Robinson v. Crawford

exhaustion, without further notice.” These were marginal dealings. On the 21st of October the respondents were carrying for the appellant the 2,000 bales referred to, and on that day, the market price of January futures having declined very considerably at the Cotton Exchange, efforts were made on the part of the respondents to communicate with the appellant, and to demand from him further margin. The market had fallen off from the 18th, and a check of the appellant for $1,049 had been given to the respondents on account of the transactions, but that check was not paid on presentation, although it was subsequently honored. On the afternoon of October 21st the respondents, not receiving any more margin from the appellant, closed out the transactions, the result of which showed a debit balance of three thousand and odd dollars, for which this suit was brought. The respondents justify the course they pursued, and claim the right to recover this balance, on the ground that it was one of the understood terms upon which the business was done, and therefore part of the contract, and that, when margins were near exhaustion, they had the right to close the transactions out at their discretion, without further notice to their customer. The rights of the parties in this particular action, we think, are to be determined in view of the special circumstances of the case and the relations they assumed to each other under the course of dealing established between them by a series of transactions with which those had in October were, as matter of fact, connected. We do not mean to say that independent transactions had between a broker and his customer are, under all circumstances, to be affected by the same general construction; but where there has been an habitual course of dealing respecting contracts and transactions of a particular kind, that course of dealing “is a material and important element in determining the construction to be put upon their acts.” Shelton v. Transportation Co., 59 N. Y. 258 ; Mills v. Railroad Co., 45 N. Y. 622 . The transactions which are involved in this action were had upon the Cotton Exchange. They were subject to the rules of the Cotton Exchange, and were not independent and separate in such a sense as to make them disconnected from other antecedent transactions of the same kind had between the appellant and the respondents. The terms and conditions upon which those antecedent transactions were had were known to the appellant, and the fair inference is that, inasmuch as the transactions of October were precisely the same in kind as those formerly had, and grew out of, and in effect were a continuation of, prior dealings, they were entered into upon the same terms, and with reference to the same conditions. It is uncontradicted that the October transactions were based upon a margin consisting of moneys in the hands of the respondents, constituting a credit balance resulting to the appellant from previous transactions of precisely the same character as those had in October, and which balance, instead of being taken in money, was again employed in the same kind of ventures. In other words, the appellant had been speculating in cotton futures through the respondents as his brokers, and on the 17th of October had a credit balance of several thousand dollars in their hands. He wished to employ that balance as margins in the same character of transactions, and

instructions were given by him to his brokers to do so. His earlier dealings had begun in May, 1895. He knew precisely on what terms these transactions were entered into. He testifies himself that he had been dealing with the respondents from May, 1895; that he had had five or six transactions with them; that they resulted in a profit of $2,-900, and that on each transaction he had received a memorandum from the respondents corresponding with the particular memorandum that was sent to him after the transactions of October 18th; that on each of these memoranda the small print provision respecting the privilege reserved to the brokers was contained. He must have read it, and therefore knew of it, and further knew that it was one of the conditions on which the particular kind of business for which he gave the October orders was conducted. The right reserved to the brokers was, therefore, by the course of business, thoroughly' understood by the appellant, and made a term of the contract by which the respondents were employed to make the October transactions. The liability to pay this balance consequently exists, and the respondents were entitled to recover, there being no question of the fairness of the sales made in closing out the contracts, nor of the legality of such contract.

It is suggested that there was no promise made that the appellant would pay any losses incurred upon closing out the transactions; but such a promise is implied. It was held in Bibb v. Allen, 149 U. S. 482 , 13 Sup. Ct. 950 , that where a broker is employed to sell property for future delivery a promise is implied on the part of the principal tó repay or reimburse the broker for losses or expenditures necessitated by or resulting from the performance of the employment. The losses in this case were settled and adjusted in accordance with the rules of the Cotton Exchange. The appellant was not ignorant of the method by which such losses were settled or adjusted, and there was an implied promise on his part to make the losses or liabilities of the brokers resulting from the transactions good to them. The view we have taken of the case makes it unnecessary to consider any other proposition urged by the appellant as a ground for reversal of the judgment.

The judgment and order appealed from must be affirmed, with costs. All concur.