Same - Futures

An agreement for the sale of stocks, grain, or any other commodity is a gambling contract where the parties do not intend an actual delivery, but agree that at the time fixed for delivery, they shall settle by one of them paying the other the difference between the price agreed upon and the market price at the time of delivery. This is a mere bet or speculation on the rise and fall of the price of the article, and is illegal, not only under the statutes, but in most states even independently of any statute.16 The law on this subject was

L. Ed. 924; Amory v. Gilinan, 2 Mass. 1; Loomis v. Insurance Co., 6 Gray (Mass.) 396; Bersch v. Insurance Co., 28 Ind. 64; Bevin v. Insurance Co., 23 Conn. 244; Sawyer v. Mayhew, 51 Me. 398; Sweeney v. Insurance Co., 20 Pa. 337; Fowler v. Insurance Co., 26 N. Y. 422; ante, p. 842. See "Insurance," Dec. Dig. (Key-No.) § 119; Cent. Dig. § 165.

14 Vance on Insurance, 107 et seq.

15 Loomis v. Insurance Co., 6 Gray (Mass.) 398; Vance on Insurance, 129 et seq. See "Insurance;' Dec. Dig. (Key-No.) § 110; Cent. Dig. § 165.

16 IN RE TAYLOR & CO.'s ESTATE, 192 Pa. 304, 43 Atl. 973, 73 Am. St. Rep. 812, Throckmorton Cas. Contracts, 233; Harvey v. Merrill, 150 Mass. 1, 22 N. E. 49, 5 L. R. A. 200, 15 Am. St. Rep. 159; Irwin v. Williar, 110 U. S. 499, 4 Sup. Ct. 160, 28 L. Ed. 225; Gregory v. Wendell, 39 Mich. 337, 33 Am. Rep. 390; Burt v. Meyer, 71 Md. 467, 18 Atl. 796; Brua's Appeal, 55 Pa. 294; Kingsbury v. Kirwan, 77 N. Y. 612; Whitesides v. Hunt, 97 Ind. 191, 49 Am. Rep. 441; Crawford v. Spencer, 92 Mo. 498, 4 S. W. 713, 1 Am. St. Rep. 745; Everingham v. Meighan, 55 Wis. 354, 13 N. W. 269; White v. Barber, 123 U. S. 392, 8 Sup. Ct. 221, 31 L. Ed. 243; Hatch v. Douglass, 48 Conn. 116, 40 Am. Rep. 154; Dunn v. Bell, 85 Tenn. 581, 4 S. W. 41; Pickering v. Cease, 79 I11. 328; Flagg v. Gilpin, 17 R. I. 10, 19 Atl. 1084; Lawtou thus stated in a late Massachusetts case: "If, in a formal contract for the purchase and sale of merchandise to be delivered in the future at a fixed price, it is actually the agreement of the parties that the merchandise shall not be delivered and the price paid, but that, when the stipulated time for performance arrives, a settlement shall be made by a payment in money of the difference between the contract price and the market price of the merchandise at that time, this agreement makes the contract a wagering contract. If, however, it is agreed by the parties that the contract shall be performed according to its terms if either party requires it, and that either party shall have a right to require it, the contract does not become a wagering contract because one or both of the parties intend, when the time for performance arrives, not to require performance, but to substitute therefor a settlement by the payment of the difference between the contract price and the market price at that time. Such an intention is immaterial, except so far as it is made a part of the contract, although it need not be made expressly a part of the contract. To constitute a wagering contract, it is sufficient, whatever may be the form of the contract, that both parties understand and intend that one party shall not be bound to deliver the merchandise and the other to receive it and to pay the price, but that a settlement shall be made by the payment of the difference in prices." 17

v. Blitch, 83 Ga. 663, 10 S. E. 353; Lester v. Buel, 49 Ohio St. 240, 30 N. E. 821, 34 Am. St. Rep. 556; Mohr v. Miesen, 47 Minn. 228. 49 N. W. 862; Wagner v. Hildebrand, 187 Pa. 136, 41 Atl. 34; Johnston v. Miller, 67 Ark. 172, 53 S. W. 1052; Counselman v. Reichart, 103 Iowa, 430, 72 N. W. 490; Jamie-son v. Wallace, 167 I11. 388, 47 N. E. 762, 59 Am. St. Rep. 302; Ponder v. Jerome Hill Cotton Co., 100 Fed. 373, 40 C. C. A. 416; Clews v. Jamieson, 96 Fed. 648, 38 C. C. A. 473; Morris v. Western Union Telegraph Co., 94 Me. 423, 47 Atl. 926; Atwater v. Manville, 106 Wis. 64, 81 N. W. 985; Rogers v. Marriott, 59 Neb. 759, 82 N. W. 21. Ana see cases cited post,pp. 430, 431, notes 55, 57. Such transactions are not regarded as contrary to public policy in England, but are held to be gaming and wagering transactions within the meaning of the statute prohibiting such transactions. Thacker v. Hardy, 4 Q. B. Div. 685. It has been held, however, that this class of contracts were not gaming contracts within the meaning of statutes avoiding instruments in the hands of bona fide holders if given on a gaming consideration. Shaw v. Clark, 49 Mich. 384, 13 N. W. 786, 43 Am. Rep. 474; Third Nat. Bank v. Harrison (C. C.) 10 Fed. 243. But see, contra, Thacker v. Hardy, 4 Q. B. Div. 685; Cunningham v. Bank, 71 Ga. 400, 51 Am. Rep. 266; Grizewood v. Blane, 11 C. B. 526; Lyons v. Hodgen, 90 Ky. 280, 13 S. W. 1076. That they are wagers within the meaning of a statute, see McGrew v. Produce Exchange, 85 Tenn. 572, 4 S. W. 38, 4 Am. St Rep. 771. See "Gaming," Dec. Dig. (Rey-No.) § 12; Cent. Dig. | 22.

17 Harvey v. Merrill, 150 Mass. 1, 22 N. E. 49, 5 L. R. A. 200, 15 Am. St. Rep. 159. And see Barnes v. Smith, 159 Mass. 344, 34 N. E. 403; Bailey & Graham v. Phillips (C. C.) 159 Fed. 535; Rodgers, McCabe & Co. v. Bell, 158

This intention must be common to both parties. If one of them intends a bona fide sale, and actual delivery if it shall be required, he may enforce the contract, though the other party may have intended a wager on future prices.18 The fact that the seller has not the article sold at the time of the contract does not render the contract void. It is valid if an actual delivery is intended, though he is to buy the article in the market at the time of delivery, and though a margin may have been deposited as security.18