Amsden v. Jacobs — 58 N.Y. St. Rep. 196

Majority

p. 196

Frank J. Amsden, Resp’t, v. George W. Jacobs, App’lt.

(Supreme Court, General Term, Fifth Department,

Filed January 18, 1894.)

Headnote

1. Contracts—Sale on margin.

An agreement by a broker to carry wheat until July 1, without further margin, and not to close the deal until so ordered by the purchaser, means that the deal shall not be closed before July 1, unless so ordered.

2. Evidence—Intention.

In an action on contract for purchase of wheat on margins, intention of defendant not to make an actual purchase is properly excluded, unless it was known to plaintiff.

Appeal from a judgment entered upon a verdict in favor of plaintiff.

Marsenus H. Briggs, for app’lt; Nathaniel Foote, for resp’t.

This action was brought to recover a balance due upon a contract for the purchase of wheat. The plaintiff was a • stock and grain broker, having an office in the city of Rochester. On the 29th day of April, 1891, the defendant gave him an order to purchase for him 25,000 bushels of July wheat in Chicago at $1.05 per bushel. The plaintiff immediately wired the order to Counselman & Day, his correspondents in^Chicago, who purchased the wheat for $1.044 per bushel, to be delivered during the month of July, but with the seller’s option as to the time of delivery within the month. After the purchase and communication of the fact to the defendant, he, on May 9, 1891, deposited with the plaintiff $1,562.50 as a margin or security, and took from the plaintiff the following receipt:

“Received of G. W. Jacobs one thousand five hundred sixty-two and 50-100 dollars, for margin on 25,000 bushels of Chicago wheat for month of July, 1891. I, the undersigned, agree to carry said wheat until July 1st without further margin, and the deal said G. W. Jacobs.

“Rochester, 9th, 1891. F. J. Amsden.”

On the 31st day of July, the wheat was delivered to Counsel-

p. 197

man & Day in the form of warehouse receipts. They notified the plaintiff, and he on the same day notified the defendant, and asked for instructions, but none were received from him. On August 4th, Counselman & Day drew a draft on the plaintiff for the balance due them on the wheat, and attached the warehouse receipt. The plaintiff notified the defendant of the fact, and asked him to make provision for it, which he neglected to do. Thereupon notice was given to him that unless he took the wheat and paid for it, or made arrangements for carrying it, the plaintiff would sell the wheat at the Chicago Board of Trade at its opening on August 11, and hold the defendant for any deficiency. The defendant made no reply, but left the city of Rochester; and thereupon, on the lltli day of August, the wheat was sold at 91-s-cents per bushel, The defense relied upon was to the effect that the plaintiff had committed a breach of contract on his part in failing to carry the wheat until it was sold by direction of the defendant, and that the contract was illegal and void under the statute, for the reason that the parties had not intended that any grain should be purchased or delivered.

The first question must be determined from the written agreement forming a part of the receipt. After acknowledging the receipt of $1,562.50, the plaintiff agrees to carry the wheat until July 1st without further margin, “and the deal is not to be closed until so ordered by said Gr. W. Jacobs.” The wheat was not only carried until July 1st, but it was carried until August 11th, without further margin. The wheat was ordered sold by the plaintiff on August 11th,.after the defendant had neglected or refused to take care of it It is claimed that the deal was not to be closed until so ordered by Jacobs. Is this a fair and reasonable construction of the language used? If so, the plaintiff could be required to carry the wheat for any time, no matter how distant. Under the margin paid, he undertook to carry the wheat until July 1st without further margin. After July 1st he had the right to call for further margin if he so desired; but it would be useless for him to call for margin, provided he was under obligation to carry the wheat until it was ordered sold by the defendant. It consequently appears to us that the construction contended for is inconsistent with the preceding clause of the agreement, and that the true meaning is that the deal was not to be closed prior to the 1st of July, unless so ordered by the defendant. Upon the trial the defendant was sworn as a witness on his own behalf, and upon the direct examination was asked the following question:

“ At the time that you gave this order to Mr. Morse to purchase for you, as he testified, did you intend to make an actual purchase of the wheat ? ”

The counsel for the plaintiff then inquired of the defendant’s counsel if he expected to prove that the defendant’s intention in that respect was known to the plaintiff or Mr. Morse, and the counsel for the defendant stated, in answer thereto, that he did not. Plaintiff’s counsel then objected to the question, and the objection was sustained. It is now claimed that this ruling was

Dissent

p. 198

erroneous, and that the exception taken thereto requires a new trial. In Dwight v. Badgley, 60 Hun, 144 ; 38 St. Rep. 112 ; Lawrence, J., says, in reference to the admission of similar testimony :

“ While the answer to it- would not have conclusively shown what the intention of the plaintiff was in entering upon the course of dealing with the defendant referred to by the witness, it involved an answer which defendant was entitled to have presented to the jury, and which might have aided them in determining what was the real intention of the parties.”

Daniels, J., says:

“ If the question as to the defendant’s intention had been answered, it might have been followed by further evidence indicating the intention of the plaintiff to 'have been the same; but without an answer to this question it would be useless to offer to make such further proof.”

dissenting, claimed that the defendant was not injured by the exclusion of the evidence, for the reason that there was no proof showing that the plaintiff had a similar intention. It thus distinctly appears, not only from the concurring opinion of Daniels, J., but by the dissenting opinion of Van Brunt, P. J. that in order to render the evidence of any value it must be shown that the intention sought to be shown was known to the plaintiff And in the case of Kenyon v. Luther, 4 N. Y. Supp. 498 ; 19 St. Rep. 32 ; Martin, J., in delivering the opinion of the court, says:

" While, in the absence of evidence to the contrary, an illegal intent will not be presumed, but an opposite presumption will arise, * * * yet we think the defendants were entitled to prove that their intention was simply to pay differences, and not purchase wheat. * * * This might not have sufficient to have sustained their defense, * * * but it was a step in that direction, which they should have permitted to take.”

Here we have a concession that the evidence would not have been sufficient to establish the defense. In the case under review, as we have seen, the defendant’s counsel, in respect to the evidence offered, says that he did not expect to prove that defendant’s intention was known to the plaintiff, thus shutting the door to that class of evidence. The evidence, if it had been received, would have constituted but a step in the direction of the defense alleged, and would have been insufficient to establish it; and, inasmuch as he had no intention or expectation of showing that the plaintiff had knowledge of such intent, it became worthless testimony, for one party cannot evade a contract, or establish its validity, by maintaining a secret intention to evade it, unknown to the person with whom he is contracting.

The judgment appealed from should be affirmed.

Dwight, P. J., and Lewis, J., concur; Bradley, J., not sitting.