Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-02-13
THE COURTS.
United states Circuit Court.

United States Circuit Court, Minnesota DIS
trict. February, 1SS1-John Wann VS.. L. II.
Kelly.
Case tried before the court without jury
z ilman & Clough for plaintiff; W. t. warner
or defendant.
This action is brought by the plaintiff
Wann, against defendant, Kelly, to recover
money paid to the latter for the plaintiffs use.
The facts developed are these: The plaintiff
and defendant and Z. B. Gibbs agreed to engage
in speculation by the sale and purchase, or
purchase and sale, it is immaterlal which, of
300 shares of Northern Pacific railroad stock
on their Joint account, each to be interested to
the extent of 100 shares. The TRANSACTION was
determined upon and agreed to by the parties
in the belief that the stock would depreclate
in the market, and by "selling Short they
would be able in the future to purchase so as
to make profit upon the whole transaction,
called by stock jobbers ''the deal"
The plaintiff claims it was agreed that Kelly
should manage the speculation and
through his broker in New York sell 300
shares Northern Pacific railroad stock, which
was done November and IL, 1879, and after
wards when a depreciation in the price OF the
stock reached two points or 81 per share, he
should order the broker TO purchase 500 shares
of the stock and thus close the venture, and
pay over to each his proportion of the profits.
The evidences hows very clearly that the ar
rangement contemplated in fact no contract OF
actual sale or purchase, but the contrary
the intention and design was that, as between
themselves and the party with whom they
dealt, all differences in the price of the stock
at the time of the supposed contracts should
be paid by one party TO the other as perform
ance and satisfaction thereof. There were no
actual bargains for the sale of the actual stock,
but mere bets or wagers on the future price,
rambling transactions on the chance of future
rise or fall
Kelly claims the deal closed November
10, 1879, when there was depreciation OF
two or more points showing profit of S647,
and that he has paid the plaintiff his portion
one-third of that amount.
Wann admits the receipt Of $215.66, but
claims that the "deal" was not closed until
November %, 1879, when Kelly actually real
lied and received profit of s., 600 and that he
is entitled to one-third OF this amount, which
Kelly received for him.
The broker in New York did not close up
the speculation until Nov. %, as appears by his
statement rendered Kelly, for whom he acted,
and the only person known to him in the bus
mess, at which time the profit realized was the
sum before stated.
Kelly claims that he was authorized by his
arrangement, which was agreed to by Gibbs
and plaintiff, to carry the ''deal' on his own
points by paying each of them the profit re-
sulting from such decline, and could close
them out in that way.
Such is not the arrangement disclosed by
the evidence II was not possible for Kelly to
close I'D the transaction with Wann and Gibbs
unless by their consent until he notified the
New York broker to close the deal and that
he would take the profit which resulted from
the speculation at the time, whether the de-
cline was two or more points.
AS the broker did not close the ''deal'' until
November 90, 1879, if the plaintiff is entitled
to recover anything 1t will be upon the basis
of the profit paid Kelly then. The testimony
of Kelly shows that the three parties were in
terested to the extent of one third each in the
venture, and the statement rendered Wann
purports to be based upon the close of the
''deal'' by the New York broker November 19.
Kelly thought he could carry the speculation
for his own benefit and at his own risk after
profit of two points was reached, but the ar
rangement as testified to by all the parties to
it would not permit him to do so.
It is urged by Kelly that the business in
which the parties engaged was contrary to
public policy and illegal, and therefore he can
retain all the profit which resulted therefrom
without recognizing his associates jointly in
terested, and that a court will not enforce the
plaintiffs claim. Such is not the law. The
agreement between tle pdIticS Itldtcu W d
single transaction, and when the business
closed and Kelly received the profits he was in
duty bound to pay over to the plaintiff his part
of If.
If the speculation was contrary to public
policy and illegal, it had been closed-wound
the illegal object of it had been accom-
plished.
It is settled by the United States supreme
court (McBlair VS.. Gibbes, II Howard 237;
Brooks vs. Martin, 2 Wal. roland authorities
cited) that when the illegal contract is com
pleted and money has been received by joint
owner by force of the illegal contract he will
not be permitted to retain it, and cannot pro-
tect himself by setting up the illegality of the
transaction in which It was paid him, but must
account to his associates.
It is also urged by the defendant that plain
tiff, if entitled to a share Of the profit, can
only enforce his claim in equity. think that
as the defendant agreed to manage
the business and pay over to each mis- proper
ton of profit, an action at law gives adequate
acknowledgement will be entered in favor of the
plaintiff for S45l, and interest from Nov. %,
1879 Costs must be paid by the plaintiff.
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