DocketNumber: Gen. No. 24,694
Citation Numbers: 217 Ill. App. 70
Judges: Barnes, Matchett
Filed Date: 3/9/1920
Status: Precedential
Modified Date: 11/29/2022
delivered the opinion of the court.
This is an appeal by defendant from a decree which set aside as void a judgment obtained by the defendant in the circuit court of Cook county for the sum of $1,319.35 on the 25th of October, 1915. The appellee alleged and the decree finds that the indebtedness for which said judgment was entered grew put of gambling transactions in grain contrary to the Criminal Code and was therefore void. Section 130 of that Code (Hurd’s Rev. St. 1917, p. 979, Call. 1916 Stat. ¶ 3733) provides:
“"Whoever contracts to have or give to himself or another the option to sell or buy, at a future time, any grain or other commodity, * * * where it is at the time of making such contract intended by both parties thereto that the option, whenever exercised, or the contract resulting therefrom, shall be settled, not; by the receipt or delivery of such property, but by the payment only of differences in prices thereof * * * shall be fined * * *, or confined in the county jail * * *, or both; and all contracts made in violation of this section shall be considered gambling contracts, and shall be void.”
Other sections provide that judgments entered upon such consideration shall be void and may be set aside by a court of equity.
The decree finds in this case, as the bill alleged, that in November, 1912, the defendant was a commission broker in Chicago dealing in grains, that the complainant about that time purchased from him 10,000 bushels of wheat, paying a margin of $250 and that after the market price of wheat fell below that margin the complainant paid an additional margin of $250; that at the time of purchase nothing was said between the parties concerning the delivery of said wheat or about the financial ability of complainant or his ability to store or use that amount of wheat; that at that time the complainant was worth not to exceed $5,000; was engaged in the drug business; had no use for that quantity of wheat or any wheat and had no means of handling it if the same was received by him; that he afterwards advanced a further margin of $250 on said wheat and gave a further sum of $250 for further margins on November 21, 1912, and on February 27, 1913, complainant advanced a further margin of $300, making a total of $1,350 paid by complainant as margins, and that when the market still further declined, complainant refused to pay further margins, and the defendant closed out said transactions; that from on or about November, 1912, until February, 1913, complainant purchased wheat from the defendant on "at least five different occasions, and on each occasion paid a margin of two or three cents a bushel, and on each occasion said transaction was closed by settling-in differences, and that in no ease did the complainant purchase or the defendant sell with the expectation of making delivery of such grain at the time purchased or at any other time, but solely with the expectation of settling in differences upon the market price upon the day of purchase and the day of sale; that in the fore part of 1914 the complainant purchased 40,000 bushels of wheat and paid as a margin $300; that said transaction was conducted like the former transactions and no conversation was had between the parties as to delivery; that the complainant owned no real estate, and was worth between $4,000 and $5,000 over and above his debts, and that consisted of his business as a druggist; that neither the defendant nor any one representing him made any inquiry as to the ability of the complainant to pay for 40,000 bushels of wheat, and defendant made no inquiry as to the complainant’s financial responsibility, except that upon one occasion he made inquiry of a commission broker with whom the complainant had previously traded and was informed by said broker that the complainant always paid his losses. That the defendant testified that he understood from such information that the complainant always paid the difference between what he paid for wheat and what he could get for the wheat at the time it was sold if the market went against him, and that he did not know whether or not plaintiff had access to any warehouse or elevators for storage purposes and that he was not interested in that matter; that the said last-mentioned transaction was settled upon differences, and thereby the defendant became indebted to the complainant in approximately $1,319.39, which represented the loss incurred by the complainant and for which the judgment described was entered against him.
As conclusion from this evidence the court found that at the time of making this transaction “neither party had any intention that delivery of the grain should be made, but it was the intention of both parties that the transaction would be settled on differences alone,” and further found as a conclusion therefrom that the transaction out of which the- indebtedness arose was a gambling transaction and void.
The rules of law to be applied in such cases are well settled. In order to invalidate a contract under the statute it must be proved that neither of the parties intended to deliver the goods, and that both had the intention, at the time of making the contract that it would be settled on differences. Cutler v. Pardridge, 182 Ill. App. 350. Contracts for the future delivery of goods are valid and not prohibited by the statute. Clews v. Jamieson, 182 U. S. 461. In considering the financial ability of the purchaser to take and pay for the goods, the value of the goods bought and delivered should be taken into consideration. Pelouze v. Slaughter, 241 Ill. 215. Settlements made on the Board of Trade by set-off and by ringing off, in so far as actual transactions are there represented, are valid and have the effect in law of a delivery. Cutler v. Pardridge, supra; Board of Trade of Chicago v. Christie Grain & Stock Co., 198 U. S. 236; Nash-Wright Co. v. Wright, 156 Ill. App. 246.
The real question to be determined is the intention of the parties, which intention may be established not only by the assertion of the parties to the transaction, but from the nature of the transaction itself, the method of carrying on the business and by all the attending circumstances. First Nat. Bank of El Paso v. Miller, 235 Ill. 135, p. 140. In Jamieson v. Wallace, 167 Ill. 388, p. 397, it is said:
“Among these circumstances, besides the mode of dealing between the parties, is the pecuniary ability of the party purchasing. If the purchases of a party, as ordered through a broker, are larger in amount than he is able to pay for, it is a strong circumstance indicating that there was no intention of receiving the property, but rather an intention to settle the differr ence between the market price and the contract price. ’ ’
And in the Miller case, supra, it is said:
“The question of intention is a question for the jury or the court, on a consideration of all the evidence.”
And it is competent, in determining such transactions, to take into consideration the previous and subsequent dealings of the parties, the nature of them, and the manner in which they were conducted. Gardner v. Meeker, 169 Ill. 40. If the understanding, express or implied, is that the transaction shall be settled by the payment of differences, it is a gambling contract and void. Pope v. Hanke, 155 Ill. 617; Pratt & Co. v. Ashmore, 224 Ill. 587, p. 591; Stewart v. Dodson, 282 Ill. 192, p. 196. In Pratt & Co. v. Ashmore, supra, p. 594, it is said:
“That the grain was in the City of Chicago, and that warehouse receipts were held by plaintiffs in error, or that the rules of the Board of Trade required the actual delivery of grain, is immaterial. If it was the understanding between the seller and purchaser that the final settlement should be made between them upon differences, the transaction was a gambling one, within the meaning of section 130, supra, and was absolutely void.”
If it is the purpose and the intent of one party to ■ use the legitimate forms of trading on the Board of Trade for the purpose of putting over an illegal transaction, and the other party knowing this lends his assistance in carrying out the purpose, the parties are accomplices in crime. Weare Commission Co. v. People, 209 Ill. 528, p. 542; Lamson v. West, 201 Ill. App. 251, p. 255; Pope v. Hanke, supra, p. 623; Irwin v. Williar, 110 U. S. 499.
It is suggested that the court failed to give due weight to certain evidence of defendant Booth which appears in the record, to the effect that he entered into valid contracts with fellow members on the Board of Trade for the amounts of complainant’s purchases, and relying on the orders of the complainant. These contracts were not produced upon the trial, but Booth testified that his books would show them and the parties to them. He admitted that he did not receive any grain on these contracts and they were closed before maturity.
It is urged that it is unbelievable that a broker would consent to enter into contracts with other members of exchanges which required delivery and receipts of commodities dealt in, and at the same time agree with the customer that as between him and the customer he should not be required to receive the commodities purchased on his order or to deliver what was sold by him. In this case the defendant’s commission on the transaction was only $60. That was all the profit he could make out of, it and i.t is claimed that it is very improbable that for such a small profit he would enter into valid contracts for large amounts enforceable by third parties against him. There are, we think, two answers to this contention. In the first place there is no evidence in the record as to what the intentions of these third parties with whom Booth contracted were nor whether the contracts entered into with them were valid or invalid. In the second place the course of dealing shows conclusively that the plan was that Booth should be protected fully by the margins which complainant was to advance from time to time. Booth’s principal duties apparently were to watch the markets and call for margins in time to make himself safe. If we are to hold that proof of outstanding contracts of this kind negatives circumstances tending to show illegal intentions and positive testimony to that effect, the statute would be practically unenforceable. While it is true in its finding of fact the decree ignores this evidence, we do not think the evidence of sufficient weight to enable us to say that the finding of the chancellor is clearly and manifestly against the weight of it.
The decree will be affirmed.
Affirmed.
Mr. Justice Gridley concurs and Me. Justice Babees dissents.