after the foregoing' statement, delivered the opinion of the court.
Except for the fund or deposit alleged to constitute security for performance of the. contract in question, a remedy for a breach rests at law, and equitable jurisdiction depends upon the existence of such fund to be administered or charged. And to maintain the bill it is further indispensable for the complainants to establish: First, an executory contract of purchase by Jamieson & -Co., bona ñde and enforceable in equity, secured by such fund; second, privity of the complainants in the contract and fund; and, third, actual injury either suffered or impending through the alleged breach. Failing proof or admission of these requisites, or either of them, the bill is properly dismissed for want of equity.
*653From tbe opinion filed in the trial court, it appears that dismissal was based on a finding of want of privity in the alleged contract; and the arguments at the bar and in the briefs of counsel upon both sides are mainly directed to that question in its various phases, as presented by the peculiarities of the transactions. Other contentions relate to the measure of damages, — whether the rules of the exchange adopted by the parties furnish an exclusive method or measure to determine the amount of damages for a breach, and whether, in any view, the pretended sale offered on behalf of the complainants can be recognized. Underlying these contentions, however, on the undisputed testimony, this paramount question obtrudes itself: Is a valid contract shown, or one which equity will enforce even between proper parties? The importance of the inquiry thus arising is recognized as one affecting a branch of operations which appears to have countenance and extended practice in the commercial world, however infrequently its transactions are brought into courts of equity for adjustment. But it cannot be ignored when the purported contract is presented as the foundation for relief in equity, and neither silence nor acquiescence on the part of the litigants will excuse the court from its determination. Otherwise stated, the question for solution is whether the contract in proof was one of bona fide purchase and sale of stock, or was either a mere; wagering transaction or a contract in options. In Irwin v. Williar, 110 U. S. 499, 508, 4 Sup. Ct. 165, the general rule governing such transactions is thus declared:
“The generally accepted doctrine in this country is, as stated by Mr. Benjamin, that a contract tor the sale of goods to be delivered at a future day is valid, even though the seller has not the goods, nor any other means of getting them than to go into the market and buy them; but such a contract is only valid when the parties really intend and agree that the goods are to be delivered by the seller a.nd the price to be paid by the buyer, and, If under guise of such a contract, the real intent be merely to speculate in 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 between tho contract price and the market price of the goods at the date fixed for executing the contract, then the whole transaction const itutes nothing more than a wager, and is null and void.”
In Embrey v. Jemison, 131 U. S. 336, 344, 9 Sup. Ct. 776, and in Bibb v. Allen, 149 U. S. 481, 492, 13 Sup. Ct. 950, this doctrine is reaffirmed, and in the latter case is well distinguished, as showing by the undisputed testimony that actual delivery was not only intended by both parties, but was expressly required by the rules of the Cotton Exchange governing the transactions.
Aside from the general rule, the contract in question is further subject to such statutory provisions of the state of Illinois as may be found applicable, and sections 130 and 131 of the Criminal Code of that state (1 Starr & C. Ann. St. [2d Ed.] pp. 1293, 1298) read as follows:
“Sec. ISO. Whoever contracts to have or give to himself or another tho option to sell or buy, at a. future time, any grain, or other commodity, stock of any railroad or other company, or gold, or forestalls the market by spreading false rumors to influence the price of commodities therein, or corners tho market, or attempts to do so in relation to any such commodities, shall be fined not less than $ 10 nor more than §1,000 or confined in the county jail not. *654exceeding one year, or botli; and all contracts made in violation of this section shall be considered gambling contracts, and shall be void.
“Sec. 131. All promises, notes, bills, 'bonds, covenants, contracts, agreements,, judgments, mortgages, or other securities or conveyances made, given, granted, drawn or entered into, or executed by any person whatsoever, where the, whole or any part of the consideration thereof, shall be for any money, property or other valuable thing, won by any gaming or playing at cards, dice, or other game or games, or by betting on the side or hands of any person gaming', or by wager or bet upon any race, fight, pastime, sport, l.ot, chance, casualty, election or unknown or contingent event whatever, or for the reimbursing or paying any money or property knowingly lent or advanced at the time or place of such play or bet, to any person or persons so gaming or betting, or that shall, during such play or betting, so play or bet, shall be null and void and of no effect.” ,.
These provisions were under consideration in Pearce v. Rice, 142 U. S. 28, 40, 22 Sup. Ct. 130, and were held to invalidate a contract which arose out of grain deals op the Chicago Board of Trade. Hidings by the supreme court of Illinois in Tenney v. Foote, 95 Ill. 99; Lyon v. Culbertson, 83 Ill. 33, and Pickering v. Cease, 79 Ill. 328, are there cited and applied; and the later cases of Pearce v. Foot, 113 Ill. 228, Cothran v. Ellis, 125 Ill. 496, 16 N. E. 646, Schneider v. Turner, 130 Ill. 28, 22 N. E. 497, and Soby v. People, 134 Ill. 66, 25 N. E. 109, reaffirm such rulings, and clearly hold that contracts which purport on their face to be absolute for sale or purchase are within the prohibition of the statute, “if the real intention of both parties ai the time of making the contract was to deal only in options, and make future settlement upon the basis of the difference in the market price, without the actual delivery of the grain or other commodity sold or purchased.” Soby v. People, supra.
Wherever the general doctrine against wagering transactions stands alone as the test of validity, it is well settled in actions at law that a contract of purported purchase aud sale will stand upon the presumption which arises in its favor, that actual delivery was intended, unless the proof clearly overcomes the presumption and establishes a mutual understanding by the parties that the transaction was a mere speculation in the market price, to be performed only by paying or receiving the amount of rise or fall in the market on the day named for delivery. In the case at bar there is no substantial conflict in the testimony, and on its' face the correspondence* between the complainants and their brokers speaks of “sales of Diamond Match stock for July account,” of inquiries for the “difference” demanded to change to August account, and of changes then ordered and reported as made by allowing the “difference.” It is not stated in terms by either party that delivery was not intended, nor does it appear in express terms in the correspondence or testimony that there was to be no actual delivery of the stock referred to on the-purported sale. On the other hand, there is'neither averment nor pretense that the sellers had or controlled any shares of the stock, or procured or intended to procure the same for delivery; and it is conceded that they had no stock at any time in the hands of their brokers, and no property in the stock of Avhich pretended tender and sale was made after the alleged default. As the rules of the stock exchange made distinct provision for “closing contracts” so entered-. *655into by paying “the difference” in market price, and tbe operations were conducted under such rules, by parties who were unquestionably acquainted with them, there is surely strong ground to infer an understanding by the parties that such was the contract, and not one of actual sale and delivery, or, as well described in Pearce v. Rice, 112 U. S. 28, 40, 12 Sup. Ct. 135, that they were “merely to speculate upon the rise and fall in prices, with an explicit understanding from the outset that the property apparently contracted for was not to be delivered, and that the transactions were to be closed only by the payment of the difference between the contract price and the marker price at the time fixed for the execution of the contract.”
In discussing the authority conferred upon the broker by the complainants, the brief of counsel presented on their behalf contains an Intel pretal ion of their contract which clearly discloses their understanding of the matter as above indicated, in the following para phrase of tlie terms of these instructions:
“Please sell to whomsoever you think responsible seven hundred shares of Diamond f.wteh stock at ¥-220 per share, to be delivered August filst. If the person to niiom you sell should become dissatisfied with nis bargain, and you can find some one to take it off his hands at a lower price, you aro author-feed to cancel the original contract and accept the substituted purchaser in the sioad of the fust purchaser, provided you are paid the difference in money. The money, of cornac, you will hold to our use. If the second purchaser, in ami, should wish to withdraw, and you or lie can find some one willing to take the shares at a still lower price, you are authorized to cancel tlie existing contract as before, and in like manner to accept tiie third purchaser, provided you are paid the difference in cash. And this you may do on like terms whenever and as often as you see fit. On the other hand, if the price advances it may be expedient and convenient that wo should, if possible, canead the existing contract (with whomsoever it may be), and obtain a new contract at the current price, in which event you are authorized to pay and charge to our account, whatever it costs to obtain such a novation, and this also you are authorized to do whenever and as often as you may deem expedient; for we have carefully studied this master, and we take it that, by the process indicated, we «'ill be in or out on the day of delivery precisely the difference between err original offer and the then market price.”
In equity jurisprudence it is fundamental that “equity looks to the in tent rather than to the form,” and “will never suffer the mere appearance and external form to conceal the true purpose, objects, and consequences of a transaction”; that one who seeks relief must come open-handed, with clean hands, and, to obtain relief, musí clearly show that equity and good conscience are with him. In this view it is at least questionable whether relief can be claimed on the mere form of this contract, resting alone on its presumptive force at common law, without “probing the conscience” of the party for the erne object. We are of opinion, however, that the transaction as disclosed clearly falls within the terms of the Illinois statute above cited, as interpreted by decisions of Die supreme court of die state, and that neither the inquiry last suggested, nor the sufficiency of the proof to show a wagering contract under the common-law rode, requires decision to ascertain the invalidity of the contract tin:s disclosed.
In Schneider v. Turner, 130 Ill. 28, 22 N. E. 497, these provisions are held applicable to a contract relating to the sale of shares of *656railway stock, and the proposition is refuted that the act merely invalidates gambling contracts, or such “option contracts as contemplate a settlement by differences.” It is remarked in the opinion:
“If that construction is the true one, why was the statute enacted at all? Nothing is more clearly and firmly established by the common law than that all gambling contracts are void. It is equally well settled that all contracts for the purchase and sale of property, with the understanding or agreement of the parties — whether that agreement is expressed on the face of the contract or exists by secret understanding — that the property is not to be delivered or accepted, but the contract satisfied by an adjustment of the differences between the contract and market price, are mere wagers or gambling contracts, and void.”
It is then said that the act intends more than the condemnation of contracts “which were already gambling contracts and void”; that its manifest object—
“Is to break down the pernicious practice of gambling on the market price of grain and other commodities. How is this object sought to be accomplished? There was or is nothing illegal or even immoral in an option contract, within itself. The evil aimed at nevertheless grew out of such contracts. As said by Judge McAllister in the opinion referred to in Tenney v. Foote, ‘In practice on the stock exchange it was often the intention of the parties that no stock should be delivered, but the transaction settled upon differences;’ and by Judge Andrews, in the Bigelow Case, 70 N. Y. 202, ‘Contracts of this kind may be mere disguises for gambling.’ In this ease the parties might have intended, if appellants called for the stock, to settle on differences. The contract could have been made the disguise for gambling on the future price of stock of the North Chicago City Railway. The question is not, did they so intend? but, did not the legislature regard such contracts as lying at the root of the evil aimed at, and strike at them? The treatment is heroic, but the evil was most malignant. * ⅜ * The contract, tested by the statute, is void.”
In the earlier case of Pickering v. Cease, 79 Ill. 328, this view is exemplified as follows:
“Agreements for the future delivery of grain or any other commodity are not prohibited by the common law, nor by any statute of this state, nor by any policy adopted for the protection of the public. IVliat the law does prohibit, and what is deemed detrimental to the general welfare, is speculating in differences in market values. The alleged contracts for August and September come within this definition. No grain was ever bought and paid for, nor do we think it was ever expected any would be called for, nor that any would-have been delivered had demand been made. What were these but ‘optional contracts,’ in the most objectionable sense; that is, the seller had the privilege of delivering or not delivering, and the buyer the privilege of calling or not calling for, the grain, just as they chose. On the maturity of the contracts, they were to be filled by adjusting the differences in the market values. Being in the nature of. gambling transactions, the' law will tolerate no such contracts.”
So in Pearce v. Foot, 113 Ill. 228, 239, it is said:
“Although the statutes being considered are highly penal, there is no warrant for construing them with any unreasonable strictness. They ought rather to have a. just, if not liberal, construction, to the end the legislative intention may be accomplished, — to prohibit all dealings in options in grains or other commodities. Nothing is productive of more mischievous results. Considerable fortunes secured by a life of honest industry have been lost in a single venture in ‘options.’ The evil is all the more dangerous from the fact it seemingly has the sanction of honorable commercial usage in its support. It is a vice that has in recent years grown to enormous proportions. Legitimate *657transactions on the board oí trade are of tlie utmost importance in commerce. Such contracts, whether for immediate or future delivery, are valid in law, and receive its sanction and all the support that can be given to them. It is only against unlawful ‘gambling contracts’ the penalties of the law are denounced, and no subtle iinesse of construction ought to be adopted to defeat the end it is to be hoped may be ultimately accomplished.”
However the terms “option” and “optional contracts” may be used and defined elsewhere, the construction of this statute by the supreme court of the state is controlling here, and invalidates the contract upon which the bill of complaint is founded. Such was the ruling in Lester v. Buel, 49 Ohio St. 240, 30 N. E. 821, where transactions were involved of like character on the Chicago Board of Trade, and were held to he within the provisions of the Illinois statute, and prohibited as well by a statute of Ohio of like import. We are of opinion that the bill was properly dismissed for want of equity, and the decree is affirmed.