71 N.J.L. 401 | N.J. | 1904
The opinion of the court was delivered by
This is an action upon two checks given by the defendant to the plaintiffs. The defence was that they were given in substitution for other cheeks, and that the transaction originated in a gambling contract for speculation in stocks and cotton. The trial judge directed a verdict for the plaintiffs.
We hare not found it necessary to consider whether the cheeks were given in exchange for money or its equivalent, and the money used to take up other checks, or whether the whole series of checks is connected with the original transaction, for the reason that we fail to find any evidence sufficient to warrant a verdict that the original transaction was illegal.
The fact that the defendant was speculating does not prove he was merely dealing in differences. The fact that he bought on margin proves only that he bought in part for cash, in part oil credit. The fact that he bought options proves only that he made contracts for future delivery, which have never been condemned by our courts. The fact that the stock was never actually assigned to him does not prove that it was not intended to be assigned. All of these facts, taken together, show at most a speculation in stocks and cotton — in part for cash, in part upon credit — and they fall far short of proving that the intention was merely to deal in differences.
In all of the cases in this state in which the transactions have been held illegal, other circumstances were present.
In Flagg v. Baldwin, the decisive test was the enormous disproportion between "the extent of the transactions and the cash margin deposited and the fact that the purchases were known to the brokers to be far beyond their customer’s pecuniary ability, which facts corroborated Flagg’s testimony that there was not to be any act of delivery of stocks, and that he should not be required to pay for them.
In Minzesheimer v. Doolittle, 15 Dick. Ch. Rep. 394, the decisive test was the enormous disproportion between the
Similar facts, in Sharp v. Stalker, 18 Dick. Ch. Rep. 596, led the Vice Chancellor to draw the same inference.
In Pratt v. Boody, 10 Dick. Ch. Rep. 175, the fact that some stock was actually delivered was relied on by the Vied Chancellor as showing that the contract was not a mere dealing in differences, although the stock delivered bore but a small proportion to the total transactions. In this respect, the view of the Vice Chancellor was sustained by the Court of Errors and Appeals. Pratt v. Boody, 11 Id. 429.
The evidence in the present case did not show that the transaction was a mere dealing in differences. The defence therefore failed, and the plaintiff was entitled to have a verdict directed in his favor.
The rule to show cause should ho discharged, with costs.