Opinion
(February Term, 1896.)
ILLEGAL CONSIDERATION — CONTRACTS — GAMBLING CONTRACTS.
Where one lends money to another to pay losses incurred in speculation in "futures," it may be recovered, provided the lender was not connected directly or indirectly in the speculation.
ACTION tried before Coble, J., and a jury, at January Term, 1896, of DURHAM.
Fuller, Winston Fuller for plaintiffs.
Manning Foushee for defendant.
The plaintiffs, as trustees for B. L. Duke, sued to recover from the defendant, as administratrix of Lucius Green, the sum of $14,158.65.
The defendant answered that the consideration of the contract under which the balance was alleged to be due was illegal, being for money lent to carry on speculation in futures. The jury, under the instructions of his Honor, found that, while the larger part of the account was tainted by the illegality alleged, the sum of $3,000 had been loaned by the trustor of plaintiffs independently of any connection that he, the trustor, had with the speculations. Judgment was rendered for plaintiff for $3,000, and defendant appealed.
The pertinent facts are stated in the opinion of Chief Justice Faircloth.
The plaintiffs institute this action, and allege that their assignor, B. L. Duke, loaned the defendant's intestate a large sum of money, and demands judgment accordingly. The defendant admits that the assignor and her intestate were engaged (391) in much speculation in products, usually called "futures" (dignified or nicknamed in the account as "adventure account"), and avers that these transactions were utterly void, according to Laws 1889, ch. 221, and pleads the same in defense to this action. Two issues were submitted to the jury:
1. "Was the consideration of the contract sued upon in this action, or any part thereof, money paid for losses in speculating in cotton or other articles mentioned in the statute, commonly called futures? If so, for how much of the amounts claimed by plaintiffs?" Answer: "Eleven thousand one hundred and fifty-eight dollars and sixty-five cents, not recoverable."
2. "How much does the defendant owe the plaintiff on lawful contracts?" Answer: "Three thousand dollars, recoverable."
Only one witness was examined, who was bookkeeper for Duke, and the witness produced an itemized account, which was introduced as evidence by defendant. The witness testified that the $3,000 allowed by the jury had no connection with and was no part of the speculative transactions; that that item was a loan of money paid by a check on Clews Co., and that the speculations were with Daniel O'Dell Co., of New York. The defendant made her exceptions to the evidence unimportant by introducing the paper-writing to which they referred. The third prayer for instructions was in substance given in the charge. The fifth exception must be overruled. It raises the question of "proper evidence other than any written evidence thereof" required by said act (section 2). We need not trouble ourselves with that question in this case as the witness says "the $3,000 item that I have been speaking of, I have recollection of, independently of this paper." His Honor instructed the jury that the burden is on the plaintiffs to show in what amount the defendant is indebted to them, and that the contracts sued on are lawful in their nature and purposes; and that if they failed to do so they cannot recover; also, that if said Duke Green were engaged in any of said (392) speculations, and the former advanced money to pay losses of the latter, or was directly or remotely connected in any way whatever with said speculations, and that the contract sued on was based on such consideration, it was unlawful under the statute. On the other hand, if Duke was no party to such dealings and advanced no money to anyone directly or indirectly, to pay Green's losses, or if he advanced money as loans to Green at his request, which was to pay Green's losses, then such loan or advancement was a lawful contract, and plaintiff is entitled to recover money so loaned. This means, if the jury believed that Duke loaned the money and had no connection with the speculations, that it was a valid contract and plaintiff would be entitled to recover. Williams v. Carr, 80 N.C. 294. The fourth and sixth prayers for instruction, and the exceptions to the charge, are pertinent on the main question argued in this Court, to-wit, can a contract be enforced when a part of the consideration is illegal and a part is legal and valid? The question is scarcely presented, as the only witness examined testified that the item recovered was a separate transaction and had no connection with the illegal one; and we may assume that the jury so decided, as they ignored the entire account, containing vicious and valid items, as testified to by the witness. As the question has been long since settled, we need only refer to the authority. In Morris v. Pearson, 79 N.C. 253, all the cases decided by this Court and other authorities are collected and carefully reviewed, overruling Stone v. Marshall, 52 N.C. 300, and the rule declared in Morris v. Pearson, supra, still prevails. 2 Chitty on Contracts, 973. We see no error.
Affirmed.
Cited: Burrus v. Witcover, 158 N.C. 387.
(393)