Court Opinion

ID: 8186902
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:09:28.238511+00
Date Added: 2024-06-11T16:40:27.125445
License: Public Domain

Cassoday, C. J.
I concur in the reversal of this judgment, but solely on the ground that an instruction applicable to a general verdict was given, whereas the case was submitted to the jury on a special verdict, contrary to the rule as held in Ward v. C., M. & St. P. R. Co. 102 Wis. 215, and subse*485quent cases. I cannot concur, however, in the proposition that the trial court committed an error in charging the jury to the effect that the burden of proof was upon the defendant to satisfy them by the greater weight of evidence that both parties intended to make, and did make, a gambling or wagering contract by and through the transactions in question.
It is conceded in the opinion filed that the contracts were valid, unless both parties intended the transactions to be mere wagering contracts on the price of wheat, without intending to deliver the same, but simply to adjust the differences by payments or receipts; citing Wall v. Schneider, 59 Vis. 352. The s actions of the statutes referred to in that case are highly penal. Secs. 4424, 4425, 4532, 4535, 4538, Stats. 1898. They not only render all wagering contracts void, but punish the offending parties and authorize the recovery back of the money paid thereon. So far as I am aware, the rule is universal that a party seeking to bring a given transaction with the opposite party under the condemnation of such penal statutes has the burden of proving it. The principle is stated by Lord Chief Justice Coee as follows: “ It is a general rule that whensoever the words of a deed, or of the parties without deed, may have a double intendment, and the one standeth with law and right, and the other is wrongful and against law, the intendment that standeth with law shall be taken.” 1 Co. Litt. 42b. So in this country it is held to be “ a rule of interpretation that where a contract is fairly open to two constructions, by one of which it would be lawful and the other unlawful, the former must be adopted.” Hobbs v. McLean, 117 U. S. 576, and numerous authorities there cited. The same rule has been applied to alleged wagering contracts. Bigelow v. Benedict, 70 N. Y. 205.
The latest edition of the American & English Encyclopedia of Law states the rule thus: “ (3) The real test whether *486the ostensible contract is or is not a gambling contract is a question of fact, and, if the evidence is conflicting, it is for the jury, under proper instructions from the court, to determine. (4) The burden of proof in actions on these contracts is upon the party alleging that the transaction is illegal and a gambling contract.” 14 Am. & Eng. Ency. of Law (2d ed.), 618. In support of such proposition numerous cases are cited from seventeen different states, besides several from the federal courts. I have only examined a few of them, but those and others I have examined support the text.
Thus, it is held that, “ in the absence of evidence to the ■contrary, it will be presumed that the contract was made in good faith, with intent on the part of both parties to perform.” Bigelow v. Benedict, 10 N. Y. 202. To the same effect is Story v. Salomon, 71 N. Y. 420,422, where it is said: “ We may guess that the parties were speculating upon the fluctuations in the price of the stock, and that the defendant was not to be required to take or deliver any stock in any case, but simply to pay differences. But a contract which can have legal interpretation and effect should not be condemned without any proof, in that way. To the same effect, Harris v. Tumbridge, 83 N. Y. 93. So it has been held in Alabama that where, “ by the terms of the contract, defendant agreed to deliver the stock, and plaintiff agreed to accept a delivery, the contract is prima facie valid, and the defendant on whom rests the burden of proof has failed to show any understanding or intent that there should be no delivery.” Perryman v. Wolffe, 93 Ala. 291. So, in Missouri, it is held that “ the burden of showing the invalidity of the contract rests upon the party asserting it.” Crawford v. Spencer, 92 Mo. 498, 502. So, in New Jersey, it is held that “ the burden of proving that transactions relating to the purchase and sale of stocks which are in form transactions between the customer, as principal, and the broker, as agent, are wagering contracts, rests on the pavrty asserting *487their illegality.” Pratt v. Boody, 55 N. J. Eq. 176. To the same effect, Beadles v. McElrath, 85 Ky. 230, 238. So, it has been held in Illinois that “ where the maker of a promissory note seeks to avoid the same on the ground that its consideration was illegal, the burden of proof is upon him to show the fact by a clear preponderance of the evidence.” Pixley v. Boynton, 79 Ill. 351. That case related to a transaction on the board of trade. To the same effect is Scanlon v. Warren, 68 Ill. App. 213, affirmed in 169 Ill. 142. See, also, Gaw v. Bennett, 153 Pa. St. 247, 255. Thus, in Minnesota it is held that “ the burden of establishing the illegality of such transactions rests upon the party who asserts it.” Mohr v. Miesen, 47 Minn. 228. See, also, Rountree v. Smith, 108 U. S. 269, 276; Irwin v. Williar, 110 U. S. 499, 507, 510; Bibb. v. Alien, 149 U. S. 492. In these cases it is held by the highest court in this country to be “ well settled that the burden of proof is upon the party who seeks to impeach such transactions by showing affirmatively their illegality.” In my judgment, there is no well-considered case holding a contrary rule.
But it said that this court is committed to a contrary ruling in Barnard v. Backhaus, 52 Wis. 593. That case was decided a few months before I became a member of the court, and a memorandum of the decision was made by the late Chief Justice Rtah, but he died before writing an opinion, and no opinion was written until a year afterwards. The syllabus to that case is, to my mind, misleading. It may be inferred from it that a contract for the sale and future delivery of grain, for a price certain, is presumptively a wagering contract. But that is contrary not only to the memorandum filed, but also to the opinion in the case; for it is declared in both that such contract, made with the “ bona fide intention to deliver,” is valid. To that statement the opinion by Chief Justice Cole adds: “ Such contracts are .constantly made in legitimate transactions, and are unob*488jectionable in law,” Page 598. It is then said in the memorandum: “But when sucb contracts are made as a cover for gambling, without intention to deliver and receive the grain, but merely to pay and receive the difference between the price agreed upon and the market price at such future day, they come within the statute of gaming, and are void in law. To uphold stick a contract 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 an evasion of the statute of gaming,' or as a cover for a gambling transaction.” Page 591. In neither of the three cases cited by Chief Justice Cole do we find anything to support the alleged presumption of illegality. On the contrary, he quotes approvingly from the Pennsylvania case the following: “We must not confound gambling, whether it be in corporation stocks or merchandise, with what is commonly termed ‘ speculation.’ Merchants speculate upon the future prices of that in which they deal, and buy and sell accordingly. In other words, they think of and weigh' — -that is, speculate upon •— the probabilities of the coming market, ■and act upon this lookout in the future in their business transactions; and in this they often exhibit lygh mental grasp and great knowledge of business and of the affairs of the world. Their speculations display talent and forecast, but they act upon their conclusions, and buy or sell in a liona fide vray.” Pages 598,599. He then adds: “But when such a contract is made as a cover for gambling, without any intention to deliver and receive the grain, but merely to pay and receive the difference between the price agreed upon and the market price at 'such future day, then it comes within the statute of gaming, and is void in law.” Page '599. This left it for the party alleging such gambling contract to prove such facts.
It will be observed that that case did not turn upon a charge of the court as to the burden of proof, as here, nor *489"apon a ruling as to the admission of evidence. On the contrary, the jury was waived and the case was tried by the court, and came to this court upon the findings of the trial court and the evidence. The conclusion of this court from such findings and evidence, as indicated in the memorandum filed, is summed up by Chief Justice Cole in these words: u It is sufficient to say that the court deems it clearly and satisfactorily proven that in respect to some of the transactions none of the parties intended an actual sale and purchase of the wheat, c but that the whole thing was to be settled by the payment of differences.’ ” Three years after-wards this court had occasion to review that case; and with the concurrence of all the members of the court who made that decision, except the late Justice Oeton and Chief Justice Eyan, who had since died, it was said that the language quoted stated “ the ground for holding the note void in that 'Case.” Wall v. Schneider, 59 Wis. 354. In that case a judgment based upon a verdict directed in favor of the plaintiff was affirmed on the ground that it appeared from the evi■dence, “ conclusively, that the seller intended in good faith to deliver the commodities sold.” I certainly did not then understand, and do not now -understand, that this court had held ■that an executory contract for future delivery was presumptively a gambling contract. Such contracts are constantly being made in respect to all kinds of commodities and in all lines of business. I am unwilling to presume that such contracts are void merely because they relate to transactions upon some board of trade. We may have a suspicion that many of such transactions are entered into without any intent on the part of either party that the commodity contracted for should actually be delivered; and yet all must admit that there are legitimate transactions upon the boards •of trade every month, if not every week, amounting to millions. Certainly there is no good ground for presuming that all parties to such transactions are outlaws, nor that the *490burden of proof should be upon any to prove their innocence. The law is no respecter of persons, and in my judgment the law when applied to a given transaction upon the. board of trade is the same as when applied to a like transaction occurring elsewhere.
Dodue, J. I concur in the position and views declared in the foregoing opinion by the chief justice.