Peck v. Doran & Wright Co.

It seems to me that the second, count states a wagering contract. It alleges that the parties agreed to deal and traffic upon the market-value of wheat, and that they did so traffic and deal between certain dates. Here is a distinct allegation that the subject of their dealing and agreement was the market-value of wheat, in distinction from the wheat itself. Then it proceeds to state the mode, viz., that plaintiff gave his orders to defendant for wheat, and paid defendant’s commissions “ for doing the business,” not necessarily fpr making purchases; and, also, paid a margin to secure defendant against a decline in the 'market-value; that if the market-value should advance it was agreed'that plaintiff should be entitled to the advance. Now, if these orders, given by plaintiff, were to be. actually fulfilled by defendant and the wheat actually purchased, there would be no need of an agreement, the plaintiff should be entitled to the advance in the market-value. For in that case the wheat would belong to plaintiff and he would have the benefit of the advance without any agreement. The fact, then, that it was necessary to make an agreement to this effect indicates that though orders were given they were not to be executed. The complaint goes on to say that the transactions were based on the rate, condition and fluctuations of the market value, and that defendant had closed the transactions (not sold the wheat) on the basis of the market and had retained the margin of $2,535. If there had been an actual purchase of wheat by defendant for plaintiff, and a subsequent sale of the same at such a decline as to cause a loss of $2,535, then the defendant would not have kept and retained that sum, but it would have been lost by the decline in prices. Here, however, the demurrer admits that defendant had kept and retained that money for the reason that by the decline in market-value the margin had been exhausted. I think that sufficient was stated to show a wagering contract. (Bigelow v. Benedict, 70 N. Y., 202, 206.) How the fact may appear in the trial we cannot tell.

I think the interlocutory judgment should be affirmed, with costs.

(dissenting):

If the contract set forth in the complaint is one for “ traffic and trade upon the market-value of wheat,” and not for the purchase *457of wheat or for traffic and trade in wheat, then it is a wagering contract. (Bigelow v. Benedict, 70 N. Y., 202; Story v. Salomon, 71 id., 420; Kingsbury v. Kirwan, 77 id., 612; Harris v. Tumbridge, 83 id., 92; Yerkes v. Salomon, 11 Hun, 471.) The complaint alleges that the parties agreed to traffic and trade upon the market-value of wheat, and in addition to their bargain to do it, did traffic and trade upon the market-value of wheat as follows: The plaintiff gave to the defendant orders for 46,000 bushels of - wheat, paid him $115 commissions and $2,535 for margins against the decline in the market-price of wheat between the date of the orders and the date of closing the transaction, and had the privilege to advance further margins; the plaintiff was to have the benefit of any advance in the market-price of wrheat, and receive such advance together with his margins. If the price fell, plaintiff would lose.

Now, undpr plaintiff’s orders for wheat, defendant was at liberty to buy the wheat ordered, and hold it to await the fluctuations in its market-value. If defendant did this, then, whether the price rose or fell, the defendant would make nothing except his commissions. If the price rose, plaintiff would win nothing from the defendant; he would make the profit, less commissions and interest, which the transaction realized. If the price fell, the plaintiff would lose the shrinkage in addition to the commissions and interest. The plaintiff would be simply a speculator, and the defendant his agent or broker. Blit if the understanding was that defendant was not to buy the wheat ordered, but if the price advanced defendant was to lose to the plaintiff the advance, and if it fell plaintiff was to lose, out of his margin, the amount of the decline and the defendant was to keep it, then the transaction was a gambling one.

We think that the allegation of the complaint, that the parties agreed to traffic and deal upon the market-price of wheat must be construed in connection with the subsequent allegation that they did traffic and deal upon the market-price “ as follows” that is to say, they agreed to traffic and deal in the manner in which they actually did traffic and deal, as set forth in the complaint. And as the manner in which they did traffic and deal was as consistent with an agreement to deal in the wheat itself as upon the market-price of it, the authorities require us to hold that that contract was made which was not forbidden by law, rather than the one which was. *458(Bigelow v. Benedict; Story v. Salomon; Harris v. Tunbridge, supra.) It follows that the interlocutory judgment must be reversed and an interlocutory judgment directed for tlie defendant, allowing tlie demurrer, with, costs of appeal, and in tlie court below, with usual leave to plaintiff to amend complaint upon payment of costs.

Interlocutory judgment affirmed, with costs.