93 Minn. 354 | Minn. | 1904
Action upon promissory note of $350, executed by defendant to E. F. Eudwigsen and indorsed by him. Defense, no consideration and void,- the note having been given for the amount of losses, advances, and commissions sustained by Ludwigsen and plaintiff in the purchase of wheat options on behalf of defendant, which amounted to a wager on the future price of wheat. The trial court sustained the defense,, and the appeal presents the question; Is there sufficient evidence to-sustain the findings of the trial court?
The parties hereto all resided in Clay county, Minnesota. The note-having been introduced in evidence by plaintiff with the indorsement
The evidence is sufficient to sustain a finding that the transaction was illegal, within the rule laid down in Mohr v. Miesen, 47 Minn. 228, 49 N. W. 862, and McCarthy v. Weare Commission Co., 87 Minn. 11, 91 N. W. 33, it not being the intention of the parties to purchase any actual wheat, but merely that defendant advanced $150 for the purpose of risking it as a five-cent margin on three thousand bushels of wheat, dependent upon its future price. No other sum was paid. The deal was the purchase of an option, and there never was any statement made of the wheat bought, nor any demand for its delivery; but a bill was presented for the losses occasioned by a fall in the market price. The conduct of the parties was sufficient to justify the court in holding that the scheme was a gamble on the future price of wheat. If the deal was illegal in its inception, and if the note was given for the purpose of covering losses resulting from a decline in the market
Waiving the question whether the declarations on the part of Rudwigsen were sufficient to establish agency, those statements were competent as between Rudwigsen and defendant for the purpose of showing the nature of the arrangement. If, therefore, the introduction of the note, with the proper indorsement, established prima facie a cause of action in plaintiff, when the true nature of the transaction developed in the course of the trial, and evidence was received sufficient to establish the illegality of the note, then plaintiff was required to assume the burden of showing that, notwithstanding such fact, he was an innocent purchaser, .in good faith, before maturity. Plaintiff made no attempt in that respect, and the defense was established. Bank of Montreal v. Richter, 55 Minn. 362, 57 N. W. 61. The reason for the rule is the same, whether the note has its inception in fraud or in an illegal transaction.
Order affirmed.