Opinion of the Court.

reversed in the Exchequer Chamber in a considered judgment delivered by Mr. Justice Willes; and the judgment of reversal was affirmed by the House of Lords, in accordance with the opinions of Lord Chancellor Westbury, Lord Cranworth and Lord Wensleydale, and of a majority of the judges who at tended, upon the ground, as stated by the Lord Chancellor, that the application of the channelled iron horizontally under the timbers of a bridge being well known, "the channelled iron was applied in a manner which was notorious, and the application of it to a vertical fish would be no more than the application of a well known contrivance to a purpose exactly analogous or corresponding to the purpose to which it had been. previously applied." 11 H. L. Cas. 683. And all who gave opinions in the House of Lords concurred with the Court of Exchequer Chamber in the proposition of law that the mere application of an old contrivance in an old way to an analogous subject, without any novelty in the mode of applying such old contrivance to the new purpose, is not a valid subject-matter of a patent. 2 B. & S. 228; 11 H. L. Cas. 666, 672, 682, 684, 685.

In the case at bar, the old contrivance of a railroad truck, swivelling upon the king-bolt, with transverse slot, and pendent divergent links, already in use under railroad cars, is applied in the old way, without any novelty in the mode of applying it, to the analogous purpose of forming the forward truck of a locomotive engine. This application is not a new invention, and therefore not a valid subject of a patent.

The decree of the Circuit Court must therefore be reversed, and the case remanded with directions to Dismiss the bill.

Statement of Facts.

IRWIN v. WILLIAR & Another.

IN ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF INDIANA.

Argued October 17th, 18th, 1883.-Decided March 3d, 1884.

Contract-Partnership-Principal and Agent-Wagers.

A contract of partnership for the buying of grain, both wheat and corn, and its manufacture into flour and meal, and the sale of such grain as might accumulate in excess of that required for manufacturing, and the use, with the knowledge of all the partners in the partnership business, of cards and letter-heads describing the firm as millers and dealers in grain, do not necessarily imply as matter of law authority to deal in the partnership name in futures by means of contracts of sale or purchase for purposes of speculating upon the course of the market, and to bind the partnership thereby. Dealing in futures by means of contracts of sale or purchase for purposes of speculating upon the course of the market, is not as matter of law an essential characteristic of every business to which the name of dealing in grain may properly be assigned.

If under guise of a contract to deliver goods at a future day the real intent be to speculate in the rise or fall of prices, and the goods are not to be delivered, but one party is to pay to the other the difference between the contract price and the market price of the goods at the date fixed for executing the contract, the whole transaction is nothing more than a wager, and is null and void.

When a broker is privy to such a wagering contract, and brings the parties to

gether for the very purpose of entering into the illegal agreement, he is particeps criminis, and cannot recover for services rendered or losses incurred by himself in forwarding the transaction.

Generally, in this country, wagering contracts are held to be illegal and void as against public policy.

A custom among brokers in the settlement of differences which works a substantial and material change in the principal's rights or obligations is not binding upon the principal without his assent; and that assent can be implied only from knowledge of the custom which it is claimed authorizes it.

The defendants in error were plaintiffs below, and brought this action against the plaintiff in error, as surviving partner of the firm of Irwin & Davis, to recover a balance alleged to be due, growing out of certain sales of wheat for future delivery, claimed to have been made by the defendants in error for the firm of Irwin & Davis upon their order. The liability of the plaintiff in error was denied on two grounds: 1. That the trans

Statement of Facts.

actions were made by Davis, the deceased partner, without the knowledge, assent or authority of the plaintiff in error, and were not within the scope of the partnership business; and 2. That the sales were wagering contracts and void.

The bill of exceptions showed that there was evidence on the trial tending to prove the following state of fact:

Irwin, the plaintiff in error, and Davis, who died in October, 1877, became partners in 1872 in the ownership and operation of a flouring-mill and appurtenances at Brazil, Clay County, Indiana. Their contract of partnership contemplated the buying of grain-both wheat and corn-and its manufacture into flour and meal, and the sale of such grain as might accumulate in excess of that required for manufacturing; and did not contemplate, as between themselves, the buying and selling of grain in large quantities for speculation. The capacity of the mill did not exceed sixty barrels of flour per day; its average manufacture was thirty. The working capital of the firm varied from $2,000 to $4,000. Irwin resided at Butler, in Pennsylvania, and visited Brazil rarely. Appurtenant to the mill was a warehouse, for the storage of grain, equipped with appliances for loading and unloading grain, in bulk, into and from railroad cars. Soon after the formation of the partnership, and as a part of its business, Davis, in its name, began and continued to ship corn and oats to Indianapolis, and corn and flour to Baltimore, for sale and immediate delivery, in consignments not exceeding $1,000 each in value; and in the year 1875 several such consignments had been made to the defendants in error at Baltimore for sale on account of the firm by Davis. In all their business correspondence, including that with the defendants in error, who were commission merchants and grain brokers in Baltimore, the cards and letter-heads were as follows: "Brazil Flouring Mills, Irwin & Davis, millers and dealers in grain, Brazil, Ind." This letter-head was used with the knowledge of Irwin, who, however, had no knowledge of any transactions by Davis, on account of the firm, in the purchase or sale of grain for future delivery. Prior to 1877, in point of fact, Davis had given no orders for the purchase of grain in Baltimore, or any Eastern market, and during that year, in the

Statement of Facts.

months of July, August and September, he shipped to defendants in error thirty-one car loads of wheat, of about three hundred and eighty bushels each, for sale, which was accounted for.

The transactions which form the subject of this suit were as follows: On July 12th, 1877, Davis, by cipher telegrams and letters, gave an order to defendants in error to sell 20,000 bushels of wheat for delivery in August, and followed that up with similar orders until the last, on September 3d, a period of fiftythree days, making an aggregate of 30,000 bushels for delivery in August, 105,000 bushels in September, and 30,000 bushels in October, in all 165,000 bushels. These orders were reported by the defendants in error as executed at the prices named, amounting in gross to $251,794.84. At or before maturity these contracts of sale were settled by defendants in error on account of Davis and Irwin according to the custom of the Corn and Flour Exchange in Baltimore, of which the former were members, at and through the members of which substantially all the business of buying and selling grain at that city was done. In these settlements the differences between the prices at which the wheat had been sold and those which the brokers would have been compelled to pay, or did pay, as the market prices, at the time of settlement, for wheat to deliver or in fact delivered in execution of the sales, amounted to $17,217.95, which was the balance sued for and recovered in this action. Davis did not consign or deliver to defendants in error any of the wheat so contracted to be sold on their account, although he had during the same period consigned other wheat to defendants in error, as above stated, but which, pursuant to orders given at the time, had been sold on arrival, but not applied on contracts of sale for future delivery. The defendants in error actually delivered on account of Davis and Irwin about 40,000 bushels of wheat on their contracts, which they purchased in open market for that purpose, but as to the rest, settled by paying the differences between the contract and market prices.

There was evidence tending to show that among the general usages and customs obtaining at Baltimore among grain commission merchants were the following, which were well known

Statement of Facts.

and which had long existed and been uniformly observed among the members of said Corn and Flour Exchange and others engaged in the buying and selling of grain on commission at said city, viz.:

1st. That a commission merchant buying or selling grain upon the order of a customer for future delivery entered into such contract in his own name, thereby becoming personally responsible to the party with whom he contracted for the performance of the contract, the name of his principal being never, or but rarely, disclosed.

2d. That such commission merchant held himself and stood responsible to his principal or customer for the performance by the other party with whom he entered into such contract of purchase or sale of such contract, and for making good the contract to nis principal in case of the insolvency or default from any cause of such other party.

3d. That purchases or sales to fill orders of customers are usually made on the floor of the Corn and Flour Exchange, by open public offer to the members of the board there assembled. That when it so occurs as that a commission merchant, who upon the order of one customer has sold to (or vice versa purchased from) another commission merchant grain for a certain future delivery, and afterwards, upon the order of another customer, buys (or vice versa sells) a like amount of like grain for the same future delivery, from (or to) the same commission merchant, the two commission merchants as between themselves set off one contract against the other and mutually surrender or cancel them, settling between them the difference in price, each substituting on his books in the place and stead of the other the new or second customer, upon whose order he made the second purchase or sale. Thus if commission merchant A, upon the order of his customer X, has sold grain for a designated future delivery to commission merchant B, and afterwards upon the order of customer Y, buys like grain for like delivery from B, A and B adjust the difference, cancel their contracts, and surrender any margins that may have been put up by them, and in such case A substitutes his second customer Y in place of B, so that the grain he had sold on the