Browne v. Thorn, 260 U.S. 137 (1922)

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Browne v. Thorn


No. 88


Argued October 20, 1922
Decided November 13, 1922
260 U.S. 137

ERROR AND CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

Syllabus

1. In an action by brokers to recover from their customer the balance of their account for purchases and sales of cotton made on their exchange pursuant to his orders, it is not a defense that the transactions were gambling because he had no intention to receive or deliver the actual cotton, if his intention in that regard was not disclosed to the brokers. P. 139.

2. Hedging -- a means whereby manufacturers and others who have to make contracts of purchase and sale in advance secure themselves against fluctuations of the market by counter-contracts -- is prima facie lawful. P. 139.

3. Section 4 of the "United States Cotton Futures Act" must be read in the light of construction of similar language of the Statute of Frauds, and does not require that bought and sold notes should name the principals and be signed by both brokers.* P. 140.

4. Evidence of an understanding between the parties held to justify interpreting a telegraphic "stop"-order from a customer to his brokers as directing sale of his cotton at the prices specified in the order or, if those could not be got, at the next best price possible. P. 140.

272 F. 950 affirmed.

Certiorari to a judgment of the circuit court of appeals affirming a judgment for the plaintiffs in an action by brokers to recover from their customer, Browne, the balance of their account for purchase and sale of cotton, on a cotton exchange of which they were members. The case went twice to the court below. See 257 F. 519; 272 F. 950.