Case Name: Bartlett and another, Respondents, vs. Collins, Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1901-03-19
Citations: 109 Wis. 477
Docket Number: 
Parties: Bartlett and another, Respondents, vs. Collins, Appellant.
Judges: Dodue, J. I concur in the position and views declared in the foregoing opinion by the chief justice.
Reporter: Wisconsin Reports
Volume: 109
Pages: 477–490

Head Matter:
Bartlett and another, Respondents, vs. Collins, Appellant.
February 2
March 19, 1901.
Contracts: Conflict of laws: Public policy: Gambling: Sale of grain on board of trade: Rules of board: Special verdict: Instructions to jury: Burden of proof.
1. If a personal contract is to be performed partly where made and partly in other countries or states, the law of the place where it is made will govern, unless a clear mutual intention is manifested that it shall be governed by the law of some other country.
2. A contract, made in this state between residents thereof, by which one employed the other, a broker, to sell wheat for him in Chicago and agreed to pay a commission for such service and to indemnify the broker against loss, is governed by the law of this state.
3. The courts of this state will not hold valid any contract which is injurious to the public rights of its people, offends their morals, contravenes their policy, or violates public law.
4. One who employs a broker to make a sale for him on a board of trade impliedly submits himself to the lawful rules of such board.
5. Where a case is submitted to the jury for a special verdict, it is error to give instructions applicable only to a general verdict.
6. To uphold a time contract for the sale and delivery of grain upon a board of trade, it must affirmatively and satisfactorily appear that it was made with an actual view to the delivery and receipt of the grain, and not as a cover for a gambling transaction. Barnard v. Bachhaus, 52 Wis. 593, followed. Cassoday, C. J., and Dodge, J., dissent.
7. The rule as to burden of proof, laid down in Barnard v. Bachhaus, 52 Wis. 593, was not changed by the subsequent enactment of sec. 2319a, Stats. 1898.
Appeal from a judgment of the circuit court for Sheboy-gan county: Michael KiewaN, Circuit Judge.
Heversed.
The plaintiffs, who are. grain commission merchants in the city of Milwaukee, brought this action against the defendant to recover upon open account for moneys advanced and services performed for the defendant in July and August, 1897. The account is set forth in the complaint as follows:
E. C. Collins, in account with Leman Bartlett & Son, Dr.
August 19th, 1897. To 2,000 bu. wheat at $.89J-. §1,782 50
“ To commission. 2 50
Total.T. §1,785 00
Credit.
July 30th, 1897. By 1,000 bu. wheat sold at.|.75J.... §755 00
Aug. 3rd, 1897. By cash received. 30 00
Aug. 6th, 1897. “ “ “ 50 00
Aug. 6th, 1897. By 1,000 bu. wheat sold at §.78£. 782 50
Total. §1,617 50
Balance due. §167 50
The answer, after setting forth a general denial of the-complaint, alleges that the transactions between the parties were gambling transactions, and void under the statutes; that all of the contracts made by the plaintiffs with the defendant by which the plaintiffs undertook to buy and sell wheat for the defendant were made without intending either to receive or deliver grain, but wholly to wager in the market price of wheat at the Chamber of Commerce in the city of ■Chicago, intending only to pay or receive the difference between the price and the market rate, whatever the same should be. It appeared in the evidence that the defendant, Oollms, resided at Plymouth, Wisconsin, and that his business was farming and buying grain; that on the 30th of July, 1897, he telephoned to the plaintiffs and told them to sell for him 1,000 bushels of December wheat, Chicago delivery; that on August 6th the defendant directed the plaintiffs to sell another 1,000 bushels of December wheat, Chicago delivery; that the plaintiffs made both sales upon the Chicago Board of Trade through their Chicago agents, the first being made at $.75£, and the second at $.78J. No wheat was actually delivered on either of these sales. The price of wheat advancing, the plaintiffs immediately began to require the deposit of margins by Mr. Oollms, and on August 3d the defendant sent $30, and on August 6th $50, in response to such demands. After the 6th‘of August Mr. Oollms failed to send any further margins, and on the 19th of August the plaintiffs bought in 2,000 bushels of December wheat at $.89-J- and closed the transaction. No wheat was actually delivered upon these purchases. The trade was claimed to be closed up under certain rules- of the Chicago Board of Trade, which were offered in evidence and received under objection, which rules, the plaintiffs claim, authorized the closing up of trades upon failure to deposit sufficient margins in the manner as was done in this case.
The defendant’s claim was that the whole transaction was a gambling transaction; that there was no intent either on the part of himself or of the plaintiffs to deliver a single bushel of wheat. The laws of the state of Illinois upon the subject were not introduced in evidence. The court instructed the jury, among other things, that the defendant bad the burden of proof to satisfy them by the greater weight of evidence that both parties intended to make a gambling or wagering contract, to which instruction the defendant duly excepted.
A special verdict was returned, in which it was found, in answer to appropriate questions, that both the plaintiffs and the defendant in good faith intended and expected an actual delivery of wheat under the two sales, and that the plaintiffs’ damages were $182.53. Erom judgment in accordance with this verdict the defendant appeals.
M. O. Mead, for the appellant.
Eor the respondents there was a brief by Moe <& Mamen, and oral argument by Otto Hem sen.

Opinion:
WiNslow, J.
This is an action by brokers to recover of their principal their commissions and moneys advanced b3? them in selling grain for the principal. Both brokers and .principal reside in this state, and the verbal order or commission given by the principal was given in this state, and any liability resulting from the contract on the part of the principal was eviden tly to be discharged in this state. It was contemplated, however, by both parties that the transaction in grain, whether a real one or only a speculative one, should take place in Chicago. This is certain, because the plaintiffs so testify, and the defendant by his answer alleges that the intention was to wager in the market price of wheat at the Chamber of Commerce in Chicago.
The question whether this contract was an Illinois contract or a Wisconsin contract is an important one in the case, but it has received little attention in the briefs, although the plaintiffs claim that a verdict should have been directed in their favor, because the sale of the wheat was to be made, and in fact was made, in Chicago, and the laws of Illinois with respect to gambling transactions were not introduced in evidence. It does not clearly appear what view the trial judge took of the question, although he instructed the jury, in accordance with the law of this state, in effect, that if both parties intended the transaction to be a mere wagering contract on the price of wheat, without intention to deliver the wheat, but simply to settle by payment or receipt of differences, then the contract was void. Stats. 1898, sec. 2319a; Wall v. Schneider, 59 Wis. 352. Whether this instruction was based on the idea that the contract was a Wisconsin contract and'governed by Wisconsin law, or that, if it Hvas an Illinois contract, then that the law of Illinois would be presumed, in the absence of proof, to be the same as the law of Wisconsin, is'not apparent. If it was an Illinois contract, it would seem at least extremely doubtful whether any presumption would be entertained that the law of Illinois was the same as the law of Wisconsin on the subject. It has been held by this court (Hull v. Augustine, 23 Wis. 383) that such a presumption will not be indulged as to a statute imposing a penalty or a forfeiture, as in the case of usury lawTs. But, however this may be, we are of the opinion that the contract between plaintiffs and defendant was a Wisconsin contract, though the sale of grain was to be made in Chicago.
The question as to what law is to govern a contract is not always an easy one to decide. As a general rule the construction and validity of a purely personal contract depend on the law of the place where made. Story, Conflict of Laws, § 272. If, however, the contract is made in one place, to be performed in another, then, as a general rule, the place of payment or performance is the place of the contract. 2 Parsons, Cont. (8th ed.), 583; Newman v. Kershaw, 10 Wis. 333. This rule is founded on the idea that, in making a personal contract to be fully performed in another state, the parties must have had the law of that other state in view. Shores L. Co. v. Stitt, 102 Wis. 450. But if the contract is to be partly performed where made, and partly in other countries or states, the law of the place where it is made will still govern, unless a clear mutual intention is manifested that it shall be governed by the law of some other country. Liverpool & G. W. S. Co. v. Phenix Ins. Co. 129 U. S. 397. Thus, it was held in Morgan v. N. O., M. & T. R. Co. 2 Woods, 244, that, where a contract was made in one state to be partly performed there and partly performed in several other states, the contract, so far as it is personal in its nature, was to be governed by the law of the state where it was made. In the present case, the contract in question is the brokerage contract by which the defendant employed the plaintiffs to sell wheat for him in Chicago, and agreed to pay the plaintiffs their commissions for such service and indemnify them against loss. Roth parties lived in Wisconsin, and the contract was made here. It is true that one act under the contract was to take place in Illinois, but all other acts, including the payment by the principal of all obligations incurred to his agents, were manifestly to take place in Wisconsin. Under the rules stated, it seems certain that it should be held to be governed by the law of Wisconsin.
But even were it held to be an Illinois contract, it is not seen how the result would be different. It is'a universal principle that the courts of no state will hold valid any contract which is injurious to the public rights of its people, offends their morals, contravenes their policy, or violates a public law. 2 Kent, Comm. (14th ed.), 458, and cases cited in note "d." So, in either event, if the alleged sale of the grain was in fact no sale, but only a gambling transaction,- and so intended by both parties, then the contract before us can be the foundation of no rights in our courts.
Certain rules of the Chicago Board of Trade were received in evidence against defendant's objection, and this ruling is now assigned as error. It is unnecessary to recite the rules at length, but it is sufficient to say that they pur port to give to members of the board, whether buyers or sellers, the right to demand of the other party to such sale or purchase the deposit of ten per cent, as security, and further security from time to time as the market price of the commodity sold varies, and also the right of resale or repurchase in case of failure to deposit the security as demanded. It is sufficient to say with regard to this ruling that we think sufficient foundation was laid for the reception of the evidence. The plaintiffs, by their agents, offered testimony to. show that the understanding was that the sale was to be made on the Chicago Board of Trade. The answer of the defendant, while claiming that the transaction was intended to be a gambling transaction, specifically alleges that it was to be a wager on prices of wheat at the Chicago Chamber of Commerce, which, we suppose, refers to the same institution as the Board of Trade. It is entirely clear that if the trade, whether real or speculative, was authorized to be made on the Board of Trade, it was intended to be made pursuant to the rules of such Board. The party who authorizes such a transaction to be made under the auspices of a particular organization, like a board of trade, impliedly submits himself to the lawful rules of the organization.
The court charged the jury, in effect, that the defendant had the burden of proof to show by the greater weight of evidence that both parties intended the transaction to be á gambling or wagering contract,' and unless he did so the defense failed; and to this instruction the defendant excepted.
The instruction was erroneous for two reasons: first, it was an instruction applicable only to a general verdict, and the case was submitted to the jury upon a special verdict; second, it is contrary to the rule laid down in Barnard v. Backhaus, 52 Wis. 593. In that base it was held that, to uphold such a contract (i. e. a time contract for the sale and delivery of grain upon a board of trade), it must affirmatively and satisfactorily appear that it was made with an actual view to the delivery and receipt of the grain, and not as a cover for a gambling transaction. This rule has not been departed from, so far as we can ascertain, in this court. It is not, in our judgment, unreasonable. It is based on the well-known fact that a very large majority of the transactions on such boards are not real transactions, but simply betting on future prices. The reasons for the rule are closely analogous to those which sustain the well-known rule that where voluntary transfers of property are made by aged-persons to one occupying a position of trust and confidence, under circumstances of secrecy, the burden is upon the grantee to show that the transaction was free from fraud. Doyle v. Welch, 100 Wis. 24. We are aware that many courts do not approve this rule, but it has been definitely approved by respectable courts. Sprague v. Warren, 26 Neb. 826; Cobb v. Prell, 15 Fed. Rep. 774; Wheeler v. McDermid, 36 Ill. App. 179.
It has been suggested that the statute (sec. 2319a, Stats. 1898) which was passed after the decision in Barnard t\. Bachhaus has changed the rule, but we have discovered no-words in that statute which indicate an intention to change the rule of evidence. It would have been very easy to express such intention in unmistakable terms if it existed.
For the error in this instruction there must be a new trial. It does not seem necessary to discuss other errors alleged.
By the Court.— Judgment reversed, and action remanded for a new trial.