A. G. Edwards Brokerage Co. v. Stevenson

• Citation: 61 S.W. 617,160 Mo. 516
• Parties: A. G. EDWARDS BROKERAGE CO. v. STEVENSON.
• Decision Date: 26 February 1901
• Court: Missouri Supreme Court

61 S.W. 617

160 Mo. 516

A. G. EDWARDS BROKERAGE CO. v. STEVENSON.

Supreme Court of Missouri, Division No. 2.

February 26, 1901.

GAMBLING CONTRACT — CONFLICT OF LAWS.

1. Plaintiff having been authorized to buy stocks for defendant without any restriction as to the market in which the purchase should be made, the contract of purchase will be governed by the law of the state in which the stock was purchased and paid for.

2. At common law a contract legitimate on its face cannot be declared void as a wagering contract on proof that one only of the parties thereto knew and meant it to be such.

3. In the absence of a showing to the contrary, the law of a foreign state will be presumed to be the common law, and not in accordance with the statute of the forum.

Appeal from St. Louis circuit court; H. D. Wood, Judge.

Action by the A. G. Edwards Brokerage Company against William H. Stevenson. Judgment for plaintiff. Defendant appeals. Affirmed.

Chester H. Krum, Lyne S. Metcalfe, Jr., and John D. Lawson, for appellant. Geo. L. Edwards, for respondent.

BURGESS, J.

The purpose of this action is to recover of defendant a sum of money aggregating, including interest and commissions as broker, the sum of $7,360.87, alleged to be due plaintiff on account of services rendered by and moneys advanced by it for defendant at his instance and request in the purchase of Linseed Oil stock and Atchison. Topeka & Santa Fé preferred stock. Plaintiff had judgment for the amount stated, and, after unsuccessful motion for a new trial, defendant appeals to this court.

Plaintiff, a broker in the city of St. Louis, engaged in the business of buying and selling stocks and bonds in St. Louis and other markets, undertook to buy for defendant Linseed Oil Company stock and Atchison, Topeka & Santa Fé Railroad Company preferred stock. At the time defendant requested plaintiff to buy for him the Linseed Oil stock nothing was said as to the price to be paid for it, or the number of shares to be bought. With respect to the Atchison, Topeka & Santa Fé Railroad stock, plaintiff suggested to defendant that he purchase this stock, and thereupon defendant requested plaintiff to purchase 200 shares of it for him. No direction was given at any time as to where the stock should be purchased, and the result was that plaintiff purchased it in the city of New York, through some broker there. The stocks were bought on account of plaintiff, and it was charged by the New York parties who bought it to plaintiff. Defendant was not known in the transaction. The certificates of stock were held by plaintiff, and they were carried by the New York parties for it for several months. The certificates were never assigned to plaintiff, nor were they ever delivered to it, or tendered to defendant, but the New York parties carried them for plaintiff on "margins," and exacted from it securities or cash as a protection in case of a decline in the value of the stock. As soon as the purchases were made, and plaintiff was notified of them, plaintiff at once notified defendant, and charged his account with the purchase price of the stocks, which plaintiff has paid in full to the New York brokers who advanced same. Defendant never made any objection to the reports of these purchases upon receiving them, nor did he make any to the statements of account rendered him in which plaintiff charged him with the amounts paid for the stocks and credited him with the dividend paid on the Linseed stock while defendant was the owner of it, but wrote on the backs of two of these papers the indorsements: "Mr. Edwards: Purchase 200 Atchison, August 21, 1895," and "A. G. Edwards & Sons; Purchase 100 `Linseed.'" On August 28, 1895, immediately after the purchase of the Linseed Oil stock, defendant addressed to plaintiff a note, which reads as follows: "Gentlemen: Please sell my two hundred shares of Linseed at the market price at such date as I will be sure to get the dividend of $1.00 per share, which I believe was declared on the 15th of August." Plaintiff credited defendant with this dividend. Defendant never at any time deposited with plaintiff any money to secure margins on these purchases, nor did he agree to do so, nor did he ever pay plaintiff anything on account therefor, although plaintiff demanded of him the purchase price. Defendant testified that plaintiff was at liberty to purchase the stocks in New York. Plaintiff called upon defendant to put up margins, and in one letter suggested that the market looks "nervous," and in another that it "has gone to pot"; but nothing was put up, and thereupon, after notifying the defendant that plaintiff had rather carry the stocks than sell them, and the defendant having failed to make the demanded advances, the plaintiff sold the stocks at a loss. Defendant testified that he had no intention of receiving the stock, or of paying therefor, and claims the transactions were simply deals on margins, speculation on the rise or fall of the market, in violation of the statutes relating to option dealing, and were, therefore, illegal and void. There was no evidence that defendant told the plaintiff that he did not intend to receive and pay for the stocks. On the other hand, plaintiff's president testified that it did not intend to settle the transaction by settling on the difference in prices, and that plaintiff did not know that defendant did not intend to receive and pay for the stocks, nor that he intended to settle the transaction by paying the difference.

At the request of plaintiff, and over the objection and exception of defendant, the court declared the law to be as follows: "The court declares the law to be that, if it appear from the evidence that defendant requested plaintiff, as his agent, to buy in New York City, N. Y., the Atchison and Linseed stocks, respectively, specified in plaintiff's petition, and that pursuant to said request plaintiff bought in said city and state, for defendant, the stocks aforesaid, then the said purchases are not within the provisions of sections 3931 or 3932 of the Revised Statutes of Missouri, 1889, but are governed as to their legality and validity by the laws of the state of New York. The court declares the law to be that, no evidence having been offered as to the laws of the state of New York, it is presumed that the law of the state of New York is the same as the common law of the state of Missouri. There is no presumption that the statutory law of the state of New York is the same as the statutory law of the state of Missouri. If it appear from the evidence that defendant authorized plaintiff to buy for him in the city of New York 200 shares of the stock of the Linseed Oil Company and 200 shares of preferred stock of the Atchison, Topeka & Santa Fé Railway Company, and plaintiff, in the state of New York, did so, and paid the purchase price of said stocks, then the court declares the law to be that plaintiff is entitled to recover the money paid by it upon said purchases, although it appear from the evidence that defendant never intended to actually receive or pay for any of said stocks, unless the court further finds that the sellers of said stock, as also the plaintiff, at the time purchases were made, understood that no shares of stock were to be delivered, but that the transactions were only to be settled by the payment or receipt of the difference in the market price; and the burden of proving this is on the defendant. If the court finds from the...