60 N.W. 60 | N.D. | 1894
The plaintiffs are seeking to recover judgment against defendant for their commissions and for advances made by them on account of the sale and purchase of wheat by them as agents for defendant. Thus far they have been unsuccessful. The case was tried before the court, and judgment was rendered in favor of the defendant. The findings of the court amply sustain the judgment. But it is here urged that the evidence does not justify certain of the findings. The defense relied on was that the transactions in which the plaintiffs claim to have paid out moneys for the defendant were mere wagers on the price of wheat, and that the plaintiffs knew that the sole purpose of defendant was to gamble in wheat options, and not to enter into bona fide wheat contracts in which wheat was to be delivered to or by him thereunder. The plaintiffs were commission merchants in the City of Duluth, Minn., and were members of the Duluth Board of Trade. The defendant was and is an attorney in full
This action, however, is not upon the several contracts of purchase and sale. It is brought to recover the advances and commissi,ons of the agents who negotiated them. But the rule which prevents recovery upon a mere wagering contract applies with equal force to the agent who brings the parties together with knowledge that their purpose is hot to enter into a legitimate agreement, but to gamble over the ever shifting price of the commodity to which their dealings relate. In this case it is expressly found that the plaintiffs knew that the purpose of the defendant was to gamble, and that he employed them in furtherance of that purpose, and that all the transactions in which the plaintiffs acted as agents for defendant were mere wagers on the price of wheat. That the agent cannot, under such circumstances, recover his commissions, or the advances made by him on behalf of his principal, is well settled. Having knowingly participated in an illegal transaction, the law will leave him without remedy in case of loss. Crawford v. Spencer, 92 Mo. 498, 4 S. W. 713; Irwin v. Williar, 110 U. S. 499, 4 Sup. Ct. 160; Phelps v. Holderness, (Ark.) 19 S. W. 921; Embrey v. Jemison, 131 U. S. 336-345, 9 Sup. Ct. 776. The findings are broad enough to embrace the fact that the persons with whom plaintiffs dealt in making purchases and sales for defendant had no thought of making or calling for delivery of the wheat, and we feel clear that t'he evidence fully sustains such a finding. But we are not compelled to rest our decision on this branch of the case upon this finding and the sufficiency of the evidence to sustain it. The "intention of the other party to these transactions is immaterial. It is sufficient if the defendant’s purpose was to gamble, and the plaintiffs knew of it when they went upon the Board of Trade to make such purchases or sales for the defendant. Being employed by the defendant to secure for him upon the Board of Trade mere
We come now to the question of the evidence to support the findings that the plaintiffs knew that the purpose of the defendant was to gamble, and that the losses for which they sue were suffered by them in furthering such illegal purpose. At the outset, we conclude that plaintiffs are right in the contention that the burden is on the defendant to establish by competent evidence the illegality of these transactions, and the participation of the plaintiffs in the unlawful purpose of the defendant. We might also safely assume that the sales and purchases made by plaintiffs on behalf of defendant were in form legal contracts, calling for the delivery of wheat specified therein. It is significant, however, that, while the witnesses on behalf of plaintiffs testify to actual sales, they do not pretend to state the terms of the contracts, nor was any writren contract of sale introduced in evidence. Without at least a written memorandum of these sales, they would not have been valid, and it is difficult to understand why these contracts were not reduced to writing if they were intended to embody the terms of a bona fide sale. It was the duty of the plaintiffs, as agents for defendant, to secure for him a contract he could enforce if they were making bona fide sales and purchases for him. The silence of the record in this respect is strong evidence that these alleged agreements were not in writing. Nay, there„is positive evidence that they were not reduced to writing. One of the plaintiffs testified that formal contracts were not drawn up, but that there was always a full understanding as to the nature of the transactions. But, however perfect the likeness of a gambling transaction to the form and features of a legitimate sale, the legality of the dealings between the parties must rest ultimately upon their honest intention. Illegality is seldom guilty of the consummate folly of flaunting its defiance of law in the face of public sentiment — of furnishing itself the evidence of its violation of law. To escape the penalties of breaking the law, it will always put on the “suits and trappings” of honest
The only remaining question is whether the plaintiffs were aware of defendant’s purpose when they went upon the Board of Trade to make for him the several purchases and sales out of which these losses grew. If they did, it is an inevitable inference that they participated in his gambling project, and actually aided him therein. We are clear that the circumstances surrounding these transactions fully sustain the finding of such knowledge and participation. The order to purchase wheat came to plaintiffs in the form in which mere orders to gamble in the price of wheat are sent by speculators to brokers. It is a well known fact that a large percentage of such transactions are only wagering operations. No one knew this better than the plaintiffs when they received the defendant’s different orders to buy and sell. At no time during all these transactions was there a suggestion from either plaintiffs or defendant that a bushel of this wheat was to be delivered to or by the defendant. He was never informed of the names of the different brokers of whom these purchases or to whom these sales were made. He never.knew who were the principals, back of such brokers with whom he had entered into contracts calling for the delivery, on plaintiffs’ theory, of thousands of bushels of wheat. His indifference to this matter of delivery all through these transactions was certainly suggestive to plaintiffs, who were familiar with such indifference, and the reasons for it, though having witnessed it in a multitude of similar transactions. From the very beginning the defendant
Our attention has been called to one of the rules of the Duluth Board of Trade, and to the testimony that it was in force when these transactions were had, and that they were entered into by plaintiffs with reference to such rule. It declares as follows: “In all cases of sale of produce, the .party or parties selling shall deliver the property sold at the time specified, unless the purchaser shall consent to accept or pay the difference in cash, when so requested to do by the seller. In all cases, however, the buyer shall have the right to demand the property, if he so
One of the errors assigned relates to the admission of the testimony of the defendant with reference to statements made to him by one Nichols, the agent of the plaintiffs, touching the character of the business he urged defendant to carry on with plaintiffs. In substance, the defendant testified that this agent informed him that these transactions which the agent induced him to enter into with plaintiffs would be mere wagers on the price of wheat; that in them no wheat would be delivered by either party to the different deals. Plaintiffs here contend that the reception of this evidence was error, because the agent, Nichols, had no authority to represent them, except in the matter of securing shipments of actual wheat, to be sold by plaintiffs for the shippers, as their agents in Duluth. There is no attempt in this case to enforce against plaintiffs any liability because of any contract made by this agent on their behalf; but it is claimed that the case shows that Nichols had no authority to act for them except in legitimate transactions, and that, therefore, any knowledge he may have acquired that the defendant intended to gamble would not affect them; and hence it is contended that it was prejudicial error to receive this evidence, as the court may have considered it as
We come now to the second branch of the case. Defendant set forth in his answer as a counterclaim that he had paid to plaintiff’s certain sums of money as margins in these gambling transactions, and asked that judgment for this money be rendered against the plaintiffs in his favor. It is undisputed that defendant did in fact pay to the plaintiffs as margins the sum of $4,259.68. The right to recover back this money, it is conceded by defendant’s counsel, rests upon the Minnesota statute. It seems to be agreed between counsel for the plaintiffs and defendant that there is no common law liability to refund such money, and that the rights of the parties are governed by the laws of Minnesota, where the transactions were carried on, and not by the laws of this state. The statute of Minnesota relied on by defendant provides that: “Whoever by playing at cards, dice or other game, 'or by betting on the hands or sides of such as are gambling, loses to any person so playing or betting any sums of money or any goods whatever and pays or delivers the same or
The trial court erred, however, in refusing costs to defendant. Plaintiffs, having failed to establish their cause of action, were not entitled to costs; and in all cases in which the plaintiff is not entitled to costs the defendant recovers costs as a matter of course. His rights do not depend upon his sustaining a counterclaim which he may have interposed. It depends solely upon his preventing a recovery of costs by the plaintiff. Had defendant set up no counterclaim, there would have been no doubt about his right to costs. He is in no worse position because he did interpose a counterclaim, and failed to sustain it Ury v. Wilde, (Super. N. Y.) 3 N. Y Supp. 791.
On plaintiffs’ appeal, the judgment, so far as it dismisses the action, is affirmed. On defendant’s appeal, the judgment is modified by allowing to defendant his costs in the District Court.
As so Modified, the judgment is in all respects affirmed.