85 Tenn. 581 | Tenn. | 1887
The origin, nature, and result, thus far, of this litigation appears from the report of the Commission of Referees, which is as follows :
“This is a case in which the complainant’s husband bet and wagered his money with the defendants, in margins,' upon the rise or fall in the price of certain commodities in the market at*583 a future (lay. The complainant’s husband lost his money- — $693.70—in these gambling and wagering contracts, and she filed this bill against the defendants who got the money, within twelve months from the date of the transactions, to recover it from them.
“ The Chancellor was of opinion and decreed as follows:
“ ‘ It further appears to the Court that the defendants made various wagering contracts in “futures” with M. C. Dunn, the husband of the complainant, and that said contracts were purely wagering or betting contracts on the rise or fall of the grain, cotton, or stock markets, without any intention on the part of either party to the contracts to handle or deliver any real article.’
“ The Chancellor granted a decree in favor of the complainant against the defendants for the money lost and interest — -$749.20. The decree is clearly correct upon the law and the facts of the case, except the set-off of $178.65 claimed by the defendants, which, we think, should have been allowed. The proof shows that the complainant’s husband, while he was losing his ‘margins,’ won that amount from the defendants. The defendants’ right to plead the set-off attached when the bill was filed against them, and they were not barred by the ninety days’ limitation, although their answer, claiming the set-off, was not filed within that time.
“‘The bringing of a suit by one party saves from*584 the operation of tlie statute all such claims of the defendant as are properly the subject of set-off, and which are in fact pleaded' as a set-off in the action.’ Wood on Lim., 601; 8 Bax., 896; 2 Esp., 569.
“It is earnestly insisted, however, that the contracts to buy ‘futures’ in this case are not within the statute authorizing the losing party to recover hack the money put up and lost ‘ on margins.’ We think the contracts are, under the proof in this case, within the letter as well as within the evil iutended tó be remedied by the statute. ' The facts are, - that when the dealer, M. C. Dunn, concluded upon which side he would put up his margin — whether he would risk it upon the rise or fall of the article named — he signed and delivered to the 'defendants a written order to buy or sell the ■ article named upon his account, at the price named, to be delivered at a future day specified, and the defendants, at the s'ame time, delivered to him a written contract that they had bought or had sold the article upon his account, to be delivered at a future day named in the contract. The contract then states the amount of the margin put up, and recites conditions upon which it would be lost and the contract closed. The proof is conclusive that the defendants did not buy or sell the articles named in the contract, and that neither party intended at any time to buy, sell, deliver, or receive the articles specified, but intended simply to settle by the ‘difference’ in the price of the article in*585 the market when the contract was made and the price on the day named for delivery. This leaves nothing in the transaction hut a ‘naked wager’ upon the rise or fall of the article in the market. We think the margins put up under these contracts are as clearly wagers as can be conceived, pernicious in the extreme, and void, .both by statute and public policy.
“We have heretofore considered the questions involved in these bucket-shop cases, giving the reasons and citing the authorities for our opinion; but, in deference to the earnest and able argument of the defendants’ counsel in this case, we will again briefly state the ground of our conclusion.
“The Code, under the general head, ‘Void Contracts,’ and under the special head, ‘Gambling and Wagering Contracts,’provides as follows:
“ ‘ 2438. All contracts founded, in whole or in part, on a gambling or wagering consideration shall be void to the extent of such consideration.
“‘2439. No money or property of any kind won by any species or mode of gaming shall be recovered by action.
“ ‘ 2440. Moreover, any person who has paid any money, or delivered anything of value, lost upon any game or wager may recover such money, thing, or its value, by action commenced within ninety days from the time' of such payment or delivery.’
“‘5705. All laws made for the prevention, disT couraging, or suppression -of gaming shall be construed as remedial and not as penal statutes, and*586 no presentment or indictment in such case shall be quashed for want of form.’
“Bouvier defines a wager as follows: Wager. A bet; a contract by which two parties or more agree that a certain sum of money or other thing shall be paid or delivered to one of them on the happening or not happening of an uncertain event.
' “ The whole current of authority now is that contracts just such as these in this record, under the same state of facts, are gambling and wagering contracts, and void, both by statute and public policy. We have no doubt whatever that the Legislature, in enacting the chapter in the Code entitled ‘Void Contracts,’ intended to declare all contracts and transactions of the character of those in this record ‘gambling and wagering contracts,’ and intended to empower the losing party, his wife or creditor, to recover the money thus lost from the other party.
“ The construction of the penal statute against gaming' — Code, § 5688 — using the words, ‘play at any game of hazard or address,’ and the cases defining gaming under that statute, have no application to the questions in this case. The chapter of the Code above recited, over the head of ‘ Gaming and Wagering Contracts,’ was simply intended to provide a remedy for the losing party in all contracts, void as gaming or wagering contracts, to recover back the money thus lost. We will cite some of the cases and authorities which we have considered, and which sustain our conclusion upon*587 the questions in this case: Marshall v. Thruston, 3 Lea, 740; Irwin v. Willar, 110 D. S., 499, 508; Dickson v. Thomas, 97 Pa., 278; Lyon v. Culbertson, 83 Ill., 33; Barnard v. Backhaus, 52 Wis., 593; Story v. Solomon, 71 N. Y., 420; Love v. Harvey, 114 Mass., 80; Dos Passos on Stock Brokers, 410, 477; 2 Benj. on Sales, 714.
“Mr. Justice Matthews, delivering the opinion of the Court in Irwin v. Willar, above cited, says:
“‘ The generally accepted doctrine in this country is, as stated by Mr. Benjamin, that a contract for the sale of goods to be delivered at a future day is valid, even though the seller has not the goods, nor any other means of getting them than to go into the market and buy them; but such a contract is only valid when the parties really intend and agree that the goods are to be delivered by the seller and the price to be paid by the buyer; and if, under the guise of such a contract, the real intent be merely to speculate in the rise or fall of prices, and the goods are not to be delivered, but one party is to pay the other the difference between the contract price and the market price of the goods at the date fixed for executing the contract, then the whole transaction constitutes nothing more than a wuiger, and is null and void.’
“The English statute, 8 and 9 Vict., Ch. 109, Sec. 18, is similar to ours, using the words: ‘Contracts by way of gaming or wageriug shall be null and void,’ and the courts there uniformly hold that contracts like .these in this record are within*588 the statute. Grizewood v. Blane, 11 C. B., 526, was an action on a contract for the future delivery of railway shares, and Jervis, C. J., left it to the jury to say what was the plaintiff’s intention and what was the defendant’s intention at the time of making the contracts — -‘whether either party really meant to purchase or sell the shares in question, telling them if they did not the contract was, in his opinion, a gambling transaction and void.’ The ruling was held to be correct.
“But certainly we need not multiply authorities upon the question. The statute is plain, and the evil to be suppressed is rank, and is corrupting the morals of the land.
“The charter of incorporation does not cover these transactions, and the defendants must be held liable individually as confederates in unlawful transactions.
“We recommend that the Chancellor’s decree, modified as above indicated, be affirmed, but the complainant should pay the cost of the appeal.
“ Caldwell and Eakin, B,.’s concur.”
The defendants filed five exceptions to the report :
“First — Because the Court failed to report that the alleged-contracts were made upon the rise and fall of the New York and Chicago markets, and that the defendants or complainant had no control over the said markets.”
The repoi’t does fail as assumed in this exception; but that is wholly immaterial. That the con
“Second — Because the Court failed to report that the defendant is an incorporated company,” etc.
The bill is not filed against “an' incorporated company,” and no such creature is before the Court as a defendant. Certain individuals are sued as persons “trading under the name of the ‘Tennessee Brokerage Association,’” but no effort is made to sue a corporation. The persons sued answer jointly as individuals, making no reference to “an incorporated company.” The bill of exceptions recites that it was agreed by counsel “that the charter of the ‘Tennessee Brokerage Association’ be read as evidence;” but no such charter appears in the transcript. The bill of exceptions paranthctically states: “This charter referred to was never filed.”
“ Third — Because they do not report that said transactions * * . * were legitimate, and not gambling or wagering transactions.”
The report states the facts of the case correctly with reference to the transactions mentioned therein, and properly applies the law to them. That neither party intended, to buy or sell real products, and that both parties intended, at the- time of making the several contracts, to close them by a settlement of differences merely, is well established by the proof; and the authorities cited sustain the proposition
The fourth and fifth exceptions are that such contracts are reported to be “within the meaning ■of § 2440 of New Code,” when the contrary should have been reported.
Upon this point the report sustains itself, and we need add nothing to it. The same construction is given in an opinion delivered to-day by Judge Snodgrass in McGrew v. Produce Exchange.
The Commission cited no authority for its holding, at the conclusion of the report, that “the defendants must be held liable individually as confederates in unlawful transactions.” Nevertheless, that proposition of law is sustained by authority, both in cases of criminal and in cases of civil liability. Judge Catron said, in State v. Smith:
“It is insisted that those who encourage and promote gaming’ are not subject to indictment by the Act of 1803. This is clearly a mistake, for two reasons. Let us. put a case: Say four persons sit down to play loo; one of the parties bets nothing himself, but plays for another. Here he who plays encourages the match without betting. To adopt the construction contended for, neither is indictable. Still, in point of fact, they are both guilty of gaming. In offenses inferior to felony, there are no accessories; all concerned in their commission are principals.” 2 Yerg., 273.
In Lear et al. v. McMillen, 17 Ohio St., 469, the Court said:
“If the plaintiffs in error were in fact engaged in maintaining and carrying on an illegal business of gaming, it is not for them to set up the illegality of the business or of the contract between them to defeat their joint liability. It is a well-known rule of law ¿that when an illegal conspiracy is proven, the acts of each conspirator are held as the acts of all. It is true their illegal contract is not binding between them, but it is binding upon them. It gives no legal rights, but it imposes upon them legal liabilities. Having established their joint proprietorship, the defendant in error, by proving the receipt of money by one, proved its receipt by all, and entitled himself to a joint recovery against all. The real ‘winners’ of the money are the proprietors of the business, who, by the terms of the contract between them — no matter if it he an illegal contract — are to furnish the funds, pay the losses, and receive the winnings. The dealer is their agent, and they are estopped from denying his power to bind them. Ilis winnings arc their winnings, and his receipt of money won is their receipt. Any other construction of the law would render it uttcr-ly ineffective. It would only be nee*592 essary to put forward an irresponsible ‘dealer’ in order that the real gamblers, who grow rich by his winnings, might evade the law. This would be to hold the nominal party and let the real party escape — to convict the ‘dealer’ and acquit the double dealer. It would be of little avail to set aside the ‘game’ by which the plaintiff has been defrauded of his money, and allow him to recover it back, and yet allow the deeper game, by which the law itself is to be defrauded of its purpose, to have its intended effect.”
It cannot be seriously controverted, in the face of this record, that the defendants were, having the business, detailed in the report, conducted for their benefit. That such was the fact is not denied by any exception to the report;- nor could it have been successfully denied by exception or otherwise. That they did not make the contracts themselves in person with Dunn is of no importance. The acts of one Herndon, whom they put forth for that purpose, were their acts, for which they are individually and joifitly liable.
The bill is in time as to all of the items allowed by the Chancellor, though such items were not lost within “ninety days” next before the filing of the bills. This is the suit of the wife, by next friend, to recover money lost by her husband. It is only the party losing the money who must sue ■ within “ninety days;” but suit by, or on behalf of, the wife is not barred if brought “after the expiration of the ninety days, and within twelve months thereafter.” New Code, § 2441.
All exceptions are overruled, the report is confirmed, and decree of the Chancello! is modified accordingly.