Dickson's ex'R v. Thomas

• Citation: 97 Pa. 278
• Parties: Dickson's Executor <I>versus</I> Thomas.
• Decision Date: 07 March 1881
• Court: United States State Supreme Court of Pennsylvania

97 Pa. 278

Dickson's Executor versus Thomas.

Supreme Court of Pennsylvania.

February 24, 1881.

March 7, 1881.

February 24th 1881.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY, STERRETT and GREEN, JJ.

Error to the Court of Common Pleas No. 4, of Philadelphia county: Of January Term 1881, No. 108.

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Benjamin Harris Brewster, for plaintiff in error.—The purchase and sales book should not have been admitted in evidence, because it failed to charge defendant or to show any delivery of the stock: Fairchild v. Dennison, 4 Watts 258; Himes v. Barnitz, 8 Id. 47; Hale v. Ard, 12 Wright 23; Ducoign v. Schreppel, 1 Yeates 347; Juniata Bank v. Brown, 5 S. & R. 231; Rogers et al. v. Old, Id. 404; Murphy v. Cress, 2 Whart. 35; Howell v. Barden, 3 Dev. (N. C.) 449; Tenbroke v. Johnson, 1 Coxe (N. J.) 288.

The delivery of stock through the clearing-house was not a legal bona fide delivery, but merely a settlement of differences, and so the court should have charged. In any event the question whether this constituted bona fide delivery should have been left to the jury. The understanding between the parties being admitted by plaintiff to be that no stock was actually to pass between them, the contract was admittedly a gambling contract contrary to the policy of the law, and therefore void: Brua's Appeal, 5 P. F. Smith 294; Smith v. Bouvier, 20 Id. 325; Fareira v. Gabell, 8 Norris 89.

The tone of the whole charge was grossly unfair to the defendant.

John O. Bowman (with whom was Thomas J. Diehl), for defendant in error.—The purchase and sales book was properly admitted in evidence. It was put in as evidence of sale, and not of delivery. Nor was it offered as primary and independent proof, but coupled with the testimony of the clerk as a means of refreshing his memory and corroborating his statements: Barnet v. Steinbach et al., 1 W. N. C. 335; Henry v. Martin, Id. 277; Nichols v. Haynes, 28 P. F. Smith 174; Imhoff v. Smith, 3 Phila. 381; Fitler v. Eyre, 2 Harris 392; Whart. on Ev., sects. 516, 519.

The mere fact of the sale being short did not constitute it ipso facto a wagering transaction: Maxton v. Gheen, 25 P. F. Smith 168.

[SHARSWOOD, C. J. — Is there any evidence in this case to show that Dickson had the stock which he authorized Thomas to sell?]

No. But Thomas did not know whether he had or not. He may have had it; and the court will not, on account of our failure to prove that he had, presume the contrary.

The use of the clearing-house, the borrowing the certificates from others, &c., do not constitute actual proofs of a gambling contract — they are all perfectly consistent with bona fide intent, and should have been submitted to a jury to draw from them what conclusion they deemed warranted as to the true nature of the transaction: Wynkoop v. Seal, 14 P. F. Smith 361; Smith v. Bouvier, 20 Id. 325.

Mr. Justice GORDON delivered the opinion of the court, March 7th 1881.

An inspection of the evidence of the plaintiff will, of itself, reveal the fact that there was a mistrial of this case in the court below.

Thomas swears that he sold for Dickson five hundred shares of Pennsylvania Railroad stock, short, fifteen days, buyer's option. This means, of course, that Dickson had no such stock, and so Thomas further on explains, by saying that at the time he professed to sell this stock, he had no such stock in his hands to sell. Nevertheless, he says, when he sold these five hundred shares, he delivered them. This anomalous kind of testimony he explains by saying that this delivery was made on the clearing-house sheet, which means a mere settlement of differences. It appears also, from this same testimony, that, in order properly to keep up appearances, when the time came for delivery, he had to borrow five hundred shares of stock from somebody whose name does not appear, and of these there was no actual delivery, but, as the witness says, it came through the clearing-house sheet. All this means, in common parlance, that Thomas sold for Dickson five hundred shares of stock, which Dickson at that time neither had nor intended to have, and that under the pretence of meeting this contract when it fell due, Thomas pretended to borrow five hundred shares, which were not delivered to him; that this altogether fictitious transaction was accomplished through the agency of the clearing-house, and was one in which no other parties were known but Thomas and Dickson, who were to account to each other for differences only.

In order to show that in this we are not mistaken, and that the confirmation may proceed from the plaintiff's own mouth, we subjoin the following evidence, to wit:

Q. Did not you upon a former trial in this case say, and have you not said it twice, we only pay the difference or receive the difference; we do not actually deliver the stock?

A. That is for our clearing-house certificate balances we only pay the difference or receive the difference. If we have something coming on one side that is going out on the other, of course we merely pay the difference.

Q. Did you act as a broker for Mr. Dickson in that sense?

A. Did I act as broker? Yes, sir.

Q. When you and the defendant, Mr. Dickson, had this understanding as you have explained it, was it not understood by you and the defendant that there would be no actual delivery of the stock by you to him or by him to you, but that he was to receive the difference from you in case the price of stock went down, or was to pay the difference to you in case the price went up?

A. Yes, sir.

Q. That is, if there were any loss he was to pay?

A. Yes, sir.

Q. And if there was any profit you were to hand it over to him?

A. Yes, sir.

Again, further on.

Q. Have not you testified that at the time Mr. Dickson directed you to sell this stock, that it was understood between you and him that there was to be no actual delivery of the stock by you to him, or by him to you, but that he was to protect you from loss if the stock went up, and that he was to receive the difference from you in final settlement, if the stock went down; did you not say that?

A. That certainly was the understanding.

Confessedly, then, this was a dealing in differences or margins, a wagering contract, and therefore utterly void. There was here no question as to a bona fide time contract, upon which the jury was called to pass, neither does it involve, as the court below erroneously imagined, the question of agency, for there were but two parties who were mutually engaged in stock jobbing, and who were to settle with each other and not with some third par...