Hallet v. Aggergaard

• Decision Date: 07 January 1908
• Citation: 114 N.W. 696,21 S.D. 554
• Parties: HALLET v. AGGERGAARD.
• Court: South Dakota Supreme Court

114 N.W. 696

21 S.D. 554

HALLET v. AGGERGAARD.

Supreme Court of South Dakota

January 7, 1908

Appeal from Circuit Court, Yankton County.

Action by Ferdinand A. Hallet, doing business as Hallet & Co. against Peter N. Aggergaard. From a judgment for plaintiff defendant appeals. Affirmed.

Corson J., dissenting.

French & Orvis, for appellant.

Gamble, Tripp & Holman and Wilson & Mercer, for respondent.

FULLER P. J.

At the trial of this action, instituted by a member of the Minneapolis Chamber of Commerce to recover his brokerage commissions and money expended in connection with the purchase and sale of wheat on that market on account of and as the agent of the defendant, plaintiff obtained the judgment sought to be reversed on this appeal.

Upon competent evidence received in support of that issue and submitted to the jury by means of a special interrogatory, it was found, in addition to a general verdict for plaintiff, that the transaction was understood by the defendant to be a mere wager on the rise and fall of prices, and that he never intended to receive any grain or do anything more than make settlement by the adjustment of the difference between the contract price and the prevailing market price at the time specified for delivery. In substance and effect it was also found in response to another special interrogatory, and upon competent evidence submitted therewith to the jury under instructions conformable to the law and easily comprehended, that the plaintiff at the time of the different transactions understood that the purchases and sales consummated pursuant to defendant's orders were bona fide and entered into upon his part with the intention that the grain was to be actually delivered. In support of this important issue formed by the pleadings, it was properly shown that the articles under which the Chamber of Commerce was organized and exists, and the rules under which the business of buying and selling produce on the floor of the exchange is operated, make it an offense punishable by suspension from all privileges, or by actual expulsion by the board of directors, for any member "to make, negotiate in any form, have, or be in any way interested in any 'bucket shop' contract, trade or transaction whatever, or any contract of sale of any personal property whatever, for future delivery, with no intent to make an actual sale or to deliver or receive such property, but with intent to settle or cancel such contract by payment of the difference between the contract and the market price; or to engage in the business of 'bucket shopping' or dealing in differences on the fluctuations in the market price, without actual purchase and sale for delivery of any commodity." The testimony presented by the record shows that some time during the month of July, 1901, plaintiff's bookkeeper or clerk called upon the defendant, who is an extensive farmer, stock grower, and shipper at Irene, S. D., for the purpose of soliciting his business should he have any in the grain market, and soon afterward the defendant made certain remittances to plaintiff, and instructed him by wire to buy 50,000 bushels of wheat for December delivery, which was thereupon purchased in the pit, where such business is carried on, according to the customs and usages of the trade. Other similar transactions, including instructions to sell, followed from time to time, and the confirmatory report in each instance transmitted by plaintiff to the defendant in the usual course of business showing that his order had been executed contains the following cautionary printed matter over the signature of plaintiff: "All transactions made by us for your account contemplate the actual receipt and delivery of the property and payment therefor. On all marginal business, we reserve the right to close transactions when margins are running out, without giving further notice. We also reserve the privilege of substituting other responsible parties as principals with you in above trades, at any time until closed, in accordance with the rules of the Exchange where the trades are made, and to clear all transactions through Clearing Association, if there be any, from day to day, in accordance with the usage prevailing at the time. All purchases and sales made by us for you are made in accordance with, and subject to, the rules, regulations, and customs of the Exchange where the trades are made, and the rules, regulations, and requirements of its board of directors, and all amendments that may be made thereto."

By counsel for the defendant plaintiff was cross-examined, and testified in part as follows: "Q. Did you ever have any wheat at all, actual wheat I mean, for Mr. Aggergaard? A. Never had any actual wheat. We had the futures. Q. That was a contract for wheat, wasn't it? A. A contract for future delivery. Q. All of these deals that you made for Mr Aggergaard were contracts for future delivery, weren't they? A. Yes, sir." As all persons knowingly participating in the execution of a gambling contract are principal offenders, and the dealers with whom the series of transactions were consummated are unknown, their intention is wholly immaterial under the pleadings and proof, and there is nothing to judicially characterize, but the contractual relation, express or implied, existing between the parties to this action. In determining this controlling question, it became necessary for the jury to look beyond mere assertions favorable to either party, and to consider all the facts and circumstances in evidence relative to the mode of dealing between them, and this appears to have been done under instructions by the court that were characteristically lucid and comprehensive. To defeat a recovery in an action of this character, it is only necessary to show to the satisfaction of the jury that neither party to the contract had any intention of receiving or delivering the property, but both expected to settle the difference between the purchase and the market price at some future time. It is firmly settled law that such transactions constitute nothing more than a wager on the fluctuation of the market, and are therefore absolutely void. Waite v. Frank, 14 S.D. 626, 86 N.W. 645. However, the purchase or sale of personal property for future delivery is not rendered illegal and void by the mere fact that at the time the contract is made neither party owns...