Rogers v. Marriott

• Decision Date: 07 March 1900
• Citation: 82 N.W. 21,59 Neb. 759
• Parties: ROGERS ET AL. v. MARRIOTT.
• Court: Nebraska Supreme Court

59 Neb. 759

82 N.W. 21

ROGERS ET AL.

v.MARRIOTT.

Supreme Court of Nebraska.

March 7, 1900.

Syllabus by the Court.

1. In a transaction, involving the alleged purchase of wheat upon the Chicago Board of Trade, which is challenged, as a wagering contract, and void as being contrary to public policy, the true test is whether there was in the minds of the parties to the transaction an intention in good faith to purchase the property, and to secure a bona fide transfer and actual delivery thereof to the purchaser.

2. A valid contract for the future delivery of wheat, even though not in the possession of the seller, may be entered into, and such contract would be upon the same plane as any other legal obligation for the sale and delivery of any species of personal property.

3. Where such a contract is entered into by one of the parties thereto in good faith, the same would be valid and binding, even though the other party to the contract entered into it with no intention to effect a genuine transfer of the property, and merely as a gambling transaction and speculative venture on the fluctuations in the price of the commodity nominally dealt in.

4. In a controversy between a principal and his agents, acting as commission merchants or brokers in a transaction involving an alleged purchase of grain for future delivery, the question is whether the intention was that the principal should become the actual buyer of grain through the agency of the commission merchants, or whether they expressly or impliedly agreed to act as the principal's agents in gambling purchases of grain, which the principal had no intention of receiving.

5. If the transaction was a gambling one on the principal's part, and known to be such by those acting for him, and the services and advances which constitute the cause of action were made and rendered in carrying it into effect, the agents cannot recover therefor.

6. Where the evidence in the case is neither conflicting nor contradictory, and it is not of such a nature as to warrant different conclusions by reasonable men, and but one rational conclusion can be drawn therefrom, it becomes proper for a trial judge to treat the case as having been resolved into questions of law, and to suitably instruct the jury accordingly.

7. Evidence examined; and held, that the only conclusion to be reached from the plaintiffs' evidence is that the contract was based on a wagering transaction, and that there was in fact no intention on the part of the parties to engage in a bona fide purchase, to be followed by an actual delivery of the commodity in which they nominally dealt, and that such transaction was a gambling venture and speculation in the fluctuations in the price of wheat in the markets, and is void as being contrary to public policy.

Error to district court, Dixon county; Evans, Judge.

Action by H. W. Rogers & Bro. against J. T. Marriott. Judgment for defendant, and plaintiffs bring error. Affirmed.O. E. Martin, for plaintiffs in error.

J. B. Barnes and A. E. Barnes, for defendant in error.

HOLCOMB, J.

As grounds for recovery the plaintiffs, in their petition, state, in substance, that the defendant is indebted to them in the sum of $1,446.25 on account of the purchase at the request of the defendant of 20,000 bushels of wheat on the market in Chicago, Ill., and a subsequent sale thereof, made on defendant's account, at a less price per bushel. The amount sued for was the difference in the buying and selling price, less $222.50, which defendant had to his credit with plaintiffs, the whole or a part thereof growing out of prior transactions in the wheat pit on the Chicago Board of Trade. The defendant, answering, in substance alleged that the plaintiffs were commission merchants in Chicago, and dealt and traded in what are known as “options,” on 'change, by buying and selling in market on 'change for future delivery, when in fact no delivery was ever made or intended or demanded, and no grain was bought or sold, or intended to be; that the whole transaction was a venture and speculation on margins, depending for profits or loss on fluctuations of the market, and a purely fictitious and gambling transaction, without consideration, that the account sued upon is claimed for loss in so trading in options, was without consideration, wholly void, as plaintiffs well knew, and in violation of law and contrary to public policy. From the foregoing a clear conception is gained of the issues involved, and upon which the case went to trial. Upon the submission of plaintiffs' evidence, the defendant moved the court to instruct the jury to return a verdict for the defendant upon the ground, among others, “that the testimony fails to make out a case or support a judgment, and shows beyond all question that the transaction upon which the suit is brought, and upon which the testimony is based, is a dealing in margins upon the Board of Trade in Chicago, and is a gambling contract, absolutely void and against public policy.” The motion was sustained, and the jury peremptorily instructed to return a verdict in favor of the defendant, which was done, and a judgment in his favor rendered on the verdict. From this judgment plaintiffs prosecute error proceedings in this court.

While some other questions are presented by the record, as we view the case it is proper and necessary only to notice the ruling of the trial judge on defendant's motion to peremptorily instruct the jury to return a verdict in his favor, and we shall therefore confine our consideration of the case to the one question mentioned. It is for us to determine only whether, under the evidence, the peremptory instruction given was justified, or, in other words, whether the evidence introduced by plaintiffs would sustain a verdict if rendered in their favor. The only evidence submitted was in the form of depositions, and consisted of the testimony of one of the plaintiffs, including the telegraphic and written correspondence which passed between the parties to the action, and relating to the transactions out of which the suit grew, and the testimony of one other witness, a member of the board of trade, who testified to certain customs thereon prevailing and the meaning of certain words used on the board of trade, such as “options,” a “put,” or a “call.” In the deposition of the plaintiff, after identifying a series of letters and telegrams passing between the parties, and testifying in relation to them, the witness was asked to state how he arrived at the amount due, to which he replied: “As before stated, at the time we made the purchase of the 10,000 bushels of wheat Mr. Marriott [the defendant] had to his credit on our books the sum of $218.89; on the 1st of March we found that he was entitled to a credit of $3.61, for an error made in an account of sale which we had sent him prior to this time. That, with the $218.89, gave him credit on our books of $222.50. The money that we obtained on the sale of his 20,000 bushels of wheat amounted to the sum of $1,643.75 less than we paid for the wheat, which we charged to his account. We also charged to his account $25, being for commission upon this transaction. We then deducted the credit from the debit, which shows a balance, as per account herewith, of $1,446.25 due us on the 18th of March, 1892.” Other questions to and answers by this witness were as follows: “Q. State whether or not these purchases of four 5,000-bushel lots of wheat were actual purchases of grain. A. They were. Q. And for Marriott's account, were they? A. Yes. Q. Is there any custom on the board of trade with regard to keeping margins in the hands of commission merchants by persons who are not members of the board, and who make purchases or sales through members of the board? A. It is customary to require a margin of money on transactions made by board, to protect commission merchants from loss by the decline or advance in the market. Q. The defendant in his answer says that your firm on the 26th day of February and the 17th day of March, 1892, dealt and traded in what are known as ‘options,’ on 'change in Chicago, in grain, by selling and buying in the market in Chicago, for future delivery, in the firm name of H. W. Rogers & Bro., when in fact no delivery was ever made or intended or demanded, and no grain was bought or sold, or intended to be. I will ask you whether or not this paragraph of the answer which I have just read is true, with reference to the transactions about which you testified yesterday. A. It is not. Q. Does your firm deal in options? A. It does not. It is not permitted on the board of trade. Q. What is an option? A. An option is a privilege whereby a purchaser, for a consideration paid, is entitled within a specified time to call upon the seller, or not, as he elects, for grain, stocks, or whatever the trade is for, at an agreed price, deliverable to him at once or at some future date,--usually at some future date. Q. State whether or not the transactions such as you have just described are permitted on the board of trade? A. That sort of trade is gambling, under the laws of the state of Illinois, and is forbidden by the board of trade; nor has it been permitted on the board of trade since the law was enacted, over twenty years ago, if, indeed, it was ever recognized. Q. Did the transactions that you had with Marriott partake of the nature of such transactions as you have just described? A. No, sir; not in the least. Q. Is it true, as stated in his answer, that no delivery was ever made or intended or demanded, and no grain was bought and sold, or intended to be, in either of these transactions which you testified about yesterday? A. My answer to that is, it is not true, but utterly false, except that the wheat was not actually delivered; but it would have been delivered to us, and paid for, if Mr. Marriott had kept a margin with us against loss. It was sold before maturity of the contracts, and was...