Price v. Estate of Barnes

• Decision Date: 31 July 1923
• Citation: 254 S.W. 33,300 Mo. 216
• Parties: THOMAS E. PRICE et al., Doing Business as T. E. Price & Company, Appellants, v. Estate of SETH S. BARNES; LAURA BARNES, Executrix
• Court: Missouri Supreme Court

254 S.W. 33

300 Mo. 216

THOMAS E. PRICE et al., Doing Business as T. E. Price & Company, Appellants, v. Estate of SETH S. BARNES; LAURA BARNES, Executrix

Supreme Court of Missouri, First Division

July 31, 1923

Appeal from New Madrid Circuit Court. -- Hon. Sterling H. McCarty Judge.

Affirmed.

Harry C. Riley, Jr., and Richard A. Jones for appellants.

(1) By Instruction 9, the court recites portion of language of Sec 3572, R. S. 1919, having reference to "option dealing," then states to the jury that the transactions therein described are by law declared to be gambling and unlawful, and that contracts made in pursuance thereof are gambling contracts and void and then terminates such instruction by directing the jury that "if you find and believe from the evidence in this case that the account sued upon herein was in fact due by Barnes to the plaintiff, but that the same was gambling and unlawful, as above defined then plaintiffs cannot recover, and your verdict will be for defendant." The giving of such instruction was without warrant, relegating to the jury the function of the court to determine and apply the law to the facts; in effect reading to the jury the statute and then advising them that if they believed the evidence to include a condition intended to be covered thereby, then their verdict will be in consonance with such conclusion. (3) In Instruction 12 given at the request of respondent, the court charges the jury that "defendant contends that the items of said account were alleged charges growing out of a gambling transaction as defined in other instructions in this case. You are, therefore, instructed that if you find and believe that said items constituting said account in question, or any substantial part of said items, were gambling transactions and void, then plaintiffs cannot recover in this action and your verdict will be for defendant." (a) Such instruction erroneously leaves the jury to grope through other instructions, a number of them in themselves erroneous, and to guess as to what the law and facts intended as constituting the gambling transaction against which the court here declares. (b) So also does the court err in relating to the jury that defendant contends "that the items of said account were alleged charges growing out of gambling transactions." It is for the court to state the law applicable to the transactions, and not what the parties contend to be such. (c) Likewise does the instruction include within its general terms the purchases and sales of cotton effected on the New York Cotton Exchange; constituting large items in the account for 1917 and 1919. As to such transactions the statute of Missouri could not in any event apply. Edwards Brokerage Co. v. Stevenson, 160 Mo. 516; Hood & Co. v. McCune, 235 S.W. 159. (3) In Instruction 11 given at the request of defendant: (a) The court erroneously tells the jury that if Mr. Barnes intended to speculate with the rise and fall of the market, then to return a verdict in favor of the estate. The statute does not prohibit speculation (R. S. 1919, sec. 3572) in any commodity. The thing prevented is the making of contracts "without any intention of receiving or paying for the property so bought, or of delivering the property so sold." A far cry this from the contracts for purchase and sale for speculative purposes -- contracts in which the maker seeks to benefit by rise or fall in the market price of the commodity. Kent v. Miltenberger, 13 Mo.App. 508. (b) So too, this instruction erroneously uses the term "gamble," leaving each juror to his own conception of the facts which he must find from the evidence in order to justify resolution to that end concerning any transaction involved; indeed, allows of conclusion that the purchase and sale of property for the purpose of speculating in the rise and fall of the market thereof was to be included in such term. (4) Concerning the dealings in grain, both claimants and Barnes were members of the Merchants Exchange during the time of the transactions involved, and during all that period by-laws of such exchange were in force binding upon them as such members, under which delivery by the seller and receipt by the buyer of the commodity contracted for was contemplated upon all transactions therein. The rules of the exchange expressly prohibited all dealings not contemplating delivery and receipt of the product contracted and made provision for discipline including expulsion of members offending against such provision. There is absent from the record proof overcoming the presumption of legal purpose which, in the first instance, attends every transaction, and the instructions of the trial court authorizing the jury to find to the contrary were unwarranted. Hood & Co. v. McCune, 235 S.W. 158; Taylor v. Sebastian, 158 Mo.App. 147; Crawford v. Spencer, 92 Mo. 498; Youtz v. McVean, 202 Mo.App. 377; Williams v. Tiedemann, 6 Mo.App. 269. The court should have given the instruction requested by appellants, directing the jury that the evidence failed to establish unlawful intent or purpose on the part of Barnes in the transactions in evidence, and not to consider defense offered on behalf of the estate to such effect. (5) The action of the trial court in overruling objections of appellants to evidence in effect allowing witnesses by their guesses or opinions to seek to influence the jury to a determination of the existence of illegal intent on the part of Barnes in the transactions involved, was error. The witness Hunter was asked by respondent's counsel, whether Barnes was "in any business where he could use, say, seventy or one hundred thousand bushels of wheat or corn?"

E. F. Sharp and Ward & Reeves for respondent.

(1) The alleged "account stated," sued upon herein, based upon the account offered in evidence between deceased Barnes and appellant T. E. Price & Company, growing out of purchases and sales, or pretended purchases and sales, or agreements and contracts for the purchase and sale of cotton and grain without any intention of receiving and paying for the property so bought, or of delivering the property so sold, and all buying or selling, or pretending buying and selling of such property on margins, or on optional delivery when the party selling same, or offering to sell same, does not intend to have the full amount of property on hand or under his control to deliver upon such sale, or when the party buying any of such property or offering to buy the same does not intend to actually receive the full amount of the same, if purchased, are by the statutes and law of this state declared to be gambling and unlawful and are thereby prohibited, and it is not necessary that both the buyer and seller shall be guilty. And any act growing out of such transaction is null and void and not collectible. Secs. 3566, 3572, 3573, R. S. 1919; Grain Co. v. Stonebraker, 202 Mo.App. 81; Smith v. Bailey, 200 Mo.App. 627; Connor v. Black, 119 Mo. 126; Lane v. Grain Co., 105 Mo.App. 215; Stewart v. Hutchison, 120 Mo.App. 37; Atwater v. Brokerage Co., 147 Mo.App. 436. (a) And these statutes, since the revision of 1889, apply to regular duly organized commission merchants and merchants' exchanges. Connor v. Black, 119 Mo. 139. (b) And such contracts are void against a person who is not a party to them, and even though he acted in ignorance of the fact that the delivery of the commodity so purchased or sold was not intended, and broker or agent is precluded from recovering his commission or money expended under such transaction, since the contract under which his principal acted was void, and no enforcible rights may accrue to any person thereunder. Smith v. Bailey, 200 Mo.App. 635; Stewart v. Hutchison, 120 Mo.App. 37; Connor v. Black, 119 Mo. 126; Edwards v. Brokerage Co., 160 Mo. 516; Atwater v. Brokerage Co., 147 Mo.App. 445. (c) And these contracts and transactions are none the less illegitimate and void because carried on under guise of legitimate trade and under rule of merchants' exchange prohibiting the same. Smith v. Bailey, 200 Mo.App. 631; Erwin v. Williar, 110 U.S. 511. (2) "Puts and calls," which form many large and divers parts of the account sued upon, are gambling transactions, and prohibited by Sec. 3572, R. S. 1919. Lane v. Grain Co., 105 Mo.App. 215; Grain Co. v. Stonebraker, 202 Mo.App. 96; Lumber Co. v. Coal Co., 160 Ill. 97. (3) This being an action on an account stated, if any material part of the items going to make up the account, is illegal and void, then the whole account is void and there can be no recovery. Grain Co. v. Stonebraker, 202 Mo.App. 98; Bick v. Seal, 45 Mo.App. 375; 1 C. J. sec. 311, p. 710; 1 Cyc. 458; Nash Co. v. Wright, 156 Ill. 265. (4) Intention on the part of Barnes to simply settle the difference according to the fluctuations of the market price of the commodity, makes the transaction a gambling one. Grain Co. v. Stonebraker, 202 Mo.App. 92; Lane v. Grain, Co., 105 Mo.App. 218. (5) The fact that a great many deals were made in the case at bar about seven hundred) and no grain received and none delivered in any of the transactions, is sufficient proof that the transactions were gambling and that Barnes did not intend to receive the grain bought or deliver the grain sold. Grain Co. v. Stonebraker, 202 Mo.App. 97; Lamson v. West, 201 Ill.App. 251. (6) The relation of the parties, the business of Barnes, his circumstances and conditions, the sort of business he was engaged in and all circumstances, are competent to show whether or not he intended to receive the commodities bought or deliver the commodities sold. Lane v. Grain Co., 105 Mo.App. 219; Schreiner v. Flack, 55 Mo.App. 406. (7) Appellants had no competent proof that this purported account was stated, or agreed to by Barnes. The only...