Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1884-02-14
THE NORTHWEST.
lorignsll
OPTION CONTRACrS-ARE THEY
LEGAL2
tconunued.l

[Continued.,
Justh vs.. Holiday, XI Wash. Law
Rep, AIS, is u case decided in the Su-
preme Court of the District of Column
.bia, in 1888. II was an action on q
note given by the late Gen.
Geo. A Custer and endorsed by the de-
I iendant Holiday. The estate of Gus
; her, which was insolvent, had paid on
( the note S926.00, and suit was brought
against the endorser for the balance,
over 81 900. In addition to the pleas of
non assun,psa and nil de6et, and that
there was no valid consideration, the
defendant interposed the plea that the
note was given for differences arising
from future delivery or option con-
tract where no delivery was contem-
plated and that the consideration was q
wager or stock-gambling one. The
court, In the syllabus, held: "When u
contract is made for the delivery or
acceptance of securities at future day,
at price named, and neither party at
the time of making the contract, in
tends to deliver or accept them, but
merely to pay differences according to
the rise or fall of the market, the con-
tract Is gambling one and is void as
contrary to public policy" The court
further held, that "the real question for
determination is the bona tdes of the
Transaction" and that ''it is not the
form but the intent with which the
scheme was planned"
Does the statute of Ohio, o. l.. Vol.
T9, p. lis, make option contracts illegal
or void merely? The statute reads:
1whoeyer contracts to have or give to himself or
another the option to sell or buy Ut tutule time,
any grain or 0thtr commodity, or
attempts to do SO snail oe nned
Of this section shall be considered gambling con
tracts, and shall bs void"
Spurgeon VS.. McElwain, 6 o., 442, was
an action brought by the plaintiff to re-
cover for labor performed in erecting a
nine-pin alley for the keeper of a public
house. The statute (Chase, p. l74O, sec.
y which at that time forbid under pen
atty any keeper of o public house keep
ing nine-pin alley, was plead as de-
tense. The court sustained the defense.
Lane, j., remarked: 1.-THE principle is
of general application that contracts
contrary to sound morals, public policy,
or forbidden by tau, will not be exc
cuted by courts of law. Although the
rule is plain and definite, difficulties
sometimes arise in its practical applica-
Hon. If an improper use be made of
goods innocently sold, or if the results
Of honest labor be devoted to improper
purposes, the agent or the vender ought
not to be visited with the penalty; yet,
If they intend to assist it in the illegal
act, they are parties to its unlawfulness,
and deserve no aid from the law.'
In Bloom VS.. Richards, 2 o. S. 1916.
Thurman, j., says: "The general prop
Ssition that contract, made in viola
ton of statutory prohibition, is void,
is not controverted. And that the ap-
plication of penalty, for the commits
sion of an act, is equivalent to an ex-
press prohibition of such act, seems to
be settled by great weight of author
fty."
In Musser's Exir VIZ. Chase, 20 o. S.,
sS2, McIlvain, j., says: ave fully rec
ognize the principle that no action aris-
es on a transaction prohibited by law.
: To the same effect, sees o. S., 25l;
33 o. S., 25l; 36 0. s., 442.
II. The execution of a nromisory note for q
stock gambling dent does not preclude inquiry into
nor cure the illegaity of the consideration.
In Swan vs.. Scott, supra, the court
say: "The test whether demand con.
nected with an illegal transaction can
4 be enforced at law, is whether the plain
tiff requires the aid of the illegal trans
action to establish his case" This i'll
quiry cannot be limited to the paper
upon which suit is brought, as it will
not be questioned that the consideration
of q promisory note can be inquired in.
10. While note is prinsa .tdcie evil
dence of liability, it certainly does not
preclude the defence that it was given
for an illegal consideration any more
than it would preclude the defense Of
g,uduae pactuns.
Morris Run Coal Co. vs.. Barclay Goa
Co., 6S Penn. ST., 173, was an action on
notes given by the defendant in pursu
ance of q contract between five Goa
companies in reference to the mining
shipping and sale of coal. The contrac
was declared illegal on the ground o
public policy, and the defense was sus
tained-the notes having been given il
pursuance of the agreement and in exc
cutiOn Of it.
Fareira VS.. Gabell, 80 Penn. St., SO, i
still more in point. 1t was an actor
brought by the plaintiff on five prom
isory notes given by the defendant
The defense was that the notes wer
given to cover losses in speculations il
stocks ION margins" The defendan
had employed the plaintiff as broker
to operate in stocks for him. Th
plaintiff, in rebuttal, gave evidenc
that defendant, upon settlement, ad
mitted there was due the plaintiff tn