51 S.E. 50 | N.C. | 1905
This is an indictment under chapter 538, Laws 1905 "to prevent dealing in futures."
By chapter 221, Laws 1889, "to suppress and prevent certain kinds of vicious contracts," it was in substance enacted as follows: Section 1 made void all contracts for the sale of articles therein named for future delivery, wherein (notwithstanding any terms used) it is not intended that the articles agreed to be sold and delivered shall be actually delivered, but Only the difference between the contract price and the market value at the time stipulated shall be paid. Section 2 enacted that when the defense provided by that act is set up in a *521 verified answer, the burden shall be upon the plaintiff to prove a lawful contract, but the answer shall not be used against the defendant on an indictment for the transaction. Section 3 made the parties to such contract, and agents concerned therein, indictable, and section 4 made persons while in this State consenting to become parties to such contract made in another state, and all agents in this State aiding and furthering such contract made in another State, indictable.
Chapter 538, Laws 1905, provides (section 1) that it shall (726) be unlawful to open or establish an office in this State for dealing in futures, as forbidden by aforesaid act. Section 2 makes such act a misdemeanor. Section 3 provides that no person participating in such act shall be excused from testifying, but a party so testifying is pardoned for such offense. Section 4 specifies certain acts which shall be prima facie evidence of a violation of this statute. Section 5 specifies what shall be prima facie evidence of a contract forbidden by the act of 1889, and section 6 provides what shall be prima facie proof of the opening and establishing an office in violation of this act and the act of 1889.
So far, the provisions of both acts clearly fall within the police power of the State, and it is not denied that if nothing further appeared in the statute the defendant is guilty upon the facts found in the special verdict, which are that the defendant opened and established an office in Raleigh for the purpose of carrying on the business forbidden by the above cited statutes, Laws 1889, ch. 221, and Laws 1905, ch. 538.
The business forbidden by the act of 1905 is — to avoid a paraphrasis, and following the usual American method of describing an act by a word or a phrase — the business of running a "bucket shop," which is defined by the Century Dictionary as, "An establishment, nominally for the transaction of a stock-exchange business, or business of a similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in." In Board of Trade v. Commission Co., 115 Fed., 574, the president of the board of trade, in answer to a question, thus defined a "bucket shop"; "It is a place where dealings are had upon the fluctuations in the market price, without anybona fide transactions." The definition of "bucket shop" in Webster's Dictionary is, "An office or place where facilities are given for betting small sums on current prices of stocks, petroleum," etc. (727) In Smith v. Tel. Co.,
In Weare v. People,
In Irwin v. Williar,
Freund on Police Power (1904), p. 186, says: "It is well established that if there is no intention to buy or sell, but Only to pay or receive differences in value, the transaction is simply betting on the rise and fall of market prices, and hence illegal and void."
While the facts found bring the defendant within the words of the statute, it is contended that the addition of the seventh and last section made the whole act unconstitutional and void under the
The defendant, however, contends that the purpose of section 7 is to provide that where any manufactory or wholesale merchandising house shall contract to deliver goods at a future date, such establishment may protect itself, or "hedge" (as it is called), by purchasing a "future" contract for raw commodities, without intending to demand actual delivery of those identical goods, but, by the profit thereby made, to recoup the loss by the rise in price of the same commodity subsequently bought, perhaps for actual delivery nearer home, to save freight. It is enough to say that no such intent is expressed in section 7, and we must construe it as it is written.
But a purchase for actual future delivery of necessary commodities required in the ordinary course of business, and not for "wagering" or gambling on the fluctuations of the market, would not be against the statute. The statute of this State does not prohibit all purchases or sales for future delivery, but only such dealings as are in the nature of gambling or wagering contracts. Though section 7 mentions only manufacturers and wholesale mercantile establishments as authorized to makebona fide dealings in "futures," this was done unnecessarily, we think, and Only out of abundant caution. It is not a discrimination, for there is no prohibition upon any one else or any other business to buy commodities for future delivery bona fide in the "ordinary course of such business," when not for speculative or *524 (730) gambling purposes. That no other business or persons are mentioned as authorized to deal bona fide for the purchase of commodities on "margin" is not an implied restriction upon others to do an act not forbidden by any statute.
Section 7 does not confer any exclusive right or privilege upon manufacturers or wholesale merchants. It does not authorize them to engage in any business prohibited by the act of 1889. It does not authorize them to speculate in cotton or other commodities. It simply provides that the courts shall not construe the act of 1905 to have the effect of preventing them from buying and selling for future delivery the necessary commodities required in their ordinary business.
The defendant further contends that by section 5, chapter 538, Laws 1905, proof that nothing was actually delivered at the date of the contract, and that a "margin" was put up, shall be prima facie evidence that the contract is a "wagering" one and forbidden by chapter 221, Laws 1889, and that section 7, chapter 538, Laws 1905, providing that this last act shall not apply to purchases or sales by manufacturers or wholesale merchants of the necessary commodities required in the ordinary course of their business, is a discrimination forbidden by the
But aside from what we have already said, the defendant is indicted for carrying on a "bucket shop" business. The Legislature had unquestionably power to make such business indictable. Booth v. Ill.,
No error.
Cited: S. v. Gatewood, post, 749; S. v. Clayton, post, 733, 736; Durhamv. Cotton Mills,
Affirmed,
(732)