Kahn v. Walton

46 Ohio St. (N.S.) 195
CourtOhio Supreme Court
DecidedJanuary 8, 1889
StatusPublished

This text of 46 Ohio St. (N.S.) 195 (Kahn v. Walton) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kahn v. Walton, 46 Ohio St. (N.S.) 195 (Ohio 1889).

Opinions

Williams, J.

The evidence tends to prove the facts found by the district court; and, as this court is not required to determine the weight of the evidence, the facts so found, will, in the disposition of the case, be regarded as established by the •evidence. The case, shown by these facts, and those admitted by the pleadings, is, that Kahn who was a commission broker in Cincinnati, doing business with, and for Ream & Co., brokers and commission merchants in Chicago, bought of, or through them wheat and pork for future delivery, so called, on Walton’s account. The transactions were mere speculations, or ventures on the prices of the commodities named, without any intention on the part of the parties concerned, that the property should either be delivered, or paid for; but all the parties understood, and intended that settlements should be made between them," on the differences between the market prices, at the dates fixed for delivery, ■and those named in the contracts. Kahn was to have a commission for his services, and he advanced margins on the deals. Walton was loser, and drew his two checks, amounting to two thousand dollars, on the bank where he had funds, payable to Kahn, for moneys paid by him on the deals and losses. Walton also paid Kalm five hundred dollars in money on the same account. Kahn telegraphed to the bank, inquiring if Walton’s checks for the amount of those drawn to him were good, and received an affirmative answer.

Walton notified the bank not to 'pay the checks, and before their presentation, brought his action to enjoin their payment.

I. Upon this state of case, the first inquiry naturally is, were the speculative transactions in which the parties engaged, in the nature of wagers, and for that reason illegal? In the ■determination of this question it is not deemed material [204]*204whether they fall within the provisions of our statutes against gaming and wagering, or do not; for, it is generally held in. this country, that wagering contracts, though not prohibited by statute, are illegal, and void as against public policy. And the great weight of authority is to the effect, that, contracts of the kind the district court found those involved in this case, to be, are void as wagering agreements.. This has been held by the courts of last resort in every state where the question has been presented, and by the-Supreme Court of the United States. The rule generally accepted is, that contracts for the sale of personal property to-be delivered in the future are valid, if the parties really intend and agree that the property is to be delivered by the-seller, and the price is to be paid by the purchaser, though the seller have not the goods, nor any other means of getting-them, than to go into the market and buy them. But if the-real intent be merely to speculate on the rise and fall of prices,, and the goods are not to be delivered, but one party is to pay to the other the difference betweeen the contract price and the-market price of the goods at the date fixed for executing the-contract, then the contract partakes of the nature of a wager and is void. Irwin v. Williar, 110 U. S. 499; Higgins v. McCrea, 116 U. S. 671; Man v. Bishop, 136 Mass. 495; Gregory v. Wendel, 40 Mich. 432; Cole v. Milmine, 88 Ill. 349; Kingsbury v. Kirwan, 77 N. Y. 612; Lowry v. Dillman, 59 Wis. 197.

II. The facts found by the district court, plainly defineKahn’s relation to the unlawful agreements. He was directly connected with them; and with full knowledge of their character, performed services and expended money to promote and forward them. It was his intention, as well as the intention of the other parties, that the property should not be delivered,, or paid for, but that the differences in the prices should be adjusted in money. It is true, Kahn was the broker, and had no pecuniary interest in the business except his commissions, and the repayment of whatever sums he might advance for margins and to pay losses as the business progressed. He-[205]*205nevertheless, negotiated the wagering contracts and was party to them.

The legal effect of . such relation to contracts of that nature, was determined in the case of Irwin v. Williar, supra. The conclusion of the court is thus stated: In Roundtree v. Smith, 108 U. S. 269, it was said that brokers who had negotiated such contracts, suing not on the contracts themselves, but for services performed and money advanced for defendant at his request, though they might under some circumstances be so •connected with the immorality of the contract as to be affected by it, they are not in the same position as a party sued for the •enforcement of the original agreement. It is certainly true that a broker might negotiate such a contract without being privy to the illegal intent of the principal parties to it which renders it void, and in such a case, being innocent of any violation of law, and not suing to enforce an unlawful contract, has a meritorious ground for the recovery of compensation for services and advances. But we are also of the opinion that when the broker is privy to the unlawful design of the parties, and brings them together for the very purpose of entering into an illegal agreement, he is particeps criminis, and can not ■recover for services rendered or losses incurred by himself in behalf of either in forwarding the transaction.” We accept this as a sound and wholesome rule, and under its operation, the checks, given by Walton to Kahn, for services rendered and losses paid by him in the unlawful enterprise, are tainted with the vice of their origin, and are subject to all the infirmities of securities given for illegal considerations.

III. It is contended, that the drawing of the cheeks by Walton on the bank where he had sufficient funds to pay them, and the bank’s response to the inquiry of Kahn’s agent, that checks to their amount were good, was a specific appropriation •of the fund, and amounted to payment of the debt for which they were drawn ; whereby the' contract became fully executed.

A check, being simply a written order of a depositor to his banker to make a certain payment out of his funds’, is executory, and, of course, revocable at any time before the bank has paid it, or committed itself to its payment. It operates, it is [206]*206true, as an assignment of the fund on which it is drawn pro■ tanto, and binds the bank to its payment out of the fund when presented, unless revoked; but, it is not itself payment of the debt for which it is drawn, unless it be so agreed between the parties. Ordinarily it is only a means of payment, and the debt is not extinguished, unless and until the check be paid, or the holder be guilty of laches which may opei'ate as a discharge of the drawer. The bank is the agent of the drawer. Its duty is to pay his money as he directs. It owes no duty to the holder, except under the drawer’s directions, until by virtue of those directions it assumes some obligation to the holder. Up to that time the latest order from the drawer governs. But after the bank has paid the check, or placed itself under an obligation to pay it, the drawer’s power of revocation is ended. This obligation may be incurred by acceptance. It is sometimes said that the legal effect of the acceptance is to place the holder of the check in the position of a depositor.

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Related

Espy v. Bank of Cincinnati
85 U.S. 604 (Supreme Court, 1874)
Roundtree v. Smith
108 U.S. 269 (Supreme Court, 1883)
Irwin v. Williar
110 U.S. 499 (Supreme Court, 1884)
Higgins v. McCrea
116 U.S. 671 (Supreme Court, 1886)
Kingsbury v. . Kirwan
77 N.Y. 612 (New York Court of Appeals, 1879)
Harrington v. Bigelow
11 Paige Ch. 349 (New York Court of Chancery, 1844)
Atwood v. Fisk
101 Mass. 363 (Massachusetts Supreme Judicial Court, 1869)
Mann v. Bishop
136 Mass. 495 (Massachusetts Supreme Judicial Court, 1884)
Lowry v. Dillman
18 N.W. 4 (Wisconsin Supreme Court, 1884)
Cole v. Milmine
88 Ill. 349 (Illinois Supreme Court, 1878)
Gregory v. Wendell
40 Mich. 432 (Michigan Supreme Court, 1879)

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Bluebook (online)
46 Ohio St. (N.S.) 195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kahn-v-walton-ohio-1889.