The opinion
Hr. Justice Dicket, dissenting:
Hy convictions compel me to dissent from the conclusions of my brethren in this case.
It may well be that a contract for the sale of grain at a future day, at a given price, in which is found an unconditional agreement that no grain shall be delivered or demanded, and no price shall be paid, but that, in lieu thereof, the difference, on the day named for the sale, between the contract price and the market price, shall be paid by the seller if the contract price be the lower, and by the buyer if the contract price be the higher, should be held a mere gaming contract, and for that reason void, and that, too, if such were the real intention of the parties, no matter under what form or device such intention might be attempted to be concealed.
But, in my humble judgment, that is not this case. The contracts do not so provide, upon their face. There is, in my judgment, no fact or proof in the record tending to show such vicious intention, and the fact that Culbertson, Blair & Co. did purchase and ship for Chicago 15,000 bushels of wheat, and did bargain, in Chicago, for other wheat, in all sufficient to fill all these contracts, tends strongly to show affirmatively that the contracts were made in good faith, with the honest expectation that the wheat contracted for would be delivered, received and paid for, in full execution of the contracts. The jury have so found, under special instructions on that very point, and no ground is perceived for questioning the truth of the verdict.
In the opinion delivered in this case, the court say: “ The fact no wheat was offered or demanded, shows, we think, that neither party expected the delivery of any wheat, but, * *• at the time of delivery, they only expected to settle the contract on the basis of differences.” In my judgment, no such inference can be drawn from the mere failure to offer to deliver, for, in the meantime, appellees had, by the default of appellants, been released from the duty to deliver; nor can such inference be drawn from the failure to demand the wheat, because, in the meantime, by the change in the market, appellant did not want it at the contract price. This is the only reason assigned in the opinion in support of the position. The verdict, in my judgment, can not properly be disturbed upon that ground.
The case is not, however, made to turn on this position, but two other grounds are taken, and, unless the views of the court are not properly apprehended, they may be stated as follows: 1st. Assuming these contracts to be valid, the plaintiffs can not recover without proving, on their part, an offer, or at least a readiness to deliver the wheat, and receive the price. 2d. that the contracts are void upon their face, because of the attempt therein shown to dispense with delivery.
It seems to me that both of these propositions are unsound, and that the court has been led to approve them by failing to notice and give full effect to a very important feature of these contracts. They provide, as a fundamental condition precedent, that each party shall, on demand, gi/ve to the other security, and all the subsequent acts required by the provisions of the contracts are dependent upon the performance of this condition precedent. In the opinion of the court under consideration, it is laid down as the imperative demand of the law, in all cases of contracts for the sale and delivery of property at a future day, to be paid for on delivery, that the seller, to put the buyer at fault and subject him to liability, must show an offer, or at least a readiness to deliver the property. This undoubtedly is the rule, unless the buyer has already been put at fault, in some other way. There are many other ways in which the buyer may be put at fault. Where the buyer has released or excused the seller from the obligation to perform the contract, proof of an offer or readiness on the part of the seller is dispensed with.
In Risinger et al. v. Cheney, 2 Gilman, 90 , this court said: “ The law is well settled, that he who prevents or dispenses with the performance of a condition, can not take advantage of the non-performance.”
A failure of one party to perform a condition precedent, will release the other party from the performance of a subsequent condition to be by him performed, when the subsequent condition is, by the contract, dependent upon the former. In the case now under consideration, by the contract, appellees were not bound to deliver the wheat, unless the security agreed upon was given when demanded. Proof of their failure to do this dispensed with proof of readiness and an offer to deliver.
In Kingston v. Preston, (cited in 2 Douglas, 690,) Lord Mansfield said: “There are covenants which are conditions dependent on each other, in which the performance of one depends upon the performance of the other, and therefore, till the prior condition be performed, the other party is not liable to an action on his covenant. (1 Chitty’s Pl. 821.) In this case, after the closing of the contracts by Culbertson, Blair & Co., for want of the required deposits, had Lyon & Co., on the last day of August, demanded the wheat of the sellers, and offered to pay the contract price, and had the sellers failed to deliver, and had Lyon & Co. sued for the failure to deliver, they could not have recovered; because, by reason of their own failure to keep their margins good, Culbertson, Blair & Co. were no longer bound to procure and deliver the wheat. Under my conception of the contracts, the undertakings to make the necessary deposits for security, were conditions precedent, on which the undertakings, on the one hand, to deliver, and on the other to pay, were dependent.
In the case of Kingston v. Preston, supra, Preston had agreed, among other things, with Kingston, that, at a given time, he would, on certain terms to be performed at the same time, among which was the making of certain deeds, give up to Preston and another his stock in trade as a silkmercer, at a fair valuation; and Kingston, on his part, among other things, had agreed to accept the stock at a fair valuation, and to execute the deeds mentioned; and further, that he would, at and Toafore the delivery of the deeds, “ cause send, procure good and sufficient security” to be given to Preston, to be approved by him, for the payment of £250 monthly to Preston, in lieu of a moiety of the monthly produce of the stock in trade. Kingston was ready, and in apt time offered to perform his part of the concurrent acts in the agreement in every respect, but he had neither offered nor given sufficient security for the payment of the £250 monthly. The court held that the giving of the security, although mentioned in the latter part of the agreement, was a condition precedent, on which the promise of Preston to turn over his stock was dependent, and that the failure' on the part of Kingston to give the necessary security, released Preston from his obligation to goon with the performance of the subsequent terms of the agreement, that the one would deliver and the other receive the goods.
On the same principle, in the case now under consideration, the failure of Lyon & Co. to give the security agreed upon, when demanded, released Culbertson, Blair & Co. from their promise to sell and deliver the wheat. The law surely can not imperatively demand that they should offer to do that which, by law, and the terms of their contract, it was not their duty to do.
Story says: “ If the promisor be prevented from performing his contract by the act of the promisee, he will be discharged from liability for non-performance.” Appellees, having promised to sell and deliver this wheat, before they could recover of appellants for a failure to buy, must perform or offer to perform the act of delivery; but if they were prevented from delivering or offering to deliver, by the act of the promisees, in failing to give security, the appellees are discharged from their liability for not delivering.
Mr. Justice Catón, delivering the opinion of this court in Palm et al. v. The Ohio and Mississippi Railroad Co. 18 Ill. 320 , said: “Where an act which the defendant is bound to do is, by the terms of the contract, made a condition precedent to the performance (of another act) by the plaintiff, (either in the nature of things, or evidently in the contemplation of the parties at the time the contract was entered into,) then the failure to do the act does, of itself, prevent the other party from performing, as much as if he were forbidden to perform it.” Apply this doctrine to this case, and it is found that, by the express terms of the contract, and from the nature of things, the putting up of the margins necessary for security was to be a condition precedent, in want of which the plaintiffs below should not be required to perform the subsequent condition of delivering the wheat.
In case of a contract for the sale and delivery of grain or other personal property at a future day, to be paid for on delivery, if the buyer, prior to the time of delivery, informs the seller that he will not accept the property, this is a waiver of the necessity of a tender of the property by the seller, and if the declaration be not withdrawn when the time arrives for the delivery, it will constitute a sufficient excuse for not offering to deliver, and, in such case, the seller may recover, without proof of a readiness or an offer to deliver. This doctrine has been repeatedly laid down by this court. It is distinctly laid down in the opinion of the court, by Mr. Justice Breese, in McPherson v. Walker, 40 Ill. 372 . The same, in principle, is decided in Wolf v. Willitts, 35 Ill. 95 , 102.
Again, it was held by this court, in Chamber of Commerce v. Sollitt, 43 Ill. 523 , that “if one party to an executory contract induces the other to believe that he has withdrawn from his contract, the other contracting party need not wait until the day of performance before making new arrangements, nor does he lose his remedy against the delinquent party, by providing at once against losses likely to arise from such delinquency.” Can it be said that appellees lost their remedy against appellants, by not going on with these contracts, after appellants, by their failure to make the required deposits, had induced appellees to believe that they had withdrawn from these contracts?
In Fox v. Kitton, 19 Ill. 533 , it is said by this court, that “ where a party, agreeing to do an act at a future day, and before the day arrives declares he will not keep his contract, the other party may act on the declaration and bring an action even before the day arrivesand the case of Hockster v. DeLatour, 20 Eng. L. and Eq. Rep. 157, is there referred to with approbation. Can it be denied that in this case appellants, before the day for the delivery of the wheat by appellees had arrived, not only declared by their default that they would not keep their contract, but actually refused and failed to keep it? If the mere declaration of one party, that he will not perform a concurrent act, will release the other from performing or offering to perform the corresponding concurrent act, surely the failure to perform a condition precedent, by one party, absolves the other from such subsequent performance or offer to perform. The case, supra, of Hockster v. De Latoure, goes, perhaps, further on this point than any other. Under the contracts under consideration, there was no need, after the failure of appellants to make good their margins, that appellees should show either a readiness or willingness, or an offer to perform; for, after the failure to give the security, they were absolved from all obligation to put themselves in a position of readiness to deliver the wheat, and are entitled to compensatory damages —the damages which they have actually suffered from the failure of appellees to perform this condition precedent—not the full contract price of the grain as if actually delivered, which would have been in this case near $32,000, but the difference between that amount and what the appellants could, at that time, get in the market for the grain, which was about $8000. It is not material at what price appellants had contracted for grain to fill this contract, nor is it material whether or not they actually sold this grain for less than they gave for it, nor whether, in that sense, they actually lost a dime or not. They wrere, by their contract, entitled to the profits which would have resulted to them from a full performance. These were taken from them by the default of appellees. These they recovered in this case. The damages allowed them are merely compensatory, according to the usual rules of law and the principles of common justice, and are in no sense penal.
Are these contracts void, per se, upon their face, because they expressly provide, that in case of failure to give the security required, no delivery or offer to deliver need be made? Had there been in these contracts no such express provision, it is-plain, from the authorities already cited, that the relations and liabilities of the parties would have been the same precisely as is provided by these rules of the board of trade. I can not believe that contracts are made void by expressly declaring therein that which the law would have implied had the contract been silent on the point.
What are these contracts, in substance, when stripped of their mere forms? Take, as an example, that bearing date August 14, 1872, and made personally between these parties, a copy of which is set out in the opinion of the court in this case.
Culbertson, Blair & Co. agree, first, that they will sell and deliver in store in Chicago, to Lyon & Co., 10,000 bushels of ISTo. 2 spring wheat, in lots of 5000 bushels, on some day in that month, to be chosen by the seller; and Lyon & Co. agree, that when the wheat is so ready and offered to them, they will receive the same and pay for it at the rate of $1.57-|- per bushel. The parties agree, each with the other, second, that on demand made by the other, at any time before the performance of the foregoing provisions, they will give to the other the security mentioned in the rules of the board of trade, by depositing, from time to time, the required margins. And they agree, third, that if either party shall fail to comply with the second part of the bargain, the other shall be absolved from the performance, on his behalf, of the first part of the agreement, and that the other party shall pay to him damages, equal to the difference at the time of the default, between the market price of the wheat and the contract price.
It is not denied that, had the contract consisted merely of the first branch of this contract, it would have been a valid contract, the breach of which would, by law, have incurred damages to the amount of the difference between the market and contract price. It can not be denied, that under that contract the seller might have been released from his obligation to deliver or offer to deliver, by the act of the buyer, as I have shown by authority. It will not be contended that the addition of the second part of the agreement rendered the contract invalid. It was competent for the parties to contract with each other to give security in the mode pointed out. Had the contract, then, contained only the first and second parts of the agreement, it would have been valid; and it is apprehended that in such case had the buyer broken his promise to give security—which in its nature was a condition precedent—it would have been a breach of the contract, for which he would have been liable to damages, and that, in such case, no proof of an offer to deliver would have been.necessary to sustain the action; and in such case, the measure of damages would, by law, have been the difference between the market price and the contract price at the time of the breach of the contract by the buyer. Had the contract, then, been silent about dispensing with an offer to deliver, and had only contained the first and second parts of this agreement, and also a clause that the measure of damages, in case of a failure to give security, should be the difference between the market and the contract price, there could be no doubt on that question, for the measure of damages which the law allows are those which flow immediately from the wrong, and which the parties are supposed to have contemplated when they contracted; and not only so, but it has been repeatedly held by this court, that the parties may lawfully agree upon the rule of damages, or on a particular amount as liquidated damages, and that such contracts are valid. Tiernan v. Hinman, 16 Ill. 401 ; Low v. Nolte, ibid. 475; and Peine v. Weber, 47 Ill. 41 .
If it be true, that in the absence of the clause in this contract which attempts to dispense with a delivery, the legal effect of the contract would be precisely the same as is in that clause declared, the addition of the clause can have no effect upon its validity. The addition of that clause neither adds to nor takes from the legal effect of the contract in question. Tet the court say, in relation to this contract, “ but when they, by the agreement, dispense with a performance, or at least an offer or readiness to perform, then they render the contract obnoxious to the law of contracts. It is this effort which stamps it as being in the nature of a gaming contract. It is this effort which characterizes the transaction and renders it illegal.”
It seems to me this contract does not dispense or attempt to dispense with performance or an offer to perform. It demands, in performance, that the security, in the shape of deposits, shall be made; and it demands, that if this be done, the grain shall be ready, and be delivered or offered, and it demands, if this be done, that it shall be received and paid for. It is apprehended that what is meant here is, that the contract attempts to dispense with that part of the performance which was to consist in the delivery of the grain. I have tried to show that this is not dispensed with, but is merely made to depend upon a condition precedent, to be first performed by the buyer.
It is not denied by me, that were the condition precedent a mere trifle, of no importance to either of the parties, the court might well say that, upon its face, it is a mere trick. Had this contract, instead of the deposits required as security, provided that either party might, at any time pending the contract, demand of the other a grain of corn, and upon failure to receive it might declare the contract at an end—and in such case no offer to deliver should be necessary—the judgment of the court might well be, that this was, in substance, attempting to dispense altogether with the performance of the contract, and that it was a mere bet upon the future price of grain, a mere traffic in differences, and, as such, void. But my sanction can not be given to the doctrine, that a contract for the future sale and delivery of personal property can, under no circumstances, be valid, which provides for a contingency, on the happening of which the vendor need not offer to deliver. Parties have the lawful right to contract for the performance of a condition precedent which may be to their interest to have performed. The condition precedent in this contract is one of substance and importance, and is reasonable.
In a large city the competition in the trade in grain, which tends to secure to the producer an active market for his products, can not so well be maintained unless dealers can safely make bargains with others with whom they are but slightly acquainted, if at all, and that, too, without the trouble and time of inquiring as to their pecuniary responsibility, and without the risk of their insolvency. This is accomplished by the use of these rules of the board of trade, which are expressly incorporated into these contracts. The provisions are not trifles. They relate to matter which every dealer knows to be a matter of substance. The security required, in reason, goes to the foundation of the whole transaction. There is nothing immoral in providing for such security, nor in demanding that it be furnished.
It is not perceived how the addition of the last clause of the contract, or of the last two clauses of the contract, stamps it as a gaming contract. In all cases where property, whether real or personal, is bought—whether for cash or on time—for mere purposes of speculation—for the mere purpose of future sale in expectation of profit, and not for use of the purchaser— the transaction partakes more or less of the nature of a bet upon the future market value of the property so bought, and in that sense such contract is a gambling contract. Such contracts are. however, upheld by the courts, both at law and in equity. It partakes of the nature of a bet, just in so far as the purchaser takes the risk of the market value going up or going down. It neither adds to nor detracts from this risk to provide, in a contract for future purchase, that.security shall be given by the parties. Bor does it add to this risk to provide, that on failure to give the security by one party, the other need not offer to perform subsequent undertakings by him. It is only when, by the terms of the contract, all acts of performance are dispensed with, that such contract, on its face, ceases to be a valid grain contract and becomes a mere bet on the market, or a dealing in differences. The bet, if any, is contained in the first part of this contract. It is there the risk comes in. It does not invalidate a contract that it contains this risk, if it contains other substantia] elements of legitimate trade, although it may be for speculation only. When, however, the other provisions of such a contract completely eliminate and take from such contract all the other substantial elements of trade, nothing is left but the risk as to the market, and in such case the contract, in law, is a mere bet. It has been shown, it seems to me, that the provisions found in these contracts, for giving security, and the provision for delivery and payment in case the security is given, take these contracts clear out of the domain of mere gambling.