If an agreement is originally valid because the parties contemplated actual delivery, it is not invalidated by the discharge of the contract by a subsequent agreement to pay differences as they exist at the time of the subsequent agreement.45 There

43 Harvey v. Merrill, 150 Mass. 1, 22 N. E. 49, 5 L. R. A. 200, 15 Am. St. Rep. 159. By statute originally passed in 1890 and now Mass. Rev. L., c. 99, S 6, it was enacted that the fact that settlements had been made without actual deliveries should be prima facie evidence that there was an intention that there should be no actual deliveries. See Fiake v. Doucette, 206 Mass. 275, 92 N. E. 455; Adams v. Dick, 226 Mass. 46, 115 N. E. 227.

44 In Jamieson v. Wallace, 167 111. 388, 47 N. E. 762, 59 Am. St. Rep. 302, the court said: "The intention of the parties may be determined from a variety of circumstances. Among these circumstances, besides the mode of dealing between the parties, is the pecuniary ability of the party purchasing. If the purchases of a party, as ordered through a broker, are larger in amount than he is able to pay for, it is a strong circumstance indicating that there was no intention of receiving the property, but rather an intention to settle the difference between the market price and the contract price. Such intention may also be inferred where the party, making the purchase, never calls upon the party, ordering the purchase, for the purchase money, but only for margins. It makes no difference, whether the real intention is formally expressed in words or not, if the facts and circumstances in proof show, that it was the real understanding that there should be no actual purchase and no delivery or acceptance of the property involved in the contract, but merely an adjustment of damages upon differences." And in the following decisions the courts recognized that no express agreement between the parties for the settlement of differences is requisite to invalidate the transaction, but that intention may be sought from all the surrounding circumstances. Boyd v. Hanson, 41 Fed. Rep. 174; Hooper v. Nuckles (Ala.), 39 So. 711; Phelps v. Holderness, 56 Ark. 300, 19 S. W. 921; Johnston v. Miller, 67 Ark. 172, 181, 53 S. W. 1052; Weare Commission Go. v. People, 209 111. 528, 70 N. E. 1076; Counselman v. Reichart, 103 Iowa, 430, 72 N. W. 490; Mohr v. Miesen, 47 Minn. 228, 49 N. W. 862; Sprague v. Warren, 26 Neb. 326, 41 N. W. 1113, 3 L. R. A. 679; Jennings v. Morris, 211 Pa. St. 600, 61 Atl. 115; Snider v. Harvey, 215 Pa. 538, 64 Atl. 687; Waite v. Frank, 14 S. Dak. 626, 86 N. W. 645; Carson v. Milwaukee Produce Co., 133 Wis. 85, 113 N. W. 393. Cf. Baker v. Lehman, 186 Ala. 493, 65 So. 321. 45Dillon v. McCrea, 59 11I. 506; is nothing illegal in such a settlement. It is the executory agreement to make it in the future which is invalid; and the invalidity seems the same whether such an executory agreement is made at the outset or is subsequently adopted in substitution of a prior legal contract. The distinction is between an agreement to pay differences which may exist in the future and an agreement to pay the differences which exist at the time the agreement is made.

If the parties originally make an illegal agreement contemplating settlement by payment of differences, they may substitute for it subsequently a valid contract contemplating actual delivery.46