Rumsey v. Berry
Israel P. Rumseys. v. Nicholas L. Berry
Headnotes
Summary
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Opinion of the Court
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Danforth, J.
The plaintiffs are and were in 1872, brokers, comznission merchants and members of the board of trade in Chicago, azzd, at the request and for the benefit of the defendant, a resident of'Bangor, contracted with third parties for the sale of a quantity of wheat.
This contract was entered into upon the 22d day of April, 1872, and the delivery was to be at the option of the defendant, at any time during the month of May following. The plaintiffs were personally responsible for the performance of this agreement, and the defendant was on his part under obligation to furnish sufficient “margin” to secure against loss in case of a rise in wheat. This he failed to do, a considerable loss followed and this action was commenced to recover the amount of it.
The liability of the defendant by the terms of the contract is not denied,'but the presiding justice was requested “to instruct the jury, that said contract was merely betting upon the price of wheat during the balance of the month of April, azzd the month of May, and therefore a ‘wagering contract’ aizd therefore illegal and invalid, as a foundation of the action.” This instruction was refused and the jury were instructed that the contract was valid under the laws of this state and in the absence of proof to the *573 contrary would be presumed to be valid under tbe laws of Illinois, where it was made.
No question is here raised as to whether any fact in relation to the nature of the contract and proper for the consideration of the jury was taken from them. The request was not for instructions as to the nature and effect of a wagering contract, but that as a matter of law this was such. As the agreement was not in writing it might have been proper for the presiding justice, had he been so requested, to have defined a wagering contract and have left it to the jury to find whether by a fair inference from all the testimony this was within the definition. But virtually the request was that the court should decide the question as a matter of law. This was done, and nothing is now presented but simply to ascertain whether the case shows any error in that decision.
Such error we fail to discover. The testimony so far as reported reveals nothing inconsistent with an ordinary sale of an article to be delivered in the future. While it may indeed appear a little singular and even suspicious that a man residing in Bangor, having no wheat of his own, should undertake to sell and deliver wheat in Chicago; still we cannot assume that any one has violated the law and been guilty of immoral and corrupting practices in his business transactions, without proof, even though he may ask it himself, for the purpose of being relieved from the obligation of a losing contract.
Besides we utterly fail to discover any wrong on the part of the plaintiffs. Their business was a legitimate one, and so far as appears, their connection with this transaction honest. Their profits were not to be affected by the result, their commissions were not to be increased or diminished by any contingency. It is true they were aware that the defendant at the time had no wheat. But the fact itself being immaterial, their knowledge of it is equally so. It is not only common but perfectly legal and sometimes necessary to contract for the sale and future delivery of an article which at the time has no existence, but which is afterwards to be purchased, raised or manufactured.
It does not appear that the defendant had any intention beyond what appears upon the face of the contract, or if he had that the *574 plaintiffs were cognizant of it. The mischief and illegality arises when the apparent contract is not the real one, when it is a mere cover for ulterior designs and such as are not authorized by law. A contract for the sale and purchase of wheat to be delivered in good faith at a future time is one thing, and is not inconsistent with the law. But such a contract entered into without an intention of having any wheat pass from one party to the other, but with an understanding that at the appointed time the purchaser is merely to receive or pay the difference between the contract and the market price, is another thing, and such as the law will not sustain. This is what is called a settling of the differences, and as such is clearly and only a betting upon the price of wheat, against public policy, and not only void, but deserving of the severest censure. This distinction is recognized in the case of Chandler, reported in The American Law Register, for May, 1874, and the Chicago Legal News of April 11,1874, relied upon by the defendant. That case both in the reasoning and conclusion reached, has our entire approbation, and were the facts in the case at bar the same as developed in that we should not hesitate to apply the same principles of law.
The result is, that whatever might be the conclusion properly reached from the facts applicable to the defendant alone, the case fails to show on the part of the plaintiffs any complicity with a wagering or illegal contract. Exceptions overruled.
Appleton, C. J\, Walton and Yirgin, JJ., concurred. Peters, J., did not sit.
Dissent
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Barrows, J.,
delivered the following dissenting opinion:
I cannot help thinking that the opinion fails to apply the sound legal doctrine, which it affirms, to the facts and rulings in the case. The case finds that the plaintiffs knew that the defendant, a citizen of Bangor, had no wheat to sell, but at his request bound themselves by contract, for him, to deliver 10,000 bushels during the next month at the seller’s option, at a certain price; that defendant furnished plaintiffs with $700 as a “margin,” but failing, though requested, to make further advances, as the price of wheat rose, they in accordance with the custom in Chicago, can *575 celed the contracts at a loss of about $3000, and brought this action to recover the difference between that sum and the $700 margin deposited.
Tf there was not enough in this to justify the defendant’s request that the presiding judge would rule as matter of law that this was a wagering contract, and illegal and void,still it seems to me very clear that its character was so suspicious that it ought to have been left to the jury, under proper instructions, to say what the true intent of the parties was. Instead of doing this, the presiding judge cut off the defense by a peremptory ruling that under such circumstances the contract would be valid.
It is futile and evasive to argue that this ruling was justified, because, upon its face, the contract was a lawful one for the delivery of wheat at a future day. If it were designed and understood to be a mere gambling transaction, its terms would still be the same.
The real question was, whether it was the intent and expectation of these parties that the wheat should be delivered, or whether it was, that in case of a rise, a settlement was to be made upon such terms as they could get, and in case of a fall they were to receive the difference from the parties with whom the contract was made.
Nor do I think it can bo rightly said that “no question is here raised as to whether any fact in relation to the nature of the contract, and proper for the consideration of the jury was taken from them.”
The defendant excepted to the instruction given, as well as to the refusal to instruct. I think his exceptions should be sustained. I do not understand that the party who knowingly furnishes one with money to be used at the gambling board is any more entitled to the aid of the court to recover it, than the winning gambler would be to enforce the wager.
Dickerson, J., concurred in this dissenting opinion. Cutting, J., was “inclined to concur in this.”
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