Jones, J..
It is argued by counsel for defendant that fhe finding of the court that the transactions in question were gambling contracts is supported by the testimony of defendant’s manager and the documentary evidence referred to in the statement of facts.
According to the testimony of the manager he did not intend that there should be actual delivery of any of the grain bought or sold, although his testimony as to the rye and wheat sales was quite inconsistent. His testimony as to his personal intention was at least- rather unsatisfactory as showing the intention of the defendant company. The only instance in which the subject seems to have been considered by the board of directors was in the case of their order for the purchase of 3,000 bushels of oats.
The witness testified that the policy of the board of directors was against transactions of this kind. No record of the corporation authorizing the transactions was offered, in evidence, and none of the directors was called as a witness.
Defendant secured a line of credit from plaintiff, carried on numerous transactions, admitted to be legal, on the basis of that credit; does not question the authority of the manager, and directed one of the purchases’now questioned; but seeks to avoid that and other transactions of similar character because of the purely personal intention of its manager.
The trial court found that, although the defendant company intended to gamble on the market price of oats, it did [441]*441not inform the plaintiff of such intention, yet found that from all the facts and circumstances the plaintiff knew and shared that intention. Counsel for defendant argue that the letters and telegrams justify the conclusion that both parties were engaged in gambling transactions.
When defendant ordered the purchase of grain on the Milwaukee Chamber of Commerce it impliedly agreed to be governed by the rules and regulations governing that body. Bartlett v. Collins, 109 Wis. 477, 85 N. W. 703. According to some of those rules and the practice, an order to sell grain to be delivered in a given month entitles the seller to make delivery on any day of that month at his election. According to the- practice, when grain is bought for delivery no physical delivery in Milwaukee or at the residence of the -buyer is necessary. It may be made in cars, but is more often effected by means of warehouse receipts on grain stored in Chicago ready for actual delivery if required. If default is made by the purchaser, according to the rules he must pay the loss; that is often adjusted by a sale or purchase in the market of a like quantity of grain, which closes the transaction and avoids the penalty which might follow.
It was the testimony on the part of plaintiff that they deliver all grain they sell in some form or other; that the sale by them contemplated the actual delivery of grain whether they purchased a like amount which should be delivered later, or whether they made actual delivery of the grain. According to the custom, delivery of the warehouse receipts is made through the Chamber of Commerce Clearing Association, and it is not necessary for one who has purchased grain for future delivery to himself tender the receipt to.the purchaser, as that is handled through the clearing house, where a record is kept.
Counsel for defendant construe the letter of October 11th as showing that plaintiff had knowledge of defendant’s intention to wager on market values. This was sent soon [442]*442after filling the order to buy 3,000 bushels of oats. There had already been transactions between the parties in buying and selling grain which the court found to be legitimate. The term “bullish” is no doubt in constant use among commission merchants or others .dealing largely in grain, although to the uninitiated it may be suggestive of mere speculation. We think that the letter may be as reasonably construed as a caution not to invest heavily in a falling market as showing knowledge by plaintiff of any unlawful intention of defendant. It certainly *was not an encouragement to engage in betting on the market.
Counsel for defendant also interpret the letter, of May 2, 1921, as weighty evidence tending to show plaintiff’s knowledge of defendant’s unlawful intention. The defendant had not given instructions in reply to letters notifying-them that provision for the grain to be delivered in May should be made. That delivery in the form of warehouse receipts was soon expected, and was made on the following day, and .a telegram to that effect was sent. In reply defendant ordered a purchase of July oats in their place.
' In addition to the telegram, plaintiff wrote a letter in part as follows:
“It was a foregone conclusion that heavy deliveries of oats would be made in view of the liberal stocks in Chicago. We understand that several million were delivered. As we understand it, you have these oats as a hedge against stored oats which have been sold out and, of course, in that event., you will want to hold them until such a time as you buy the oats that have been sold out.”
Owing to the heavy depreciation in the market price after the order- had been made and executed there was a material loss which must be borne by one of the parties. It was arranged for in-a manner customary in the Chamber of Commerce with the consent of the defendant. We do not consider that the letter criticised by defendant’s counsel, [443]*443when construed with the- undisputed facts, bears out the construction sought to be given it.
There is also criticism of a transaction by which on April 1, 1921, plaintiff made a transfer of $1,000 from the car account to the “Ettrick Elevator Company, future account,” and it is claimed that this is evidence that the dealings were on margins. Plaintiff’s explanation was that this transfer from the open account was made so that interest might be charged and to show that the credit account had been reduced. Even if this change in the form of the account were to be treated as a margin, that would not invalidate an otherwise valid contract. Wall v. Schneider, 59 Wis. 352, 360, 18 N. W. 443; Hatch v. Douglas, 48 Conn. 116; Corbett v. Underwood, 83 Ill. 324; Union Nat. Bank v. Carr, 15 Fed. 438; Wagner v. Engei-Millar Co. 144 Wis. 486, 129 N. W. 392.
The principal contentions of defendant’s counsel relate to the purchase and sale by which a loss of $765.97 was incurred. The later transaction in which there was a loss of $72.22 was evidently for the purpose of closing up the former ones.
On the part of the plaintiff the testimony was that the company had no knowledge of any intention on the part of-the defendant not to accept or make deliveries of any of the grain according to their contracts and that the plaintiff intended to make and accept the deliveries. Unless the letters and telegrams which have been referred to disclose the unlawful intent t)f the parties, there was no written evidence of that character. The parties do not seem to have had oral communication and there was no oral testimony showing collusion between the managers of the two companies.
Much testimony was given as to the rules a.nd customs of the Chamber of Commerce in adjusting. accounts by the Clearing House Association when grain was delivered by [444]*444means of warehouse receipts. It does not seem necessary to state this evidence in detail..
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Jones, J..
It is argued by counsel for defendant that fhe finding of the court that the transactions in question were gambling contracts is supported by the testimony of defendant’s manager and the documentary evidence referred to in the statement of facts.
According to the testimony of the manager he did not intend that there should be actual delivery of any of the grain bought or sold, although his testimony as to the rye and wheat sales was quite inconsistent. His testimony as to his personal intention was at least- rather unsatisfactory as showing the intention of the defendant company. The only instance in which the subject seems to have been considered by the board of directors was in the case of their order for the purchase of 3,000 bushels of oats.
The witness testified that the policy of the board of directors was against transactions of this kind. No record of the corporation authorizing the transactions was offered, in evidence, and none of the directors was called as a witness.
Defendant secured a line of credit from plaintiff, carried on numerous transactions, admitted to be legal, on the basis of that credit; does not question the authority of the manager, and directed one of the purchases’now questioned; but seeks to avoid that and other transactions of similar character because of the purely personal intention of its manager.
The trial court found that, although the defendant company intended to gamble on the market price of oats, it did [441]*441not inform the plaintiff of such intention, yet found that from all the facts and circumstances the plaintiff knew and shared that intention. Counsel for defendant argue that the letters and telegrams justify the conclusion that both parties were engaged in gambling transactions.
When defendant ordered the purchase of grain on the Milwaukee Chamber of Commerce it impliedly agreed to be governed by the rules and regulations governing that body. Bartlett v. Collins, 109 Wis. 477, 85 N. W. 703. According to some of those rules and the practice, an order to sell grain to be delivered in a given month entitles the seller to make delivery on any day of that month at his election. According to the- practice, when grain is bought for delivery no physical delivery in Milwaukee or at the residence of the -buyer is necessary. It may be made in cars, but is more often effected by means of warehouse receipts on grain stored in Chicago ready for actual delivery if required. If default is made by the purchaser, according to the rules he must pay the loss; that is often adjusted by a sale or purchase in the market of a like quantity of grain, which closes the transaction and avoids the penalty which might follow.
It was the testimony on the part of plaintiff that they deliver all grain they sell in some form or other; that the sale by them contemplated the actual delivery of grain whether they purchased a like amount which should be delivered later, or whether they made actual delivery of the grain. According to the custom, delivery of the warehouse receipts is made through the Chamber of Commerce Clearing Association, and it is not necessary for one who has purchased grain for future delivery to himself tender the receipt to.the purchaser, as that is handled through the clearing house, where a record is kept.
Counsel for defendant construe the letter of October 11th as showing that plaintiff had knowledge of defendant’s intention to wager on market values. This was sent soon [442]*442after filling the order to buy 3,000 bushels of oats. There had already been transactions between the parties in buying and selling grain which the court found to be legitimate. The term “bullish” is no doubt in constant use among commission merchants or others .dealing largely in grain, although to the uninitiated it may be suggestive of mere speculation. We think that the letter may be as reasonably construed as a caution not to invest heavily in a falling market as showing knowledge by plaintiff of any unlawful intention of defendant. It certainly *was not an encouragement to engage in betting on the market.
Counsel for defendant also interpret the letter, of May 2, 1921, as weighty evidence tending to show plaintiff’s knowledge of defendant’s unlawful intention. The defendant had not given instructions in reply to letters notifying-them that provision for the grain to be delivered in May should be made. That delivery in the form of warehouse receipts was soon expected, and was made on the following day, and .a telegram to that effect was sent. In reply defendant ordered a purchase of July oats in their place.
' In addition to the telegram, plaintiff wrote a letter in part as follows:
“It was a foregone conclusion that heavy deliveries of oats would be made in view of the liberal stocks in Chicago. We understand that several million were delivered. As we understand it, you have these oats as a hedge against stored oats which have been sold out and, of course, in that event., you will want to hold them until such a time as you buy the oats that have been sold out.”
Owing to the heavy depreciation in the market price after the order- had been made and executed there was a material loss which must be borne by one of the parties. It was arranged for in-a manner customary in the Chamber of Commerce with the consent of the defendant. We do not consider that the letter criticised by defendant’s counsel, [443]*443when construed with the- undisputed facts, bears out the construction sought to be given it.
There is also criticism of a transaction by which on April 1, 1921, plaintiff made a transfer of $1,000 from the car account to the “Ettrick Elevator Company, future account,” and it is claimed that this is evidence that the dealings were on margins. Plaintiff’s explanation was that this transfer from the open account was made so that interest might be charged and to show that the credit account had been reduced. Even if this change in the form of the account were to be treated as a margin, that would not invalidate an otherwise valid contract. Wall v. Schneider, 59 Wis. 352, 360, 18 N. W. 443; Hatch v. Douglas, 48 Conn. 116; Corbett v. Underwood, 83 Ill. 324; Union Nat. Bank v. Carr, 15 Fed. 438; Wagner v. Engei-Millar Co. 144 Wis. 486, 129 N. W. 392.
The principal contentions of defendant’s counsel relate to the purchase and sale by which a loss of $765.97 was incurred. The later transaction in which there was a loss of $72.22 was evidently for the purpose of closing up the former ones.
On the part of the plaintiff the testimony was that the company had no knowledge of any intention on the part of-the defendant not to accept or make deliveries of any of the grain according to their contracts and that the plaintiff intended to make and accept the deliveries. Unless the letters and telegrams which have been referred to disclose the unlawful intent t)f the parties, there was no written evidence of that character. The parties do not seem to have had oral communication and there was no oral testimony showing collusion between the managers of the two companies.
Much testimony was given as to the rules a.nd customs of the Chamber of Commerce in adjusting. accounts by the Clearing House Association when grain was delivered by [444]*444means of warehouse receipts. It does not seem necessary to state this evidence in detail.. There are certain general rules with respect to contracts of this kind which have been followed in this state and in other states for many years.
“Contracts in writing for the sale and delivery of grain at a future day, for a price certain, made with a bona fide intention to deliver the grain and pay the price, are valid in law; but when such contracts are made as a cover for gambling, without intention to deliver and receive the grain, but merely to pay and receive the difference between the price agreed upon and the market price at such future day, they come within the statute of gaming, and are void in law.” Barnard v. Backhaus, 52 Wis. 593, 597, 6 N. W. 252, 9 N. W. 595.
Such contracts through boards of trade are not necessarily invalid although actual physical delivery' is not expected,’ and the delivery may be made by means of warehouse receipts. Wall v. Schneider, 59 Wis. 352, 355, 18 N. W. 443. Such contracts are not invalidated by reason of the secret unlawful intent of one of the parties. Wall v. Schneider, 59 Wis. 352, 18 N. W. 443; sec. 2319a, Stats.
The unlawful intent must be shared by both parties to the contract. That unlawful intent must exist, not after losses have been sustained or gains made, but at the time when the contract is made. Wall v. Schneider, supra.
In ascertaining whether such contracts are valid the court is not concluded by their written terms, but may look into the facts and circumstances attending them to find whether they were bona fide or merely colorable!. Wall v. Schneider, supra.
In the consideration of cases of this character the legislative policy must not be overlooked. In 1883 the following statute was enacted:
“No contract for the future purchase, sale, transfer or delivery of personal property shall be void when either, party thereto intends, in good faith, to perform the same; and an intention on the part of either not to perform any [445]*445such contract shall not invalidate it if the other party shall in good faith intend to perform the same. No such contract shall be void because the vendor was not, at the time it was made, the owner of the property contracted to be sold; and in any action by either party -for the enforcement of its terms or to recover damages for a breach thereof it shall be incompetent to show in defense, by any extrinsic evidence, that such contract had any other intent or meaning. than it expresses; and it and all collateral contracts, agreements or securities growing out thereof or of which they may have formed the consideration in whole or in part shall be legal and valid; provided, that nothing herein shall be construed to exclude evidence of fraud in the procuring of any such contract as is first mentioned herein, or of any collateral contract, agreement or security growing out thereof, or that any such contract was not entered into upon sufficient consideration, or is not supported thereby, or that both parties intended to malee a wagering contract.” Sec.'2319®, Stats.
It will be observed that in condensed form this statute expresses some of the rules which had previously been declared by the courts. It sanctions sales for future delivery; does not invalidate such contracts for the reason that one of the parties does not intend performance, or because the vendor was not at the time of the contract the owner of the property contracted to be sold. It preserves the right to impeach the contract for fraud; to show want of consideration; and that a wagering contract was intended.
Before the enactment of that statute it was held that, in actions like the present, “to uphold such a contract it must affirmatively appear that it was made with an actual view to the delivery and receipt of the grain and not as an evasion of the statute of gaming, or as a cover for a gambling transaction.” Barnard v. Backhands, 52 Wis. 593, 6 N. W. 252, 9 N. W. 595.
In an opinion by Mr. Justice Winslow rendered after the passage of the statute, in a very brief discussion of the subject, this decision was quoted and followed as authority [446]*446for placing the burden of proof on the party asserting the validity of the contract. It was said in the opinion:
The rule “is based on the well known fact that a very large majority of the transactions on such boards are not real transactions but simply betting on future prices.” Bartlett v. Collins, 109 Wis. 477, 85 N. W. 703.
At that time the court consisted of five Justices, and Mr. Chief Justice Cassoday and Mr. Justice Dodge dissented on the question of burden of proof. In the full discussion of the subject by the Chief Justice he reviewed .the peculiar circumstances under which the decision in Barnard v. Backhaus, supra, was written, and expressed the opinion that it did not support the view that contracts of this character are presumptively wagering contracts. He cited a large number of cases from other jurisdictions showing that outside of this state the overwhelming weight ' of authority supported the contrary rule.
It is unnecessary to here repeat those citations, and we only cite a few of the many later cases of the same character: Jones v. Ames, 135 Mass. 431; Jennings v. Morris, 211 Pa. St. 600, 61 Atl. 115; Allen v. Caldwell, Ward & Co. 149 Ala. 293, 42 South. 855; Overbeck v. Roberts, 49 Oreg. 37, 87 Pac. 158; King v. Zell, 105 Md. 435, 66 Atl. 279; Pelouze v. Slaughter, 241 Ill. 215, 89 N. E. 259; Clews v. Jamieson, 182 U. S. 461, 21 Sup. Ct. 845; Bond v. Hume, 243 U. S. 15, 37 Sup. Ct. 366.
It is undoubtedly true that the great majority of contracts made through the agency of boards of trade are gambling contracts; that thousands of persons every year enter into such contracts fancying that they can foresee the trend of the world’s markets better than their fellows, and have their awakening when compelled to pay their losses.
On the other hand, a vast amount of important and legitimate business is carried on every day through the agency of boards of trade. Speculation is not necessarily gambling, and contracts to be consummated on boards of trade, if in[447]*447tended to be carried out in good faith, are as legitimate as the innumerable other contracts made in the business world in which gains or losses may depend on changes in market values.
. “When there is an impression that the price of a commodity is likely to rise, dealers in that commodity will make these time contracts, as they are called, in order to profit by the anticipated rise. Persons may and. do purchase wheat in advance because they believe there will be a rise of price in the markets of the world, in consequence of scarcity, or some unusual demand. They may and do speculate in regard to future prices of this and other commodities, oftentimes, as has been said, exhibiting in their speculations great forecast and ability, and much knowledge of business affairs; and, so long as their engagements are entered into with the intention that the subject matter of the contract shall rbe delivered and received in good faith, courts uphold-their agreements.” Barnard v. Backhaus, 52 Wis. 593, 598, 6 N. W. 252, 9 N. W. 595; Wall v. Schneider, 59 Wis. 352, 18 N. W. 443; Board of Trade v. Christie G. & S. Co. 198 U. S. 236, 25 Sup. Ct. 637; Clews v. Jamieson, 182 U. S. 461, 21 Sup. Ct. 845.
It is too familiar a rule to require citation of authorities that where fraud or negligence is alleged the burden rests upon the one asserting it. The same rule applies in the absence of some confidential relation when the illegality of a contract or other transaction is relied on. Hale v. Haselton, 21 Wis. 321; State ex rel. Hopkins v. Olin, 23 Wis. 309; St. Croix Co. v. Webster, 111 Wis. 270, 87 N. W. 302; American S. M. Co. v. Jaworski, 179 Wis. 634, 192 N. W. 50.
According to the overwhelming weight of authority- in other jurisdictions the same rule governs in cases of the character now before us. The statute above quoted sanctions sales for future delivery. It states no rule as to the burden of proof, but makes no provision that the usual rule as to the burden of proof shalhnot prevail.
[448]*448After careful consideration we have come to the conclusion that in the case of a contract of sale for future delivery, valid on its face, it must be shown by the person who attacks it as void that there was no intention to deliver the article sold and that nothing but the difference between the contract and the market price was intended to be paid. Applying this test, we conclude that the defendant has not met the burden of proof which the law imposes.
It is probable that the trial court was influenced, and properly influenced, by the. former decisions of this court, and it is possible that otherwise there would have been a different result.
Some objection is made by counsel for appellant to the form of the judgment, but we do not consider that objection well taken. It was suggested during the oral argument that some part of the claim had been paid after judgment was entered. It is our conclusion that the claim of the appellant should be allowed by the court, less such payment, if any.
By the Court. — Judgment reversed, and the cause is remanded to the circuit court with directions to enter judgment in accordance with the opinion.