Central Stock & Grain Exchange of Chicago v. Bendinger
| Decision Date | 05 June 1901 |
| Docket Number | 768.,765 |
| Citation | 109 F. 926 |
| Parties | CENTRAL STOCK & GRAIN EXCHANGE OF CHICAGO v. BENDINGER. BENDINGER v. CENTRAL STOCK & GRAIN EXCHANGE OF CHICAGO. |
| Court | U.S. Court of Appeals — Seventh Circuit |
The bill in the circuit court was by the complainant (appellee on the main appeal and appellant on the cross appeal), a citizen of Ohio, against the defendant below (appellant on the main appeal and appellee on the cross appeal), a corporation under the laws of Illinois, to recover nine thousand dollars said to have been diverted by one William Stichtenoth brother-in-law of complainant, from the purpose for which it was intrusted to him, and by him lost in gambling operations carried on through the house of the defendant and its Cincinnati agency.
The bill, in substance, avers, and the proof, in substance shows, that on or about the first of May, eighteen hundred and ninety-six, the complainant delivered nine thousand dollars in currency to Stichtenoth with directions to invest the same in the capital stock of the Cincinnati Street Railway Company of Cincinnati, the certificates for the same to be issued and taken in complainant's name; but, that having come into possession of the money, Stichtenoth, without the knowledge, authority or consent of complainant, deposited seven thousand six hundred and forty-two dollars and fifty cents of the same, on divers dates and in sundry sums during the months of May, June and July, eighteen hundred and ninety-six, with M. S. Forbus & Company, of Cincinnati, as margins or forfeits (and without any other consideration whatever), in certain transactions in grain and other commodities, commonly called 'bucket shop' transactions; that some of the checks making these deposits were signed by Stichtenoth, 'Agent'; that the defendant and Forbus & Company being the agents, in the matter of Stichtenoth's transactions and his deposits as margins thereto, of the defendant; that there was no intention, on the part either of Stichtenoth, of Forbus & Company or of the defendant, that there should be any actual buying, selling, receiving or delivering of such commodities, or that there should be any engaging in any bona fide transaction in any such commodity; but that the transactions were, from beginning to end, intended as, and, in fact, were, gambling transactions in the future prices of grain and other commodities.
The bill, in substance, avers, and the proof, in substance, shows, that, in the course of these transactions, there were put, at divers times during the months of May, June and July, to the credit of Stichtenoth on the books of Forbus & Company, as so-called profits, certain sums of money, amounting, in all, to one thousand four hundred and thirty-eight dollars and fifty cents; that, during such period, there were also put on the same books to the debit of Stichtenoth certain other sums of money, as so-called losses, amounting, in all, to seven thousand eight hundred and twenty-three dollars and seventy-five cents; that, from time to time during such period, according to the entries in said books, there were withdrawn by Stichtenoth these so-called profits to the amount of one thousand four hundred and thirty-eight dollars and fifty cents, and the so-called losses were charged up against the margins deposited by Stichtenoth.
It is averred, in substance, in the bill, and shown by the proof, that no part of the so-called profits thus withdrawn by Stichtenoth has ever been turned over to the complainant, and that no part of the seven thousand six hundred and forty-two dollars and fifty cents deposited by Stichtenoth as margins has ever been returned to him by Forbus & Company or the defendant, unless the withdrawal of the so-called profits by Stichtenoth is to be regarded as a repayment to him of so much of the money deposited.
Neither the defendant nor Forbus & Company are shown to have had knowledge that the money deposited by Stichtenoth as margins belonged to complainant, or that Stichtenoth was without authority to use it for the purposes of speculation; but Stichtenoth was not only without such authority, but, during the next two years, by paying to complainant at stated intervals sums corresponding with the interest supposed to be falling due upon the Cincinnati Street Railway bonds, kept her in the belief that her money was invested as had been directed.
The bill avers that the defendant and Forbus & Company refused her an inspection of their books and accounts; that defendant had attempted to cover up and confuse the entries of its transactions with Stichtenoth, as well as the true character and nature of such transactions; and that the complainant was unable, without the aid of discovery, to prosecute her claim, or state the particulars of the transactions. The bill is framed on the theory that the money deposited by Stichtenoth as margins remains, notwithstanding such deposit, the money of the complainant; that defendant's relation to it was that of a trustee; and that an accounting was essential to develop fully the nature of that relation, and the amount for which the defendant was responsible.
The Circuit Court decreed that defendant was liable to complainant as trustee on account of the seven thousand six hundred and forty-two dollars and fifty cents thus deposited, for which sum, less one thousand four hundred and thirty-eight dollars and fifty cents, previously withdrawn by Stichtenoth, together with interest at the rate of five per centum from July the fifteenth eighteen hundred and ninety-six, a decree was entered.
From this decree an appeal is prosecuted by the Central Stock and Grain Exchange of Chicago and a cross appeal by Emma Bendinger.
The principal errors assigned on the appeal are as follows:
First that the case made out is not...
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