Whitesides v. Hunt. ment at any time and without regard to the maturity of his contract, and he is then paid the difference between the then market price and the price at which he bought or sold, less a sum which is called by complainants a commission.' This sum, which is one-fourth of a cent on each bushel of grain which is alleged to be bought or sold, is not a commission, as the complainants always take the deal themselves, and do not pretend to buy or sell to others for the account of the customer, but is really the odds which the customer gives them in the wager on the future of the market. It is perhaps true if the customer keeps his margin good, so that he cannot be closed out, and does not exercise his right to settle upon the basis of the difference in the prices of the grain, etc., he can demand a compliance with the contract and a delivery; but if the course of business between the complainants and their customers is to settle their alleged contract by a payment of the differences in the market rates, the fact that a customer may, under certain circumstances, require an actual delivery, does not relieve the complainants from the charge of carrying on a bucket-shop.' It is the general course of a man's business which defines and classifies it. If bucket-shop' means a place where wagers are made upon the fluctuations of grain and other commodities, then I think the evidence shows the complainants keep such a shop,' and are of the class to which defendants are prohibited from furnishing the market quotations of the Chicago Board of Trade. This is gambling, and a very pernicious and demoralizing species of gambling, which a court of equity should not protect, even if the board of trade had not taken the action it has. It is true that this kind of gambling has not yet been made criminal by the statute law of the State, still if a case of wager is made out, none of the State courts will enforce such contracts. Sawyer v. Taggart, 14 Bush, 727. Gambling on the fluctuation in the market prices of stocks, grains, etc., is against the public policy of the State, though it may not be a crime punishable by fine or imprisonment. It was formerly held that when the vendor had neither the goods nor entertained any contract to buy them, at the time of the sale, nor had any reasonable expectation of receiving them by consignment, but intended to go into the market and buy the articles he engaged to deliver, no action could be maintained on such contract. But that rule has been changed by the later authorities, and there have been numerous decisions, particularly in this country, holding that the vendor may contract for the sale of an article not in his possession, and this doctrine seems to be entirely in accordance with the rules of public policy. Bryan v. Lewis, Ry. & Moody, 386, and note a; Wolcott v. Heath, 78 Ill. 433; Brua's Appeal, 55 Penn. St. 294; Brown v. Hall, 5 Lans. 177; Noyes v. Spaulding, 27 Vt. 420; Hibblewhite v. McMorine, 5 M. & W. 462; Kingsbury v. Kirwin, 43 N. Y. Super. Ct. 451; Pixley v. Boynton, 79 Ill. 351; Rumsey v. Berry, 65 Me. 570; Disborough v. Neilson, 3 Johns. Cas. Whitesides v. Hunt. 81; Cassard v. Hinman, 1 Bosw. 207; Ashton v. Dakin. 4 H. & N. 867; Chapman v. Campbell, 13 Gratt. 105; Cole v. Milmine, 88 Ill. 349; Logan v. Musick, 81 id. 415; Gregory v. Wendell, 39 Mich. 337; s. c., 33 Am. Rep. 390. In the last case cited, the court says: "The mercantile business of the present day could no longer be successfully carried on if merchants and dealers were unable to purchase that which as to them had no actual or potential existence. A dealer has a clear right to sell and agree to deliver at some future time that which he then has not, but expects to go into the market and buy; and it is equally clear that the parties may mutually agree that there need not be a present delivery of the goods, but that such delivery may take place at some other time." There is a difference, and a distinction must be made, between a contract where there is a bona fide intent to fulfill the agreement according to its terms, and those where the difference in the market price is to be paid. There can be no doubt but that sales of a commodity to be delivered at some other time are valid, but if the parties agree at the time of making the contract that no title to any property shall pass or any delivery be made, or when, from the nature of the contract it must be apparent that the intent of the parties was such that at some future specified time the losing party should pay to the other the difference between the selling price at that time and the time of making the contract, it would be a contract which the law would refuse to enforce, for the reason that it is clearly a wager upon the price of the commodity at some future day. Yerkes v. Salomon, 11 Hun, 471; Grizewood v. Blane, 11 C. B. 526; Story v. Salomon, 71 N. Y. 420; Pickering v. Cease, 79 Ill. 328; Lyon v. Culbertson, 83 id. 33; s. c., 25 Am. Rep. 349; Bigelow v. Benedict, 70 N. Y. 202; s. c., 26 Am. Rep. 573; Maxton v. Gheen, 75 Penn. St. 166; Peabody v. Speyers, 56 N. Y. 230; Williams v. Tiedemann, 6 Mo. App. 299; Sampson v. Shaw, 101 Mass. 145; s. c., 3 Am. Rep. 327; Kirkpatrick v. Bonsall, 72 Penn. St. 155; Clarke v. Foss, 7 Biss. 540; Rudolf v. Winters, 7 Neb. 125; Waterman v. Buckland, 1 Mo. App. 45; In re Green, 7 Biss. 338; Bartlett v. Smith, 13 Fed. Rep. 263; Beveridge v. Hewit, 8 Brad. 467; Enderby v. Gilpin, 5 Moore, 571; Swartz's Appeal, 3 Brewst. 131; Barnard v. Backhaus, 52 Wis. 593; Everingham v. Meighan, 55 Wis. 354; Cameron v. Durkheim, 55 N. Y. 425. In the case of Rumsey v. Berry, supra, the court very clearly defines the line which separates the two classes of contracts, the legal from the illegal. In that case it was said: "A contract for the sale and purchase of wheat to be delivered in good faith at a future time is one thing, and is not inconsistent with the law. But such a contract entered into without an intention of having any wheat pass from one party to the other, but with an understanding that at the appointed time the purchaser is merely to receive or pay the difference between the contract and the market Whitesides v. Hunt. price, is another thing, and such as the law will not sustain. This is what is called a settling of the differences, and as such is clearly and only a betting upon the price of wheat, against public policy, and not only void, but deserving of the severest censure." In the case of Kent v. Miltenberger, 13 Mo. App. 503, in the opinion by THOMPSON, J., it was held that where by the terms of the contract, the commodity, at the maturity of the contract, may be required to be delivered, or damages recovered for the breach, unless a delivery is waived by the opposite party, the contract will be held to be legal, unless there is an express agreement made, at the time of the contract, that the property should not be delivered, and that such an agreement, subsequently made, would not vitiate the contract. In the case of Cobb v. Prell, 15 Fed. Rep. 77, in the opinion by MCCRARY, J., it was held that the fact that the intention of the parties to a contract of the sale of commodities for future delivery is, that there shall be no actual delivery, but that the transaction shall be settled by the payment of the difference between the selling and market price, will render such contract void, and that all the circumstances and acts of the parties may be considered in determining their intention. We think this case the better authority. A contract to sell a commodity for future delivery, coupled with an express agreement made at the time, that the commodity, at the maturity of the contract, shall not be paid for or delivered, but shall be settled for by difference on prices, is no contract of sale at all. And well may the learned court in that case admit that such a contract is illegal and void. The trouble arises where, at the date of the contract, there is no express agreement as to payment and delivery, and where those questions are to be settled by implication, based upon the understanding and intention of the parties. In the case of Union Nat'l Bank v. Car, 15 Fed. Rep. 438, it was held, that "The validity of option contracts depends upon the mutual intention of the partics. If it is not the intention in makng the contract, that any property shall be delivered or paid for, but that the fictitious sale shall be settled on differences, the contract is illegal. But if it is the bona fide intention of the seller to deliver, or the buyer to pay, and the option consists merely in the time of delivery within a given time, the contract is valid, and the putting up of margins to cover losses which may accrue from the fluctuations of prices, etc., is legitimate and proper. In the case of Justh v. Holliday, 2 Mackey (D. C.), 246, it was held: "Where a contract is made for the delivery or acceptance of securities at a future day, at a price named, and neither party at the time of making the contract intends to deliver them or accept them, but merely to pay differences, according to the rise or fall of the market, the contract is a gambling one and is void as contrary to public policy. The indorser of a promissory note, given on account of such dealings as are recognized as gambling transactions, Whitesides v. Hunt. can rely upon their illegality as a defense to an action on the note. In an action to recover money where the defense set up is that the contract was a stock gambling one, the real question for determination is the bona fides of the transaction. It is not the form but the intent with which the scheme was planned. If neither party contemplates that there should be a delivery of the stock, but merely to pay differences according to the rise or fall of the market, the contract is a gambling one.' * In the case of Cunningham v. National Bank of Augusta, 17 Cent. L. J. 470, it was said: "It is manifest that the consideration of the note sued on is for and on account of dealings commonly called futures. Is such a transaction in the nature of gaming? If so then the note was void at the time it was given; and no subsequent transfer could revive or give vitality or any legal validity to a contract thus tainted and poisoned at its birth. The plea expressly alleges the transaction to be a wagering and gaming contract.' But what is the transaction termed futures? It is this: One person says, 'I will sell you cotton, at a certain time in the future, for a certain price; you agree to pay that price, knowing that the person with whom you have to deal has no cotton to deliver at the time; but with the understanding that when the time for delivery arrives, you are to pay me the difference between the inarket value of the cotton and the price you agreed to pay, if cotton declines; and if cotton advances, I am to pay you the difference between what you promised to give and the advanced market price.' If this is not a speculation on chances, a wagering and betting between the parties, then we are unable to understand the transaction. A betting on a game of faro, brag or poker cannot be more hazardous, dangerous or uncertain. What are some of the consequences of these speculations on futures'? The 'faithful chroniclers of the day' have informed us that as growing directly out of these nefarious practices, there have been bankruptcies, defalcations of public offices, embezzlements, forgeries, larcenies and deaths. Certainly, no one will contend for one moment, that a transaction fraught with such evil consequences is not immoral, illegal and contrary to public policy." * * * In the case of Rudolf v. Winters, 7 Neb. 126, the Supreme Court of that State held, that "A contract to operate in grain options, to be adjusted according to the differences in the market value thereof, is a contract for a gambling transaction which the law will not tolerate. It is contra bonos mores, and against public policy.' And a number of the heretofore cited authorities, with others, are referred to in support thereof. In the case of Lyon v. Culbertson, 83 Ill. 33; s. c., 25 Am. Rep. 349, the following language is used: "The fact that no wheat was offered or demanded shows, we think, that neither party expected the delivery of any wheat, but in case of default in keeping margins good, or even at the time for delivery, they only expected Whitesides v. Hunt. 6 to settle the contract on the basis of differences, without either performing or offering to perform his part of the agreement; and if this was the agreement, it was only gaming on the price of wheat, and if such gambling transactions shall be permitted, it must eventually lead to what are called corners,' which engulf hundreds in utter ruin, derange and unsettle prices, and operate injuriously on the fair and legitimate trader in grain, as well as the producer, and are pernicious and highly demoralizing to the trade. A contract, to be thus settled, is no more than a bet on the price of grain during or at the end of a limited period. If the one party is not to deliver or the other to receive the grain, it is, in all but name, a gambling on the price of the commodity, and the change of names never changes the quality or nature of things. * This seems to be a subtle invention to abrogate well established, fair and just principles of the law of contracts, and not only so, but to the great injury of fair and legitimate trade." In the case of Brua's Appeal, 55 Penn. St. 294, it was said: Any thing which induces men to risk their money or property, without any other hope of return than to get for nothing any given amount from another, is gambling, and demoralizing to the community, no matter by what name it may be called. It is the same whether the promise be to pay on the color of a card, or the fleetness of a horse, and the same numerals indicate how much is lost and won in either case, and the losing party has received just as much for the money parted with in the one case as the other, viz.: nothing at all. The lucky winner, of course, is the gainer, and he will continue so until fickle fortune in due time makes him feel the woes he has inflicted on others. All gambling is immoral. I apprehend that the losses incident to the practice disclosed have contributed more to the failures and embezzlements by public officers, clerks, agents and others acting in fiduciary relations, public and private, than any other known, or perhaps all other In the train of its evils, there is a vast amount of misery and suffering by persons entirely guiltless of any participation in the cause of it." causes. * * * * We conclude from the foregoing authorities, that in this class of cases, the correct rule is, that where a commodity is bought for future delivery, no matter what the form of the contract is, the law regards the substance and not the shadow, and if the parties mutually understood and intended that the purchaser should pay |