* * *

language first quoted from Mr. Roger's work on Expert Testimony is correct. The opinions of eminent and learned physicians and surgeons and oculists are entitled to great consideration, at least where they have made a personal examination of the subject, as in the present case. While many courts speak disparagingly of some kinds of expert testimony - that with regard to handwriting, for instance- yet we think that all courts hold that the testimony of competent medical experts is entitled to great respect and consideration. Pannell v. Commonwealth, 86 Penn. St. 260; Eggers v. Eggers, 57 Ind. 461; Cuneo v. Bessoni, 63 id. 524; Jarrett v. Jarrett, 11 W. Va. 584, 626; Thomas v. State, 40 Tex. 65; Pitts v. State, 43 Miss. 472, 480; Templeton v. People, 10 Hun, 357; Choice v. State, 31 Ga. 424, 481; Flynt v. Bodenhamer, 80 N. C. 205; Getchell v. Hill, 21 Minn. 471; Wood v. Barker, 49 Mich. 295, 298; Rogers on Expert Testimony, 268, 269. * * * In the present case we think the expert testimony of the physicians and surgeons who were in fact appointed by the court, and who made a personal and professional examination of the plaintiff's eyes, is entitled to great consideration, and that the court below erred when it instructed the jury that such testimony should be received and weighed with caution.'”

Contracts for speculations in stocks upon margins, when the broker and the customer do not contemplate or intend that the stock purchased or sold shall become or be treated as the stock of the customer, but the real transaction is a mere dealing in the differences between prices-that is, in the payment of future profits or losses, as the event may be, are contracts of wager, dependent on a chance or casualty. Such contracts, if made in this State, are unlawful, and securities given therefor are void by force of the provisions of "the act to prevent gaming." Rev., p. 458. Such contracts, though made in another State, where they are to be presumed to be lawful and enforceable, will not be enforced here-at least against residents and citizens of this State-because their enforcement would violate the plain public policy of this State on the subject of gambling and betting evinced by the statute above mentioned. In this respect such contracts are excepted from the rule of comity which requires the enforcement by the courts of one State of contracts made in another, if valid by the lex loci contractus.

ΟΝ

N appeal from a decree of the chancellor, whose opinion is reported in Baldwin v. Flagg, 36 N. J. Eq. 48. Opinion states the case.

A. Q. Keasbey, for appellants.
Cortlandt Parker, for respondent.

MAGIE, J. The bill in this case was filed for the foreclosure of a mortgage made by Jennie M. Flagg and William L. Flagg, her husband (who are the appellants), to Abram F. Baldwin (who is the respondent) upon lands in this State, to secure the payment *S. C., 38 N. J. Eq. 219.

of appellant's bond. The bond and mortgage were dated August 26, 1880. The bond was in the ordinary form of a money obligation, and was conditioned for the payment to respondent of $11,563.44, with interest, on demand. The mortgage recited that it was intended to secure the money which appellants had so bound themselves to pay, and that the amount of $11,563.44 was made up of $7,563.44, which was therein declared to be due from appellants to respondent, and of $4,000 to be security for future advances.

From the proofs it appears that the sum of $7,563.44, so admitted to be due from appellants to respondent, was made up of different sums. One sum represented the loss which had been incurred by Mr. Flagg in a stock speculation which had been carried on by him and one Ripley with respondent, a stock broker in New York. Another sum represented losses incurred by Mr. Flagg in a like speculation carried on by him and respondent in joint account. Another sum represented losses incurred in a like speculation originally carried on by Mr. Flagg with respondent, and afterward transferred to and carried on by Mrs. Flagg, under the control and management of her husband, with respondent. The losses thus incurred were the result of stock dealings for these respective parties upon a margin sometimes put up in cash, and in Mrs. Flagg's case in her own note, which represented her margin.

The $4,000 of future advances were designed and intended as a margin for a continuance of the stock speculation of Mrs. Flagg to be carried on in her name under the management of her husband with respondent, and the advances contemplated by both parties were such as would cover and make good their losses therein, if any.

Respondent's books show that the bond and mortgage were credited to Mrs. Flagg's account for the sum of $11,563.44, and that account had been charged with the previous losses. It appears further that the speculative stocks carried in that account have all been closed out with the result of leaving a balance in Mrs. Flagg's favor of $653.93. Since the mortgage entered into the account, the effect is that there is due thereon the sum of $10,909.51, with interest, and its foreclosure and the sale of the mortgaged premises must be conceded unless some of the defenses are sustained.

The main defense goes to the validity of the bond and mortgage, and contests them on the ground that the contracts out of which they arose were wagering contracts, and illegal and void, and that the boud and mortgage securing an indebtedness arising solely from such cause are tainted with the same illegality, and cannot be enforced.

In coming to the consideration of the question thus raised, it is obvious that it is important to determine at what place the contracts contested were made. For if they are New Jersey contracts, and subject to our law, the sole question is whether they are such contracts as are declared unlawful by the "act to prevent gaming." Rev., p. 458. While if they are con tracts of another place it must be preliminarily deter mined whether they are objectionable by the law of the place of contract; or if not, whether they will still be enforced by our courts.

The evidence seems to leave no room for doubt that the contracts in question are contracts made and to be performed in the State of New York. The transac tions anterior to the execution of the bond and mort gage took place wholly within that State. By the bond and mortgage the parties averred they resided in that State. The mortgagee did in fact reside there. The mortgage was acknowledged there. Delivery of the papers was made, and the remaining transactions took place there. Although the mortgage affected lands in this State, the above stated facts establish, according

to a long line of decisions, that the contracts were New York contracts. Cotheal v. Blydenburgh, 1 Hal. Ch. 17; S. C., id. 631; De Wolf v. Johnson, 10 Wheat. 367; Dolman v. Cook, 1 McCart. 56; Campion v. Kille, id. 229; S. C., 2 id. 476; Atwater v. Walker, 1 C. E. Gr. 42.

Where contracts of a particular kind are forbidden by the law of the State in which they are sought to be enforced, and the party seeking to enforce them relies upon the fact that they were made in a foreign State, and are valid contracts by the lex loci contractus, it has been held elsewhere that he is bound to aver and prove those facts. Thatcher v. Morris, 11 N. Y. 437.

But the rule which seems to have been established in this State requires one who defends against a foreigu contract, if he relies on its being invalid by force of the lex loci contractus, to both set up and prove the foreign law. Campion v. Kille, ubi supra; Dolman v. Cook, ubi supra; Uhler v. Semple, 5 C. E. Gr. 288.

We have then to deal with transactions which took place within the State of New York, and must be presumed to be governed by the laws of that State. Whatever may be the rule respecting the burden of setting up and proving the law of the foreign State under such circumstances, neither appellants nor respondent have furnished in their pleadings or proofs any information on the subject. In the absence of proof of the law of another State, the better opinion is, that at least with respect to States comprised in the territory severed from England by the revolution, the presumption is that the common law prevails. White v. Knapp, 47 Barb. 549; Stokes v. Macken, 62 id. 145; Holmes v. Broughton, 10 Wend. 75; Thurston v. Percival, 1 Pick. 415; Shepherd v. Nabors, 6 Ala. (N.S.) 631; Walker v. Walker, 41 id. 353; Thompson v. Monrow, 2 Cal. 99; Inge v. Murphy, 10 Ala. 885; Norris v. Harris, 15 Cal.226; Titus v. Scantling, 4 Blackf. 89; Crouch v. Hall, 15 Ill. 263; Brown v. Pratt, 3 Jones (N. C.) Eq. 202.

By the common law contracts of wager and similar contracts were not objectionable per se. They were in fact enforced by the courts without any objection on the score of being dependent on a chance or casualty. Courts did in some instances refuse to enforce such contracts, but only when the subject of the wager was objectionable, as tending to encourage acts contrary to sound morals (Gilbert v. Sykes, 16 East, 150); or being injurious to the feelings or interest of third persons (Da Costa v. Jones, Cowp. 729), or against pub. lic policy or public duty. Atherfold v. Beard, 2 T. R. 610; Tappenden v. Randall, 2 B. & P. 467; Shirley v. Sankey, id. 130; Hartley v. Rice, 10 East, 22.

It has not been urged, nor does there seem to be ground for contending, that the transactions in question were such as by the common law would not be enforced.

We are therefore required to determine whether these contracts, made in the State of New York, and presumed to be governed, as to their validity, by the doctrines of the common law, and not objectionable thereunder, are to be enforced in this State.

The common law under which such contracts were enforceable has been here altered by the passage of the act against gaming above reterred to. By the first section all wagers, bets or stakes made to depend on any lot, chance, casualty or unknown or contingent event are declared to be unlawful. By the third section all bonds, mortgages, or other securities made or given, where the whole or any part of the consideration shall be for money laid or betted in violation of the first section, or for repaying money knowingly advanced to help or facilitate such violation are declared to be utterly void.

If the contracts now sought to be enforced would be obnoxious to these provisions of our statute, if made in this State, are we to enforce them because made in

New York, where we are bound to presume the common law exists unaltered?

The enforcement of a foreign law and contracts dependent thereon for validity, within another jurisdiction and by the courts of another nation, is not to be demanded as a matter of strict right. It is permitted, if at all, only from the comity which exists between States and nations. Every independent community must judge for itself how far this comity ought to extend. Certain principles are well nigh universally recognized as governing this subject. It is everywhere admitted that a contract respecting matter malum in se, or a contract contra bonos mores, will not be enforced elsewhere, however enforceable by the lex loci contractus. An almost complete agreement exists upon the proposition that a contract valid where made will not be enforced by the courts of another country, if in doing so, they must violate the plain public policy of the country whose jurisdiction is invoked to enforce it, or if its enforcement would be injurious to the interest or conflict with the operation of the public laws of that country. Story's Confl. Laws, § 244; 1 Add. Cont., § 241; Forbes v. Cochrane, 2 B. & C. 448; Grell v. Levy, 16 C. B. (N. S.) 73; Hope v. Hope, 8 De G., M. & G. 731; 2 Kent Com. 475; Bank of Augusta v. Earle, 13 Pet. 519; Ogden v. Saunders, 12 Wheat. 213; Blanchard v. Russell, 13 Mass. 1. This proposition has been announced and applied in our own State. Varnum v. Camp, 1 Gr. 326; Frazier v. Fredericks, 4 Zab. 162; Moore v. Bonnell, 2 Vroom, 90; Bentley v. Whittemore, 4 C. E. Gr. 462; Watson v. Murray, id. 257; Union L. & E. Co. v. Erie R. Co., 8 Vroom, 23. Since the courts of each State must, at least in the absence of positive law, determine how far comity requires the enforcement of foreign contracts, it results that there is contrariety of view, and the proposition above stated is not universally admitted. Thus in New York a contract made in Kentucky, under a law of that State, establishing a lottery for the benefit of a college, was upheld, notwithstanding the law of New York prohibiting lotteries. Com. of Ky. v. Bassford, 6 Hill, 526.

Chief Justice Nelson limited the cases of contracts not enforceable, though valid where made, to such as are plainly contrary to morality. He gave no consideration to the doctrine elsewhere settled, that excludes from enforcement contracts opposed to the public policy or violative of a public law of the place of enforcement. In this view he seems to be sustained by the Court of Appeals. Thatcher v. Morris, 11,N. Y. 437.

So in Massachusetts a contract arising out of a completed sale of lottery tickets, in a State where such sale was lawful, was enforced by the courts, although such sale was there prohibited by statute. McIntyre v. Parks, 3 Meto. 207. But there was no discussion of principles by the court.

The courts of this State have expressed and'enforced different views. Thus in Varnum v. Camp, 1 Gr. 326, the question of the validity of a foreign assignment for the benefit of creditors came before the Supreme Court. The assignment was made in New York, and was assumed to be valid by the law of that State. It created preferences, and by the law of this State was fraudulent and void. The assignment was held unenforceable here. Chief Justice Ewing, whose opinion was adopted by the court, puts the decision distinctly upon the ground that the assignment was one in violation of the policy of our laws, in hostility with their provisions, and which they declared to be fraudulent and void.

In Bentley v. Whittemore, 4 C. E. Gr. 462, a similar question arose in this court, and the doctrine of Varnum v. Camp was restated and affirmed. The application of the doctrine was however limited to the protection of the residents and citizens of this State, for

whose benefit its public policy was held to be adopted. With respect to non-residents or citizens of other States it was held that comity would require the recognition of foreign assignments if valid where made. Watson v. Murray, ubi supra, was the case of a bill filed for an account of a partnership transaction in a lottery in another State, where such a transaction was claimed to be lawful. The bill was dismissed on the advice of Vice-Chancellor Dodd. His conclusion was that such a transaction, though valid where made, should not be enforced here, because it was in violation of a public law of this State, and within the exceptions to the rule of comity requiring the enforcement of foreign contracts. He further argued that lotteries are not only illegal, but are judicially considered to be immoral. It is unnecessary to determine how far that view can be sustained. But with the conclusion arrived at I unhesitatingly agree. It is in accord with the decisions in Varnum v. Camp and Bentley v. Whittemore. It seems to me that no court can, on full consideration, deliberately adopt a rule that will require the enforcement of foreign contracts, violative of the public laws and subversive of the distinct public policy of the country whose laws and policy they are bound to enforce. No comitas inter communitates can compel such a sacrifice.

The limitations on the rule laid down in Bentley v. Whittemore do not come in question in this case. It appears that Mrs. Flagg was, in fact, a resident of this State at the time these contracts were made, and there is nothing to show a change of residence.

We are brought then to the question whether our law against gaming is such a public law and establishes such a public policy as to require us to refuse to enforce foreign contracts in conflict with it in a case like that under consideration. I think this question must be answered in the affirmative.

It is true that in Dolman v. Cook and Campion v. Kille, ubi supra, foreign contracts, valid by the law of the State where made, were enforced here, although by our law they were usurious and declared to be void. No consideration seems to have been given to the question whether our usury law was such a law and evinced such a public policy as required us to refrain from enforcing foreign contracts in conflict with it. As we have seen, that consideration led our courts to reject foreign assignments violative of our laws where the interests of our own citizens were concerned. But a plain distinction at once presents itself between a usury law and a law regulating assignments for the benefit of creditors, or a law against gaming. One affects only the parties to the contract, and is framed for the protection of the borrower. The others relate to the public or classes of the public who are interested therein and affected thereby.

It remains to determine whether the enforcement of these contracts will conflict with the provisions of this statute and the public policy thereby established. If so, it must be for the reason that the mortgage secures an indebtedness arising out of transactions that are wagers.

In considering this question, care should be taken not to trench upon legitimate and proper enterprises. The act is not intended to interfere with the right of buying and selling for speculation.

The line is to be drawn between what is legitimate speculation and what is unlawful wager. When property is actually bought, whether with money or with credit, the purchaser and owner may lawfully hold it for a future rise and risk a future fall. With such transactions the law does not pretend to interfere. They are within the line of lawful speculation.

But when either without any disguise or under a guise which stimulates such legitimate enterprises, the real transaction is a mere dealing in the differences between prices, i. e., in the payments of future profits or future losses, as the event may be, then in my judgment, the line which separates lawful speculation from illegal wagering is crossed, and the contract, under our law, becomes unlawful, and the securities for it void.

This proposition is sustained by all the cases, without an exception, that I can discover. The only disagreement relates to the application of the doctrine.

Thus in New York, the Court of Appeals, in Kingsbury v. Kirwan, 77 N. Y. 612, declared that a contract for the purchase and sale of property would be a wagering contract, if it was the understanding that the property should not be delivered, but that only the difference in the market price should be paid and received.

In Bigelow v. Benedict, 70 N. Y. 202, the same view had been expressed, and it was also held that although the form of the contract was unobjectionable, yet if in fact it was a mere cover for betting on the future price of a commodity, and no actual sale or purchase was intended, the contract was one of wager.

It is true that the same court has determined, though against the protest of able and distinguished judges, that between the broker purchasing on a margin and his customer, the relation of principal and agent and of pledgor and pledgee exists. Markham v. Jaudon, 41 N. Y. 235; Baker v. Drake, 66 id. 518; Gruman v. Smith, 81 id. 25.

It has been there held that a broker can recover from his customer deficiencies arising from sales of stocks bought on a margin, and that where, upon a margin, a broker made "short sales" of stock, which he borrowed for that purpose, he might recover of his customer what was expended in replacing the borrowed stock. Wicks v. Hatch, 62 N. Y. 535; Knowlton v. Fitch, 52 id. 288. But in these cases it does not seem to have been contended that the contract was a mere cover for wager. Such contention was made in King

held that there was no sufficient evidence that the transactions were not real. Upon a review of all the cases in New York, they establish, in my judgment, the correct doctrine that a contract relating to differ ences only would be a wager contract. But they also hold that dealings on margin are not to be considered as dealings in mere differences. If in any case, evidence sufficient to show that the margin dealings were mere covers for dealings in differences was produced, then upon the principles there laid down, the contracts would be wagers.

In the courts of Pennsylvania, the same principles have been often enunciated. Thus in Smith v. Bouvier, 70 Penn. St. 325, the court approved a charge to a jury

which left to them to say whether the transactions embraced in the case were bona fide or were mere covers for gambling operations. See also Fareira v. Gabell, 89 Penn. St. 89.

And in general, whenever the verdict of a jury es tablished, or the evidence required the court to hold. that the transactions, however correct in point of form, were mere dealings in differences, they were declared to be wagers. Brua's Appeal, 55 Penn. St. 294; Kirkpatrick v. Bonsall, 72 id. 155; Maxton v. Gheen, 75 id. 166; North v. Phillips, 89 id. 250; Dickson v. Thomas, 97 id. 278; Ruchizky v. De Haven, id. 202; Patterson's Appeal, 16 Rep. 59.

The point of divergence between the New York and Pennsylvania cases is upon the relation existing between the customer and the broker who is managing a speculative account upon a margin. The New York cases treat the broker as a mere agent, and so as a pledgee of the stocks purchased on such an account. This result was reached by a divided court, Justices Grover and Woodruff delivering vigorous dissenting opinions. The latter especially points out in a perspicuous, and in my judgment, convincing way, the plain difference between a stock broker dealing on margius and a broker or agent in ordinary trausactions. Markham v. Jaudon, 41 N. Y. 256.

In Pennsylvania, it is held that one who enters into a stock speculation on margins, with a stock broker, is to be considered as dealing with the broker as a principal, and not as an agent. Ruchizky v. De Haven, supra. This view is, in my judgment, eutirely correct. The customer who deals on margins knows no other person in the transaction but the broker. He has no claim upon, and is subject to no liability to any other person whatever.

The same doctrine has been announced by the Supreme Court of the District of Columbia (Justh v. Holliday, 2 Mack. 346), and by the United States Circuit Court in the District of Kansas. Cobb v. Prell, 22 Am. L. Reg. (N. S.) 609. To the latter case a note is appended, discussing the subject and collecting many cases.

In Grizewood v. Blane, 11 C. B. 526, it was held that a colorable contract for the sale and purchase of railway shares, when neither party intends to deliver or accept the shares, but merely to pay differences according to the rise and fall of the market, was a gaming contract, within the 8 and 9 Vict., ch 109, § 18, which declares contracts by way of gaming and wagering void, and forbids recovery of any money won on a wager. The subsequent case of Thacker v. Hardy, 4 Q. B. Div. 685, does not shake the authority of Grizewood v. Blane, but expressly approves it. Since however, in the case of Thacker v. Hardy, a broker was permitted to recover of his customer indemnity for contracts entered into on a speculative account, although the broker knew the customer did not intend to accept the stock bought or deliver the stock sold for him, but expected the broker to so arrange matters that nothing but differences were to be payable by him, it has been much relied on by respondent's counsel. But in that case the broker was treated as a mere agent entering into contracts for his principal, and so entitled to indemnity against any personal liability thereon. The ground of decision was that the contract, as between the customer and the other principal (the stock broker being treated as mere agent), was at the most void, but not illegal, and that the broker's right of indemnity was not affected thereby. Thus, Lindsley, J., by whom the case was tried without a jury, says that: "If gaming and wagering were illegal, I should be of opinion that the illegality of the transactions in which the plaintiff and defendant were engaged, would have tainted, as between them, whatever plaintiff had done in furtherance of their illegal designs, and would

have precluded him from claiming, in a court of law, any indemnity from the defendant in respect of liabilities incurred." He points out that it had been held under the English act of 8 and 9 Vict., above cited, that although gaming and wagering contracts could not be enforced, they were not illegal. He draws the conclusion that the acts of the broker, not being in furtherance of an illegal transaction, and being directed by the customer, entitled him to indemnity against loss thereby. On appeal; the views of the trial judge were approved.

It will be observed that our statute declares such contracts not ouly void, but unlawful, and further, that the relation of agency between the customer and broker, in such transactions on which the decision was grounded, is not, by the weight of authority in this country, recognized as the real relation of the parties. For reasons above given, I think it clear that the customer and broker, in these margin transactions, deal as two principals, and not as principal and agent.

My conclusion is that these transactions, so far as affected by our law against gaming, are to be examined, to discover their real nature, and if however unobjectionable their form may be, the real contract is merely in respect to differences, the contract is a wager, both void and unlawful.

On examining the transactions in question in this cause, with a view to discover their real character, I am compelled to the conclusion, that however they may have been made to imitate real transactions, they were in fact mere wagers. It never was contemplated, intended or agreed, by either party, that the stocks purchased or sold were to become or to be treated as the stocks of appellants. The real contract disclosed by the evidence was to receive and to pay differences.

All the transactions were upon margins. They commenced by Flagg's depositing $1,000 with respondent, when he agreed to open the account, which was wholly a speculative account. Afterward Flagg deposited $300 more. Then the wife's note for $4,500 was put in, and the account transferred to her name. Finally the bond and mortgage were given.

Upon these advances the purchases were very large. Respondent testifies that upon the margin of $1,300, stocks of a cash value of about $450,000 were purchased for the account between January 28 and June 16, 1880. After the account was transferred to Mrs. Flagg's name, stocks to an amount between $600,000 and $700,000, were purchased between June 16, 1880 and March 17, 1881. Thus in less than fourteen months purchases aggregating over $1,000,000 were made. According to Flagg's statement, the account once held one thousand three hundred shares, of a par value of $1,300,000.

The certificates of the stocks were never transferred or delivered to appellants.

These enormous transactions were far beyond the ability of appellants at any time, and were known to be so. It appears that respondent was notified that the first advance was all that Flagg had to speculate with. The wife's note, and subsequently her bond and mortgage, were resorted to with the avowed purpose of binding her separate property. Respondent admits that he was informed and knew that Flagg was speculating for all that Mrs. Flagg and he had in the world.

Under such circumstances, it is idle to pretend that there was or could be any hope or expectation that appellants were to take or could be required to take these vast amounts of stock. For respondent to have tendered them, and demanded payment for them, would have been absurd in the extreme. The whole circumstances show that no such right to tender entered into