Summary
involving failure to deliver a telegram concerning a gambling contract
Summary of this case from Covenant Health Rehab of Picayune v. BrownOpinion
No. 35661.
October 23, 1944.
1. TELEGRAPHS AND TELEPHONES.
In action for negligence in failing to transmit telegram, evidence supported conclusion that had telegram been sent on day of delivery to telegraph company and had hedging contract been made on that day in accordance with purpose of telegram, it would have been a futures contract and that only, so that it would have been an unenforceable gambling contract (Code 1942, sec. 28).
2. GAMING.
A futures contract without any real purpose or expectation that actual deliveries would be made upon it is illegal and fact that contract is for purpose of hedging does not save it (Code 1942, sec. 28).
3. ACTION.
If a plaintiff requires essential aid from an illegal transaction to establish his case, he cannot recover.
4. TELEGRAPHS AND TELEPHONES.
Where seller filed message with telegraph company addressed to member of seller's firm for purpose of having him procure a hedging contract to protect seller against rise in price, telegraph company which did not deliver message could not be held liable for damages because of rise in price before placing of hedging contract, since reliance on illegal hedging contract was essential to establish a case (Code 1942, sec. 28).
APPEAL from the circuit court of Bolivar county.
Dugas Shands, of Cleveland, for appellants.
With utmost deference, appellants urge the court to continuously recognize in this appeal that this is an action in tort ex delicto and not an action in contract. Appellants charge that appellee was guilty of simple and gross negligence. This distinction is particularly important in the correct solution of appellee's claim that appellants cannot measure their damages or loss by or upon the hedge which Capps, on behalf of the partnership, made or executed on July 21, 1941, with the avowed and, I believe, uncontroverted purpose of protecting himself, and eventually appellee, from any greater loss in this matter than was necessary.
The sale by appellants of six hundred bales of cotton to Rex-Hanover by contracts dated July 10, 1941, was valid and efficacious as was the fixation of the price thereof.
Burgson Co. v. Williams, Smithwick Co., 155 Miss. 351, 121 So. 817; Stroud v. Loper, 190 Miss. 168, 198 So. 46; Sec. 414, Title 27, U.S. Code Annotated, Pocket Part Supplement.
The Federal Communications Act of 1934 does not effect appellants' common law rights and remedies and appellee's common law duties and obligations.
The acts of Rogers, manager of the Cleveland, Mississippi, Postal Telegraph office, within the scope of his employment, are acts of Postal Telegraph-Cable Company.
Sec. 217, Title 47, U.S. Code Annotated, Pocket Part Supplement.
See also Sec. 412, Title 47, U.S. Code Annotated, Pocket Part Supplement.
The alleged rules and regulations filed by appellee under Federal Communications Act are not admissible in the lower court.
The appellants' purchase through C.W. Capps of six hundred bales of cotton on the future market by telegram on July 21, 1941, from Providence, Rhode Island, to DuPont in New York City, New York, was not a wagering contract.
Brown v. Thorn, 67 L.Ed. 171.
A telegraph company is somewhat akin to a common carrier in that they are both carriers. The carrier transports persons and merchandise, the telegraph intelligence. It is so far a common carrier as to be bound to serve all people alike, and to exercise due care in the discharge of its public duties. It is bound to act with reasonable dispatch independent of the contractual relations which it may assume with those dealing with it.
Clemens et ux. v. Western Union Telegraph Co. (Del.), 28 A.2d 889.
The message was not sent because of the interoffice acts and negligence of appellee's manager and messenger boy, who, under the law and statutes, are its agents.
Hamilton Brothers Co. v. Weeks, 155 Miss. 754, 124 So. 798.
The purchase by appellants of the cotton on July 21 of six hundred bales to hedge against the contract to deliver six hundred bales to Rex-Hanover does not prevent a judgment in favor of appellants.
Meador v. Hotel Grover, 193 Miss. 392, 9 So.2d 782; Johnston v. Swift Co., 186 Miss. 803, 191 So. 423.
Appellants do not need the aid or use of any gambling contract to measure their damages.
Meador v. Hotel Grover, supra; Wells v. Postal Telegraph Co., 92 N.E. 415. Hugh F. Causey, of Cleveland, for appellee.
The contract made by appellants with their broker, DuPont, for the purported purpose of 600 bales of cotton was a gambling contract and cannot be used as a basis for the recovery of damages from appellee.
Gray v. Robinson, 95 Miss. 1, 48 So. 226; Ascher Baxter v. Edward Moyse Co., 101 Miss. 36, 57 So. 299; Weld Co. v. Austin, 107 Miss. 279, 65 So. 247; Cohn v. Brinson, 112 Miss. 348, 73 So. 59, Ann. Cas. 1918E, 134; Falk v. J.N. Alexander Mercantile Co., 138 Miss. 21, 102 So. 843; Alamaris v. John F. Clark Co., 166 Miss. 122, 145 So. 893; Knox v. Clark, 177 Miss. 195, 171 So. 340; Andrews v. Geo. M. Shutt Co., 14 F.2d 337; Allen v. Denman (Tex.), 278 S.W. 899; Parker Gordon Imp. Co. v. Benakis, 213 Iowa 136, 238 N.W. 611; Daniel v. Tullis, Craig Co., 11 S.W.2d 203; Melchert v. American Telegraph Co., 11 F. 193; Code of 1942, Secs. 22, 26, 28, 2188, 2189, (Code of 1930, Secs. 958, 959, 1824, 1828, 1830); United States Cotton Futures Act, Title 26, Secs. 13, 1920, 1922, pars. (a) (2), (a) (5), 1925 (a), (b).
The contract made by appellants with DuPont being against public policy and illegal cannot be used as a basis for a suit for damages against appellee.
Ascher Baxter v. Moyse, supra; Weller Sons v. Western Union Tel. Co., 276 S.W. 538; Adler v. Zimmerman, 235 N.W. 431, 135 N.E. 840; McDaniel v. Tullis, Craig Co., supra; Smith v. Western Union, 2 S.W. 483; Schmitzer v. Western Union Tel. Co., 85 A. 1021; Weld v. Postal Tel. Co., 199 N.Y. 88, 92 N.E. 415; Rainer v. Western Union Tel. Co., 91 S.W.2d 202; Morris v. Western Union Tel. Co., 47 A. 926; Western Union v. Harper, 39 S.W. 599; Southwestern Bell Tel. Co. v. Bagley Co., 178 Ark. 876, 12 S.W.2d 782, 62 A.L.R. 177; Gist v. Western Union Tel. Co., 45 S.C. 344, 55 Am. St. Rep. 763; Wiggins v. Postal Tel. Co., 130 S.C. 292, 125 S.E. 568, 44 A.L.R. 781; Tracy v. Southern Bell Tel. Co., 37 F. Supp. 829; Hamilton v. Western Union Tel. Co., 34 F. Supp. 928; Godwin v. Carolina Tel., 136 N.C. 258, 48 S.E. 636, 67 A.L.R. 251, 103 Am. St. Rep. 941, 1 Ann. Cas. 203; Smith v. Western Union Tel. Co., 84 Ky. 664, 2 S.W. 483; Bryant v. Western Union Tel. Co., 17 F. 825; 17 C.J.S. 656, 659; 6 R.C.L. 816-817, par. 215; 26 R.C.L. 556, par. 61.
The purported message was an interstate message, and the rights of the parties are controlled by the rules and regulations filed with the Federal Communications Commission pursuant to the acts of Congress regulating interstate communications, and appellee is not liable under such rules and regulations.
Mobile O.R. Co. v. Jensen, 162 Miss. 741, 139 So. 840; Pitman v. Yazoo M.V.R. Co., 171 Miss. 799, 158 So. 547; Rager v. Western Union Tel. Co., 313 Ill. App. 589, 40 N.E.2d 606; Goldman v. United States, 316 U.S. 129, 86 L.Ed. 1323; Wernick v. Western Union Tel. Co., 290 Ill. App. 569, 9 N.E.2d 72; Western Union Tel. Co. v. Nester, 309 U.S. 582, 60 S.Ct. 769, 84 L.Ed. 760, 128 A.L.R. 628; Western Union Tel. Co. v. Esteve Bros. Co., 256 U.S. 566, 41 S.Ct. 584, 65 L.Ed. 1094; Western Union v. Priester, 276 U.S. 252, 48 S.Ct. 234, 72 L.Ed. 555; Sablowsky v. United States, 101 F.2d 183; Western Union Tel. Co. v. King (Ga.), 6 S.E.2d 368; Code of 1930, Sec. 1583 (Code of 1942, Sec. 1745); Constitution of United States, Art. 1, Sec. 8, Sub-sec. 3; Federal Communications Act, Title 47, U.S. Code Annotated, Secs. 151, 152, 153, 203, 204, 205, 412; Rules and Regulations of Federal Communications Commissions, Rules 1.01B, 2.012, 2.013A, 14.041, 2.0110.
Appellants, on July 17, 1941, sold 600 bales of cotton to the Rex-Hanover Mills of Gastonia, North Carolina, at a specified price, deliveries to be made in September and October, 1941. Appellants did not have the cotton on hand but expected to buy it from neighboring planters when gathered. Therefore on the same day appellants, through their office manager, filed a message with appellee telegraph company, at its Cleveland, Miss., office, addressed to the head of appellants' firm, who was then in Greensboro, North Carolina, advising of the sale with the admitted purpose, and none other, that the head of the firm, who was the only member thereof authorized to act in that particular, so far as the firm was concerned, would immediately make what is commonly called a hedging contract with appellants' brokers on the New York exchange to protect appellants against any rise in the price that appellants would have to pay in the performance of the Rex-Hanover contract.
The message was never sent, and the head of the firm did not learn of the sale until July 21, 1941, at which time the market price of cotton had advanced so as to make a difference against appellants on the 600 bales of more than $500, the amount for which appellants sued herein. On that day, to wit, July 21, 1941, the head of appellants' firm placed a hedging contract with his New York brokers and kept it in force until the cotton in kind was actually purchased by appellants at market prices, which prices never at any time afterwards were lower than on July 21st.
There is ample testimony to support the conclusion that had the telegram been sent on July 17th and had the hedging contract been made on that day, it would have been a futures contract and that only, without any real purpose or expectation that actual deliveries would be made upon it, so that under our statutes and decisions it would have been a gambling contract, unenforceable in the courts of this State, either directly or indirectly, and regardless of where made. Section 1830, Code 1930, Section 28, Code 1942; Alamaris v. John F. Clark Co., 166 Miss. 122, 145 So. 893; Ascher Baxter et al. v. Edward Moyse Co. et al., 101 Miss. 36, 53, 57 So. 299. That the futures contract for the purpose of a hedge does not save it, as was definitely decided in Falk v. J.N. Alexander Mercantile Co., 138 Miss. 21, 102 So. 843, under the statutory section reading substantially as does the present section, supra.
The telegraph company was in no way responsible for the rise in the market. The complaint against it, so far as damages are concerned, is that because of its negligence the opportunity was not taken, as otherwise would have been, on July 17th to hedge against the loss in the rise in the market; wherefore to maintain the issue in appellants' behalf for the recovery of damages, it was essential that appellants rely on the hedging contract, but so to do they must rely on that which is illegal and void and this brings into application the familiar rule that if a plaintiff requires essential aid from an illegal transaction to establish his case, he has no case. 1 C.J.S., Actions, sec. 13, pp. 996-998; 1 Am. Jur., pp. 414-415; Western Union Tel. Co. v. McLaurin, 108 Miss. 273, 66 So. 739, L.R.A. 1915C, 487. Compare Southwestern Bell Tel. Co. v. Bagley Co., 178 Ark. 876, 12 S.W.2d 782, 62 A.L.R. 177. A hedging contract, such as here contemplated, is in the eyes of the law of this state void; it is nothing; it is the same as that which is nonexistent, and being nonexistent, it can furnish no foundation in our courts upon which to lay a claim for damages.
Appellants rely on Meador v. Hotel Grover, 193 Miss. 392, 9 So.2d 782. There, however, the illegality was not an essential part of plaintiff's case, as the court pointed out on page 405 of 193 Miss., on page 785 of 9 So.2d, while here the illegality is not only an essential part of the case, but is substantially all of it.
Affirmed.