Peck v. Doran & Wright Co. — 32 N.Y. St. Rep. 405

Majority

p. 405

Hency C. Peck, Resp’t, v. The Doran & Wright Co., Limited, App’lt.

(Supreme Court, General Term, Third Department

Filed July 7, 1890.)

Headnote

1. Wager contracts — Proof of.

In an action to recover moneys lost on wager contracts for the purchase» and sale of wheat, plaintiff testified that at the commencement of his dealings defendant’s agent stated that they booked the orders themselves; that they had no.wheat to deliver ar.d did not expect their customers to want any; that it was merely to adjust differences. This was denied by the agent. Plaintiff also testified that he did not intend to buy any wheat. Held, that the absence of testimony that any wheat was bought tended to> indicate that they dealt with reference to the price of wheat and not in. wheat, and to sustain the verdict in plaintiff’s favor.

2. Same — Ultra vires.

In an action against a corporation to recover moneys lost through wager contracts made with their agent, the doctrine of ultra vires cannot avail as a defense, where the corporation retains the proceeds of such contracts.

Appeal by defendant from a judgment entered upon a verdict upon trial at the Albany county circuit in October, 1889, and from the order denying the motion made upon the minutes to set aside the verdict and grant a new trial.

The action was brought by the plaintiff to recover under the statutes the money lost by him upon wager contracts with the defendant upon the market price of wheat. The defendant was a corporation organized to do a general brokerage and commission business in grain and other commodities. It had 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 pbtained. Other facts are stated in the opinion.

Wm. H. Shepard, for app’lt; Eugene Burlingame, for resp’t.

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 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

p. 406

was ordered and the day the sale was ordered. Kingsbury v. Kirwan, 77 N. Y., 612 ; Story v. Salomon, 71 id., 420; Bigelow v. Benedict, 70 id., 204.

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 fact.

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 the agents 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 agrees 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 methods of obtaining it; it cannot insist upon a defense so long as it refuses to qualify itself to inter

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pose 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.

Learned, P. J., concurs; Mayham, J., not acting.