McGrew v. City Produce Exchange

• Decision Date: 14 March 1887
• Citation: 4 S.W. 38,85 Tenn. 572
• Parties: MCGREW v. CITY PRODUCE EXCHANGE and others.
• Court: Tennessee Supreme Court

4 S.W. 38

85 Tenn. 572

MCGREW v. CITY PRODUCE EXCHANGE and others.

Supreme Court of Tennessee.

March 14, 1887

Appeal from chancery court, Davidson county.

SNODGRASS J.

This suit was brought on the fourth April, 1882, to recover various amounts lost by complainant on certain wagers made with defendants.The several amounts, with dates of their deposit, are set forth in the bill, together with dates of the closing of the "deals" whereby the loss occurred.All the deposits, except one for $600, were made within 90 days of the commencement of the suit, and the "deals" referred to by which all the loss was occasioned were within 90 days.The individuals sued were Joseph W. Horton, Charles Sulzbacher, W.C. Graves, Thaddress H. Mason, and Thomas Parkes, incorporators of the City Produce Exchange.The bill alleged, and the proof showed that these defendants combined and confederated together styling themselves and chartered as the "City Produce Exchange," for the purpose of engaging in the business of buying and selling "futures" in corn, cotton wheat, etc., ostensibly, while in reality this was a pretense; the real business intended to be done, and in fact done, being the pretended purchase or sale, for future delivery, of these products under contracts in legal and valid form, when in fact illegal and invalid because of the non-existence of any real intention to buy and sell for such delivery; and so executed and framed to cover and conceal the real purpose of the parties, which was to gamble and wager on the rise and fall of prices of the articles pretended to be bought or sold.

There were several defenses interposed-- First, that the corporation was alone liable; that, being chartered for an apparently legal purpose, the incorporators could not be held individually liable for illegal acts of its managers or officers.There is nothing in this defense.The facts justify the finding that the incorporation was but a cloak used to cover the illegal acts contemplated in the organization, and done as a business; and in such case the form of the transaction is disregarded, and the interest and substance ascertained, and liability fixed for the thing done, without respect to the pretense under which it was attempted to be concealed.Nor, in this connection, it may be properly stated, is it material that defendants did not themselves originally in person receive of complainant the sums lost by him, but did it through an agent at Shelbyville, who received and forwarded the money to their office at Nashville.When it appears that several have unlawfully combined and confederated to gamble with and defraud another through a selected party, each confederate participating is liable for the entire amount received, as the money is received for all, and by all, according to the devised illegal method under which they were all jointly operating.

The second defense interposed was (as to one of the transactions,--a deposit of $800, in December, 1881,)the statute of limitation of 90 days.New Code, § 2440.The language of that section is as follows: "Moreover, any person who has paid any money, or delivered anything of value, lost upon any game or wager, may recover such money, thing, or its value, by action commenced within ninety days from the time of such payment or delivery."If the money was lost when deposited, the item referred to could not be recovered, for more than ninety days had elapsed from the date of deposit until the commencement of the action; but this amount was not lost until the close of the "deal," as to it, on the eighth of February, 1882; and we hold that the statute did not operate until date of the loss, as before that time it was merely deposited to abide the result.The payment, for this purpose, must date from such appropriation of the money of complainant, or his loss at that time in the transaction.

It is also insisted that there can be no recovery in this case because there was no "wager upon the game;" and that this is essential to constitute the "wager" referred to in the statute.The terms of the statute answer this position.It is not a "wager upon a game" for which recovery is authorized.The plain language is that money "lost upon any game" or "wager" may be recovered.Mr. Bonner defines a "wager" to be "a contract by which two parties or more agree that a certain sum of money, or other thing, shall be paid or delivered to one of them on the happening or not happening of an uncertain event."If for the word used in the statute this definition was substituted, there could...