Case ID: monaghan_2/html/0032-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Myers v. Tobias.
    I11 an action brought by a broker against his principal, to recover the loss on a transaction carried on by margins, in which the defense is that the contract was a gambling contract, the testimony of the defendant, that his means were inadequate to carry the contract into effect as a sale, is admissible as evidence, which, though not conclusive, may be taken into view in determining whether his intention was to buy.
    Jan. 23, 1889.
    Error, No. 176, July T. 1888, to C. P. No. 2, Phila. Co., to review a judgment on a verdict for defendant in an action of assumpsit, by Theodore W. Myers and Edward IT. Myers, trading as Theodore W. Myers & Co., against Joseph Orlando To-bias, at Sept. T. 1887, No. 30.
    The plaintiff’s statement averred that, on various dates, specifying them, the plaintiffs had loaned the defendant certain sums of money, by transmitting such sums to Tufts & Walker, of Chicago, for him and at his request, and his promise to repay it. The defendant pleaded non assumpsit. On the trial, the defendant contended that the contract was a gambling transaction in the purchase of corn on margin, in which plaintiffs had acted as brokers for defendant.
    Mr. Tufts, of Tufts & Walker, was called asa witness for plaintiffs and explained the manner of purchasing to be that they gave a written paper to parties carrying large quantities of corn, confirming the purchase of a certain quantity of corn, deliverable in May, at a price named, and the same parties gave them a paper confirming the sale. By the custom of trade, deliveries under such contracts are made on May 1st, and the contract obliged the parties to have the corn ready for delivery on that day, and obliged Tufts & Walker to take it and pay the price on that day. The parties knew only Tufts & Walker in the transaction, and they were brokers for Tobias and Angelo Myers, father of the plaintiffs. In February, 1887, Angelo Myers and Tobias requested their account to be split. It was accordingly done. Myers took his share of corn on May 1, but the defendant, after depositing margins to cover the transaction, ordered his purchases sold April 28th. This was done at a considerable loss. The purchasers demanded delivery of the grain and warehouse receipts for the same were accordingly delivered to them.
    When the defendant was on the stand, he was asked this question, in his examination in chief: “ Q. What were your means at that time ? ” Objected to. Objection overruled and exception. [ 1.]
    The defendant then testified: “ My means were not sufficient to purchase fifty thousand bushels, and I think plaintiffs were familiar with that.”
    In rebuttal, one’ of the plaintiffs testified: “ I always understood that the defendant was fairly well off.”
    The court charged as follows:
    “The plaintiffs are brokers in New York. The defendant was in no business. The father, Angelo Myers, suggested to Tobias that they should purchase one hundred thousand bushels of corn in Chicago; that grain would rise and they could make some money. Tobias consented, and Edward Myers was directed to purchase. Myers & Co. purchased forty thousand at one time, and ten thousand at another time, and fifty thousand at another.
    “ Theodore and Edward Myers had correspondents in Chicago and had an understanding of the terms upon which they were to act. In pursuance of this understanding, the corn was purchased in their own name and charged to Myers & Co., for the account of Myers & Co. It is not certain that Tufts & Walker were known to act as agents and they purchased as principals. As Tufts & Walker were the only people who were liable to the people from .whom they bought the grain, Myers & Co. were liable to Tufts & Walker. Originally this was on joint account, but at a certain time it was split and charged severally to Tobias and Angelo Myers.
    “ The brokers in Chicago and New York were not willing to trust to the responsibility of the purchasers, and required a margin so as to avoid a loss; and they consequently transferred to Tufts & Walker some five thousand which they (Myers & Co.) had in their hands belonging to Myers and Tobias. Corn began to fall. The corn was deliverable in May. If com fell, the purchasers would lose; if it rose, they would gain. The twenty-five hundred was not sufficient to cover the loss; a demand was made for further margin on Tobias. In April the .corn declined so as to absorb all the money put in by Tobias. The price of the corn was nearly $25,000,. and after deducting the $4,000 advanced by Tobias he became liable for the difference, about $20,000. • Whatever was the purpose of Tobias, whether to have it delivered or to wager on the price, the subsequent purchasers really had it delivered; but, because it so happened with them, it does not follow that Tobias & Myers had such intention. There is nothing in law forbidding a contract being made on December 31st deliverable in May. Such contracts are sometimes used as a cover as a gambling transaction. On the other hand, it does not follow that such is the case. It may happen that a man may buy deliverable at a future time. If a man says, ‘ I will bet you corn will not rise between this and May 1st as much as it may fall,’ that is gambling, and it is more objectionable than some other gambling. Since the law forbids a naked bet, it also forbids such a contract; it is unlawful and cannot be enforced.
    “ The question whether it was a wager is for you. It is quite possible for a man who wants to buy corn to go to a broker, and the broker to buy of another person. In all that there is nothing, if the purpose is to carry out; but if it is the man’s purpose notto get the corn, but to wager on the price of the corn, it is a bet. It does not appear that Tufts & Walker dealt specifically in grain. The two parties in contract were not dealing in grain. Tufts & Walker did not communicate the names of their principals to the persons from whom they bought. They charged themselves to Myers & Co. as the sellers, Myers & Co. being responsible, and Angelo Myers and Tobias became answerable for them. If they^were answerable to Tufts & Walker they could enforce the contract.
    “ Another circumstance is whether the means of the parties is competent to carry it out. If it is gambling, it is necessary for the person to have a sufficient margin to cover the decline; but if he intends to buy the corn, he must have sufficient means to pay for it. The defendant says that all he has in the world was the cash which was used in margins. I do not see any evidence of unfair dealing on the part of the plaintiffs. As far as I can see, they carried out the contract, although the defendant was disappointed; but, at the same time, certain contracts are not to be enforced which are against public policy, such as gambling, which cannot be enforced.
    [“ It has been held by the supreme court, that, in considering the nature of such transactions, regard may be had to the means of the alleged purchaser, and that, if these are inadequate to carry the contract into effect as a sale, it is a circumstance which, though not conclusive, may be taken into view in determining whether his intention was to buy. The defendant says that all he had in the world was not sufficient to pay what was to be given for this corn on the first of May.' This may also be taken into consideration by the jury as throwing light on whether his intention was to buy.’"]
    Verdict and judgment for defendant.
    
      The assignments of error specified, 1, the ruling on the evidence, quoting the question and ruling but not the answer; 2, the portion of the charge within brackets, quoting it; and, 3, the action.of the court in entering judgment for defendant, because there was not sufficient evidence that the contract was a gambling one.
    
      Rudolph M. Schick, for plaintiff in error.
    The contract was a legal one on its face. Smith v. Bouvier, 70 Pa. 325 ; Maxton v. Gheen, 75 Pa. 167. .
    The fact that the contract was sold, on April 28, does not justify a conclusion that it was in its inception a wager. Fareira v. Gabell, 89 Pa. 90.
    Moreover, the contract, having been made several by the agreement of the parties, Angelo Myers, who joined with the defendant in this contract in its inception, did actually take the corn under his contract on the first of May. Clearly, therefore, as to this part of the contract, there is no possibility of adjudging it a wager; but if it was good in part, it was good as to the whole. If there had- not been this severance of the contract, and Angelo Myers had taken the whole of it, and the state of the account had been such that a balance was due plaintiffs, surely defendant could not have defended as to his liability that he had intended a wager.
    Aside from the single circumstance that defendant was not engaged in the corn business, there was not anything in the case, at the time the offer, of which we complain, was made, to afford the slightest suspicion that the parties intended only a wager. In Kirkpatrick v. Bonsall, 72 Pa. 155, when the offer was made, the defendants, besides showing that Bonsall was not a refiner of oil, and therefore would not need the oil for his own consumption, had shown that he had not sold the oil when he demanded its delivery, and had no contract of his own to fill, and also that he did not intend to call for the oil if it had gone below the contract price.'
    But there is one distinction between the case at bar and Kirkpatrick v. Bonsall more important still. In that case, the brokers were defendants, and the customer was plaintiff. The defendants had set up gaming as a defense, and their plea was conclusive, as against them, that they intended only a wager on the price. Therefore, if they could show that their customer had a similar intent, the issue would be established in their favor. But, by the answer to this question, if the inferences be drawn from it that the defendant wishes to have drawn, it establishes only the intent of the defendant, and that is clearly immaterial unless the existence of a similar intent is shown to exist in the minds of the plaintiffs. Fareira v. Gabell, 89 Pa. 89, 91.
    Feb. 4, 1889.
    
      Thomas R. Elcock, for defendant in error,
    not heard. — The evidence as to defendant’s means was properly admitted to throw light upon the intention of the parties. Kirkpatrick v. Bonsall, 72 Pa. 155-
   Per Curiam,

The question whether this was a gambling transaction was fairly submitted to the jury and they have found that it was. The plaintiff complains of two things, (a) that the defendant was permitted to testify as to his means, or, to state it more accurately, his impecuniosity, and (b) that the court instructed the jury that, “in considering the nature of such transactions, regard may be had to the means of the alleged purchaser, and that if they are inadequate to carry the contract into effect as a sale, it is a circumstance, which, though not conclusive, may be taken into view in determining whether his intention was to buy.” As both the admission of the testimony and the charge referred to are fully sustained by Kirkpatrick v. Bonsall, 72 Pa. 155, we see no occasion for a discussion of this case.

Judgment affirmed.