On 11th April, 1902, plaintiffs wrote to defendant as follows: Re 1902 cut of hemlock. We will give you $8.75 per M. for all your lumber at Bracebridge cut to your order, less 2 per cent. 30 days from date of shipment, the whole to be shipped out by 1st March, 1903, or paid for less two per cent. This offer includes all hemlock to be cut at the switch, providing the manufacture and sorting is the same as the Bracebridge stock. Kindly send us an acceptance of this offer."

On 15th April, 1902, defendant wrote in answer: "In reply to yours of the 11th instant, re my cut of hemlock, say that I will accept your offer of $8.75 per M., less 2 per cent. 30 days from date of shipment. Stock to be taken each month and 25 per cent. advanced. The whole to be shipped out March 1st or paid for. This will include the hemlock at the switch if it is satisfactory."

The stock of logs at Bracebridge was cut by defendant to plaintiffs' orders, and delivered and paid for, and no difficulty has arisen in respect of it. The contest between the parties is in respect of the stock at the switch.

It turned out that defendant was unable to get any one to erect a saw mill and cut this stock, and about the middle of September, 1902, he sold it as it was to a firm of Laidlaw & Co., having about a month previously informed plaintiffs that he had been unable to get any one to cut it, and that he did not think he would be able to get it cut that fall.

In November, 1903, this action was brought.

Defendant contends: (1) That there was no concluded contract between the parties, his letter of acceptance having introduced a new term which was not assented to by plaintiffs, viz., "stock to be taken each month and 25 per cent. advanced." (2) That, even if there was an assent to this variation, yet there never was in fact any contract by which defendant was bound to cut logs at the switch.

This was the view taken by the Divisional Court, and we think it was right. It is unnecessary, therefore, to consider the first objection.

The correspondence is to be read in the light of the surrounding circumstances, and, assuming that there was a binding contract in respect of the Bracebridge stock, we see that the parties expressed themselves very differently respecting that at the switch. The former was to be manufactured to

plaintiffs' order, and was intended and expected to be cut by defendant at his own saw mill at Bracebridge. The cutting of the latter depended entirely, as the parties knew, upon the ability of defendant to procure some one to bring a portable mill to the spot,, and it might be, as it turned out to be, practically impossible to do so; or it might be difficult or inconvenient, in such a mill if procured, to cut it to the standard of the Bracebridge stock.

"If satisfactory," in the defendant's letter of acceptance, is the complement of the expression in plaintiffs' proposal "providing the manufacture and sorting is the same as the Bracebridge stock." To my mind it is clear that this left the defendant free to manufacture the switch stock into such kind and description of lumber as was most convenient to himself. The plaintiffs only offered to take it if it was manufactured-not to their order-but to suit them, i.e., if it was the same as the Bracebridge stock-and defendant did no more than assent to that proposition. If, as I think, he was free to manufacture and sort it differently from the Bracebridge stock, it follows that he was under no obligation to cut it at all, and therefore that there was no concluded contract between the parties in respect of it.

Plaintiffs' appeal must therefore be dismissed with costs. As to defendant's cross-appeal on his counterclaim, we are of opinion that the disposition already made of it by two Courts cannot be faulted, and should not be interfered with. The cross-appeal will also be dismissed with costs.

JUNE 29TH, 1905.

C.A.

REX v. HARKNESS.

Criminal Law-Unlawfully Making Contracts for Sale of Stocks-Keeping Common Gaming House-Stock Transactions on Margin-Agent for Broker-Evidence-Onus -Criminal Code-Aiding and Abetting.

Case stated by the Judge of the County Court of Welland, pursuant to an order of this Court made upon the application of defendant, after trial and conviction upon charges of unlawfully making contracts purporting to be for the sale of stock, goods, wares, or merchandise, in respect of which

no delivery thereof was made or received, without the boa fide intention to make such delivery, with intent to make gain or profit by the rise or fall in price of the stock, goods, etc., contrary to sec. 201 of the Criminal Code, and of being the keeper of and keeping a common gaming house, contrary to that section.

Defendant elected to be tried and was tried by the Judge without. a jury.

The following were the questions submitted for the opinion of the Court:

1. Does the evidence given on behalf of the Crown prove an offence against sec. 201 of the Criminal Code, under which the indictment was laid?

2. Does the evidence shew that the contracts charged in the first and second counts of the indictment were made or authorized by defendant; and, if the evidence shews that defendant had no interest in either of the transactions with which he is charged in said counts except the payment of his commission, which was a fixed amount, and was payable to him whether the price of wheat or of the stock, the subject of such transaction, rose or fell or remained stationary, can the conviction upon such counts or either of them be sustained?

3. Does the evidence shew that the contracts charged in the first and second counts of the indictment were made within the Dominion of Canada, and can the conviction upon said counts be sustained?

4. Was the evidence of J. G. Beaty and Clarence W. Cady, received by the County Court Judge upon the trial of the accused, admissible as evidence, and having been received, should such conviction be sustained?

5. Could defendant properly be convicted of an indictable offence under sub-sec. 3 of sec. 201 of the Criminal Code? 6. Is defendant liable to a penalty or punishment in respect of an offence under sub-sec. 3 of sec. 201 of the Criminal Code, by virtue of sec. 951 or otherwise, under the Code or under the common law.

The case

was heard by Moss, C.J.O., OSLER, MACLENNAN, GARROW, MACLAREN, JJ.A.

E. F. B. Johnston, K.C., for the prisoner.

J. R. Cartwright, K.C., for the Crown.

Moss, C.J.O.:-The evidence shews that from the beginning of January, 1904, until the information was laid, some time after 1st March in the same year, defendant was occupying a room or office in the town of Niagara Falls, Ontario, in which he was carrying on a business under the name and style of Harkness & Co. The nature of the business may be learned from a circular issued by defendant, a copy of which dated 23rd February, 1904, is in evidence. It is headed" Office of Harkness & Co., Brokers, Stocks, Grain, and Provisions." After a reference to the advanced prices of May wheat and pork as compared with the prices less than 4 weeks before, it continues: "Figure out for yourselves what a neat little turn you could have made on these staples, with only a very small investment. A word to the wise," etc. "Come and see us. We quote all the sales made on both Chicago and New York Exchange. Our service is unsurpassed. We buy and sell stock on only two points margin— grain and provisions only one point. No interest charges."

These attractive and suggestive statements seem to have drawn a good number of persons to the office with whom defendant had transactions. Generally speaking, these transactions took the shape of orders for the purchase of stocks, grain, or provisions. Defendant is not a member of the stock exchange at New York or Chicago, and he did not deal directly with either of these cities. He claims to be a branch or agency of a firm of operators known as Richmond & Co., whose head office is in Pittsburg, Pennsylvania, with a branch in Buffalo, N.Y. Defendant swore that he did not know whether any member of the firm of Richmond & Co. was a member of either of these exchanges. This statement is all the more remarkable because of the fact that the trial was postponed from time to time from 17th March to 16th May, on which day defendant, who had testified on the first day of the trial, again testified on his own behalf. It is somewhat surprising that if he had not endeavoured to ascertain before he should not have done so during the progress of the trial.

When giving their orders the persons who dealt with defendant deposited with him sums of money, never exceeding, so far as appears, a margin of 2 per cent. in the case of stocks or 1 per cent. in the case of grain or provisions, out of which the defendant received a commission from the Buffalo office. Each order was telegraphed to the Buffalo office, and the next day defendant handed to the customer a paper, signed

Harkness & Co., brokers," containing, amongst other things, a notification to the customer as follows: "Mr. ——————————, You have bought from Richmond & Co., Pittsburg, at the price named in this memorandum, for delivery on demand, subject to the contract and notice and provisions above and herein." In the margin appear the words: "I consent and agree to the contract expressed hereon." But the customer was not required or expected to sign, and apparently never did sign it. Save this document, there was no delivery, and it was proved that in answer to a question put to him by the Chief of Police, to whom he was explaining the nature of the business, defendant stated that he did not deliver goods or stock -the people did not do business that way. If the stocks, grain, or provisions held by the customer went up in price, he directed defendant to sell out and received back his deposit with the profit. If the price declined below the margin, the customer either put up a further deposit or let his first deposit go and bore the loss. Defendant remitted the amounts he received each day to Richmond & Co., Buffalo, who remitted to him the sums payable to customers on the result of transactions closed out during the day.

There is evidence that the ordinary mode of dealing by brokers who are members of the stock exchange either in New York or Chicago, in the purchase of stocks, grain, or provisions, is to require a deposit said to be usually 8 or 10 per cent. in the case of stocks, and 5 or in exceptional cases 3 per cent. in the case of grain or provisions. In order to complete a purchase he borrows from a bank upon a deposit of the certificates, the amount beyond the customer's deposit necessary to make up the price paid. When the price falls to the extent of the margin, he requires the customer to remargin or make a further deposit-and if this is done and so long as it is done the transaction is carried until the customer desires to pay the balance of the purchase price and take over the commodity or to sell. Upon a sale being made, the broker deducts his charges, including interest paid to the bank, commissions and other interest and charges (if any), from the purchase money.

The transactions in which defendant was concerned appear to bear little resemblance to those mentioned, and it does not require the aid of the so-called expert opinions of Messrs. Beaty and Cady to enable the distinctions to be clearly

seen.