This proceeding originated in the Probate Court of New Madrid County by the filing therein of a demand, founded upon an account stated, against the estate of Seth S. Barnes, deceased, The claimants had judgment for the sum of $19,353.20. On the executrix's appeal the cause was tried de novo in the circuit court, and the proceedings there had are presented for review on this appeal.
Plaintiffs were commission merchants engaged for the most part in making purchases and sales of grain, cotton and other commodities for others upon a commission. They were members of the Merchants Exchange of St. Louis. Seth S. Barnes, defendant's testate, was also a member of the Merchants Exchange, but he lived in the little town of Marston in New Madrid County, where he conducted a general merchandise business. He owned about two thousand acres of land and was a director in a local bank. In connection with his mercantile business he bought grain that was produced in the vicinity of Marston, and operated a cotton gin, ginning about 1,000 bales a year. The most of this cotton he bought and sold. His principal business, however, was running his store and operating his farm.
The transactions giving rise to the claimants' suit were alleged purchases and sales of grain and cotton, the former on the Merchants Exchange of St. Louis and the latter on the Cotton Exchange of New York, made for and on behalf of Barnes by plaintiffs as commission merchants. The book account which plaintiffs kept with *Page 224 Barnes with reference to these transactions consisted merely of items of profit and loss. In their written demand which is the basis of the action, plaintiffs allege "that by reason of the difference between the price at which said grain and cotton was purchased and sold from time to time resulted profits and losses which claimants received and which they incurred and paid, all at the special instance and request of said Seth S. Barnes and for and upon his account and of the amounts and on the dates stated in the itemized account hereto attached." In other words, when plaintiffs, for example, bought corn for Barnes and advanced money therefor, they did not charge Barnes with either the amount advanced or the purchase price of the corn, but waited until Barnes sold, which he invariably did before the time of delivery, and then debited him with the loss, or credited him with the profit, whichever resulted from the transaction. The items were posted on plaintiffs' ledger in this form: "To loss purchases and sales 80,000 bushels grain, $712.60, com. $50, tax $13.12 — $775.62;" "By profit purchases and sale 90,000 bushels grain, $812.50, com. 56.25, tax $12.35 — $743."
The ledger account just referred to covers a period beginning December 3, 1915, and ending June 7, 1919. In addition to the items of profit and loss on purchases and sales of grain and cotton there are others of cash paid out and received on the sale of "put and calls." According to plaintiffs' evidence the sales of "put and calls" were made by Barnes personally. They acted with respect to these merely as his financial agent in receiving the proceeds of said sales and in making payments for him on account of them. The account discloses that in the beginning Barnes made considerable money by his "trading," but that later on "the market went against him," and on February 1, 1917, he was indebted to plaintiffs in the sum of $30,697.21. His efforts to meet this indebtedness disclosed great financial embarrassment. Finally, on October 16, 1918, he conveyed *Page 225 to plaintiffs 120 acres of New Madrid County land, for which they credited his account with $12,000, but which his executrix now claims was intended by both parties at the time to be in full settlement of the amount that was owing by Barnes.
In January, 1919, Barnes renewed his operations on the Merchants Exchange and so continued until June 7th of that year. On the last-mentioned date, according to plaintiffs' ledger account, the balance due from Barnes was $18,939.67. Plaintiffs' bookkeeper testified that during the running of the account he checked it over from time to time with Barnes, and that the latter assented to its correctness, and this particularly with reference to the balances shown to be due on February 1, 1917, and on June 7, 1919, respectively.
Defendant filed an answer setting up in addition to that of payment the further affirmative defense that the transactions upon which the account was based were gambling transactions, in that, neither of the parties thereto intended the receipt or delivery of the commodities so alleged to have been purchased and sold. On its face the account shows that during December, 1915, and the early part of 1916, Barnes sold through the plaintiffs, and delivered, eight cars of corn and two cars of sunflower seed, but that aside from these, during the period of nearly four years, transactions were had almost daily wherein thousands of bushels of grain and enormous quantities of cotton were purported to have been purchased and sold and in which there was not a bushel of grain or a pound of cotton ever received or delivered.
Over the objection of plaintiffs defendant introduced evidence with respect to the character of business Barnes was engaged in at Marston, tending to show that he did not handle grain and was not equipped for handling it, that there were neither mills for manufacturing it into finished products nor elevators, granaries or other facilities for storing it, that the same was true with reference to cotton, and that he bought and sold only the small *Page 226 quantities of cotton that came to him from local production for ginning.
Plaintiffs offered in evidence by-laws of the Merchants Exchange which contained the following:
"All deliveries upon cash sales of or upon contracts for grain, unless otherwise expressly provided, shall be made by tender of regular elevator receipts, which have been registered, and which have been issued by such elevators as have been classified as regular by the board of directors. . . .
"Any member of the Exchange engaged in, or who shall be interested or associated in business with, or who shall act as the representative of any organization, firm, or individual, engaged in the business of dealing in differences or fluctuations on the market prices of any commodity, without a bona-fide purchase or sale of property for actual delivery, shall be deemed guilty of unmercantile conduct, and of misconduct as a member of the Merchants' Exchange, and shall be subject to discipline under Section 9 of Rule IV."
Plaintiffs offered an instruction to the effect that the evidence failed to established unlawful intent or purpose on the part of Barnes in the transactions upon which the account in suit was based. This was refused. Thereupon the court at plaintiffs' instance instructed the jury with reference to that issue as follows:
"The court instructs the jury that Seth S. Barnes had lawful right to make purchase of grain, cotton or other commodities under the contracts for delivery at some future date and to make a re-sale of same prior to the time provided under the contract for delivery and had lawful right to make purchases and sales of such commodities or any of them with the intent at the time to make re-sale thereof prior to the date at which delivery was to be made in accord with the terms of contract of purchase, and such fact or facts alone will not render such transaction or transactions in violation of law, unless the jury further find from the evidence at *Page 227 the time of entering upon the transaction involved, a settled purpose and intent on the part of said Seth S. Barnes to, under no circumstances, accept receipt in case he was purchaser or make delivery in case he was seller of the thing so contracted to be purchased or sold.
"The jury are instructed that unlawful intent or purpose in a transaction is not to be presumed, but the one asserting such unlawful intent or purpose on the part of the other must establish it by a preponderance of the evidence, and in consideration of the contention of the estate of Seth S. Barnes to the effect that he was engaged in and purposed an unlawful act by the transaction described in evidence, the jury will take into consideration in determining whether or not the evidence is of such character as to establish such defense, the presumption in the first instance attaining lawful intent, the place and authority, rules and regulations under and subject to such transactions were had, and all other circumstances in evidence, and upon such consideration unless the jury believe Seth S. Barnes intended in the transactions described in evidence to, under no circumstances, receive or make delivery of the commodity involved, then has the estate failed to establish its defense of unlawful conduct on his part and in such regard.
"The jury are further instructed that the receipt or delivery in case of purchase or sale of grain, cotton or other commodities, of elevator or warehouse receipts, or bills of lading or other muniment of title to the thing involved, for the purpose of transferring title thereto, constitutes a valid delivery thereof to the same intent and purpose as if the thing itself was manually transferred from the possession of one into that of the other.
"The court instructs the jury that the presumption surrounding the conduct of parties to any transaction is that they were engaged with lawful intent and purpose therein, and the burden of proof is upon estate of Seth S. Barnes to establish by a preponderance of evidence the contention that in the transaction involved, he did *Page 228 not, in any event, or under any circumstances, intend to either receive or make delivery of the products dealt in by him as described in evidence, and unless the jury finds the evidence preponderates to establish such fact, then this will not constitute any defense to claimants' claim."
For defendant the court gave, among others, the following instructions:
"9. The court instructs the jury that all purchases and sales, or pretended purchases and sales, or contracts and agreements for the purchase and sale of cotton, grain and other agricultural products whatever, either on margin or otherwise, without any intention of receiving and paying for the grain so bought or of delivering the grain so sold, and all the buying or selling or pretended buying or selling of such grain on margin or on optional delivery, when the party selling same, or offering to sell same, does not intend to have the full amount of the property on hand, or under his control, to deliver upon such sale, or when the party buying any of such property, or offering to buy the same, does not intend actually to receive the full amount of the same, if purchased, are, by law, declared to be gambling and unlawful, and any contract or contracts made in pursuance thereof are gambling contracts and void. And if you find and believe from the evidence in this case that the amount sued upon herein was in fact due by Barnes to the plaintiffs, but that the same was gambling and unlawful, as above defined, then plaintiffs cannot recover, and your verdict will be for the defendant.
"10. The court instructs the jury that if you find and believe from the evidence in this case that S.S. Barnes employed the plaintiffs to buy and sell grain for him on the St. Louis Merchants' Exchange, not intending to receive the grain so bought, nor intending to deliver the grain so sold, but only for the purpose of speculating in the future price of such grain; and that it was the intention of said S.S. Barnes merely to receive the profits or pay the losses for the difference in the *Page 229 prices of such grain bought and sold, and that the account sued for herein is for such differences of price and sum advanced by plaintiffs for losses, and commissions to plaintiffs on such trade, and expenses incurred in connection therewith, then plaintiffs cannot recover in this case and the jury should find for the defendant.
"And the jury are further instructed that in ascertaining the intent of the parties to the contract of purchase and sale mentioned in evidence in this case they are not limited to the assertions of the parties on the one side or the other, but that all the attending circumstances connected with the transactions must be looked into in ascertaining such intent.
"11. The court instructs the jury that a sale of goods to be delivered in the future may be valid, although the seller has no other means of getting the goods than to go to the market and buy them, but if the real purpose and intention of the parties at the time of making such contract is merely to speculate in the rise and fall of prices of such goods, and it is not intended that the goods are to be delivered, but only the difference paid between the contract and the market price, then such contract is a wager and is void. And as to contracts made in this State, it issufficient if either one of the parties to the buying or sellingintended to gamble in such transaction or to speculate on therise and fall of the market, and such intention of either one ofthe parties renders the contract absolutely void, notwithstandingthe other party may be ever so innocent and wholly unaware of theintention to gamble or speculate entertained by the other. And inthis case if you find and believe from all the evidence that asto such transactions as took place in this State, said Barnesintended merely to speculate with the rise and fall of themarket, then your verdict must be for the defendant, whether youfind from the evidence that the plaintiffs knew of such intentionor not." *Page 230
The court also instructed the jury, by defendant's Instruction 12, that if they found that the items, or a substantial part of them, constituting the accounts between plaintiffs and Barnes were gambling transactions as defined in other instructions, their verdict should be for defendant.
From a judgment rendered on a verdict for defendant plaintiffs prosecute this appeal.
I. (1) Appellants' first assignment is that the court erred in refusing to instruct the jury that the evidence failed to establish an unlawful intent or purpose on the part of Barnes in the transactions upon which the account in suit was based. This principally on the ground that all the contracts of "purchases" and "sales" shown by the evidence to which ourUnlawful statute (Sec. 3572, R.S. 1919) would apply, thatIntent: No is, those made in this State, were by their termsEvidence: made in accordance with the rules and regulationsPeremptory of the Merchants Exchange, a by-law of whichInstruction. prohibited the "dealing in differences or fluctuations on the market price of any commodity, without a bona-fide purchase or sale of property for actual delivery," and that there was no evidence showing affirmatively that Barnes's contracts were made in violation of the by-law. But neither the assertions of the parties nor the form of the contracts is conclusive as to the character of such transactions. [Smith v. Bailey, 200 Mo. App. 627, 631-3.] What was said in Irwin v. Williar, 110 U.S. 499, 511, is applicable on the facts of this case: "It might . . . be the case, that a series of transactions, such as that described in the present record, might present a succession of contracts perfectly valid in form, but which on the face of the whole, taken together, and in connection with all the attending circumstances, might disclose indubitable evidences that they were mere wagers. The jury would be justified in such a case, without other evidence than that of the nature and *Page 231 circumstances of the transactions, in reaching and declaring such a conclusion." The mere form of the bookkeeping by which only profits and losses were entered, in addition to the fact that no grain or cotton with respect to which the contracts of purchases and sales were made was ever received or delivered, was sufficient to take the case to the jury on the question of whether the transactions were bona-fide purchases and sales, or mere wagers on the fluctuations of the market. This assignment is ruled against appellants.
(2) It is contended that the giving of defendant's instruction numbered 9 was erroneous because it simply recited the language of the statute, and then directed the jury to apply its provisions to the facts in proof. This method of instructing juries is never commendable; sometimes it resultsInstruction in in positive error. The instruction complained of,Language of however, could not have been misleading orStatute. confusing because the characteristics of contracts of purchases and sales which render them gambling contracts within the purview of the statute were so clearly set forth in other instructions. It is not in conflict with those instructions and when read in connection with them may have been of some aid to the jury in determining the issue submitted under it.
(3) The portion of defendant's instruction numbered 11 which we have italicized is criticized on two grounds. First, that it told the jury that if Barnes intended to speculate on the rise and fall of the market, then they should return a verdict for defendant; and, second, that it left to each juror to determine for himself without any direction from the court,Speculation what was meant by the term "gamble." Practicallyand Gambling. all buying and selling is speculation in a sense, and speculation per se is not within the inhibition of the statute. When the whole instruction is read, however, it is very clear that the terms "speculation" and "gambling" were used with reference to contracts *Page 232 of purchases and sales made "without any intention of receiving and paying for the property so bought, or of delivering the property so sold," and must have been so understood by the jury.
(4). There was perhaps no evidence that would have justified a finding that both parties to the cotton transaction did not intend receipt or delivery of the commodity which they pretended to buy and sell, and which would have been necessary in order to have reached the conclusion that suchAction on Account contracts were wagering contracts at commonStated: Transactions law. By Instruction 12 the jury were toldOutside of State. that if the items constituting the account, or any substantial part of them, originated in gambling transactions, as defined in other instructions, they should return a verdict for defendant. Appellants complain that this language was broad enough to include the transactions had on the New York Cotton Exchange with respect to which the Missouri statute is without application. It is true that gambling transactions were defined in defendants instruction numbered 9 in the general terms of the statute without limiting their application to contracts made in this State. But in defendant's instructions numbered 10 and 11 the facts hypothesized as constituting wagers referred exclusively to purchases and sales made on the Merchants Exchange of St. Louis and to contracts made in this State. And in plaintiffs' instructions an unlawful intent on the part of Barnes only was treated as sufficient to render the contracts void, regardless of where made. Neither party asked an instruction by which the jury would have been advised as to the distinction between Missouri contracts and New York contracts with respect to the rules to be applied in determining whether the one or the other were gambling contracts. For the purposes of the case the distinction was not important. The suit was on an account stated and it was not necessary that illegality should have attached to all of the items constituting the account in order to *Page 233 render the implied promise to pay the balance agreed upon unenforceable. [Grain Company v. Stonebraker, 202 Mo. App. 81, 99.] Appellants' criticism is too tenuous to merit serious consideration.
II. The evidence offered by defendant as to the character of business Barnes was engaged in at Marston, his financial ability and his lack of facilities for handling or storing grain or cotton was all objected to by plaintiffs on the ground that it was irrelevant to any issue in the case. The principal issue was whether Barnes in entering into the contracts purporting to be for the future delivery of commodities intended delivery in fact, or whether he was merely making wagers on the rise or fall of the market. The evidence objected to was competent as tending to show his intention in that respect. "The facts . . . that a party to a future contract is not financially able to pay for the commodities for which he has contracted to buy, or that he has no means with which to buy the commodities which he does not own and which he has contracted to sell, or that he is not a regular dealer in the commodity and has no means or facilities for taking, handling or storing it, are evidence tending to show that the intention of the parties is to gamble." [27 C.J. 1065.]
Defendant asked one of her witnesses this question: "Was he [Barnes] in any business where he could use, say, seventy or one hundred thousand bushels of wheat or corn?" The answer was: "No, sir; not that I know of." A similar question propounded to another witness elicited a like answer. Plaintiffs objected to each question on the ground that it called for the conclusion of the witness. The objections should have been sustained. However, the jury had before them all the facts as to the character and extent of Barnes's business and his methods of carrying it on and could judge as well as the witnesses whether the amounts of grain mentioned could have been reasonably used in connection with such business. *Page 234 It is therefore highly improbable that they were influenced to any extent by these negative conclusions of the witnesses. For that reason we do not regard the error in admitting the evidence as sufficiently harmful to call for a reversal of the judgment.
The record disclosing no reversible error the judgment is affirmed. All concur.