Davis v. Fleshman & Co.

Opinion by Mr. Justice Mestrezat, In 1904 the defendants were engaged in the business of gambling upon wagers or bets that the market value of certain stocks would rise or fall as evidenced by quotations from the New York Stock Exchange. The business did not contemplate the purchase or sale of shares [226] of stock, but was only a dealing in differences or fluctuations in tbe prices of stocks. Tbe Arm would receive deposits of money as a stake, or security for tbe payment of tbe difference between tbe selling price of tbe stock on one day and tbe selling price of tbe same stock on another day. Tbe business was closed out on November 28,1904. Since tbe twenty-second day of October, 1904, tbe plaintiff deposited with tbe defendants at various times certain sums of money as a stake or security upon tbe bet or wager of tbe fluctuations of certain specified stocks, aggregating $1,860, wbicb is now sought to be recovered in this action. An affidavit of defense was filed denying the liability of tbe defendants for tbe whole or any part of tbe sum claimed by tbe plaintiff. A rule for judgment was taken wbicb was discharged by tbe court below. An appeal was taken to this court, and tbe judgment of tbe court below was affirmed: Davis v. Flesh-man, 232 Pa. 409. In tbe opinion we said, inter alia: “Whether this is a case where tbe evidence will show that tbe illegal gambling transactions were closed and tbe accounts stated between tbe parties, and where tbe original deposits still remain with tbe broker so identified that they can be recovered back; or, an instance where tbe plaintiff is endeavoring to> reclaim losses paid on illegal gambling transactions, wbicb the.law will not aid him to recover; or, one where the plaintiff dealt with tbe defendants as principals, and where tbe conduct of tbe parties demonstrates that as between themselves they treated tbe matter as closed, settled and ended, and where, all being sui juris, tbe law will look at tbe plaintiff as one who has paid bis bet, tbe loss from wbicb be will not be assisted to recover, cannot be satisfactorily ascertained from tbe information contained in tbe statement of claim and tbe affidavits of defense.” On the subsequent trial of tbe cause, tbe learned court below granted a nonsuit wbicb it subsequently refused to take off and tbe plaintiff has taken this appeal. We have no quarrel with tbe doctrine of tbe cases cited [227] by the appellant. Since the decision in McAllister v. Hoffman, 16 S. & R. 146, decided more than three quarters of a century ago, it has been the settled law of this State that a recovery may be had from a stakeholder even though the contingent event upon which the bet turns has happened, if the stake has not actually been paid over to the winner. Before actual payment the gambler may repent and demand of the stakeholder the repayment of his deposit. The law regards the transaction as illegal and void, and the deposit in the hands of the stakeholder is still the money of the gambler. Hence, he may maintain an action to recover it before it passes into the hands of the other party to the gambling transaction. The authorities cited by the learned counsel for the appellant declare this to be the law of this State, and we know of no decision of this court in conflict with it. It is equally well settled in this jurisdiction that all mere wagering contracts are illegitimate transactions which the law declares void and which will not be enforced at the instance of either party to the contract. It will not aid the winner to recover from the loser the amount of the stake, and it will not give assistance to the loser to recover back the amount of the bet after the transaction has been closed. It will leave the parties as it finds them. The law will not attempt to settle disputes between gamblers by enforcing their alleged rights arising out of the illegal transaction. This was not a case of marginal dealings in which a broker purchased and sold stocks for his customer. It is not pretended that such was the purpose of the contract entered into between the plaintiff and the defendants. The latter carried on what is known as a “Bucket Shop” in which the real transaction was a daily settle: ment of differences in the fluctuations of the prices of stocks on the New York Stock Exchange. No stocks were purchased or sold by the defendants for or on ac,-, count of customers. This was well known by the plaintiff. The plaintiff, deposited with the defendants a cer [228] tain sum of money as a wager or bet that a certain number of shares of a particular stock would advance. If the stock did so advance the plaintiff was the winner. If, however, the price of the stock declined the defendants won and held the amount of the deposit. During the whole period of the transaction involved in this case the plaintiff made the deposits or series of bets upon the various stocks from time to time, the amount aggregating, as already observed, $1,800. It appears that in six of the transactions, in which the aggregate payments were $220, the movement of the market was in favor of the plaintiff. He ordered the transaction closed and made a demand for his profits on November 28, 1904, but the defendant firm failed the following day and he was unable to collect the amount of his winnings. As to whether the other bets resulted favorably to the plaintiff the evidence does not with certainty disclose. Uncertainty as to this and other material matters exists throughout the case. The evidence on the trial of the cause did not clear up the uncertainty which we held to exist in the pleadings when the case was here before and we declined to enter judgment for want of a sufficient affidavit of defense. The burden was upon the plaintiff to show, as alleged in his statement, that the several transactions were open, undetermined and unexecuted on November 28, 1904, and that the contingent event which was to determine the bet had never taken place. This is denied by the defendants and the evidence does not support the plaintiff’s contention. At all events, the evidence is so uncertain that a verdict finding such to be the fact could not be sustained. If the bets were against the plaintiff the deposit, automatically, went into the hands of the defendants as winners. In the absence of evidence to the contrary, it must be assumed that the successive amounts were deposited with the defendants because each prior deposit went to the defendants as winners, each transaction being closed and followed by its-successor. The evidence does not, [229] therefore, clearly show any sum remaining in the hands of the defendants dependent upon the fluctuations of the market in favor of the plaintiff which was necessary to enable the plaintiff to recover in this action. This is not an action brought by the loser in a gambling transaction against a stakeholder to recover the amount of the deposit before the transaction is closed and the amount paid to the winner. The defendants were not stakeholders of the funds deposited with them in the sense which would permit a recovery by the loser in an undetermined or unexecuted gambling transaction. The plaintiff and defendants were both parties to the illegal contract. The money deposited by the plaintiff with the defendants was a wager upon the fluctuations of the prices of certain specified stocks. This deposit was made with the defendants to secure them in their winnings. They could have trusted the plaintiff to pay his debt if he lost but they did not intend to take any such chance. They, therefore, made themselves secure by requiring the deposit. When the bet was won by the defendants it automatically passed to and went into the possession of the defendants. The transaction was then closed and the defendants no longer held the deposit awaiting the happening of the contingency which determined their right to the deposit. They were not stakeholders who were disinterested in the result of the bet and who held the fund for the successful party to the wagering contract. They were parties to the illegal transaction and held the deposit as winners of the bet. This action, therefore, was brought by one party against the other party to a gambling transaction which the law declares void and which it will not enforce in aid of either party. The judgment is affirmed.