The First National Bank of Creston v. Carroll

• Decision Date: 10 May 1890
• Citation: 45 N.W. 304,80 Iowa 11
• Parties: THE FIRST NATIONAL BANK OF CRESTON v. CARROLL et al
• Court: Iowa Supreme Court

45 N.W. 304

80 Iowa 11

THE FIRST NATIONAL BANK OF CRESTON v. CARROLL et al

Supreme Court of Iowa, Des Moines

May 10, 1890

Decided May, 1890.

Appeal from Union District Court.--HON. R. C. HENRY, Judge.

ACTION on a promissory note for one hundred and fifty dollars. The execution of the note is admitted, but it is alleged to be void because given in fulfillment of a gambling contract, of which the following is a copy:

"CRESTON IOWA, December 5, 1888.

"In consideration of thirty dollars paid me this day by L. J Cusick, I hereby guaranty to him that the five cars of cattle shipped by Cusick Bros., on December 3, to Chicago, shall sell in Chicago for four (4) cents per pound, and, he having a one-half interest in said cattle, I agree to make good to him any loss by reason of said cattle selling for less than four cents. That is, I am to pay him the difference, if any between the price the cattle sell for and four cents on his half interest, in case they sell for less than four cents. Said difference to be paid to him on receipt of account sale and, if said cattle sell for more than four cents, I am to have the difference. C. W. CARROLL."

"I agree to pay C. W. Carroll whatever said cattle sell for over four cents, on my half interest.

"L. J. CUSICK."

The answer sets out the contract and contains averments that when the contract was made the cattle were in transit to the Chicago market; that they were sold for less than four cents per pound; and that the note in suit was given to said Cusick to make good to him the four cents per pound for the cattle under the contract, and that there was no other consideration for the note. A demurrer to the answer presents the question as to the validity of the contract. The district court sustained the demurrer, and from a judgment for plaintiff for the amount of the note the defendants appeal.

REVERSED.

Maxwell & Leonard, for appellants.

McDill & Sullivan, for appellee.

OPINION

GRANGER, J.

Counsel in argument agree that the question for determination is whether or not the contract set out in the answer is a wagering contract. If so, the note in suit, given as it was in pursuance of the contract, is void under our holdings even in the hands of the plaintiffs. Traders Bank v. Alsop, 64 Iowa 97, 19 N.W. 863. Appellant likens this contract, in its purpose and effect, to "option deals," which are held to be gambling contracts, and void. Appellee, however, urges as a distinctive feature that in option deals there is no actual property as a basis for the transaction, and no property is intended to be delivered or received, while in this case the cattle actually on the way to market formed the basis of the transaction, and it urges that by the contract the cattle were sold to Cusick, or, at least, an interest therein. We are unable to find any language in the contract evincing such a purpose. Cusick Bros. shipped the cattle. They are to sell the cattle in Chicago, and the contract in question is an executory one, to be performed after the cattle are sold. The transaction was clearly a speculative one as to prices. The disposition of the cattle is precisely what it would have been had the contract not been made. Cusick Bros. sold the cattle, as they intended to, for what they would bring in the market, and received the pay therefor; and this would have been the situation without the contract in question. The parties to the contract dealt alone with what would be the market price when the cattle should arrive in Chicago. The market price represented the actual value of the cattle. If the market price was above the four...