Dillaway v. Alden

• Court: Maine Supreme Court
• Writing for the Court: EMERY, J.
• Citation: Dillaway v. Alden, 88 Me. 230, 33 A. 981 (Me. 1895)
• Decision Date: 13 December 1895
• Parties: DILLAWAY et al. v. ALDEN.

33 A. 981

88 Me. 230

DILLAWAY et al.

v. ALDEN.

Supreme Judicial Court of Maine.

Dec. 13, 1895.

(Official.)

Report from supreme judicial court, Kennebec county.

Action by Charles P. W. Dillaway and others against George A. Alden on defendant's promissory note given in Boston on six months. Case reported. Defendant defaulted.

The plea was a general issue, and the following brief statement of defense:

"That the note described in the plaintiffs' writ was given without consideration, and is null and void; that it was given by way of settlement and in consideration of contracts made by and between the plaintiffs and the defendant, by way of gaming and wagering, contrary to the form of the statute then and still in force (in the commonwealth of Massachusetts, where said contracts were made and executed) in such case made and provided, and contrary to law in such case; that prior to the making of such note said plaintiffs, as brokers residing and doing business in the city of Boston and commonwealth of Massachusetts, contracted with the defendant to buy and sell, in the commonwealth of Massachusetts, upon credit and margins, certain securities and commodities; that neither the plaintiffs nor defendant, at the time such contracts were made, had any intention to perform said contracts by actual receipt or delivery of such securities or commodities, and payment of the price therefor, and that they in fact were never delivered or paid for, nor did either ever intend that the other was bound to deliver the same, but that in all said contracts the real intent of the parties was to wager on and to speculate in the rise and fall of such securities and commodities, and that the one party was to pay and the other to accept the difference between the contract price of such securities and commodities at the date fixed for executing said several contracts, or when said contracts should be closed, and that there was no intention that said securities or commodities be bought outright, and that such contracts were all gambling transactions, and illegal and void; and that said note was given for such credits and securities and transactions so arising in buying and selling such securities and commodities within said commonwealth of Massachusetts, and if the plaintiffs paid any money for or on account of the defendant, for which said note was given, they did so knowing that such money was lent and advanced to and for the defendant on account of, and to be used in, gaming and illegal transactions, in which the plaintiffs and defendant were connected; and that the plaintiffs themselves made the application of such moneys, according to their own judgment, in the promotion and furtherance of such gaming and illegal transactions."

"The defendant further averred that he frequently forbade the plaintiffs from buying and selling said securities and commodities on the defendant's account, but the plaintiffs disregarded his directions so made, and fraudulently, and for their own benefit, and for the commission which the said plaintiffs would receive in such transactions as brokers, fraudulently continued to buy and sell said securities and commodities."

S. S. Brown, for plaintiffs.

Edmund P. & Appleton Webb, for defendant.

EMERY, J. The material facts found by the court are these: The defendant had an Intimate personal acquaintance with one Brown, a member of the firm of Francis B. Dana & Co., stockbrokers in Boston. March 29, 1892, the defendant turned over to this firm 200 shares of St. Louis Southwestern Railway stock, and $2,000 of Maine Central Railroad 5 per cent. bonds. The stock was the residuum of some prior stock transactions with or through Brewster, Cobb & Estabrook, another brokerage firm in Boston. The Maine Central bonds had been deposited with this latter firm as collateral security for margins. All were turned over to Francis B. Dana & Co., on the defendant's order.

From April, 1892, to March, 1893, Francis B. Dana & Co. apparently bought and sold various stocks on the defendant's account. Their books show numerous such transactions. The defendant appears to be charged with amounts paid for stocks, plus commissions, and credited with proceeds of stock sold, minus commissions. Some few of these seeming transactions were by direct, special instructions of the defendant. The mass of them, however, were under what Dana & Co. claimed to be general authority from the defendant to buy and sell for him at their discretion.

In April, 1893, as the result of these various stock transactions (actual or seeming), the books of Dana & Co. showed a balance against the defendant of some $12,500, for which, according to their books, they held as security 350 shares of various stocks, and the original $2,000 of Maine Central bonds. In the meantime Brown had withdrawn from the firm of Dana & Co., and become a member of the plaintiff firm of Dillaway, Starr & Co., of Boston, also stockbrokers. At Brown's request the defendant gave the last firm written instructions to pay the balance due from him to Dana & Co., and take over his securities in their hands. This the plaintiffs did, April 13, 1893, paying Dana & Co. $12,511.41. At the request of Mr. Dillaway, the defendant on July 3, 1893, gave the plaintiffs his note for that sum and interest, collaterally secured by the stocks and bonds they had received...