HUNGER, District Judge.
This appeal seeks a review of the action of the court below in disallowing a part of a claim filed against the bankrupt’s estate, and in allowing an offset in favor of the estate as against another part of the claim. The bankrupt corporation was engaged in the business of buying, selling, and shipping grain and .grain products. Its principal place of business was at Fremont, Neb., where its mill was situated. Fred M. Brown was in the active charge of its business, and was secretary and treasurer of the corporation. The plaintiffs were partners engaged in the grain commission business, having; a principal place of business at Chicago, but also having offices at Fremont and Omaha, Neb., in charge of employes wim solicited and received orders for dealing in grain, and this partnership will hereafter be referred to as the plaintiff.
The bankrupt shipped to the plaintiff, at various times, many carloads of grain, drawing upon the plaintiff, with bill of lading attached, for the estimated value of the grain. The plaintiff paid these drafts, and the first item of its claim was for overpayments made [682]*682above the ascertained value of the shipments. The third item of its claim was for the amount of a promissory note given by the bankr rupt for money loaned by the plaintiff. The correctness of these items was conceded by the trustee. The second item of claim was for a balance claimed by plaintiff, as the bankrupt’s brokers, for advances made and commissions earned in making purchases and sales for the bankrupt, at its request, upon the Chicago Board of Trade. The trustee asserted that this balance arose from gambling transactions .between the bankrupt and the plaintiff. He also asserted a claim of offset ■ against the conceded items due to the plaintiff, alleging that Mr. Brown, purporting to act in the bankrupt’s name, had wrongfully used the bankrupt’s funds without its consent or knowledge, in payments to the plaintiff of amounts which he had lost in wagering transactions in grain, and asked for an allowance of the amount thus lost. The referee in .bankruptcy disallowed the second item of plaintiff’s claim, and allowed the offset claimed by the trustee, finding that the bankrupt had engaged through the plaintiff in buying and selling grain upon the Chicago Board of Trade upon “margins.”
• Upon a petition for review the District Court found the same balances to be due that the referee had found, and that neither the bankrupt nor plaintiff had had any intention, in-the disputed'transactions, that there should be any delivery of grain, and that these transactions were wagers, but also found that each order given by the bankrupt to the plaintiff’s agents was immediately transmitted to the plaintiff at Chicago, and corresponding orders were, by the plaintiff, executed on the floor of the Board of Trade,.and that both plaintiff and the brokers with whom they made such corresponding trades intended to carry out these contracts according to the rules of the Board of Trade, and to receive or deliver the grain contracted for, and to make payment therefor, unless the liability should be set off by other transactions, as authorized by the rules, and that plaintiff did make settlement of these contracts.
[1] The effect of these findings is discussed by counsel, and it must be conceded that they are to be taken as presumptively correct, and should be allowed to stand,, unless some obvious error has occurred in the application of the law, or some serious or important mistake has been made in the consideration of the evidence, but they are not conclusive. Houck v. Christy, 152 Fed. 612, 614, 81 C. C. A. 602; In re Hawks (D. C.) 204 Fed. 309, 312.
The evidence discloses that the bankrupt, acting through Brotyn, gave a series of orders to the plaintiff’s employés in charge of the Fremont and Omaha offices, directing the purchase or sale upon the Chicago Board of Trade of specified quantities of grain for future delivery, and .making deposits of money, unless the plaintiff already held a balance of the bankrupt’s money in its hands. When such an order was given, it was at once telegraphed to plaintiff by its agents, and the plaintiff at once purchased or sold corresponding amounts of grain in conformity to the bankrupt’s order; and a message was sent plaintiff’s agents, reporting the execution of the order, and the bankrupt was so inform.ed; but it was also informed that it was subject to confirmation at Chi[683]*683cago. Within a few days a letter of confirmation was sent the hank-rapt from the plaintiff at Chicago, containing the details of the transaction, and notifying the bankrupt that it must keep on deposit with plaintiff funds sufficient to protect it against changes in values of the grain, and that in case such funds, in the plaintiff’s judgment, became insufficient to give this protection, the bankrupt understood that plaintiff was authorized to dispose of the contract on the open market without further notice. It also stated that the plaintiff reserved the right to substitute other principals with bankrupt, and that all purchases and sales made for the bankrupt were made according to and subject to the rules and customs of the exchange where the trades were made. It also stated that all transactions made by plaintiff for bankrupt’s account contemplated the actual receipt and delivery of all the property and payment therefor.
[2] The plaintiff executed all of the bankrupt’s orders by making lawful and binding contracts of purchase or sale, and all of these contracts were performed or legally satisfied by the plaintiff. The rules of the Board of Trade allowed delivery, when delivery was due, of warehouse certificates for the requisite amount of grain in Chicago. On its face each of these contracts of the bankrupt appeared to be lawful and this presumption could only be overthrown by evidence showing it to be invalid. Bibb v. Allen, 149 U. S. 481, 492, 13 Sup. Ct. 950, 37 L. Ed. 819; Wilhite v. Houston, 200 Fed. 391, 392, 118 C. C. A. 542; Boyle v. Henning (C. C.) 121 Fed. 376, 380; Browne v. Thorn (C. C. A.) 272 Fed. 950, 952; Gettys v. Newburger (C. C. A.) 272 Fed. 209, 216.
[8, 4] As these orders were given to the plaintiff, as the bankrupt’s broker, to be. executed upon the Board of Trade at Chicago, the legality of the transactions is governed by the laws of Illinois, and in Illinois such a contract is void only when both parties intend it as a wager, to he settled by the payment of differences, and not by the delivery of grain. Berry v. Chase, 146 Fed. 625, 629, 77 C. C. A. 161; Wilhite v. Houston, 200 Fed. 390, 392, 118 C. C. A. 542; Beal v. Carpenter; 235 Fed. 273, 278, 148 C. C. A. 633; Erwin v. Williar, 110 U. S. 499. 508, 4 Sup. Ct. 160, 28 L. Ed. 225; Bibb v. Allen, 149 U. S. 481, 489, 13 Sup. Ct. 950, 37 L. Ed. 819; Clews v. Jamieson, 182 U. S. 461, 481, 491, 21 Sup. Ct. 845, 45 L. Ed. 1183; Browne v. Thorn (C. C. A.) 272 Fed. 950, 952; Gettys v. Newburger (C. C. A.) 272 Fed. 209, 217, 219.
[5, 6] Mr.
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HUNGER, District Judge.
This appeal seeks a review of the action of the court below in disallowing a part of a claim filed against the bankrupt’s estate, and in allowing an offset in favor of the estate as against another part of the claim. The bankrupt corporation was engaged in the business of buying, selling, and shipping grain and .grain products. Its principal place of business was at Fremont, Neb., where its mill was situated. Fred M. Brown was in the active charge of its business, and was secretary and treasurer of the corporation. The plaintiffs were partners engaged in the grain commission business, having; a principal place of business at Chicago, but also having offices at Fremont and Omaha, Neb., in charge of employes wim solicited and received orders for dealing in grain, and this partnership will hereafter be referred to as the plaintiff.
The bankrupt shipped to the plaintiff, at various times, many carloads of grain, drawing upon the plaintiff, with bill of lading attached, for the estimated value of the grain. The plaintiff paid these drafts, and the first item of its claim was for overpayments made [682]*682above the ascertained value of the shipments. The third item of its claim was for the amount of a promissory note given by the bankr rupt for money loaned by the plaintiff. The correctness of these items was conceded by the trustee. The second item of claim was for a balance claimed by plaintiff, as the bankrupt’s brokers, for advances made and commissions earned in making purchases and sales for the bankrupt, at its request, upon the Chicago Board of Trade. The trustee asserted that this balance arose from gambling transactions .between the bankrupt and the plaintiff. He also asserted a claim of offset ■ against the conceded items due to the plaintiff, alleging that Mr. Brown, purporting to act in the bankrupt’s name, had wrongfully used the bankrupt’s funds without its consent or knowledge, in payments to the plaintiff of amounts which he had lost in wagering transactions in grain, and asked for an allowance of the amount thus lost. The referee in .bankruptcy disallowed the second item of plaintiff’s claim, and allowed the offset claimed by the trustee, finding that the bankrupt had engaged through the plaintiff in buying and selling grain upon the Chicago Board of Trade upon “margins.”
• Upon a petition for review the District Court found the same balances to be due that the referee had found, and that neither the bankrupt nor plaintiff had had any intention, in-the disputed'transactions, that there should be any delivery of grain, and that these transactions were wagers, but also found that each order given by the bankrupt to the plaintiff’s agents was immediately transmitted to the plaintiff at Chicago, and corresponding orders were, by the plaintiff, executed on the floor of the Board of Trade,.and that both plaintiff and the brokers with whom they made such corresponding trades intended to carry out these contracts according to the rules of the Board of Trade, and to receive or deliver the grain contracted for, and to make payment therefor, unless the liability should be set off by other transactions, as authorized by the rules, and that plaintiff did make settlement of these contracts.
[1] The effect of these findings is discussed by counsel, and it must be conceded that they are to be taken as presumptively correct, and should be allowed to stand,, unless some obvious error has occurred in the application of the law, or some serious or important mistake has been made in the consideration of the evidence, but they are not conclusive. Houck v. Christy, 152 Fed. 612, 614, 81 C. C. A. 602; In re Hawks (D. C.) 204 Fed. 309, 312.
The evidence discloses that the bankrupt, acting through Brotyn, gave a series of orders to the plaintiff’s employés in charge of the Fremont and Omaha offices, directing the purchase or sale upon the Chicago Board of Trade of specified quantities of grain for future delivery, and .making deposits of money, unless the plaintiff already held a balance of the bankrupt’s money in its hands. When such an order was given, it was at once telegraphed to plaintiff by its agents, and the plaintiff at once purchased or sold corresponding amounts of grain in conformity to the bankrupt’s order; and a message was sent plaintiff’s agents, reporting the execution of the order, and the bankrupt was so inform.ed; but it was also informed that it was subject to confirmation at Chi[683]*683cago. Within a few days a letter of confirmation was sent the hank-rapt from the plaintiff at Chicago, containing the details of the transaction, and notifying the bankrupt that it must keep on deposit with plaintiff funds sufficient to protect it against changes in values of the grain, and that in case such funds, in the plaintiff’s judgment, became insufficient to give this protection, the bankrupt understood that plaintiff was authorized to dispose of the contract on the open market without further notice. It also stated that the plaintiff reserved the right to substitute other principals with bankrupt, and that all purchases and sales made for the bankrupt were made according to and subject to the rules and customs of the exchange where the trades were made. It also stated that all transactions made by plaintiff for bankrupt’s account contemplated the actual receipt and delivery of all the property and payment therefor.
[2] The plaintiff executed all of the bankrupt’s orders by making lawful and binding contracts of purchase or sale, and all of these contracts were performed or legally satisfied by the plaintiff. The rules of the Board of Trade allowed delivery, when delivery was due, of warehouse certificates for the requisite amount of grain in Chicago. On its face each of these contracts of the bankrupt appeared to be lawful and this presumption could only be overthrown by evidence showing it to be invalid. Bibb v. Allen, 149 U. S. 481, 492, 13 Sup. Ct. 950, 37 L. Ed. 819; Wilhite v. Houston, 200 Fed. 391, 392, 118 C. C. A. 542; Boyle v. Henning (C. C.) 121 Fed. 376, 380; Browne v. Thorn (C. C. A.) 272 Fed. 950, 952; Gettys v. Newburger (C. C. A.) 272 Fed. 209, 216.
[8, 4] As these orders were given to the plaintiff, as the bankrupt’s broker, to be. executed upon the Board of Trade at Chicago, the legality of the transactions is governed by the laws of Illinois, and in Illinois such a contract is void only when both parties intend it as a wager, to he settled by the payment of differences, and not by the delivery of grain. Berry v. Chase, 146 Fed. 625, 629, 77 C. C. A. 161; Wilhite v. Houston, 200 Fed. 390, 392, 118 C. C. A. 542; Beal v. Carpenter; 235 Fed. 273, 278, 148 C. C. A. 633; Erwin v. Williar, 110 U. S. 499. 508, 4 Sup. Ct. 160, 28 L. Ed. 225; Bibb v. Allen, 149 U. S. 481, 489, 13 Sup. Ct. 950, 37 L. Ed. 819; Clews v. Jamieson, 182 U. S. 461, 481, 491, 21 Sup. Ct. 845, 45 L. Ed. 1183; Browne v. Thorn (C. C. A.) 272 Fed. 950, 952; Gettys v. Newburger (C. C. A.) 272 Fed. 209, 217, 219.
[5, 6] Mr. Brown, for the bankrupt, testified that he did not intend to receive or deliver any grain oil any of these purchases or sales, but he explained this statement by saying that he always meant to close out all of his contracts before delivery was due, by giving an order of sale or purchase that would balance his prior order. He also testified that he intended to perform any obligation incurred. This testimony falls far short of showing an intention of the bankrupt not to accept delivery, when delivery should be due. Rountree v. Smith, 108 U. S. 269, 275, 2 Sup. Ct. 630, 27 L. Ed. 722; Cleage v. Laidley, 149 Fed. 346, 350, 79 C. C. A. 284. The trustee urges that, the fact that no grain was either delivered or tendered for delivery demonstrates [684]*684that no delivery was intended; but it also appears that no contract was carried through to the time when delivery was required. So this fact is inconclusive. Cleage v. Laidley, supra; Wilhite v. Houston, supra; Kirkpatrick v. Adams (C. C.) 20 Fed. 287.
[7, 8] It is also urged that the contracts of most of the customers of the Fremont and Omaha offices were speculative and resulted in no deliveries, but what others intended and what others did does not determine the question of the bankrupt’s intention. Rountree v. Smith, 108 U. S. 269, 276, 2 Sup. Ct. 630, 27 L. Ed. 722; Flowers v. Bush & Witherspoon Co., 254 Fed. 519, 521, 166 C. C. A. 77; Browne v. Thorn (C. C. A.) 272 Fed. 950, 953; Gettys v. Newburger (C. C. A.) 272 Fed. 209, 219. As against these circumstances are the facts that bankrupt was a milling company, known to plaintiff to be a dealer and shipper of grain; that hedging by such dealers is a common and lawful practice (Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 249, 25 Sup. Ct. 637, 49 L. Ed. 1031; Gettys v. Newburger [C. C. A.] 272 Fed. 209, 218); that the contracts appeared to be lawful when made; and that no claim is made that the bankrupt ever notified plaintiff or its agents of any intention not to perform the contracts, if delivery became due, and the bankrupt’s manager testified that he intended to fulfill all obligations.
[9] There is but one conclusion to be drawn from these facts, and that is that there was no proof of an intention of the bankrupt, at the time it entered into these contracts, not to accept or make delivery, or to merely make settlement of the differences in prices. But, even if the intention were such as it now asserts, there is no evidence that the plaintiff was aware of such intention, or that it did not intend to make or accept deliveries, and therefore the claim of the trustee that these were gambling contracts cannot be sustained, because of the lack of mutual intention to make wagering transactions. Spring & Co. v. Carpenter, 154 Fed. 487, 488, 83 C. C. A. 327; Parker v. Moore, 115 Fed. 799, 803, 53 C. C. A. 369; Parker & Co. v. Moore (C. C.) 125 Fed. 807, 808; In re Trion Mfg. Co. (D. C.) 214 Fed. 161; Bailey & Graham v. Phillips (C. C.) 159 Fed. 535, 539; Gettys v. Newburger (C. C. A.) 272 Fed. 209, 221.
[10] The trustee also makes the claim that wagering contracts were beyond the corporate powers of thfe bankrupt. What has been said disposes of this objection, but it may be noted that the making of sales or purchases for future delivery of grain is embraced within the corporate powers of the bankrupt, as its charter authorized it to buy or sell grain, to make contracts of any kind or description, and to do any and all acts that a copartnership or natural person might do.
The conclusions already stated make it unnecessary to discuss other contentions. The decree of the lower court will'be reversed, with directions to allow the plaintiff’s claim as filed, and disallowing the trustee’s claim of set-off.