[260 U.S. 137, 138] Mr. James B. McDonough, of Ft. Smith, Ark., for plaintiff in error.
Messrs. Ira D. Oglesby, of Ft. Smith, Ark., and L. C. Going, of Memphis, Tenn., for defendants in error.
Mr. Justice HOLMES delivered the opinion of the Court. [260 U.S. 137, 139] This is a suit brought by the respondents, cotton brokers, to recover the balance of an account for the purchase and sale of two thousand bales of cotton on the New Orleans Cotton Exchange. At a first trial a verdict was directed for the defendant on the ground that broker's seller's slips coupled with oral evidence that corresponding buyer's slips were executed, or vice versa, were not competent evidence of the transactions, under the United States Cotton Futures Act. Act of August 11, 1916, c. 313, part A, 4, 39 Stat. 446, 476 (Comp. St. 6309d). The judgment was reversed by the Circuit Court of Appeals after a very satisfactory discussion. Thorn v. Browne, 257 Fed. 519, 168 C. C. A. 469. There followed a second trial in which the verdict was for the plaintiff and a judgment, sustained by the Circuit Court of Appeals. Browne v. Thorn, 272 Fed. 950, that is brought here by writ of error, supplemented by a petition for a writ of certiorari. There is no ground for the writ of error on the record, although the plaintiff in error now, in view of Hill v. Wallace, 259 U.S. 44 , 42 Sup. Ct. 453, May 15, 1922, argues that the Cotton Futures Act is void except in the taxing provision enacted as an alternative to compliance with its regulations. A petition for certiorari was granted at the October Term, 1920. 256 U.S. 689 , 41 Sup. Ct. 625
The first ground relied upon for the petition is that the transactions were gambling transactions. That was the petitioner's contention at the trial, but to put it at the lowest, there was evidence to the contrary, the question was left to the jury with instructions that if the plaintiff knew that the defendant had no intention to deliver or receive the actual cotton they could not recover, and the jury found for the plaintiffs. The defendant contended that his undisclosed intention was enough to defeat the plaintiff's claims; but that is not the law. It is objected that the judge instructed the jury that hedging was lawful, hedging being explained as a means by which manufacturers and others who have to make contracts of purchase or sale in advance secure themselves against the fluctuations [260 U.S. 137, 140] of the market by counter contracts. Prima facie such transactions are lawful. Board of Trade v. Christie Grain & Stock Co., 198 U.S. 236, 249 , 25 S. Sup. Ct. 637.
The bought and sold notes executed on the Exchange mentioned only the names of the brokers and neither was signed by both the brokers. It is said that the Act of Congress, 4, was not satisfied. We agree with the Circuit Court of Appeals that the language of section 4 of the Cotton Futures Act must be read in the light of the decisions upon the similar language of the Statute of Frauds and that the notes were sufficient; assuming without discussion that in this case it was necessary to prove that section 4 was followed. See Bibb v. Allen, 149 U.S. 481 , 13 Sup. Ct. 950.
Perhaps the most serious of the petitioner's defences was that the 2, 000 bales of cotton were sold without authority. As stated by his counsel, on Germany's announcing unrestricted submarine warfare cotton fell and the petitioner telegraphed to the defendants to sell 2,000 bales. The telegram read as follows: 'Stop ten seventeen twenty and ten seventeen fifteen'- which is understood to carry a direction to sell one thousand bales at 17. 20 cents per pound and one thousand at 17.15. But there was clear and sufficient evidence that such stop orders as they were called were understood to direct not only sale at the price mentioned but, if that could not be got, a sale at the next best possible price. The respondents sold at fourteen cents which was the best that could be done. We think it unnecessary to go into further detail to show that the judgment should be affirmed.