Buckingham v. Fitch

• Decision Date: 25 May 1885
• Citation: 18 Mo.App. 91
• Parties: G. AND S. C. BUCKINGHAM, Respondents, v. ELIHU C. FITCH, Appellant.
• Court: Missouri Court of Appeals

18 Mo.App. 91

G. AND S. C. BUCKINGHAM, Respondents,

v.ELIHU C. FITCH, Appellant.

Kansas City Court of Appeals, Missouri.

May 25, 1885.

APPEAL from Johnson Circuit Court, HON. NOAH M. GIVAN, J.

Reversed and remanded.

Statement of case by the court.

This is an action instituted by plaintiffs on a promissory note made by defendant to them for the sum of $1,383.36.

The amended answer of defendant is as follows:

“Comes now defendant, and for his amended answer to the first count in plaintiffs' petition, says that at the dates hereinafter set forth, the said plaintiffs as co-partners, were engaged in business in the said city of St. Louis, in said state of Missouri, in buying and selling what is known to the commercial world as “options, or futures” in grain or other commodities, and in making for customers wagering contracts in the pretended purchase or sale of imaginary grain and other products of commerce. That, while so engaged, some time in the month of January, 1880, the said plaintiffs, in their own name, pretended to purchase on the market at said city of St. Louis, of some one, to defendant unknown, large quantities of wheat for this defendant, to be thereafter delivered at and for a certain price per bushel, pretended to be agreed to be paid at the time pretended to be agreed upon for the delivery of said grain. That from and after the date of said pretended purchase, and the time specified in said pretended contract of purchase and sale for the delivery, the market value of the quantity of grain mentioned in said pretended contract, depreciated to the extent of the money advanced to and put up by this defendant as a “ margin” with said plaintiffs, and the amount specified in the note described in the first count in plaintiffs' petition, which latter amount the plaintiffs claimed to have been paid to said unknown vendor in the settlement of said difference between the price to be paid and the said market value, and that said note was given in settlement of said amount so claimed to have been paid as aforesaid and for no other purpose, and upon no other or further consideration.”

Defendant further alleges the truth to be, that, although said contract of purchase and sale was regular in form, yet the sale was not made in good faith, but was immoral, illegal and void, for that it was mutually agreed and understood by and between the parties to said contract that no grain should be delivered, and that the only subject matter of said pretended purchase and sale contracted for was that the parties thereto should, at the time agreed upon for the delivery of said grain, settle the difference in price agreed to be paid and the market price at the time mentioned in said contract for the delivery of said grain. That said contract was a mere wagering contract as to the future value of grain at the time mentioned for its delivery, and, therefore, immoral and illegal. That the money so claimed to have been paid out by plaintiffs in settlement of said difference was paid out by them without the knowledge or consent of this defendant, and to carry out the illegal undertaking so entered into by said plaintiffs. That said note, having been given as aforesaid, upon and for no other or further consideration than in the settlement of the sums so claimed to have been paid out and expended by plaintiffs for said immoral and illegal purpose, is likewise void and of no binding effect.

On the filing of the foregoing amended answer, plaintiffs moved for judgment on the pleadings, which motion was by the court sustained, and judgment entered against said defendant for the principal and interest of said note, amounting to $1,711.90.”

From this judgment the defendant has appealed to this court.

SAMUEL P. SPARKS, for the appellant.

I. The defence set up in the original answer as in the amended answer was sufficient. A contract to pay at a certain future time an amount equal to any rise in the market price of any article of commerce in consideration that the other party will pay an amount equal to any fall, is void as a gambling contract. Lyon v. Culbertson, 83 Ill. 33; Logan v. Musick, 81 Ill. 415; Pixley v. Boynton, 79 Ill. 351; Pickering v. Cease, 79 Ill. 328; Tenny v. Foote, 4 Bradw. 594; Beveridge v. Hewitt, 8 Bradw. 467; Colderwood v. McRea, 11 Bradw. 543; Corbitt v. Underwood, 83 Ill. 324; Webster v. Sturgis, 7 Bradw. 560; Cole v. Milmme, 88 Ill. 349; In re Chandler, 13 Am. Law Reg. (U. S.) 310; In re Green, 7 Biss. 338; Gilbert v. Gaugar, 8 Biss. 214; Melchert v. Am. Un. Tel. Co., 3 McCrary 521; Sawyer v. Taggart, 14 Bush 727; Gregory v. Wattowa, 58 Iowa 711; Story v. Solomon, 71 N. Y. 420; Bigelow v. Benedict, 70 N. Y. 202; Harris v. Tumbridge, 82 N. Y. 92; Yerkes v. Solomon, 11 Hun. 473; Parsons v. Taylor, 12 Hun. 282; Kingsbury v. Kernan, 20 Am. Law J. 14; Ruchizky v. DeHaven, 97 Pa. 202; Fareira v. Gabell, 89 Pa. 89; Bruce's Appeal, 55 Pa. 294; Smith v. Bonvier, 70 Pa. 325; Dickson's Ex'r. v. Thomas, 97 Pa. 278; Kirkpatrick v. Bonsall, 72 Pa. 155; Patterson's Appeal, 16 Cent. L. J. 461; Gregory v. Wendall, 39 Mich. 337; 40 Mich. 432; Shaw v. Clark, 49 Mich. 384; Rumsey v. Berry, 65 Me. 574; Williams v. Tiedman, 6 Mo. App. 269; Waterman v. Buckland, 1 Mo. App. 45; Cobb v. Pall, 16 Cent. L. J. 453; Kent v. Miltenberger, 16 Cent. L. J. 433; 52 Wis. 593; 80 N. C. 204; 11 Wash. Law Rep. 418; 7 Gray 160; 3 Allen 238; 10 Allen 337; 103 Mass. 313; 10 Allen 346; 3 Lea. 740; 55 N. Y. 425; 90 Pa. 38; 75 Pa. 166; 3 Brewst. 131; 27 Vermont 240; 7 Biss. 540; 6 Biss. 53; 1 Biss. 177; 83 N. Y. 92; 77 N. Y. 612; 2 Sup. Ct. Rep. (Desty) 630; Ir. Rep. 2 C. L. 220; 55 Wis. 354; 48 Conn. 116; 20 Gratt. 206; 59 Iowa 435; 11 C. B. 536; L. R. 4 Q. B. D. 685; 5 Woods 554; 33 Law J. (1864) 55; 3 Exc'r. 465; 10 Exc'r 614; 7 Neb. 125.

II. Our statute prohibits a recovery upon any contract founded on a gaming consideration (sect. 5722, Rev. Stat. Mo. 1879). Williams v. Wall, 60 Mo. 318.

III. Brokers and commission merchants cannot recover for losses paid or commissions earned under an agreement by which a customer is to deal in illegal options, and a promissory note given in settlement of such transactions will be void, even in the hands of a bona fide holder for value before maturity. Williams v. Wall, 60 Mo. 318; Koch v. Branch, 44 Mo. 542; McKinnell v. Robinson, 3 M. & W. 434; Cannon v. Bryce, 3 B. & Ald. 170; Hooker v. Knab, 26 Wis. 211; Dixon v. Thomas, 93 Pa. 278; Fareira v. Gabell, 89 Ib. 89; Kirkpatrick v. Bonsall, 72 Ib. 155; Lyon v. Culbertson, 83 Ill. 328; 79 Ill. 328; 71 Ill. 579; 95 Ill. 109; 4 Bradw. 594; 7 Biss. 338; Armstrong v. Toler, 11 Wheaton (U. S.) 258.

IV. The court erred in not permitting defendant to file his amended answer, except upon payment of costs then accrued. The only change was that the amended answer set up that the payment forming the consideration of the note in suit was made without the knowledge or consent of defendant. It further appears that the court on a former occasion overruled an objection ore tenas of the same nature. The amendment in no way prejudiced the plaintiffs, as the trial proceeded upon their part, as though it had never been made. Sect. 3567, Rev. Stat.; Riddles v. Aikin, 29 Mo. 453.

GEO. E. SMITH, P. R. FLITCRAFT and S. T. WHITE, for respondents.

I. All the exceptions saved by appellant to action of trial court in holding original answer insufficient were waived by pleading over. Ely v. Porter, 58 Mo. 158; Scoville v. Glassner, 79 Mo. 449.

II. The trial court did not abuse its discretion in requiring appellant to pay costs as a condition upon its

leave to amend. Under the circumstances the payment of costs was a proper condition with the leave to amend. The section of the statute cited (3567) provides for amendments “upon such terms as may be proper.” Neither does the case cited (29 Mo. 453) support the point made. The sufficiency of the answer was a question of law. If the trial court erred in holding it insufficient the appellant should have stood upon his pleading and saved his exception. In that case it would have been improper for him to allege surprise. Hite v. Lenhart, 7 Mo. 22.

III. The motion for judgment on the pleadings was properly sustained. The amended pleading was in all substantial respects identical with the original, which the court had just held insufficient. The only change was that the allegation “that plaintiffs knew the illegal nature of the grain contracts” was dropped out, and an averment that “plaintiffs paid the money forming the consideration of the note without the knowledge or consent of the defendant” was inserted. The latter averment was immaterial. “A subsequent express promise to pay is equivalent to a previous request.” Armstrong v. Toler, 11 Wheaton 274. If the original answer was insufficient the amended answer is also.”

IV. The court gave judgment notwithstanding the answer. The question is thus presented precisely as though the amended answer had been stricken out and judgment entered for plaintiffs. It was the same old answer which had been held bad, and it was properly disregarded, if as a pleading it was insufficient, as the court held it. Let this sufficiency be examined. The making and delivery of the note sued on is not denied. An attempt is made to show that the note was given for money paid by plaintiffs in settlement of an illegal contract, and the inference is drawn from this fact that the note itself is illegal and void. Here are three contracts pleaded. 1. The contract of agency to buy grain for defendant and defendant to indemnify plaintiffs against liabilities incurred within the scope of such agency. 2. The contract made by plaintiffs for defendant as his agent, settled by plaintiffs without the knowledge or consent of defendant. 3. The note given in reimbursement for such settlement. Upon the facts pleaded there was no agreement for compensation for plaintiffs' services in the contract of agency. The first and third of these contracts were...