Edgeley Co-Operative Grain Company v. H. Spitzer
| Decision Date | 17 October 1921 |
| Citation | 184 N.W. 880,48 N.D. 406 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of LaMoure County, Graham, J.
Judgment modified and affirmed.
Judgment affirmed. Respondent entitled to his costs and disbursements on appeal.
John W Carr, for appellant.
"The essence of a gambling transaction is that the particular transaction shall contemplate no delivery, without reference to the making of any other deal." John Miller Co. v Klonstad, 105 N.W. 164.
It is also well settled that where the principal cannot recover because of the gambling nature of the transaction, neither can the agent recover. Dows v. Glaspell 60 N.W. 60.
Mohr et al v. Miesen (Minn.) 49 N.W. 862.
The fact that a note had been given by the defendant to cover the loss or a portion of the loss on the gambling transactions does not change the rule so as to preclude him from setting up as a defense the fact that the consideration for the note was represented by losses on the various gambling transactions." Embrey v. Jemison, 131 U.S. 338 9 S.Ct. 776; Dows v. Glaspell, 60 N.W. 60 (N.D.).
The question of whether the creditor applied a payment otherwise than as directed by the debtor is one for the jury. Root v. Kelly, 39 Misc. (N. Y.) 530; 80 N.Y.S. 482.
"Generally the question of application of payments by the parties as determined by their intention is one of fact for the jury." 30 Cyc. 1296.
Hutchinson & Lynch, for respondent.
The court is justified in directing a verdict where the evidence is undisputed or of such conclusive character or so preponderates in favor of the plaintiff that the court in the exercise of sound judicial discretion would be compelled to set aside a verdict in opposition to it. 38 Cyc. 1567 to 1571.
The court did not err in directing a verdict for the plaintiff on all the issues of the case. Buchanan Elevator Co. v. Lees, 37 N.D. 27; The John Miller Co. v. Klovstad, 14 N.D. 435; 105 N.W. 164; Bibb v. Allen 149 U.S. 481; 13 S.Ct. 950; 37 L. ed. 819; Clews v. Jamieson, 182 U.S. 461; 21 S.Ct. 845; 45 L. ed. 1183; Chicago Board of Trade v. Christie G. & S. Co., 198 U.S. 236; 49 L. ed. 1031; Van Duzen Harrington Co. v. Jungeblut, (Minn.) 77 N.W. 970; Wall v. Schneider (Wis.) 18 N.W. 443; Hill v. Levy, (D. C.) 98 F. 94; Parker v. Moore, (C. C. A.) 125 F. 807; Ponder v. Jerome Hill Cotton Co. 100 F. 373; 40 C. C. A. 416.
The contracts were in accordance with the customs and usage of the Minneapolis Chamber of Commerce and there was no evidence that delivery could not be legally exacted in any of the transactions involved. Barnes v. Smith, 159 Mass. 344; 34 N.E. 403; Board of Trade v. Kinney, et al 130 F. 507; 64 C. C. A. 669; The John Miller Co. v. Klovstad, supra; Board of Trade v. Christie, supra.
The rules and regulations of the Minneapolis Chamber of Commerce are not in conflict with the Minnesota statute with reference to bucket shop. John Miller Co. v. Klovstad, supra; Sampson v. Camperdown Cotton Mills 82 F. 833.
The functions of the Minneapolis Chamber of Commerce and all other such exchanges are necessary and they are created by law and sanctioned by the courts of the land. John Miller Co. v. Klovstad, supra; Bibb v. Allen, supra; State v. Duluth Board of Trade, et al (Minn.) 23 L.R.A. (N. S.) 1260; Clews v. Jamieson, supra; Chicago Board of Trade v. Christie G. & S. Co. supra.
Contracts for the future delivery of merchandise of tangible property are not void whether such property is in existence in the hands of the seller or to be subsequently acquired. John Miller Co. v. Klovstad, supra; Bibb v. Allen, supra.
It is well settled that the burden of proof is upon the defendant to prove that the contracts were illegal. The law presumes that they are ligitimate transactions. John Miller Co. v. Klovstad, supra; Chicago Board of Trade v. Christie, G. & S. Co. supra; Clews v. Jamieson, supra; Bibb v. Allen, supra.
This is an action to recover on a promissory note in the sum of $ 4,000, with interest thereon from the 20th day of April, 1917, to date of maturity, at the rate of 7 per cent. per annum until due, and 10 per cent. per annum thereafter. The issues of fact were presented to a jury.
At the close of the testimony the court directed a verdict in plaintiff's favor for the amount of the note and interest. Judgment was entered on the verdict, and this appeal is from the judgment.
The complaint states a cause of action in the ordinary form on a promissory note. The answer admits the execution and delivery of the note to the payee. It denies that it was executed or delivered for value received or any legal consideration, and further denies any indebtedness to the plaintiff in any sum whatsoever. In the answer it is further alleged that the sole and only consideration for the execution and delivery of said note by defendant was in substance as follows: That during the months of March and April, 1917, and subsequently thereto, this defendant, acting through the said Pomona Valley Farmers' Elevator Company, as his agent, engaged in the purchase and sale of grain options and in gambling and speculating upon the prices of grain upon various boards of trade, selected by said Pomona Valley Farmers' Elevator Company, and during said periods this defendant, acting through said Pomona Valley Farmers' Elevator Company, as his agent, bought and sold grain options, solely as gambling and speculative operations, it being at all times fully understood by the said Pomona Valley Farmers' Elevator Company, by this defendant, and by all others connected with said transactions, that said transactions were purely and solely gambling and speculative operations; and it was never understood by said Pomona Valley Farmers' Elevator Company, or by this defendant, or by any one else connected therewith, that any actual grain was to be bought or sold, received or delivered by defendant. And defendant alleges that neither this defendant nor Pomona Valley Farmers' Elevator Company, nor any other party connected with the transaction mentioned above, actually intended that there should be any actual transfer, delivery, or receipt of the commodities covered by said options.
The answer is of too great length to be set out in full. The principal defense set forth in the answer is that the entire transaction with reference to the sale and purchase of 10,000 bushels of rye, the facts in reference to which will hereafter be set forth, was one of speculation and gambling. The defendant pleads a counterclaim in the sum of $ 1,800, the alleged value of the number of bushels of rye delivered by him to the Pomona Valley Farmers' Elevator Company in the fall of 1917, and further claims that it agreed to give credit on the note for that amount which it failed to do. A reply was interposed to the answer averring payment to defendant of the amount of the actual rye delivered in the fall of 1917.
The material facts in the case are substantially as follows: The price of rye in March, 1917, was about $ 1.49 per bushel. At that time Ernest Steel was the agent of the Pomona Valley Farmers' Elevator Company at Edgeley, N.D. During the month of March, and until April 20, 1917, the Pomona Valley Farmers' Elevator Company sold in the manner hereinafter described for defendant 10,000 bushels of rye at the market price of about $ 1.49 per bushel. Between the time when defendant had through the said Elevator Company sold the rye and the 20th day of April, 1917, rye on the market had advanced in price to such an extent that a loss of about $ 4,000 had occurred on the transaction, and at that time for this amount the note in suit was taken. After the giving of the note, rye still continued to advance. The defendant in the month of July, 1917, through the Elevator Company, purchased 10,000 bushels of rye at $ 2.05 per bushel. The loss on the entire transaction up to the time of the purchase last mentioned was approximately $ 5,505.
The defendant owns and operates a farm of about 1,000 acres in the vicinity of Edgeley. He also owns about 1,000 acres of land in Canada. Formerly he was engaged in the real estate business and had also seven years experience as a grain buyer. He was a stockholder in the Pomona Valley Farmers' Elevator Company which was later reorganized into the Edgeley Co-operative Grain Company, now the owner and holder of the note in suit.
In the fall of 1916, he sowed 800 acres of winter rye on his La Moure county, North Dakota, farm. In the spring of 1917 he endeavored to contract with the Pomona Valley Farmers' Elevator Company his prospective rye crop, which he estimated at about 12,000 bushels. Steel, the agent of the said Elevator Company, stated that he could not at that time contract to buy the rye, but that it might be handled as a "hedge."
The defendant desired to sell September rye. There was then no dealings in September rye, and the commission firm informed said Elevator Company to this effect. Steel again took the matter up with the commission firm and they finally suggested that what is termed a trial sale for July might be undertaken, and, if...
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