Peck v. Doran Wright Co. — 10 N.Y.S. 401

Majority

p. 401

Peck v. Doran Wright Co., Limited.

(Supreme Court, General Term, Third Department.

July 7, 1890.)

Headnote

1. Gaming—Action for Money Lost—Parol Evidence.

In an action under 3 Bev. St. N. Y. (7th Ed.) p. 1962, § 9, providing that a person who shall pay any money on the event on any wager may recover the same of the winner, it appeared that plaintiff gave defendant written orders to buy wheat for him, and paid the money sued for as margin? to defendant, who agreed to carry the wheat until ordered to sell by plaintiff. Meld, that paroi evidence was admissible to show that the real understanding between the parties when the orders were given was that wheat should not he delivered, but that only the difference in the market price should be paid or received.

8. Same—Sufficiency of Evidence.

. Plaintiff testified that at the commencement of his dealings he asked defendant’s agent as to their course of business, and the latter replied that they had no wheat to deliver, and did not expect their customers to want any; that it was merely to adjust the difference between the price at the time of ordering wheat bought and ordering it sold. The agent denied that any such conversation took place. There was no proof that any wheat was bought or sold. Meld sufficient evidence to support a verdict for plaintiff, even against the evidence furnished by the form of the contract.

8. Corporations—Ultra Vires.

Defendant cannot repudiate the acts of its agent upon the ground that it is a corporation formed to do a lawful business, and therefore the unlawful dealings of its agent were ultra vires,

Appeal from circuit court, Albany county.

Action by Henry 0. Peek against the Doran Wright Company, Limited, to recover, under 3 Rev. St. N. Y. (7th Ed.) p. 1962, § 9, the money lost by him upon wager contracts with the defendant upon the market price of wheat. Section 9 provides as follows: “Any person who shall pay, deliver, or deposit any money, property, or thing in action upon the event of any wager or bet herein prohibited, may sue for and recover the same of the winner or person to whom the same shall be paid or delivered, and of the stakeholder or other person in whose hands shall be deposited any such wager, bet, or stake, or any part thereof, whether the same shall have been paid over by such stakeholder or not, and whether any such wager be lost or not. ” The defendant was a corporation organized to do a general brokerage and commission business in grain and other commodities. It liad an office in Albany, in charge of one Fuller. Plaintiff, at such office, gave to the defendant a large number of orders to buy wheat, and paid various sums as margins. The transactions in form were contracts whereby the defendant bought for the plaintiff, as a broker, upon commission, the wheat ordered at the market price on the day of the order. The plaintiff paid the defendant various sums as margins. The defendant ostensibly carried the wheat upon the margins until the plaintiff ordered it sold, when they accounted with each other upon the basis that the selling price was obtained. Judgment was entered on a verdict for plaintiff, and an order was entered denying a motion for a new trial on the minutes, and defendant appeals.

Argued before Learned, P. J., and Landon, J.

Wm. H. Shepard, for appellant. Eugene Burlingame, for respondent.

The dealings between the parties were in form genuine contracts, evidenced in writing made at the time, for the purchase and sale by the defendant, as a broker, upon margins, and for a commission, of wheat at the market prices ruling at the time. The losses sustained by the plaintiff were apparently caused because he bought wheat at a higher price than he subsequently sold it. The burden was upon the plaintiff to prove that the apparent contract was not the real contract, and that the real understanding between the parties was, when the contracts were made, that the wheat •should not be delivered, and that only the difference in the market price should

p. 402

be paid or received; in other words, that the parties did not deal in wheat, but agreed to gain from or lose to each other as the price varied between the day the purchase was ordered and the day the sale was ordered. Kingsbury v. Kirwan, 77 N. Y. 612 ; Story v Salomon, 71 N. Y. 420 ; Bigelow v. Benedict, 70 N. Y. 207 . The jury have found, upon the evidence, that the plaintiff made good the burden resting upon him. We think the verdict supported by the evidence. True, the written contracts were against him; but the statute against wager contracts would be of small value if the truth could not be shown by extrinsic evidence, and it was competent to give such evidence.

- The plaintiff testified that at the commencement of his dealings with Fuller, who represented the defendant, and through whom the same were made, he asked him how the defendants executed their orders, and Fuller replied “that they assumed their orders, and booked them themselves; that they had no wheat to deliver; that they did not expect their customers to want any wheat; that it was merely to adjust the difference as between the market price and the prices marked on the slip, [contract.]” Fuller testified that nothing of the kind was said, and thus it was for the jury to settle the fáct. The plaintiff also testified that he did not intend to buy any wheat, but only to deal with respect to its fluctuations in price. The absence of any testimony that wheat was purchased upon any of the orders, and the accounts given of the various transactions, tended to indicate that they dealt with reference to the price of wheat, and not in wheat.

The defendant objects that it is a corporation, authorized to do a legitimate business, and that, as it could not lawfully authorize Fuller to do an illegitimate business, it cannot be bound by his acts in the prosecution of it; that the attempt to confer such authority would be ultra vires, and the attempted ratification of the agent’s acts equally so. The position is untenable. A person, equally with a corporation, has no lawful power to do wrong; but both have the capacity to act, and the capacity to act amiss inheres in the capacity to act at all. Given the power and capacity to do right, the actor may nevertheless do wrong. Unless the actor is wholly irresponsible, he must answer for his wrong action, partly in justice to those injured thereby, and partly as a deterrent to its like repetition by himself and others. If theagents of a railroad corporation take my timber or iron against my consent, and convert it into a bridge, to the use of the corporation, the corporation must either restore my property, or pay me for it. Here the defendant corporation has obtained the plaintiff’s money. It was obtained by means of wager contracts. Confessing that it has the money, the defendant practically argues that, because it could not thus obtain it within its lawful powers, it does not really have it. Pretending to disclaim the transactions by which it obtained, the money, it practically argues that its pretended disclaimer gives it title to keep the money. But, in truth, it cannot perfect its disclaimer of the transaction without surrendering its fruits; it cannot retain the money without adopting its agent’s method of obtaining it; it cannot insist upon a defense so long as it refuses to qualify itself to interpose it. The doctrine of ultra vires is in no wise applicable to the case. We have examined the various other exceptions to the admission of evidence, and to the rulings of the court, and find none which require a reversal. Judgment affirmed, with costs.

Cases cited

Story v. Salomon 71 N. Y. 420 N.Y. 1877-12-11 p. 402