Maxton v. Gheen

• Decision Date: 26 January 1874
• Citation: 75 Pa. 166
• Parties: Maxton <I>versus</I> Gheen <I>et al.</I>
• Court: Pennsylvania Supreme Court

75 Pa. 166

Maxton versus Gheen et al.

Supreme Court of Pennsylvania.

January 21, 1874.

January 26, 1874.

January 21st 1874.

Before AGNEW, C. J., MERCUR and GORDON, JJ. SHARSWOOD, J., at Nisi Prius.

Error to the Court of Common Pleas of Chester county: Of July Term 1873, No. 151.

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J. F. Perdue, for plaintiffs in error.—This transaction was selling stock "short," and is one prohibited by the common law of Pennsylvania: Pritchett v. Insurance Company of North America, 3 Yeates 458; Edgell v. McLaughlin, 6 Wharton 178. This is a wagering contract, and cannot be enforced in this Commonwealth: Brua's Appeal, 5 P. F. Smith 294; Smith v. Bouvier, 20 Id. 325; Kirkpatrick v. Bonsall, 22 Id. 155.

G. F. Smith, for defendants in error, was stopped by the court.

The opinion of the court was delivered, January 26th 1874, by AGNEW, C. J.

This was not a transaction in stocks by way of margin, settlement of differences, and payment of the gain or loss, without any intention to deliver the stocks. Such transactions are mere wagers. But here the stock was in every instance actually sold and delivered, and the transaction carried into final execution. The plaintiffs, who were the brokers of the defendant, were not even aware that he was selling "short" until the term of credit was expiring, and he bought to fill his sales. It will not do to say, because there is so much gambling in stocks, that every sale "short" as it is termed, is ipso facto a wager. It is evidence, it is true, but there must be other facts to characterize the transaction, and to show the actual intent of the parties was to wager merely upon the prospective price.

Judgment affirmed.