Corn Exchange National Bank v. Jansen

• Decision Date: 16 December 1903
• Docket Number: 13,252
• Citation: 97 N.W. 814,70 Neb. 579
• Parties: CORN EXCHANGE NATIONAL BANK, APPELLANT, v. PETER JANSEN ET AL., APPELLEES
• Court: Nebraska Supreme Court

97 N.W. 814

70 Neb. 579

CORN EXCHANGE NATIONAL BANK, APPELLANT, v. PETER JANSEN ET AL., APPELLEES

No. 13,252

Supreme Court of Nebraska

December 16, 1903

APPEAL from the district court for Jefferson county: JOHN S. STULL JUDGE. Affirmed.

AFFIRMED.

Arnott C. Ricketts and Lowe A. Ricketts, for appellant.

Frank M. Hall and John Heasty, contra.

AMES C. HASTINGS and OLDHAM, CC., concur.

OPINION

AMES C.

In and prior to the year 1893 Peter Jansen was engaged, through the agency of Congdon & Co., commission dealers in Chicago, in gambling in grain options on the board of trade in that city. That the transactions in which he was engaged, the buying and selling of options to be settled at future dates, by ascertainments and adjustments of differences in market prices, without the delivery of the commodities nominally dealt in, was gambling, within the meaning of that word at the common law, is agreed by counsel and need not be discussed. It is, indeed, contended by counsel for the plaintiff that, at the time the several purchases and sales were made, there was no agreement that grain should not be delivered pursuant to them, and that, in fact, either party to any such transaction was lawfully entitled to such delivery. But we are of opinion that the intent of the parties, as disclosed by a long course of transactions, is more indicative of the real nature of the latter than are the forms observed in effecting their purpose, and that illegal practices are not purged of their vice because of a superficial resemblance to legality.

Moneys required for the prosecution of these undertakings were furnished by Congdon & Co. to Jansen, from time to time, and charged to him upon a pretended book account, upon which he was supposed to be credited with his winnings at the game. It does not appear that he ever owed them any lawful debt, but, at the time mentioned, he had been charged by them on this account with a sum of money largely exceeding the aggregate amount of the securities in dispute in this action. Jansen was the owner and payee of three negotiable promissory notes, secured by as many several mortgages upon lands situate in this state. These notes he indorsed and delivered to Congdon & Co. at Chicago, as partial security for the sums charged against him on this account. Two of the notes became due January 2, 1896, and were returned to Jansen for the purpose of enabling him to procure, in substitution for them and the mortgages, new notes and new mortgages on the same lands. This he did, indorsing the new notes and forwarding them, together with the new mortgages, through the mails to Congdon & Co. These doings were all so evidently parts of a single transaction that it does not seem to us that the suggestion of counsel, that a different principle applies to the new securities from that which governs those for which they were substituted, calls for comment. Subsequently, Jansen acquired the title to all the mortgaged lands, and this suit was begun for the foreclosure of the mortgages. The plaintiff claims to be the bona fide holder of the paper, by delivery from Congdon & Co. as collateral security for indebtedness by the latter to it.

The defenses pleaded are two in number: First, that the indorsements are without consideration and void, both at common law and under statutes of the state of Illinois, because of having been made on account of gambling transactions; second, that the paper was acquired by the plaintiff after maturity and with the knowledge of the lack of consideration for the indorsements. The reply consists of a general denial and a plea of estoppel, to the effect that Jansen indorsed and delivered the paper to Congdon & Co. for the express purpose of enabling the latter to pledge it as collateral for their indebtedness to the plaintiff. In our opinion, if the first mentioned defense is valid, the matter pleaded in estoppel is ineffectual as an avoidance of it. The evidence makes it entirely clear that even if the purpose, or one of the purposes, of the transfer was to enable Congdon & Co. to make the specified use of the paper as collateral, still the consideration therefor was the pretended indebtedness upon gambling account, and both at common law and by the statute, it is the consideration of the contract, and not the purpose for which it is intended to be used, that affects its validity.

Jansen lived in this state, and he indorsed the new notes and deposited them in an envelope addressed to Congdon & Co., in a post office here; and counsel for plaintiff therefore claim that the delivery of them was made here, and his indorsements of them, Nebraska contracts. In support of this proposition they cite authorities to the effect that the depositing in the...