Wheeler v. Stock Exchange , 72 N.H. 315 ( 1903 )

The superior court ruled that the defendants were estopped to deny Letourneau's agency for them in the transactions upon which the action arises. There is no contention that this ruling was erroneous in law or unauthorized by the facts. The case, therefore, upon the main question, may be considered as though the plaintiff's dealings were directly with the defendants.

It does not appear that any question arising upon such contracts for the purchase or sale of stocks as are described in the case has heretofore reached this court for decision. In other jurisdictions the questions now raised have often been presented and decided. In such cases it has been held that contracts for the purchase and sale of merchandise for future delivery at a fixed price are valid if the parties contemplate the actual delivery of the subject of the contract. But when the parties do not in fact intend such actual delivery, but their real purpose, whatever the language of the contract, is to adjust the same at some future time by the payment of the difference between the price named in the contract and the market price at the time, the generally accepted doctrine in this country is that such contracts are mere wagers, and are null and void. Benj. Sales, ss. 82, 83, 541, 542; Dilloway v. Alden, 88 Me. 230, — 33 Atl. Rep. 981; Harvey v. Merrill, 150 Mass. 1; Wagner v. Hildebrand, 187 Pa. St. 136, — 41 Atl. Rep. 34; Jamieson v. Wallace, 167 In. 388, — 59 Am. St. Rep. 302, note 308; Irwin v. Williar, 110 U.S. 499, 508, 509. Any money or property deposited, paid or delivered by any person upon a wager or its loss may be recovered by such person; and any person receiving any money or property won by him upon any wager is liable to the person losing the same in the proper action. P. S., c. 270, ss. 16, 17. Under these provisions, the only question is whether the money lost by the plaintiff was deposited, paid, or delivered to the defendants upon a wager.

It is not necessary to rely upon the general current of authority that such contracts are wagers, for the legislature has specifically defined the contracts upon which the right of action depends. "Any contract or agreement for the purchase, sale, loan, payment, or use of money or property, real or personal, the terms of which are made to depend upon, or are to be varied or affected by, any uncertain event in which the parties have no interest except that created by such contract or agreement, shall be deemed a bet or wager." P. S., c. 270, s. 18. The contracts described in the case, as the parties understood them, were mere wagers within the terms of this statute. The margin deposited by the plaintiff was the plaintiff's bet or stake. The uncertain event, upon which depended the result of the transaction, was the market price of the stock when the transaction was closed. The plaintiff could order it closed at any time, when the amount due him from the defendants was determined by the relation between the market price and the price named in the contract. The plaintiff made or lost as the market price was greater or less, accordingly as he had bought or sold, as his action was termed; while if the market price varied from the contract price against the plaintiff to the amount of the margin, the transaction was closed and the plaintiff's stake was lost. The finding, that in a purchasing contract the plaintiff could have had his stock delivered if he wanted it, is immaterial, because the real contract, as understood by the parties, was that no stock was to be delivered at any time.

The defendants excepted to all oral testimony as to the intention and understanding of the parties. The purpose of the evidence was to prove a fact which, if proved, established that the contract was void and never had any legal effect. This fact could be proved by any competent evidence, even if it contradicted the recitals of the writing. 1 Gr. Ev., s. 284; Chit. Cont. (10th Am. ed.) 119; Collins v. Blantern, 2 Wils. 341, 350, 352. Their intention being material, the parties themselves could testify thereto. Moore v. Davis, 49 N.H. 45, 56. The intention of the parties in cases like the present is to be found from all the circumstances surrounding the transaction. Evidence of any facts having probative force upon the issue is competent. Jamieson v. Wallace, 167 Ill. 388, 396, — 59 Am. St. Rep. 302; Sprague v. Warren, 26 Neb. 326, — 3 L.R.A. 679; and cases above cited.

It is found that the releases pleaded by the defendants were obtained by fraud. There is no specific exception to this finding; but it appears that at the close of the evidence a motion for a nonsuit was denied, subject to exception. Under this exception, the only objection urged is as to the sufficiency of the evidence to authorize the general finding of fraud. A general verdict implies the finding of all facts necessary to support it of which there is evidence; and hence a general finding made by the court or a referee must stand unless some of the special facts found are inconsistent there with Concord Coal Co. v. Ferrin, 71 N.H. 33; Strafford Savings Bank v. Church, 69 N.H. 582; Noyes v. Patrick,58 N.H. 618. A part of the evidence is reported, and certain facts are found. No objection is made to the sufficiency of the testimony to authorize the evidentiary findings made. The only question, therefore, for consideration is whether from the facts and evidence reported the inferences necessary to sustain the finding of fraud could reasonably be made. Fraud may consist either in, the assertion as true of that which is known to be false or not known to be true as to some matter material to the contract, or the intentional concealment of some material fact. Perry v. Hardy, 71 N.H. 151, 152; Hanson v. Edgerly, 29 N.H. 343, 358; Hoitt v. Holcomb, 23 N.H. 535, 552. "Where one party to a contract stands by and allows the other to enter into a contract under delusion of the existence of which he is aware, and which he might have removed, the contract is void." Chit. Cont. (10th Am. ed.) 756.

Briefly, the facts are that the plaintiff dealt with Letourneau understanding that he was the defendants' agent, and that his contracts were actually with the defendants, although in form they were with Letourneau alone. Letourneau had represented himself as the defendants' agent upon printed matter sent out from his office. In October, 1898, the defendants wrote to Letourneau objecting to such representation, but he nevertheless continued with the defendants' knowledge, and without further objection from them so far as appears, to hold himself out as their agent until the time of his failure, about December 18, 1899. The defendants then sent one Mepham to Berlin to represent them and to adjust matters. The parties did not undertake to adjust the claim made in this suit, but did attempt to settle the matters arising out of their wager contracts; and in such adjustment the defendants secured the release of all claims, which is now pleaded. Whether such a release, obtained under such circumstances, would be an answer to the claim made in this suit, is a question which has not been raised. The controversy then between the parties was as to the amount due from the defendants. If they were responsible as principals for Letourneau's contracts, a much larger sum was understood to be due than if they were not. At an interview between Wheeler (the plaintiff) and Letourneau, Mepham said Letourneau was not their agent. Letourneau replied, "I can't help it; I was your agent." Mepham said, "Didn't we notify you to take that agency business off your letter-heads?" Letourneau said, "I can't help it; I didn't take it off."

From this evidence it would not be unreasonable to find that Mepham's purpose was to induce Wheeler to believe that the defendants had not so conducted as to render themselves liable as principals for Letourneau. The representation that they had forbidden Letourneau to so act, omitting the material facts that the notice had been given long before and to the defendants' knowledge had not been complied with, had a direct tendency to deceive the plaintiff, and it cannot be said that it would be unreasonable to infer that the half-truth was stated for the purpose of deceiving Wheeler, and that the omission of the material facts qualifying the statement was intentional. Furthermore, it is found that the defendants received of Letourneau $720 of the plaintiff's money, upon the agreement that they would reinstate all of the plaintiff's transactions. It does not appear that anything beyond the agreement of the defendants to reinstate the plaintiff's transactions upon the receipt of the money was necessary to effect such reinstatement as between the parties. If that be so, the statement of Mepham to Wheeler that his trades were not reinstated was a misstatement of a material fact and evidence of fraud. If, however, the agreement to reinstate contemplated the performance of some, act which the defendants agreed to do but did not do, to which Mepham's denial related, the evidence, if it does not amount to falsification as to the material fact, has some tendency to establish want of good faith on the part of the defendants in the whole transaction, and bears upon the honesty of Mepham's conduct in the settlement. Upon the case, it might fairly be found that although the statement as to agency in fact was true, nevertheless Mepham knew that Wheeler executed the release under a delusion as to the facts created by his representation, and hence that the contract was void.

The defendants further object that it does not appear that the plaintiff has offered to return the sum received by him under the release. It is apparent that this objection was not raised at the trial. If then made, it might have been obviated by proof of facts establishing that such offer was not necessary as matter of law, or such orders could have been made as would require the plaintiff to do what he equitably ought to do. Upon the facts, it does seem that any order would be required. Mead v. Welch,67 N.H. 341, 342.

Exceptions overruled.

All concurred.