Dempsey v. Harm

OPINION by

Me. Chief Justice Gorudon :

On tbe 4tb day of March, 1883, H. B. Huff and J. A. Ege, doing business as Huff Brothers & Company, executed to Mrs. M. A. Harm a certificate of deposit, payable with interest, in one year after date, in tbe sum of $3,000. Some time in May following Mrs. Harm transferred this certificate, as collateral security, to cover differences or margins in tbe purchase and sale of oil, to N. D. Preston, who in turn, on tbe 20th of tbe same month, assigned it to S. G. Slike, tbe plaintiff below. Again, on tbe 28th of June then next, Mrs. Harm, for an alleged valuable consideration, assigned all her right, title and interest, in and to tbe said certificate, to Huff Brothers & Company.

Now, tbe paper in controversy not being negotiable, tbe transferees of tbe original parties must depend upon tbe equities of those from whom they claim title, unless these transferees have some new and independent equity of their own. If, indeed, Slike was an innocent purchaser for value, and if of this fact Huff Brothers & Company bad notice, be would as against them be entitled to recover at least tbe amount which be paid to Preston for the paper.

How then stand tbe original parties: Preston and Mrs. Harm ? Clearly, if Preston is to be believed, be was a bolder without consideration. He says: “She was to give me these certificates of deposit, and in case her oil rendered a profit I was to return tbe certificate of deposit, so that tbe interest should not be broken; and in case tbe market should decline to a place where tbe certificates were eaten up, it was to be my property. They were to become my property if they were nearly taken up by tbe decline, and in case tbe oil rose I was to return ber certificates. If oil advanced so that sbe could settle up, I was to give ber money for ber profit and give ber certificates back again, wbicb I bad done on former occasions.”

This was clearly gambling upon tbe price of oil; as be says afterwards a dealing in differences, wbicb, as we bave repeatedly ruled, is a transaction of sucb a nature as cannot be sustained in a court of justice. It follows that tbe court made a mistake in excluding tbe defendant’s offer covered by tbe eigbtb assignment; for any and all evidence tending to show tbe real character of tbe transaction ought to bave been admitted.

It was also error to instruct tbe jury that Preston bad testified that Mrs. Harm bad transferred tbe certificate to him for a valuable consideration, for bis evidence shows very clearly that tbe consideration was illegal and void. Nor was it less erroneous to charge as follows: “Now, gentlemen, you would bave no great difficulty, from tbe evidence of this witness alone, in arriving at tbe conclusion that Preston was tbe owner of tbe certificate.” On tbe evidence “of this witness alone” tbe instruction should bave been that Preston was not tbe owner of this certificate, but a mere bailee for Mrs. Harm.

What has been said sustains the eigbtb, ninth, eleventh, twelfth, and thirteenth assignments; tbe first, not being founded on an exception in tbe court below, we refuse to consider, and tbe others are not sustained.

Tbe judgment is reversed and a new venvre ordered.