Jamieson v. Wallace

Decision Date11 May 1897
Citation167 Ill. 388,47 N.E. 762
PartiesJAMIESON et al. v. WALLACE.
CourtIllinois Supreme Court

OPINION TEXT STARTS HERE

Appeal from appellate court, First district.

Suit by Mary Wallace against Malcolm M. Jamieson and others. From a judgment of the appellate court (60 Ill. App. 618) affirming a decree for complainant, defendants appeal. Affirmed.E. Jamieson and J. A. Rose, for appellants.

Pence & Carpenter, for appellee.

This is a bill, filed on September 6, 1893, by the appellee, Mary Wallace, against the appellants, Malcolm M. Jamieson, Roland C. Nickerson, Irving H. Waggoner, and Henry F. Billings, doing business under the firm name of Jamieson & Co. The bill alleges that the defendants were stockbrokers in Chicago, engaged in the business of buying and selling stocks; that on December 5, 1892, the defendants contracted to give the complainant the privilege of dealing in Chicago Gas Company's stock with or through them, and that, if there was a loss, the complainant was to pay it to defendants, and, if there was a gain, defendants were to pay it to complainant, and for their services charge a commission; that the method of conducting the business was unknown to complainant, and that it was understood and agreed between them that none of the stock should be delivered to her, or be paid for by her, but that defendants should adjust such deal with her by settling the difference or differences between the market value of such stock at the time of such deal and the time of closing it up and settling with her; that no time was agreed upon when such deal should be closed, but that was left to the option of the defendants; that on January 17, 1893, under like circumstances, and upon a like agreement, defendants suggested to her to deal in Chicago, Milwaukee & St. Paul Railway stock; that about December 5, 1892, Jamieson & Co. reported to her that they had purchased for her 100 shares of the Chicago Gas Company's stock, at 94 cents on the dollar, amounting to $9,412.50, and afterwards reported to her that on January 17, 1893, they had purchased for her 100 shares of the Chicago, Milwaukee & St. Paul Railway stock, at 80 [167 Ill. 390]75/100 cents on the dollar, amounting to $8,087.50. The bill then alleges: That defendants never received such stock into their possession, nor offered to deliver it to complainant, nor demanded payment therefor from her. That said stock afterwards declined in value, and, as it so declined, defendants demanded of her money or collaterals to make good the margins or decline in the same; and that, in pursuance of such demand, she delivered to them the following securities, to wit: Two bonds of the Consolidated Packing Company, of the par value of $1,000 each; two bonds of the Consumers' Gas Company, of the par value of $1,000 each; five bonds of the Hyde Park Gas Company, of the par value of $500 each; one bond of the Santa Fé Elevator & Dock Company, of the par value of $500; also ten shares of the Milwaukee & Chicago Breweries Company's stock, of the par value of about $50 each; and also eight shares of the West Chicago Street-Railroad Company's stock, at the par value of $100 each, the face value of all being about $8,300. That said securities constituted nearly her entire estate. That, upon her inability to deliver them any more securities to make good the margins or declines, they informed her that they had sold said Chicago, Milwaukee & St. Paul Railway's stock at 48 1/2 per cent. of the par value, and had sold the Chicago Gas Company's stock at 48 per cent. of the par value thereof, and that complainant was indebted to them in the sum of $7,851.84; and they informed complainant they had sold the two bonds of the Consumers' Gas Company, of the face value of $2,000, at 68 per cent. of the par value thereof. The bill alleges that complainant has made demand for the return to her of the collaterals so pledged by her to defendants, and they had refused to comply with said demand, and had converted said collaterals to their use; that, if said purchases of said 200 shares of the gas company's stock and of the railway stock were ever made as claimed by defendants, said purchases were gambling transactions, under the statute of Illinois, and that the pledge of said collaterals by her to them was based upon the said gambling transactions, and is null and void, and that the complainant is entitled to the return of the collaterals so pledged; that her investment in said collaterals was intended to be permanent, and that the same were held by her for the purpose of drawing the dividends and interest arising therefrom; that defendants have never lost anything by reason of such transactions, and have never paid anything to any person on account of such pretended purchases on her behalf; that it is necessary to have a production of the books of the defendants, and to have the same examined, for the purpose of an accounting in reference to said collaterals. The bill prays for an injunction restraining defendants from selling said collaterals so pledged to them, and for an order compelling the defendants to produce their books and accounts, and for a decree declaring said transactions to be gambling ones, and to be null and void, and requiring defendants to return to her all of said collaterals or their equivalent, and that an accounting may be had between the parties, and that complainant may have judgment for the amount due to her, or to which she may be entitled in case any of said collaterals may be out of their power to return to her. The bill also prays for general relief.

The answer of the defendants denies the substantial allegations of the bill, and alleges that on December 5, 1892, upon the order of the complainant, defendants bought for her 100 shares of the Chicago Gas Company's stock, and on January 17, 1893, bought for her, upon her order, 100 shares of the Chicago, Milwaukee & St. Paul Railway Company's stock; that the same were bought for her by them, and paid for by them, upon the understanding that she would take the same, and pay for them; that they notified her of said purchases; that she informed them that she was unable to pay for the same, and delivered to them, as securities against loss to them from shrinkage in the value of said shares of stock, the collaterals named in said bill; that in July, 1893, the stock of said gas company and of the railway company greatly shrunk in value, as did the said collaterals pledged with the defendants; that defendants gave complainant notice of such shrinkage, and requested her to furnish additional security, but, upon being informed that she was unable to do so, they sold said shares of stock of the Chicago Gas Company and the Chicago, Milwaukee & St. Paul Railway Company, on July 27, 1893, and gave her notice of such sales. The answer admits that complainant has made demand for the return of said collaterals, and that defendants have refused to comply with such demand.

The cause was referred to a master in chancery, who took testimony, and made a report in the case. The master found that there was no intention on the part of the defendants or the complainant that said 200 shares of stock should be delivered to her or paid for by her, and that, therefore, the transaction as to each of the purchases of stock was a gambling contract. The master also found in his report that, inasmuch as said transactions were gambling contracts, the complainant was entitled to recover back her collaterals delivered as margins to the defendants, and that she was entitled to the return of such collaterals as had not been sold by the defendants, and to an accounting from them as to those of them which had been sold. After hearing had upon report of the master, and upon evidence taken by him, the court rendered a decree confirming the report of the master, and overruling the exceptions thereto. The court found in its decree that the transaction in reference to the purchases of said 200 shares of stock were gambling contracts, and illegal and void; that, at the time of such purchases, there was no intention on the part of defendants or of the complainant that said stock should be delivered by them to her, or accepted or paid for by her, but that it was intended as between them that she should speculate in the rise and fall of the value of said stocks, and receive the profits, if any, and bear the losses, if any, arising out of such transactions; that it was their intention that a settlement was to be ultimately made between them upon the basis of the difference between the amount paid by them for said stock and the amount for which they should sell said stock at some future time. The decree also found that on August 17, 1893, the defendants sold the two bonds of the Consumers' Gas Company for $1,376.37, and that there was due from the defendants to complainant, for the proceeds of such sale and interest thereon, and for dividends and interest collected upon the other collaterals, the sum of $2,259.42; that defendants still have in their possession all of the collaterals so pledged with them, except the said Consumers' Gas Company's bonds. It was thereupon ordered by said decree that complainant should recover of the defendants said sum of $2,259.42, and have execution therefor, and that defendants should surrender to her the other securities, except the two Consumers' Gas Company's bonds sold by them. From the decree so rendered by the circuit court, the defendants took an appeal to the appellate court. The appellate court has affirmed the decree of the circuit court, and the present appeal is prosecuted from such judgment of affirmance, rendered by the appellate court.

MAGRUDER, C. J. (after stating the facts).

According to the contention of the appellants in this case, they purchased for appellee, on December 5, 1892, 100 shares of the Chicago Gas Company's stock, at $94 per share, making, with commissions, $9,412.50, and on January 17, 1893, purchased for her...

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