Raymond v. Leavitt

• Decision Date: 29 June 1881
• Citation: 46 Mich. 447,9 N.W. 525
• Court: Michigan Supreme Court
• Parties: RAYMOND and others v. LEAVITT.

9 N.W. 525

46 Mich. 447

RAYMOND and others v. LEAVITT.

Supreme Court of Michigan

June 29, 1881

An agreement having for its object the forcing up of prices in the grain market, and creating what is understood as a "corner" therein, is against public policy, and courts will not lend their aid for the recovery of money paid in pursuance of such agreement.

Otto Kirchner and C.A. Kent, for plaintiffs in error.

H.M Cheever, for defendant in error.

CAMPBELL J.

Leavitt sued plaintiff in error on the common counts and served a bill of particulars in which the demands were set out under different forms and items as $10,000 money lent, $10,000 handed defendants for their use on their guaranty that it should be repaid in a reasonable time $10,000 deposited with them for their accommodation, and $2,327.53 on account stated. He recovered $3,027.53, which is claimed on the argument to have been made up by the sum of what is called an account stated, and an error of $700.

The plaintiff's story on oath was that the sum of $10,000 was advanced by him in May, 1880, to defendants for the purpose of controlling the wheat market at Detroit for what is called by the parties the May deal, with a view of forcing up prices, and producing what is understood as a corner, and compelling parties who had contracts to fill to pay a higher price for wheat to fill them. Defendants, as he testified were to give him a third of the expected profits, and to repay the $10,000 with or without profits at all events.

Defendants claimed that Leavitt furnished the $10,000 as a margin for these wheat transactions, and was to bear his risks, and that the speculations resulted in a loss. At the end of July 1880, defendants gave plaintiff three documents or statements, exhibiting transactions up to that time, in which he was treated as a party concerned in the transactions, and one of these papers showed in a brief way that at that time there was left of his share no more than $2,327.50. This is now claimed to be an account stated. Several special questions were left to the jury and they found that there was no loan made, and that defendants, when they rendered these statements, understood the business was closed. They also negatived the giving of the money for the purpose of contracting for more wheat than could be delivered, and thus artificially raising the price. If the testimony is properly printed it does not appear distinctly that any one swore the purpose was merely to raise the price of wheat so as to get the advantage of those who should agree to sell to defendants themselves, but rather to so raise it as to compel all persons, who had wheat to deliver to anybody, to pay larger prices. The answer given by the jury does not fully meet the testimony.

We do not understand on what basis plaintiff recovered under his bill of particulars. He never advanced to defendants any sums except two $5,000 items, amounting to $10,000. If there was any money to be returned under his particulars it could have been no less than $10,000. On the other hand both parties repudiated the idea that they had ever agreed on the July bills or any of them, as settling the amount due from one to the other; and there cannot be in law an account stated that neither party agrees to. It is impossible to support the judgment on any theory of the evidence that conforms to the demands of either party. But the defendants, both at the close of plaintiff's case and at the close of the whole testimony, asked for instructions that the plaintiff should not recover, and in our opinion they should have been given. The object of the arrangement between these parties was to force a fictitious and unnatural rise in the wheat market for the express purpose of getting the advantage of dealers and purchasers, whose necessities compelled them to buy, and necessarily to create a similar difficulty as to all persons who had to obtain or use that commodity, which is an article indispensable to every family in the country. That such transactions are hazardous to the comfort of the community is universally recognized. This alone may not be enough to make them illegal. But it is enough to make them so questionable that very little further is required to bring them within distinct prohibition.

The cases of The Morris Run Coal Co. v. Banlay Coal Co. 68 Pa.St. 173, and Arnott v. Pittston & Elmira Coal Co. 68 N.Y. 558, held contracts involving similar dealings with coal, to be against public policy. And we think the reasoning of those cases is based on familiar common-law principles, which apply more strongly to provisions than to any other articles.

There is no doubt that modern ideas of trade have...