Court Opinion

ID: 6140492
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:38:06.459159+00
Date Added: 2024-06-11T08:54:37.210587
License: Public Domain

Yah Hoesef, J.
These two actions involve the same questions, and were argued and are to be decided together. The observations which follow are made with reference to the Storey case, though they apply equally to the Griffin case.
The action is to recover the amount due from Salomon to Storey upon a contract known, in the parlance of Wall street, as a straddle. A straddle is said to be a double privilege, in other words, a put and a call combined. In this instance it is, in plain language, an option possessed by Storey either to demand from Salomon, or to sell and deliver to him, within thirty days from May 15, 1875, one huúdred shares of the capital stock of the Western Union Telegraph Company, at the rate of seventy-seven dollars and a half per share. An option has been pronounced to be valid in law, when supported by a sufficient consideration.
No question of consideration arises in this case. It was urged by the counsel for the defendant, upon the argument, that a straddle is an illegal contract, because it cannot be anything else than a mere wager that the stock which is to be put or to be called will, for the period named in the instrument, remain without fluctuation at a designated price. It. was further said that a bare inspection of such a contract shows that the contracting parties do not contemplate an actual purchase -or an actual sale of stocks, but simply the payment of the difference between the price named in the straddle and the price to which the stock may rise or may fall within the stipulated time.
If the necessary and obvious meaning of a straddle is that the maker of it shall merely pay a difference, but not be bound to receive or to deliver the stock, it is a gambling contract, and utterly illegal and void. If, however, such be not the unmistakable import of its language, then whether or not it is a gambling contract will depend upon the actual and covert intention of the parties. If they contemplated merely the payment of a difference, the straddle is illegal; but if the delivery of stock, it is a valid contract. I cannot say, for I do not believe, that a straddle always means, or that the parties to it always intend, that a difference only need be paid. The con*539tract in this case makes provision that “ all dividends and extra dividends declared during the time are to go with the stock.” This language plainly contemplates an actual delivery of stock; and 1 have no right to presume, without an iota of evidence to that effect, that it was introduced merely to cloak and cover up the unlawful design of the parties to gamble for a difference.
The straddle is not, in my opinion, upon its face illegal; and if it were made illegal by the intent of the parties, the defendant should have alleged such illegality in his answer, and proved it on the trial (O'Toole v. Garvin, 1 Hun, 92, and cases there cited). This he has utterly failed to do.
It is further contended by the counsel for the defendant that a new trial should be ordered for errors committed by the court below in receiving evidence offered by the plaintiff.
It is evident, from a perusal of the complaint, that, when it was prepared, the plaintiff was laboring under an apprehension that the straddle would be attacked by the defendant as a gambling contract, and therefore the pleader inserted a number of allegations respecting an offer to deliver, and the refusal of the defendant to receive, the stock. These allegations were, I think, entirely unnecessary, for the plaintiff’s claim was really upon an account stated. Upon the trial, the plaintiff, instead of proving his allegations of a tender of the.stock by himself, and a refusal on the part of the defendant to receive it, called a witness to prove a usage among brokers which makes it unnecessary to tender stock to a broker who had suspended payment. Evidence of an excuse for failing to make a tender was not admissible under the allegation of tender, but no objection was made upon that ground. An amendment, even if such objection had been made, would doubtless have been permitted. It was shown that the defendant had suspended before the straddle had expired, and before the ascertainment of the amount payable upon the straddle was reached by the parties. This evidence of usage was, in my opinion, entirely unnecessary, and I think it will appear to have been harmless as well as needless. If so, the admission of it ought not to cause the reversal of the judgment (Smith v. Paton, 31 N. Y. 66).
I have said that the plaintiff’s cause of action was really an *540account stated. The complaint alleged an accounting between the parties by which it was agreed that the defendant should pay the plaintiff $475 in settlement of the straddle; the market price of the stocjr at the time of the settlement being seventy-two dollars and seventy-five cents per share, and the price named in the contract being seventy-seven dollars and a half per share.
These allegations in the complaint were fully proved upon the trial by the written contracts and the written admissions of the defendant. A perfect case was thus made out, and no evidence of a usage among brokers was required.
There was no impropriety in calling a witness to explain the meaning of the incomplete expression contained in the paper which I have called an account stated. I doubt, if such explanation were necessary, though it certainly was competent.
' I think the words “ Settled at market 72f. S. ,N- Salomon,” indorsed upon the straddle, would be understood by any court without the aid of an expert to explain their meaning (Dana v. Fiedler, 12 N. Y. 45, 46).
As I have already said, when the plaintiff had put in evidence the straddle, with the indorsement upon it, and had proved the meaning of those expressions which were abbreviated or incomplete, he had proved all that was necessary to entitle him to a verdict. The other evidence was needless, but could not possibly have injured the defendant. In the absence of evidence on the part of the defendant, there was no question to submit to the jury, and it was the duty of the court to direct a verdict.
The judgments, in both the Grillen and the Storey cases, should be affirmed, with costs.
Joseph F. Daly, J., concurred.
Judgment affirmed.*

 Affirmed in the Court of Appeals, December 11th, 187Í.