
    R A. Dempsey, Assignee for the Benefit of the Creditors of Huff Bros. & Company et al., Plffs. in Err., v. M. A. Harm, to the Use of S. G. Slike.
    Dealing in margins is a gambling transaction which a court of justice will not sustain.
    The assignment of a certificate of deposit to a broker as collateral security for margins in oil renders the broker merely the bailee of the assignor.
    A certificate of deposit not being a negotiable instrument the transferees of the original parties must depend on the equities of those from whom they claim title, unless they have some new and independent equity of their own.
    Cited in Durr v. Barclay, 8 Pa. Co. Ct. 285.
    Note. — In Pennsylvania the rule that every wagering contract is void (Pritehet v. Insurance Co. [1803] 3 Yeates, 458) ; and that no action can be maintained by the winner for the recovery of an unpaid wager (Phillips v. Ives, 1 Rawle, 36; Edgell v. McLaughlin, 6 Whart. 178, 36 Am. Dec. 214) ; or even by a bona fide holder of a promissory note given for such wager (Harper v. Young, 112 Pa. 419, 3 Atl. 670); although the loser may, under some circumstances, recover his wager from the stakeholder (App v. Coryell, 3 Penr. & W. 494; Conklin v. Conway, 18 Pa. 329; Forseht v. Green, 53 Pa. 138; M’AUister v. Hoffman, 16 Serg. & R. 147, 16 Am. Dee. 556), — is strictly applied to dealing in “margins” and wagers upon the prospective prices of stocks, bonds, oil, grain, etc.
    
      “A wager,” said Judge Hake in Parara v. Gabell, 89 Pa. 89, “may be defined as a contract in which the parties stipulate that they shall gain or lose upon the happening of an uncertain event in which they have no interest except that arising from the possibility of such gain or loss. . . . But it does not follow that every contract which produces such a result is a wager; the question is one of intention as deduced from the facts and circumstances.
    Accordingly, no recovery can be had by an indorser after maturity, upon a note given in settlement of the maker’s loss, by “selling short” certain stocks to the payee, without an intention actually to deliver the same. Rrua’s Appeal, 55 Pa. 294 (1867).
    
      In an action by tbe assignee of one to whom tbe payee first assigned a certificate of deposit against the maker, who is the subsequent assignee of the payee, the defendant may show as a defense that the certificate was assigned by the payee to the plaintiff’s assignor as collateral security for the payment of a gambling debt, or that the defendant was an innocent purchaser for value without notice.
    Such a defense is a complete bar to the action unless the plaintiff was himself an innocent purchaser for value.
    An assignment of error not founded on exception will not be considered.
    Hot decided whether, under the act of June 23, 1885, the panel in a civil action having been exhausted after sixteen jurors are called, the court ■may direct the sheriff to call talesmen from the bystanders.
    A judgment entered upon a bond and warrant to cover “margins,” though ■a declaration of no set-off has been executed, will not be enforced in the hands of an assignee who had no knowledge of the declaration; Griffith’s Appeal, 16 W. N. 0. 249; or had notice of the character of the transaction. ■Griffiths v. Sears, 112 Pa. 523, 4 Atl. 492.
    In an action on a contract for future delivery, apparently lawful, for ■damages for failure to deliver oil when “called” according to the contract it is a good defense to show that the contract was made not with a bona fide intention to take the oil, but merely to settle differences (Kirkpatrick v. Bonsail, 72 Pa. 155); and a similar rule applies where the vendor is plaintiff in an action for damages for the purchaser’s refusal to take oil according to contract (Scofield v. Blaekmarr, 2 Sad. Hep. 544.
    Where a broker advances money to carry on, for his client, a stock gambling operation he cannot recover the amount from his client. Fareira v. ■Gabell, 89 Pa. 89; Dickson v. Thomas, 97 Pa. 278.
    If one lends money to another for the express purpose of having it used in speculation upon the rise and fall of prices, and the money is so used, the lender cannot recover it. He is partioeps crimvms. But mere knowledge that the money will be so used does not necessarily defeat his recovery; Waugh v. Beck, 114 Pa. 422, 60 Am. Eep. 354, 6 Atl. 923; the test Í3 whether the plaintiff requires the aid of the wagering contract to establish his case. Lloyd v. Leisenring, 7 Watts, 294; Scott v. Duffy, 14 Pa. 18.
    
      (Argued May 10, 1887.
    Decided October 3, 1887.)
    January Term, 1887,
    No. 166,
    E. D., before Mebcue, Cb. J., •GobdoN, Tbunkey, Steeeett, Geeen, and Olaek, JJ.
    Error to tbe Common Pleas of McKean County to review a judgment •on a verdict for tbe plaintiff in an action of assumpsit.
    Reversed.
    Tbe facts as they appeared at tbe trial before Olmstead, P. ■J., are stated in tbe opinion.
    Tbe panel being exhausted after sixteen jurors were called, an order was made directing tbe sheriff to call talesmen from tbe bystanders. Defendants’ counsel objected to tbe calling of talesmen, claiming that under tbe act of assembly of June 23, 1885, they have a right to twenty jurors called from the regular-panel. Objection overruled and talesmen called. No exception. (First assignment of error.)
    On the other hand money paid in settlement of differences or deposited by way of “margins” cannot be recovered (Merriam v. Public Grain & Stock Exchange, 1 Pa. Oo. Ot. 478),- although the rule is different izz the case-of an infant (Ruehizky v. De Haven, 97 Pa. 202) ; and an action cannot be maintained against a broker for violating an agreement to carry stocks, on “mai-g'in” for a specified time (North v. Phillips, 89 Pa. 250).
    Of course these cases are inapplicable to bona fide time eonti-acts for the sale and delivei-y of stocks and other personal property. The character of every transaction is for the jury. Smith v. Bouvier, 70 Pa. 325; Maxlon v„ Gheen, 75 Pa. 166.
    If the contract is void by virtue of the act of 1794, the check given is void. Durr v. Barclay, 8 Pa. Co. Ct. 285. Money held by a stakeholder as. the result of a wagering contract may be withdrawn. Dauler v. Hartley, 178 Pa. 23, 35 Atl. 857. And a note given in payment is uncollectible. Gaw v. Bennett, 153 Pa. 247, 34 Am. St. Rep. 099, 25 Atl. 1114. But a bona fide indorsee and holder for value, without notice and before maturity, of a promissory note given in a stock gambling transaction znay recover against the maker. Northern Nat. Bank v, Arnold, 187 Pa, 356, 40 AtL 794.
    The jury having been sworn and the facts stated in the opinion having been testified to, Mrs. M. A. Harm was called as a witness, and testified as follows:
    
      0. Tou may state if you ever gave that certificate to one N.. D. Preston ?
    
      A. I think I did.
    
      Q. You may state what for ?
    
      A. For margins on buying oil. I gave it to him for margins on buying oil.
    
      Q. What was the understanding with him at the time you gave it to him, about his returning it to you ? What was the-agreement between you at the time ?
    
      A. I think Mr. Preston said that if the market was in my favor he was to pay it back to me; and if not I don’t know that anything was said about it. I don’t think we talked about that. Brokers never talk about that part of it.
    
      Q. ITow much did you owe him, if anything, at the time you gave him that certificate ?
    
      
      A. I don’t think I owed him anything. We were expected to keep a few cents of margins good.
    
      Q. How much, if anything, did you owe him on the 18th of May, 1882 (the day Mrs. Harm transferred the certif. to Preston) ?
    
      A. I don’t think I owed him anything. We were expected, as I say, to keep a few cents of margins good.
    
      Q. State whether or not Mr. Preston ever offered to return the certificate to you ?
    
      A. No.
    
      Q. After you had given him the certificate, did he call on you for any money prior to May 18, 1882 \
    
    Objected to as incompetent.
    Offered for the purpose of showing that she complied with the conditions on which this certificate was given to Mr. Preston.
    Objection sustained and evidence excluded. Exception. (Eighth assignment of error.)
    The court charged the jury, inter alia, as follows:
    “Mr. Preston testifies that Mrs. Harm, in the middle of May, 1882, indorsed this certificate and transferred it to him for a valuable consideration and delivered it into his possession, and that on the 20th of May, the same year, he sold and delivered it to S. G. Slike.” (Ninth assignment of error.) . . .
    “What interest did Preston acquire by the transfer to him by Mrs. Harm of the certificate about the middle of May, 1882 ? . . . Preston says in his direct examination that he became the owner of it by purchase from Mrs. Harm.” (Eleventh assignment of error.) . . .
    “Now, you would have no great difficulty from the evidence of this witness alone (meaning Preston) in arriving at the conclusion that Preston was the owner of the certificate.” (Twelfth assignment of error.) . . .
    “The jury should observe that while she (Mrs. Harm) testifies in a guarded way that she was not, as she understands it, indebted to him at the time of the assignment, she corroborates Preston in his allegation that the transfer was to indemnify him against loss by the falling of the price of oil, and that oil fell and she subsequently paid him other moneys in addition to this certificate to keep up the loss. Does she state or intend to state that she did not become indebted to him to the full amount of Ibis certificate by reason of the depreciation in the price of oil before she transferred her interest in the certificate to Huff and Ege ? What is the fair conclusion from the testimony of Preston and Mrs. Harm on this question ? Did not the full amount of this certificate become absorbed by the falling price of oil, and did not, as a consequence under the agreement between them, Preston become the owner of the certificate with full right to transfer it to Slike or bring suit upon it in his own name as he saw fit ? If you find that he did, then, as we understand the case, the defendant has no defense and the plaintiff is entitled to recover the full $3,000 and interest.” (Thirteenth assignment of error.)
    Verdict and judgment were for the plaintiff for $3,720.
    
      Morrison & Apple and Brown & Roberts, for plaintiffs in error.
    The purpose of the act of June 23, 1885 (P. L. 138), was to call the full number of jurors that could be called, provided each party exhausted his challenges. It therefore enacted that twenty jurors should be called, and thus each could challenge with the certain knowledge that the jury would be composed of those left, and neither'be subjected to the unknown caprice of him upon whom the duty of calling talesmen would devolve. By the plain terms of the act it is directed that the twenty jurors shall be drawn from the box containing the names of those summoned for that court, and that the jury thus drawn shall be the jury to try the cause. This being the last legislation upon the subject, and no provision being made for drawing talesmen, without the consent of both parties to the suit a jury could not be legally constituted, either in whole or in part, by calling men from among the bystanders.
    The undisputed evidence in the case is that Preston held the certificate as collateral security for margins on oil, which he was pretending to carry, on a gambling contract made with Mrs. Harm. Under any view of the evidence, he at most only held the certificate as collateral security for performance on her part of their contract. This being so, he could not sell and dispose of it without notice, and settlement and demand for the differences from her. Edwards, Bailm. §§ 275, 279, 282, 286; Davis v. Funk, 39 Pa. 243, 80 Am. Dec. 519.
    The rule is the same, although the debt is payable presently and without demand, and although by the terms of the pledge tbe creditor may sell at public or private sale without notice. Wilson v. Little, 2 N. T. 443, 51 Am. Dec. 307.
    Tbe consignee is bound to give notice of a decline and make an actual demand for tbe margins. Milliken v. Debon, 27 N. Y. 364.
    Tbe bolder of a collateral security cannot appropriate it in satisfaction of bis debt at bis own option. Sitgreaves v. Farmers’ M. Bank, 49 Pa. 359; Diller v. Brubaker, 52 Pa. 498, 91 Am. Dec. 177; Conyngbam’s Appeal, 57 Pa. 474.
    
      M. F. Ellioitj B. Brown, and D. II. Jack for defendant in error.
   OPINION by

Me. Chief Justice Gorudon :

On tbe 4tb day of March, 1883, H. B. Huff and J. A. Ege, doing business as Huff Brothers & Company, executed to Mrs. M. A. Harm a certificate of deposit, payable with interest, in one year after date, in tbe sum of $3,000. Some time in May following Mrs. Harm transferred this certificate, as collateral security, to cover differences or margins in tbe purchase and sale of oil, to N. D. Preston, who in turn, on tbe 20th of tbe same month, assigned it to S. G. Slike, tbe plaintiff below. Again, on tbe 28th of June then next, Mrs. Harm, for an alleged valuable consideration, assigned all her right, title and interest, in and to tbe said certificate, to Huff Brothers & Company.

Now, tbe paper in controversy not being negotiable, tbe transferees of tbe original parties must depend upon tbe equities of those from whom they claim title, unless these transferees have some new and independent equity of their own. If, indeed, Slike was an innocent purchaser for value, and if of this fact Huff Brothers & Company bad notice, be would as against them be entitled to recover at least tbe amount which be paid to Preston for the paper.

How then stand tbe original parties: Preston and Mrs. Harm ? Clearly, if Preston is to be believed, be was a bolder without consideration. He says: “She was to give me these certificates of deposit, and in case her oil rendered a profit I was to return tbe certificate of deposit, so that tbe interest should not be broken; and in case tbe market should decline to a place where tbe certificates were eaten up, it was to be my property. They were to become my property if they were nearly taken up by tbe decline, and in case tbe oil rose I was to return ber certificates. If oil advanced so that sbe could settle up, I was to give ber money for ber profit and give ber certificates back again, wbicb I bad done on former occasions.”

This was clearly gambling upon tbe price of oil; as be says afterwards a dealing in differences, wbicb, as we bave repeatedly ruled, is a transaction of sucb a nature as cannot be sustained in a court of justice. It follows that tbe court made a mistake in excluding tbe defendant’s offer covered by tbe eigbtb assignment; for any and all evidence tending to show tbe real character of tbe transaction ought to bave been admitted.

It was also error to instruct tbe jury that Preston bad testified that Mrs. Harm bad transferred tbe certificate to him for a valuable consideration, for bis evidence shows very clearly that tbe consideration was illegal and void. Nor was it less erroneous to charge as follows: “Now, gentlemen, you would bave no great difficulty, from tbe evidence of this witness alone, in arriving at tbe conclusion that Preston was tbe owner of tbe certificate.” On tbe evidence “of this witness alone” tbe instruction should bave been that Preston was not tbe owner of this certificate, but a mere bailee for Mrs. Harm.

What has been said sustains the eigbtb, ninth, eleventh, twelfth, and thirteenth assignments; tbe first, not being founded on an exception in tbe court below, we refuse to consider, and tbe others are not sustained.

Tbe judgment is reversed and a new venvre ordered.  