192 Pa. 304 | Pa. | 1899
Opinion by
It has been settled by this Court so often that it ought not to require reiteration that dealing in stocks even on margins is not gambling. Stocks are as legitimate subjects of speculative buying and selling as flour or dry goods or pig iron. A man may buy any commodity, stock included, to sell on an expected rise, or sell “ short ” to acquire and deliver on an expected fall, and it will not be gambling. Margin is nothing but security, and a man may buy on credit, with security or without, or on borrowed money, and the money may be borrowed from his broker as well as from a third person. The test is, did he intend to buy, or only to settle on differences ? If he had bought and paid for his stock, held it for a year and then sold, no one would call it gambling and yet it is just as little so, if he had it but an hour and sold before he had in fact paid for it. And so with selling. Every merchant who sells you something not yet in his stock but which he undertakes to get for you, is selling
Turning now to the facts of the present case, it is clear that the law was not correctly applied by the auditor and the court below. The brokers made an assignment on December 21,1895, on which day they held certain stock for appellant, which they had bought on his order, and he had certain other stock which they had sold on his order, but which he had not yet delivered to them. He desired to close the account, complete the mutual deliveries and receive the balance which the transactions left in his favor. He was entitled to do so, even if the transactions were wagering, the agreement of the parties to make the sales actual would, under Anthony & Co. v. Unangst, 174 Pa. 10, supra, have made them valid. It is true, the settlement was not actually made until January 10, but it was made as of
But there was no sufficient evidence that the transactions were illegal at anytime. The auditor reports that “the stocks ordered to be bought or sold by the customers of L. H. Taylor & Co. were, as shown by their books, actually bought and sold, and as this evidence is uncontradicted I must and do so find. .... Thus, so far as L. H. Taylor & Co. were concerned, the transactions were not fictitious, but were actual purchases and sales of stock.” This finding should have been a warning to caution in taking a different view of the appellant’s position in the transactions. It is true, the purchase or sale may be actual on part of the broker and merely a wager on part of the customer (see Champlin v. Smith, 164 Pa. 481), but there should be at least fairly persuasive evidence of the difference. There is none here. The transactions covered by the account began with a small cash balance to appellant’s credit, followed by an order to buy 200 shares of Wabash common, which were bought by the brokers, paid for by appellant and delivered to him. The close, two years and a half later, showed, as already said, a large number of shares in the hands of the brokers, bought for appellant, and of which he demanded delivery, and other shares sold for him and which he had in his possession ready to deliver. As to the intermediate transactions, appellant testified, “It was always the intention to buy the stocks out and out and pay for them, and I had money to do it with.” In the face of these facts and this uncontradicted testimony, the auditor found that “ the account, including his enormous short sales, has all the earmarks of a gaming transaction and I so find it.” This was a mere inference, unwarranted by the account itself, and wholly opposed to all the evidence in the case.
Judgment, so far as it relates to appellant’s claim, reversed and claim directed to be allowed.
