Yontz v. McVean
| Decision Date | 05 January 1920 |
| Parties | A. C. YONTZ, Respondent, v. W. A. McVEAN, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Moniteau Circuit Court.--Hon. John G. Slate, Judge.
Judgment affirmed.
F. J Singley, J. B. Gallagher and S. C. Gill for appellant.
Roy D Williams and Embry & Embry for respondent.
Plaintiff's action is for breach of contract for sale and delivery of a lot of corn. He had judgment in the trial court.
The contract was in writing reading as follows:
At the close of plaintiff's case defendant asked a peremptory instruction which the trial court refused. The instruction is based on the idea that the agreement, on its face, was a gambling contract and that if not on its face, it was shown to be of that character by the evidence.
In considering the question thus presented we must keep in mind that a valid contract of sale may be made for future delivery of grain even though the vendor has no grain on hand and will have to provide himself with the requisite quantity and quality before time of delivery. The thing which taints a sale for future acquisition and delivery is that there was never any intention to procure and deliver, or receive and pay for, thereby becoming a mere wager on the market price of the article at a given time. [Crawford v. Spencer, 92 Mo. 498; Scott v. Brown, 54 Mo.App. 606, 610; Connor v. Black, 119 Mo. 126, 142; Smith v. Bailey, 209 S.W. 945; Elmore Grain Co. v. Stonebraker, 214 S.W. 216.]
The contract in question is not wholly of the character we have just mentioned, since it does not contemplate absolutely that there is a sale, in that plaintiff, as vendee, does not agree to buy, nor defendant to sell unless plaintiff shall elect to buy at the time stipulated, viz., the month of December, 1919. In other words plaintiff paid eighty dollars for an option, to purchase the corn at $ 1.40 per bushel, become final and complete on his election to take it.
We have a statute (Sec. 4780, R. S. 1909) on the subject of option contracts. It reads that "All purchases and sales, or pretended purchases and sales, or contracts and agreements for the purchase and sale of . . . grain or agricultural products whatever, either on margin or otherwise, without any intention of receiving and paying for the property so bought, or of delivering the property so sold, and all the buying or selling or pretended buying or selling of such property on margins or on optional delivery, when the party selling the same, or offering to sell the same, does not intend to have the full amount of the 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 actually to receive the full amount of the same if purchased, are hereby declared to be gambling and unlawful, and the same are hereby prohibited. . . ."
An option means a privilege. [Illges v. Dexter, 77 Ga. 36, 38.] It is called an unaccepted offer in McMillan v. Phila Co., 159 Pa. 142, 144, 28 A. 220; and in Hopwood v. McCausland, 120 Iowa 218, 221, 94 N.W. 469, it is said to be but a right of election to exercise a privilege. It will be noticed that all option contracts for grain are not prohibited by this statute. In some States they are, but not so in ours. It is only such contracts that are made by parties who do not intend to receive and pay for the property bought, or deliver the property sold, that are void. The evidence clearly saves this case from the prohibition of the statute. Undoubtedly plaintiff intended to receive and pay for the corn. He gave defendant a written order to deliver and had arranged to procure the money to pay for it. And defendant had made an effort to purchase at least a part of the corn with which to deliver the quantity contracted. It is manifest from the sum of his testimony that he intended to deliver, but failed. He did not deny that he had made the effort. Indeed his chief excuse for failing was that plaintiff did not give him long enough notice wherein he could deliver.
It will be noticed that the contract contains this statement: "The eight dollars being all Yontz can lose on the deal." It is manifest that the word "eight," is merely a clerical error and that "eighty" was meant It being intended to provide that if plaintiff did not exercise his privilege of purchasing the corn he only lost the price he paid for such privilege. No particular point has been made on this, though plaintiff has suggested that it aids his contention that there was no intention by either party for a bona fide sale and shows the contract to be a mere wager and hence void under the statute. We do not think so. An option to purchase is a thing of value and a contract to pay for it is valid, even though it is never exercised. It does not show that no intention existed to receive and pay for the article. There is no element of a mere wager on the market with an intention not to purchase, but to settle with money on the state of the market, the purchaser to gain the amount of a rise and the seller to gain the amount of a decline.
It is true that if after making the contract, plaintiff for any cause concluded not to exercise his privilege of receiving the corn at the agreed price, he would only lose the sum he paid for the option. But there is nothing objectionable in that--nothing in it against the statute. It is no more than liquidated damages. It is said in Story v. Salomon, 71 N.Y. 420, a case like the present, in which there was no showing that one party had no intention to deliver, or that the other had no intention to receive, settlement to be had by one or the other paying the difference in the rise or fall of the market, the court said that ...
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