The sun. [volume] (New York [N.Y.]) 1833-1916, 1877-11-27

durig ,r nb RpBEsoN's time. Then let II
proceed t. ~, .lsh The rotten and unncCc
siiy ,ou.cIn. II We build any more ships,
aud u,ci any motc steam machinery, let It's
do a. other nations do-givc the work out
10 contractors. and hold them responsible
fcy the designing and execution Of it. A bill
90. H.. a., M of the Bureau of Steam
rn.,,ncor,n..r. Department should
/. in'rolucei ,t on carly day. ,ad
pcn- r,' .aua . 90 be aNa.. y"
wager, on the Iutatc Price of Grain.
\ decision of considerable Importance,
lately rendered 10y the supreme Court of
Illinois. illustrates q tendency In American
commercial circles to ignore somo * the
Oldest and plainc-t rules of law, whore
speculation is concerned. Examples OF this
tendency occurred in New York some years
ago when brokers attempted to sell the
pledged stocks of their customers without
notice or authority. In the West, where
grain is the subject Of great speculative
transactions, contracts for its future dcliv-
cry at specified price are very common;
and tho cnsc TO which we refer arose out Of
several agreements OF this sort made in
Chicago and cNprcs .ly subject to the rules
and regulations of the Board vi Trade Of
that city
These rules and regulations provide for
margins and deposits on all time contracts.
Let Us suppose that the seller has agreed to
furnish the buyer with specified quantity
of wheat at a certain price. deliverable on
the first of January next. The market now
falls below the agreed price This, under
the rules. entities the seller to security from
the buyer. II is given by making n deposit
Of money with the treasurer OF the board or
some other chosen person. Tho amount
aars a prescribed proportion to the market
value Of the grain. II must be deposited
within the next banking hour after 1t l. de-
mandcd. But the rules go much further
than this. In such u case as we have sup
posed. ii the bI.yof fails to respond with the
required -ecurity in time the seller, 10y Civ
Ing p.otce to that effect, may consider the
Contract filled ut the prevailing market price
/ Of the wheat, and charge the buyer with the
difference between that value and the higher
price he has agreed to pay. Assume, for IN
stance, that he is to pay $3.50 a bushcl ON
the first of January. In the mean time the
price Of wheat has fallen to a dollar. The
|
buyer neglccts to comply with the demand.
Then. under the rules Of the Chicago Board
of Trade. the seller may treat the contract
a. though the time for delivery had now ar
| rived. and as though he had actually deliv-
cred the wheat. but received only dollar "a
bushel for it instead of $50; leaving him
with claim of fifty cents Il bushcl against
the buyer
The suit in which the Supreme Court of
Illinois has made the decision we have men
toned was brought to enforce precisely
such a claim a. this. \ firm in Chicago
bought ten thousand bushels of spring
wheat from another firm. deliverable at the
option Of the sellers during Il future month
at sl57i hu-hcl After the contract wa-
made the market price for spring wheat
began 10 fall below the price fixed by the
terms OF the agreement. until IT had de-
ciinrd TO sl.11l a bu-hel. The vendors de-
nandcd from the purchasers the deposits
for security to which they were entitled
under the rules Of the Board of Trade. The
purchasers neglected to furnish such depoS-
its. Thcreupon, the vendors elected 10 IT,
gard the wheat rs having been delivered ny
them and paid for at the rate of slllA a
bu-hel. and they charged the difference be-
tween that amount and Sl.j74 bushel. on
the whole quantity OF wheat. to the account
ot the purchasers They then commences
an action to collect this difference, and ia,
verdict OF the jury was in their favor.
The judgment has now been reversed i
we leave out Of view the Board of Trad,
rules. the seller could not recover agnir 1
tine buyer, when the time came for dover
ing the grain, without performing his part
Oi the agreement or Offering to perform 1t
He would have had TO tender the wheat aut
his cause Of action would not accrue until he
had done So, and the buyer had refused {
accept and pay for it, These propositions
are based on elementary rules in the law q
contracts. Now, it may very well be tina
parties, either through the adoption Of gen
cla rules applicable to their business in
particular city, or by stipulation otherwise
can lawfully agree that failure to furnish
certain security shall mature their con
tracts Mt once. 50 rs TO impose the neccssit,
Of Immediate performance. This is thu
. effect II the Chicago regulation allowing
one party 10 consider the contract as filled
upon the neglect OF the other to make TIN
requisite deposit "a security. But can the.
, 80 further, and by any valid agrcemcn
default without performing on his part. o
, Offering to performs Gould the seller, in tn
Illinois case. recover of the buyer the diner
cnce between the market price Of Sl.llI an
the contract price OF Sl.57A, without tender
ing the wheat, or at least showing that h
, had the ability to deliver it and was willin,
to do SOP
=, The supreme Court OF Illinois says No.
, rcfu-,s to sustain such contracts: First be-
cause an arrangement which dispenses wit
' a performances or an offer or a readiness l.
= perform, on behalf of the party seeking t
( put the other in default, Is not any contrao
$ at all; and secondly, because the Yer
p effort to do this gives the transaction th
t. nature of a gaming contract, Illegal /
g itself, injurious to trade, and immoral an
y pcrnicious in its tendency The fact that II
1 grain is offered or demanded in these case
# is mentioned rs evidence of the expcctJ
IA tion Of the parties to settle with each otl'
q on tho basis OF differences, when the tim