Case ID: nys_14/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "Lawrence, J. \n      Daniels, J., Van Brunt, P. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Dwight et al. v. Badgley.
    
      (Supreme Court, General Term, First Department.
    
    May 15, 1891.)
    1. Evidence—Relevancy—Similar Transactions.
    Where the defense to an action is that the transactions from which the cause of action arose were in contravention of statutory provisions against wagers and gaming, proof of former similar transactions, alleged to be in like manner illegal, is not competent.
    
      2. Same—Competency—Intent.
    A question to a witness as to his intention and the intention of another party to certain contracts in making such contracts is properly excluded, the witness being incompetent to testify to the intention of another.
    3. Custom and Usage—Evidence.
    A question to a witness as to what was the general custom in regard to certain transactions is not admissible before the existence of such a custom has been established by evidence.
    4. Evidence—Competency—Intent.
    In an action on an account for goods purchased, etc., by plaintiffs for defendant, the defense was that the intent of the parties was not to make any actual sale or delivery, but that differences between the market value and the contract price should be paid, and that the transactions were mere wagers, contrary to statute. Held, that testimony by defendant as to his intention and understanding that none of the property should be delivered to him, but that the difference in the market price should be adjusted between the parties, was admissible.
    Following Kenyon v. Luther, 4 N. Y. Supp. 493,10 N. Y. Supp. 951.
    Van Brunt, P. J., dissenting.
    Appeal from circuit court, New York county.
    Action by John H. Dwight and James F. Gillette against Howard G. Badgley. Defendant appeals from a judgment for plaintiffs, entered on the verdict of a jury, and from an order denying a motion for a new trial.
    Argued before Van Brunt, P. J., and Daniels and Lawrence, JJ.
    
      Leavitt & Leavitt, (Edwin R. Leavitt, of counsel,) for appellant. Wolff & Hodge, (Robert Sewell, of counsel,) for respondents.
   Lawrence, J.

The complaint alleges that the defendant is indebted to the plaintiffs in the sum of $1,997.50 upon an account for certain goods purchased, services rendered, and moneys advanced between certain specified dates; that payment of said sum has been duly demanded, but that no part thereof has been paid. A bill of particulars showing the account between the parties follows the complaint in the printed case, by which it appears that the amount claimed by the plaintiffs is due to them. The defendant, in his answer, denies, among other things, any indebtedness to the plaintiffs, and avers as an affirmative defense that the plaintiffs at the times mentioned in the complaint were not dealers in the merchandise mentioned therein, nor had they possession or control thereof. Also “that at the times mentioned in said complaint, any and all transactions mentioned in said complaint, between these plaintiffs and this defendant, were had with the intent of the parties hereto not to make any actual sale or delivery thereof, but at maturity of the said contracts or transactions that the difference between the market value and the contract price should be paid by one party to the other. That the market price of such merchandise at the maturity of the contracts was at the times of making the contracts contingent and uncertain; and that the contracts were mere wagers on the future market price thereof, and contrary to the statute.” The learned justice before whom this cause was tried at the conclusion of the evidence of both parties directed a verdict in favor of the plain tiffs for thesumof $2,357.05 which verdict the defendant’s counsel moved to set aside as contrary to law. He also moved for a new trial upon the minutes, and upon the exceptions taken, and upon all the grounds stated in section 999 of the Code of Civil Procedure. This motion being denied, the defendant’s counsel excepted.

We will consider the exceptions taken by the defendant’s counsel in the order in which they appear in the case. On the cross-examination of Mr. Hodge, the broker of Dwight & Gillette, through whom the sales and purchases for the defendant were effected, the witness was asked this question: “Was that wheat ever delivered to Mr. Badgley?” It appeared by his previous testimony that prior to the transactions involved in this action the witness had other transactions with Mr. Badgley, the defendant, on account of the firm of Dwight & Gillette, the plaintiffs. We think the ruling of the learned justice was correct. In this case it is sought to stamp a transaction as illegal as being in contravention of the provisions of the Revised Statutes against wagers or gaming. The statute is penal in its nature, and the burden of proof is upon the defendant to establish the illegality of the-contract. Story v. Salomon, 71 N. Y. 420. Even 'if the parties had been guilty of entering into illegal contracts prior to the transactions upon which this action is based, as the plaintiff is entitled to the strictest proof in this case, we think that proof of former transactions alleged to be illegal, not embraced within the times specified in the bill of particulars, was not competent. The next exception was to the exclusion of the question as follows: “Question. At the time of making these contracts for the purchase of this wheat and corn, was it not your intention and the intention of Mr. Badgley to adjust the differences between the market price in buying and the market price in selling?” The exception was not well taken. The question was too broad. It called not only for the intention of the witness, which might have been admissible, but also for the intention of the defendant. As to the defendant’s intention the witness was clearly incompetent to speak. . The exception to the ruling as to what was the general custom as to the delivery of the wheat or corn cannot be sustained for the reason that no such custom is pleaded, and because no evidence had been given tending to show that the parties had any knowledge of such custom, nor that any general custom existed in relation to such transactions as are involved in this controversy. The establishment of the existence of a general custom by evidence should have preceded the question which was put to the witness, and before such custom was established the witness could not properly be called upon to give a.statement as to what the custom was. Harris v. Tumbridge, 83 N. Y. 93. The observations just made, apply with equal force to the exception upon disallowing the questions to the defendant, Badgley, as to his transactions with the plaintiffs prior to December 30, 1886.

The question put to the defendant as to his intention and understanding that none of the grain should be delivered to him, but that the difference in the market price should be adjusted between the parties, should, we think, have been allowed. While the answer to it would not have conclusively shown what the intention of the plaintiffs was in entering upon the course of dealings with the defendants referred to by the witness, it in valved an answer which the defendant was entitled to have, presented to the jury, and which might have aided them in determining what was the real intention of the parties. Peck v. Wright Co., 10 N. Y. Supp. 401; Kenyon v. Luther, 4 N. Y. Supp. 498, and cases cited. The case of Kenyon v. Luther, supra, decided by the general term of the fourth department, is directly in point. That was an action brought to recover for commissions earned and losses sustained by plaintiffs under a contract with the defendant for the sale of a large' amount of wheat. The defense set up was that such contract was intended as a cover for a gambling transaction, and that it was illegal and void under the statute. Upon the trial, the defendants were asked directly whether they intended at the time to purchase or hold any wheat, or to sell any wheat: or whether it was their intention to tender or call for the grain, or to settle the difference between the price at which it was sold and the market price at the future day. The questions calling for the intention of the defendants were objected to by the plaintiffs’ counsel and the objections were sustained. Upon appeal it was held that the exclusion of the questions was error, that the defendants were entitled to show what their intention was, and that such evidence should have been submitted to the jury. Upon a subsequent appeal, after a verdict had been rendered in favor of the defendants, the court ailirmed the judgment. .See 10 21. Y. Supp. 951. For the error of the learned justice in excluding this question, we are of the opinion that the judgment should be reversed, and a new trial ordered, with costs to appellant to abide event.

Daniels, J.,

(concurring.) If the question as to the defendant’s intention had been answered it might have been followed by further evidence indicating the intention of the plaintiffs to have been the same. But without an answer to this question it would be useless to offer to make such further proof. If the answer had been taken the defendant might also have been in a position to submit the further inquiry to the jury, from the course of the dealings concerning the subject in controversy, whether that was not also the intention of the plaintiffs. By excluding the answer the defendant was not only deprived of this position, but the evidence, if it could have been given, of the intention of the plaintiffs, was rendered wholly inoperative. In this class of cases all pertinent evidence should be received, to discover the true nature of the transactions. The design generally is to avoid exposure and evade the law, and that should be prevented when it can be done by receiving in evidence all pertinent answers having the effect of disclosing the true nature of the transactions. I agree witli Mr. Justice Lawrence that there should be a reversal of the judgment and a new trial.

Van Brunt, P. J.,

(dissenting.) Although I agree that it was error to exclude the question as to what the defendant’s intentions were, such error in no way injured the defendant, because, in the absence of proof that the plaintiffs had a similar intention, the defendant’s intention would not make the contract void. It is true that an attempt was made to prove what the intention of the plaintiffs was, but not by competent evidence. The defendant not sustaining any injury by the exclusion of the question relating to his own 'intention, the judgment should not be reversed because of that error. I think therefore that the judgment and order should be affirmed with costs.