Kendall v. Fries

• Decision Date: 07 November 1904
• Citation: 71 N.J.L. 401,58 A. 1090
• Parties: KENDALL et al. v. FRIES.
• Court: New Jersey Supreme Court

58 A. 1090

71 N.J.L. 401

KENDALL et al.

v. FRIES.

Supreme Court of New Jersey.

Nov. 7, 1904.

(Syllabus by the Court.)

Action by William B. Kendall and C. Howard Whitlock against Samuel F. Fries. Verdict for plaintiffs. Rule to show cause discharged.

Argued June term, 1904, before GUMMERE. C. J., and GARRISON, GARRETSON, and SWAYZE, JJ.

Frank T. Lloyd and F. Morse Archer, for plaintiffs.

Frederick A. Rex, for defendant.

SWAYZE, J. This is an action upon two checks given by the defendant to the plaintiffs in substitution for other checks. The defense was that the transaction originated in a gambling contract for speculation in stocks and cotton. The trial judge directed a verdict for the plaintiffs.

We have not found it necessary to consider whether the checks were given in exchange for money or its equivalent, and the money used to take up other checks, or whether the whole series of checks is connected with the original transaction, for the reason that we fail to find any evidence sufficient to warrant a verdict that the original transaction was illegal. The only evidence on that subject is that the stocks were bought on a margin, that the checks were for the purchase of options on cotton, that the defendant was speculating, and that the stock was not at any time assigned or given to the defendant. This evidence does not justify a conclusion that the parties were merely dealing in differences. As was said by the present Chancellor in Flagg v. Baldwin, 38 N. J. Eq. 219, 227. 48 Am. Rep. 308: "The act is not intended to interfere with the fight of buying and selling for speculation. The line is to be drawn between what is legitimate speculation and what is unlawful wager. When property is actually bought whether with money or with credit, the purchaser and owner may lawfully hold it for a future rise, and risk a future fall. With such transactions the law does not pretend to interfere. They are within the line of lawful speculation." The fact that the defendant was speculating does not prove he was merely dealing in differences. The fact that he bought on margin proves only that he bought in part for cash, and in part on credit. The fact that he bought options proves only that he made contracts for future delivery, which have never been condemned by our courts. The fact that the stock was never actually assigned to him does not prove that it was not intended to be assigned. All of these facts, taken together, show, at most, a speculation in...