Zeltner v. Irwin

The action was brought by the assignee of one Annie W. Smith and Annie W. W. Smith to recover from the defendant sums of money which the two assignors had sent to the defendant to be used in the purchase of futures in grain in the Chicago market. The claim of the plaintiff is that the money was to be used ostensibly in the purchase and sale of grain in that market for future delivery, but that it was understood between the two assignors 'and the defendant that no actual delivery of grain should be received or made, but that the entire transactions had with the money should be mere wagers or bets, dependent upon the rise and fall of the prices of grain in the market, which prices fluctuated from day to day, and were unknown and contingent events. It was claimed by the plain

There is no doubt that wagering contracts, as such, were not invalid at common law, unless, in addition to being wagering contracts, they contravened some recognized rule of public policy. The wagering element, merely, was not sufficient to make the contract invalid, or to authorize a person who had invested money upon it to recover that money from the person to whom he had paid it. Chit. Cont. (11th Am. Ed.) 735; Bunn v. Riker, 4 Johns. 428 . The right to recover of the plaintiff, then, must stand upon the statute of the state of New York. But that statute has no extraterritorial force, and it cannot operate to make unlawful any contract which was valid in the jurisdiction where it was made. If the plaintiff’s assignors entered into this contract in the state of Pennsylvania, they were bound by it, if it was a valid contract there. Story, Confl. Laws, § 282; Jewell v. Wright, 30 N. Y. 259 . There is no proof in the case, and no allegation in the complaint, that in Pennsylvania such con- • tracts were invalid, or that by the laws of that state money paid upon them could be recovered back. Such invalidity, and the right to recover, only come to exist by the statute, and there is no presumption that the statute of Pennsylvania in that respect is like the statute of the state of New York (Cutter v. Wright, 22 N. Y. 472 ); but, on the contrary, in the absence of proof on the subject, the presumption is that the law which obtains there is the common law (Greenl. Ev. [14th Ed.] § 43, note; Harris v. White, 81 N. Y. 532 ). By that law this contract was not illegal. Therefore it is material to consider whether the plaintiff’s contention that the contract was made in the state of. New York is well founded, because, if it is not, he has failed to establish a right to recover.

“That people down in Wall street were content to put in large sums of money, and get large gains, whereas, people of smaller means would put in smaller sums; that they could add up all together, and then they would be content with smaller amounts, while rich people would not be content with smaller amounts; that poor people would be content with $10 gain, while rich people would not be bothered looking at that, but that he would put the whole lot together in the markets in Chicago, where he had facilities of knowing all about it, and that he rarely ever failed in his judgment on the market.”

The witness further stated that there was a little printed circular containing statements of profits:

“One. month, $10; another month, $10; some months, $10, or $15; one month, $20; and each month you get a whole lot of money. If you spent $100 each month, you got $10 extra; and, if you put that $10 back, you would get more, and in a short time you would get quite wealthy.”

This is the substance of the circular as given by the witness. She stated that, after she had received that circular, she sent a letter to Irwin from New York, to the address which was given in the circular. The contents of that letter are given. She says that she sent a check and a note at the same time, stating that:

“So many dollars were from Mamma, and so many from myself; and, when he sent the receipts, would he credit my mother with so much money, and me with so much money, and send each a separate receipt, so as not to get things mixed?"

The letter contained no reference to the circular, and no suggestion that it was sent in pursuance of any proposition or offer or. request contained therein. It is conceded that the defendant, in answer to the letter, returned a receipt containing substantially a contract to use the money in the purchase and sale of future contracts in grain for the account and risk of the person sending the money, in accordance with the rules of the Chicago Board of Trade; the receipt containing provisions as to the commissions to be paid to the defendant, and as to the payment of the profits and the liability

The plaintiff .claims that the circular constituted an offer on the part of Irwin to make a contract to speculate in futures at Chicago; that, when it was followed by the sending of money to him by the plaintiff’s assignors, the contract was complete; that, the money having been deposited in the post office in New York, the acceptance of Irwin’s offer was then made; and that, the acceptance having been made in this state, the contract was a New York state contract. It is very doubtful whether the evidence was sufficient to bring home to Irwin any knowledge that the circular was delivered to the plaintiff’s assignors, or, indeed, that it was issued by him. That such a circular was received by Mrs. Smith must be conceded, but that it was sent by Irwin, or that it was even issued by him, has not been proved. The fact that it bore his signature printed upon it is not, of itself, sufficient; and there was no reference to the circular, at the time the money was sent, from which it could be inferred that Irwin had any knowledge that the transaction had been undertaken on the faith of his advertisement. On the contrary, Mrs. Smith nowhere suggests that she made any reference in the letter which she sent. For that reason, without going further,- there is grave doubt whether the circular could be regarded as an offer made by Irwin which was accepted by Mrs. Smith, even if the circular itself could be said to amount to an offer to make a particular contract. But an examination of the circular shows quite clearly that it is not susceptible 'of any such construction. It is utterly impossible to say, from reading it, that any particular contract is proposed to be made. The advantages of a certain mode of dealing are set forth in glowing terms, and the facilities which the signer of the circular had to give to investors the benefit of these advantages are stated; but it is not possible to gather from the circular what was to be done with the money, except, generally, that it was to be used for speculative purposes in the Chicago markets. So far from being an offer to do any particular thing, by the acceptance of which a contract would be created, it is a mere proposal to assume business relations, for the purposes of speculation, with persons who should desire to undertake such things. It is like any other advertisement, the effect of which is simply to give notice to persons who desire to enter into a particular business or speculation that the advertiser is prepared to enter into a business relation; but it is not sufficiently definite to serve as the basis of a contract. An offer, to serve as such a basis, must be such as that, upon the acceptance, without more, not only can the contract be ascertained, but that it will be obligatory upon each party at the time the acceptance is deposited in the post office, whether the one making the offer receives it or not (Mactier v. Frith, 6 Wend. 108 ; Trevor v. Wood, 36 N. Y. 307 ); and unless it is sufficiently definite for that purpose, so that the contract is complete

Under all the circumstances of the case, it is clear to us that the circular, so called, was a mere advertisement; that the sending of the money to the defendant was the offer to enter into the contract; and that that offer reached the dignity of a contract only when it had been accepted by Irwin by the transmission to Mrs. Smith of the receipt, which it was conceded he sent, and she received. That was done in Pittsburg, and the contract, therefore, was made at that time, and it was a Pennsylvania, and not a New York, contract, and it is governed by the laws of that state, and not by the laws of the state of New York; and therefore the court below erred in holding that it was invalid under the laws of this state.

For these reasons, the judgment of the courts below must be reversed, and a new trial granted, with costs in all the courts to the appellant to abide the event. All concur.