10 F. Cas. 345 | U.S. Circuit Court for the Northern District of Illnois | 1878
The fair conclusion from the admitted facts, I think, is that one transaction was made to settle and adjust the other. In other words, the differences between the prices at which the sales were made and the prices of the purchases, were settled, and the plaintiffs paid the losses to the buyers.-
The sole defense made, is, that the transaction falls within the option contract law of this state (Rev. St. c. 3S, § 130), and is void as a gaming contract. The language of the statute is: “Whoever contracts to have or give to himself or another the option to sell or buy at a future time any grain, etc.,” shall be fined. “And all contracts made in violation of this section shall be considered gambling contracts, and shall be void.”
This statute has been several times before the supreme court of this state for construction, and the uniform ruling, so far as I have been able to learn from adjudged cases brought to my notice, has been that- the statute was not intended to prohibit sales of grain or other commodities for future delivery. The statute prohibits “options to sell or buy” — not sales where the seller reserves to himself a simple option as to the time of delivery within certain limits: Wolcott v. Health, 78 Ill. 433; Pixley v. Boynton, 79 Ill. 351; Logan v. Musick. 81 Ill. 415; Corbett v. Underwood, 83 Ill. 324. Rumsey v. Berry, 65 Me. 570, gives the same construction to a-statute similar to ours, by the supreme court of Maine.
Lyon v. Culbertson, 83 Ill. 33, and Pickering v. Cease, 79 Ill. 328. would seem at first to hold a different doctrine, but a careful examination of those cases shows that the court. proceeded upon the fact found, that neither party expected, at the time the contracts were made, to deliver any wheat, but only to adjust or settle differences. These two cases also differ from this in other important features. In both those cases the suits were directly between the parties to the' contracts, and the court held them to be gaming contracts, because it was found as a fact that neither party intended to sell or buy the wheat, but only to speculate in differences, transactions which the court held were contrary to public policy, and therefore void. And while it may be -well, as a matt ter of public, policy, to prevent parties from gambling by refusing to enforce gambling contracts between them, yet it is. at least doubtful whether they should be allowed .to gamble at the expense of others, and riot pay those whom they employ to do the work, and. who advance money for them. . .
The obvious intent of the Illinois statute is-to prohibit dealing in what are familiarly called “puts” and “calls,” which are mere options to sell or buy; a class of contracts which the district court of this district had held void before the statute was enacted. Ex parte Young [Case No. 18,145]. But in that' case the court took pains to say: “I do not intend to be understood as holding that every, option contract for the delivery of grain or stock, or that every ‘put’ is necessarily void, but only that all these contracts, in the light of the testimony before the court, were, in their essential features, gambling contracts. The parties, when they made them, did not intend to deliver the grain, but only at the utmost to settle the differences,” thus clearly distinguishing that case from this. But even, under the English acts for the prevention.of stock jobbing, it was held that when a broker had paid money on defendant’s account, to compromise or settle differences for not delivering stocks, the broker could recover from the principal. Faikney v. Reynous, 4 Burrows, 2069; Petrie v. Hannay, 3 Term R. 418; Knight v. Cambers, 15 C. B. 563, 80 E. C. L. 561; Jessopp v. Lutwyche, 10 Exch. 614; Rosewarne v. Billing, 15 C. B. (N. S.) 316, 109 E. C. L. 316.
As early as 1857 the learned circuit judge-of this circuit held that a contract substantially like the ones under consideration was valid: Porter v. Viets [Case No. 11,291], So in Lenman v. Strassberger [Id. 8,216]; Judge' Woods, of the Fifth circuit, sustained a cause of action almost identical with this. But the most full and exhaustive discussion of the question which I have met, is found in the case of Clarke v. Foss [Id. 2,852], by the learned district judge of the Western district-of Wisconsin, and the doctrine of that case fully sustains the plaintiffs’ right of recovery in this case. To further discuss the questions raised here, after the full examination they have received in the two cases last cited, seems to me unnecessary.-
I therefore conclude that the contracts made by plaintiffs, in defendants’ behalf, were not options to sell or buy, but lawful contracts to deliver corn at a future day, upon which defendants might have been liable for tlie difference between the price at the time at which they sold and agreed to deliver, and the market price at the maturity of their contract. And if, by reason of thei