Kirkpatrick v. Bonsall

• Decision Date: 21 October 1872
• Citation: 72 Pa. 155
• Court: Pennsylvania Supreme Court
• Parties: Kirkpatrick & Lyons <I>versus</I> Bonsall.

72 Pa. 155

Kirkpatrick & Lyons versus Bonsall.

Supreme Court of Pennsylvania.

October 16, 1872.

October 21, 1872.

October 16th 1872.

Before THOMPSON, C. J., READ, AGNEW, SHARSWOOD and WILLIAMS, JJ.

Error to the Court of Common Pleas of Allegheny county: Of October and November Term 1872, No. 115.

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S. Schoyer, Jr., for plaintiffs in error.—The contract on its face was wagering. The $1000 was a premium as for insuring plaintiff the oil in a given time, and there was no insurable interest: Paterson v. Powell, 9 Bing. 320; Pritchet v. Insurance Co., 3 Yeates 464; Hall v. Berger, 19 Barb. 122; Brua's Appeal, 5 P. F. Smith 294.

D. W. Sellers (with whom was T. J. Keenan), for defendant in error, cited Smith v. Bouvier, 20 P. F. Smith 325.

The opinion of the court was delivered, October 21st 1872, by AGNEW, J.

We cannot pronounce this agreement a gambling contract on the face of the writing. A bargain for an option, such as it presents, may be legitimate, and for a proper business object. We can imagine such cases. But it is evident such agreements can be readily prostituted to the worst kind of gambling ventures, and therefore its character may be weighed by a jury in connection with other facts in considering whether the bargain was a mere scheme to gamble upon the chance of prices. The form of the venture when aided by evidence may clearly indicate a purpose to wager upon a rise or fall in the price of oil at a future day, and not to deal in the article as men usually do in that business. We must not confound gambling, whether it be in corporation stocks or merchandise, with what is commonly termed speculation. Merchants speculate upon the future prices of that in which they deal, and buy and sell accordingly. In other words they think of and weigh, that is speculate upon, the probabilities of the coming market, and act upon this lookout into the future, in their business transactions; and in this they often exhibit high mental grasp, and great knowledge of business, and of the affairs of the world. Their speculations display talent and forecast, but they act upon their conclusions and buy or sell in a bonâ fide way. Such speculation cannot be denounced. But when ventures are made upon the turn of prices alone, with no bonâ fide intent to deal in the article, but merely to risk the difference between the rise and fall of the price at a given time, the case is changed. The purpose then is not to deal in the article, but to stake upon the rise or fall of its price. No money or capital is invested in the purchase, but so much only is required as will cover the difference — a margin, as it is figuratively termed. Then the bargain represents not a transfer of property, but a mere stake or wager upon its future price. The difference requires the ownership of only a few hundreds or thousands of dollars, while the capital to complete an actual purchase or sale may be hundreds of thousands or millions. Hence ventures upon prices invite men of small means to enter into transactions far beyond their capital, which they do not intend to fulfil, and thus the apparent business in the particular trade is inflated and unreal, and like a bubble needs only to be pricked to disappear; often carrying down the bonâ fide dealer in its collapse. Worse even than this, it tempts men of large capital to make bargains of stupendous proportions, and then to manipulate the market to produce the desired price. This, in the language of gambling speculation, is making a corner — that is to say, the article is so engrossed or manipulated as to make it scarce or plenty in the market at the will of the gamblers, and then to place its price within their power. Such transactions are destructive of good...