12 Ind. App. 38 | Ind. Ct. App. | 1894
On the 2d of September, 1891, the appellee commenced this action against appellants on a note executed by appellants to appellee on the 11th day of October, 1882. The appellants answered in two paragraphs.
The first paragraph is a general denial.
The second paragraph is as follows:
“The defendants, for further answer to plaintiff’s complaint, allege that at the date of the execution of the note sued on herein and for more than one year previous thereto, the defendants, under the firm name and style of Nave, Allen & Co., were engaged in a general grain and warehouse business in Attica, Indiana, and were also engaged in speculating in grain, such as wheat, oats, corn and other things, on what is commonly called margins, options or futures, by which they gamed upon the future price of such articles, and paid, or secured at a future day, the difference between the price of the article then and at the date of the contract, of which last named business, and the character thereof, the plaintiff well knew, and, with such knowledge, engaged with defendants, the said Nave, Allen & Co., to make deals of said character for him, plaintiff, in the name of said Nave, Allen & Co.; that the said Nave, Allen & Co., in pursuance of said engagement, and under the authority and direction of plaintiff, made numerous deals or trades of the character aforesaid, for plaintiff, with parties operating upon the board of trade in the city of Toledo, Ohio; that said transactions continued from the 17th ■day of February to the 11th day of October, 1882, the said Nave, Allen & Co., during said period of time, mak
On the 11th day of October, 1882, all of said transaction having been closed, settled and adjusted in manner and form agreed upon as aforesaid, and none of said grain having been paid for nor delivered, the plaintiff and the said Nave, Allen & Co. had an accounting between themselves with reference to said speculating contracts and transactions, as aforesaid, and it was found that upon the basis, estimates and calculations agreed upon and understood by them, as aforesaid, and the allowance to said Nave, Allen & Co., of one-fourth of one per cent, as their compensation for transacting said business, as aforesaid, and which had been agreed upon at. the time of making said pretended sales and purchases,
The demurrer of appellee to this paragraph was overruled and a reply of general denial filed. A trial by jury resulted in a verdict for appellee for $2,675.
Appellant’s motion for a new trial was overruled and thereupon judgment was rendered on the verdict.
The error assigned by appellants is: That the court erred in overruling appellant’s motion for a new trial.
The only cross-error assigned by appellee is:
“ The court erred in overruling the demurrer to the complaint.”
Through inadvertency, counsel have evidently made a mistake in the assignment of the cross-error. There was no demurrer to the complaint. The only adverse ruling against appellee was the overruling of the demurrer to the second paragraph of the answer. The only question, therefore, presented for our consideration arises on the error assigned by appellants.
It is earnestly contended by counsel for the appellants that the verdict of the jury is not sustained by the evidence.
We have carefully read the evidence, in the light of the argument of counsel, and can not escape the conclusion that it proves in substance and without conflict the material averments contained in the answer. It clearly appears that appellee started out with the intention of gambling on the price of grain, and employed appel
Now what is the law applicable to this state of facts? The rule, as stated by Judge Mitchell in Sondheim v. Gilbert, Ass’nee, 117 Ind. 71, is as follows:
“While contracts for the sale of property to be delivered in the future are valid, when the parties, or either one of them, actually contemplate a delivery of the sub
In Harevy v. Merrill, 150 Mass. 1, the court says:
“It is now settled here, that contracts which are void at common law, because they are against public policy, like contracts which are prohibited by statute, are illegal as well as void. They are prohibited by law because they are considered vicious, and it is not necessary to impose a penalty in order to render them illegal. Bishop v. Palmer, 146 Mass. 469; Gibbs v. Consolidated Gas Co., 130 U. S. 396. The weight of authority in this country is, we think, that brokers who knowingly make contracts that are void and illegal as against public policy, and advance money on account of them at the request of their principals, can not recover either the money advanced or their commissions, and we are inclined to adopt this view •of the law. Embrey v. Jemeson, 131 U. S. 336, ubi supra, and the other cases there cited.”
Counsel for appellee do not controvert the legal proposition enunciated in the authorities hereinbefore cited but deny their application to this case. They insist that appellants were the appellee’s agents. Counsel then say: “And we affirm the law to be, that when a principal in carrying on an illegal businees, by or through an agent, and money arising from, or growing out of the illegal
The general rule is well settled that where an agent receives money for the use of his principal, he can not be heard to say when called to account that the transaction between the principal out of which the money grew was illegal.
In this case, however, if it is conceded that the relation of principal and agent existed between appellants and appellee, the principal and the agents were so intimately connected with the illegal business- in promoting and carrying it foward that they all became tainted with the vice of the business. In the language used in Lemon v. Grosskopf, 99 Am. Dec. 58. “It was as well a part of his agency to receive and account for the money as to sell the tickets.” In this case it was as well a part of the agency of appellants to receive and account for the profits as it was to make the deals. In this connection we quote from the decision in Pearce v. Foote, 113 Ill. 228, as follows:
“The agreement, as the trial court was authorized to find it, is, that Hooker & Co., contracted to give plaintiff the privilege to deal in options with or through them, and, if there was a loss, plaintiff was to pay it to them, and ‘if there was a gain,’ Hooker & Co., were to pay it to plaintiff, and for their services they were to be paid a commission. The suggestion that Hooker & Co., merely acted as agents for the plaintiff in these unlawful transactions may be rejected at once as having nothing in its support. There is and can be no such thing as agency in the perpetration of crimes or misdemeanors, or, indeed, in the doing of any unlawful act. All persons actively participating are principals.”
Counsel for appellee rely on the following cases to supportjtheir position: Wright v. Hughes, 13 Ind. 109; City of Indianapolis v. Skeen, 17 Ind. 628; United States Express Co. v. Lucas, 36 Ind. 361.
The cases cited, as we view them, do not sanction the recovery of the money in controversy by legal proceedings. In those cases there had been some unintentional omissions in an honest effort to comply with the law while in this case there was no unintentional omission in an honest effort to comply with the law; but, on the contrary, the appellee engaged with and through the appellants in a gambling enterprise, which is held by the law to be illegal and void as against public policy, because of its vicious and demoralizing tendencies. In cases of the class last cited, to hold that the agent is not bound to account for the money received by him would be to sanction acts of the grossest dishonesty and bad faith on the part of the agent without the accomplishment of any benefit to any one or to the public; but in cases of the class of the one now under consideration, for the courts to hold that one of the parties who enters into a gambling transaction through another can recover the winnings, on the theory that the relation of principal and agent, exists, would be to encourage vicious and demoralizing practices.
In other words I apprehend the rule to be this, if A and B enter into a wagering contract, and B pays the wager to 0, who was not connected with the original illegal transaction, to deliver to A, he can recover the money in an action against C, or where, in an honest effort to comply with the law, there has been an unintentional omission which renders the transaction illegal and there is no moral turpitude, as the result of which,
See State v. Tumey, 81 Ind. 559; Reed v. Dougan, 54 Ind. 306.
Judgment reversed with instruction to sustain appellants’ motion for a new trial.