the basis of the present suit.” But' it is held, and properly we think, that the fact that a party has engaged in gambling transactions Avith strangers is Avholly irrelevant. — Potts v. Dunlap, 110 Pa. 177, 20 Atl. 413. Such evidence, in general, “it would be- manifestly unjust. to admit, since the conduct of one man under certain, circumstances, or towards certain individuals, varying as it will necessarily d.o according, to the motives which influence him,, .the qualities -he possesses and his knowledge of the character of those with whom he is dealing, can never afford a safe criterion by which to judge of the behavior of another man similarly situated, or of the- same man toward other persons.” 1 Tayl. Ev. (10th Ed.) § 317, quoted in Jones, Ev. § 140. All the considerations which make against admissibility of res inter alios actas obtain here. However, this testimony being relevant to- one aspect of the case, or rather to one issue involved in the case, as ivas held on the the former appeal, it was properly admitted. But in charges 15 and 16, refused by the court, appellant sought to limit the operation and effect of this evidence in accordance with the views we have expressed in regard to its relevancy. That was the approved method of reaching the end desired, and in refusing these charges the court committed error.

It has long been a paid of the statute law of this state that “all contracts, founded in whole or in part, on a gambling consideration, are void.” — Code, § 3338. The act of March 7, 1907 (Acts, p. 448 et seq.; Code, §§ 3349-3352, 6473-6478), enumerates and declares void certain “future contracts,” including contracts for the sale of cotton, provides criminal punishment for all persons avIio become parties to such contracts, and establishes a rule of evidence for controversies arising out of such contracts. In so far as the act of 1907 enumerates those contracts Avhich shall be held void, its probable effect, if not its purpose, Avas to Avithhold the law’s denunciation from contracts in commodities not numerated. In so far as it declares void the enumerated contracts, it re-enacts section 3338, and declares again the laAv as it had been declared by this court on several occasions. It does not purport to effect, nor could it effect, any change in the substantive rights of the parties to the transactions at issue which were had before the statute of 1907. It was in terms limited to take effect from the beginning of the year 1908. This suit was commenced in 1904 and tried in 1910. The substantive rights of the parties were to be decided according to the law as it existed when the action was begun; but the general principle is that statutory alterations in the rules and methods of procedure, including rules of evidence, are always retrospective unless there be some good reason against it. — Endlich, Interp. Stat. §§ 282-286. “Statutes which relate alone to the remedy, without creating, enlarging, or destroying the right, operate generally on existing causes of action, as well as those which afterwards accrue.” — Coosa River Co. v. Barclay, 30 Ala. 120; Tutwiler v. Tuscaloosa Co., 89 Ala. 391, 7 South. 398. There is no vested right in the rules of evidence. It is clear that there was no actual delivery of cotton at any time, and that “margins” Avere deposited or secured. The rule of evidence enacted in section 3351 of the Code Avas therefore operative in the case. And on this rule, in connection with all the circumstances in evidence, it was for the jury to say whether A. B. Hooper and Currey had a common purpose that there should be no deliveries of cotton, and, if so, Avhether plaintiff’s assignor had knowledge of that fact. We have considered the questions raised. For the error pointed out the judgment is reversed; the cause is remanded.

Reversed and remanded.

All the Justices concur, except Doavdell, C. J., not sitting.