Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1905-10-09

not contemplate an actual delivery of
1.-THE commodity sold, but agree that
one party shall pay the other the
difference between the contract price
and the market price at the date set
for the execution OF the contract, 1t Is
void as a wagering or gaming con
tract. S.Sf IS
In an action on such q contract, 1t
IS no defense that the vendor did not
intend an actual delivery Of the com
modify II the other party contemplated
such delivery. The ltest OF illegality
is the intention, not alone OF one Of
the parties. but of both.
Fisk, District j.: Appeal from a
Judgment rendered by the district
court OF Steele county upon verdict
directed for plaintiff. The facts neces-
sary to a correct understanding Of the
questions involved are as follows:
During the time covered by the trans
actions between the parties the plain
till was commission broker and mem
Der Of the Duluth Board OF Trade, en-
gagged In buying and selling grain for
other persons upon commission, and
the defendant was engaged in operat-
ing an elevator at Dwight, In this
state, and in buying and shipping grain
to Duluth to be there sold. The plain
tiff, through its president John Miller,
made arrangements with defendant in
the month Of August, 1902, whereby
the defendant was to purchase grain
at Dwight for shipment to plaintiff at
Duluth ito be sold upon the usual COM
mission, the plaintiff to furnish defend
and with the necessary funds to carry
on such business at a rate Of interest
agreed upon. 1t was talked over and
understood that the speculative feature
of the business, by reason of fiuctua-
tons of the market, should be obviated
by a system of hedging" which
means that the defendant would, for.
all grain purchased by him, sell, or in
other words, obtain contract through
his said brokers to sell like amount
to arrive or for future delivery. Sell
ing to arrive and selling for future de-
livery have we'll defined meaning up
on the Board Of Trade and In the bust
ness world; the former expression
meaning that the vendor has fourteen
days in which to make delivery Of the
warehouse receipts, and the latter ex-
preston means that he has any day
during some specified month In the
future in which to make such delivery.
This system Of hedging" eliminates
the risk Of loss which otherwise might
occur by a decline In the market price
during the time necessarily consumed
In Transporting the grain to market.
OF course, IN order to- make the
hedge" perfect the grain sold to ar
rive or for future delivery should at
all times just equal the amount Of
grain purchased by defendant and. un.
sold. As soon as the grain shipped
IL 49,
arrives at its destination and is sold
the hedge" must be taken down, or
in other words, an equal amount Of
grain must be purchased for delivery
at the same time as the grain which
was sold for such future delivery is to
be delivered, and thus one is made to
balance or Offset the other. Such
hedging transactions are consum.
mated through the broker upon the
board of trade upon instructions from
the principal, and when the shipment
OF grain against which there is q
hedge arrives and is sold, the
custom, under the undisputed eyi
dence. is for the broker to remove the
hedge" If the shipment is not &C
companied with instructions to The
contrary, but, Il the shipment ia ac
Continued on EOurfI Do - 5000