Court Opinion

ID: 9418768
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:38:44.492668+00
Date Added: 2024-06-11T17:22:09.748802
License: Public Domain

Mr. Justice Butler,
dissenting.
I am unable to join in the decision just announced.. My understanding of the evidence constrains me to dissent. .
Sections 4316-4323, Mo. R. S., 1929, prohibit bucket-shop transactions in Missouri. Section 4318 denounces as gambling pretended purchases and sales “wherein there is, in fact, no actual purchase and sale'or sale and purchase of. such commodities for or on account of the •party or parties thereto.” This Court rests its decision solely on that provision.
Section 4324 denounces as gambling all purchases and sales “ without any intention of receiving and-paying for the property so bought, or of delivering the property, so sold.” The judgment of the district court appears to be; based upon the conclusion that the transactions between plaintiff and defendants violated that section. ' But the contracts here involved were executed outside Missouri and, as shown by the opinion of this Court, are not governed by § 4324. It is not involved. Edwards Brokerage Co. v. Stevenson, 160 Mo. 516, 527-528; 61 S. W. 617. Atwater v. Edwards Brokerage Co., 147 Mo. App. 436, 448; 126 S. W. 823. Hood Co. v. McCune, 235 S. W. 158. *201Claiborne Commission Co. v. Stirlen, 262 S. W. 387, 388, Cf. State v. Gritzner, 134 Mo. 512, 526-527; 36 S. W. 39. State v. Christopher, 318 Mo. 225, 237; 2 S. W. (2d) 621.
The evidence shows affirmatively: and without contradiction that plaintiff and defendants did not intend to and did not violate § 4318:
Plaintiff is. not a bucket shop proprietor. It has been engaged for many years in operating grain elevators including a terminal one of great capacity and in dealing on its own account in cash grain. It long has been a mem-, ber of the Chicago, Minneapolis, Kansas City and Winnipeg exchanges and a broker executing customers’ orders for the purchase and sale .of grain for future as well as for immediate delivery. '
In 1924, from April to late November, it had a branch’ at Carrollton, Missouri, in charge 'of one McDonough. This branch was connected by private telegraph wire With its Kansas City office and regularly posted prices at which purchases and sales of grain were being contemporaneously made on the exchanges. . McDonough' solicited from defendants and others in and about Carrollton orders for the purchase and sale of grain for future de livery to be executed by plaintiff upon the exchanges and, upon information obtained from plaintiff, gave advice to those desiring to speculate in contracts for the buying and selling of grain on the exchanges.
He had no authority to bind plaintiff to éxecute orders and transmitted any obtained by him to the Kansas City office. If plaintiff rejected the order, it notified him,.at once. An accepted order was sent to plaintiff’s office in Chicago- and, if for purchase or sale in that city, was executed by its representative in the grain pit on the exchange there. An order for execution at Winnipeg was sent by wire, to plaintiff’s broker there. ’ Each order forwarded was identified by the customer’s name which for brevity in transmission was usually indicated by the num*202ber given to his account. Unless the customer stipulated . otherwise, it had to be executed on the day it was given.
In making the purchases and sales on the' exchanges,. members dealt with each other as principals, but each was required separately to execute each order and, when called on, to furnish the name of his customer to the broker with whom he dealt. The rules of such exchanges required a member to furnish to his customer' desiring . the information the'name of the-other broker. And plaintiff made available to defendants’ counsel its records' disclosing the names of .the other parties to the purchases and sales in question.
Upon the execution of an order, .plaintiff promptly wired McDonough the result and on the same, day sent by mail directly to the customer a confirmation showing the. kind and quantity of grain, the time specified for delivery, and the price at which it was bought or sold. Each confirmation contained the statement that “ all transactions made by us for your account contemplate the actual receipt and delivery of the property and payment there;* for.” The customer was bound within the specified future month to receive or deliver the.grain he .had contracted to buy or sell unless prior to that time he had sold or otherwise closed his contract.
All .the contracts here involved were, when made, intended by the parties to be and in -fact were closed by such counter transactions prior to the time fixed for de-, livery. In. accordance with usage prevailing on all contract market exchanges, defendants’ contracts of purchase were closed by corresponding sales and vice versa. And in each instance plaintiff sent a statement to the defendant showing the respective dates of purchase and sale, the quantity and kind of grain, the specified time for delivery, the amounts of plaintiff’s commission and of federal taxes, together with the net gain or loss.
Defendants admit that they intended the orders to be executed on the exchanges, that they were so executed, *203and that the accounts are correct. The advances sued on were made. and . the commissions, claimed were earned. Plaintiff did not sell what deféndants bought, or buy what they sold. It did not gain'when they sustained losses on . their contracts to purchase or sell' or lose When théy made gains thereon. There was no betting between plaintiff and defendants.
The trial Judge, taking plaintiff’s requests, for findings as a basis, characterized the transactions as “ purported,” “pretended” and “ fictitious.” It quite clearly .appears, from the form and language as well as from the substance. of the findings1 2345*and .from his filed opinion, that he'Tield *204that, as actual deliveries were not intended or made, the contracts creating the right to make or call for delivery, on specified terms violated § 4324. The characterizations, *205like the statement in the opinion that the transactions were “ wagering contracts . . . cloaked with the forms of law/’ may not be deemed to be findings of fact. They are *206mere assertions in .the nature of conclusions of law. The effect or weight to be given- them necessarily depends upon the details and circumstances shown by the evidence. Made as they were through a mistaken view of- the applicable law, these declarations may not reasonably be adopted here as findings that no such contracts were made and that plaintiff and defendants indulged in the make-believe denounced by § 4318.
There is no evidence of any violation of the bucketshop laws, nor is there any suggestion that the transactions shown can be held illegal except by force of the Missouri statute. I do not disagree with the majority that the Federal Grain Futures Act has not superseded the statutes of Missouri applicable to these transactions.
I am of opinion that the judgment of the district court should stand reversed and that the judgment of the circuit court of appeals should be affirmed.
Mr.-Justice Stone and Mr. Justice Cardozo join in this dissent.

 The findings followed the form of plaintiff’s requests and employed the same, language, except ás indicated below. The ‘words italicized were added by the court’; those within brackets were deleted.from plaintiff’s requests.,
• 1. In all of the transactions involved in these suits the plaintiff purported to act. [acted] as broker for defendants in the purchase and .- sale of grain for futures delivery, and in no ease did plaintiff pretend ■ to enter into any other than a brokerage contract with any defendant.
2. Every pretended purchase and pretended sale was executed by plaintiff for defendant on the Grain Exchange in Chicago, Illinois, Minneapolis, Minnesota, or Winnipeg, Manitoba. None'of the-contracts of purchase or sale involved in these suits purported to have, been [was] executed in Missouri.' 7 •
3. Every transaction was a pretended contract of purchase of sale of grain for future delivery, purported to have been executed on grain exchanges by plaintiff in behalf of defendants on the one side, in'which the plaintiff was a clearing member of .the exchange where executed and in which the purported other party to the transaction, either acting for himself or a pretended undisclosed principal, :was also a clearing member.
4. Every pretended contract of purchase or sale executed, by plaintiff. for defendants was purported to have been carried out in conformity with and in compliance with- the rules of the particular grain exchange on which.it was pretended to have been closed.
5. Every contract purported to have been executed by plaintiff on - behalf of defendants pretended to call [actually called] for the purchase or sale of grain for future delivery and was evidenced by a memorandum in writing under which, and under the customs and *204rules of the exchanges were executed, the parties .were obligated in form 'and pretense to take or make, delivery, or to respond in damages dor failure to do so.. That) under the custom and practice- existing and under the rules of the exchanges^' off-setting' or ringing purchases or sales under proper circumstances, in good faith, were permitted in lieu oT the actual delivery of grain contracted for.
6. Every transaction involved in these suits initiated by a' purported purchase or sale was offset, by a pretended sale or pretended purchase executed in the same manner as the initiating purported purchase or sale. Every pretended purchase or , sale was closed out by a purported offsetting transaction before the delivery time arrived 'and was purported to have been executed by plaintiff on the orders and at the instruction of defendants, save and except as to some of the last transactions, which were closed out by plaintiff without instruction from such defendant at a time when defendant had no cash margin to protect his. transactions..
7. At all the times in question plaintiff was a member in good standing of the grain exchanges on which the pretended contracts of purchase and sale were executed, and plaintiff constantly maintained a margin with the Clearing House of each Grain Exchange as security ■for the performance of its bona fide contracts. All transactions of pretended purchase and pretended sale executed by plaintiff for defendants were purported to have been contracted for on the Exchanges in the name of plaintiff [plaintiff was responsible for their performance, and in each instance where the sale price was for an amount less than the purchase price, plaintiff acting as defendants' broker paid the difference to the Clearing House of the Exchange upon which the transactions were carried out. In none of the transactions did plaintiff profit or lose by' a loss or profit to defendants. In all of them it acted only as a broker for defendants.]
8. None of the pretended purchases or sales were purported to have been executed at. Carrollton, Missouri. Orders were pretended to have been given by defendants from time to -time at Carrollton to plaintiff’s local office for purported execution on the Grain Exchanges at Chicago, Minneapolis and Winnipeg; but none of these orders were purported to have been accepted by plaintiff at Carrollton. All of them were telegraphed to Kansas City for acceptance or rejection, and if accepted, were purported to have been carried out by plaintiff *205by telegraphic instructions emanating from Kansas City and by pretended written confirmation of the execution of the order, which pretended written confirmations would be mailed from Kansas City . to the customer. . .
9. That no. records of the accounts of plaintiff with the defendants were kept at Carrollton; that no moneys were paid out to customers in Carrollton, but remittances were mailed direct by check from Kansas City. All statements, all pretended'“ P. & S’s,” all pretended confirmations of the purported execution of purchases and sales, were mailed to defendants from Kansas City. The Carrollton office merely pretended to receive[d] and transmitted] purported orders to its customers to Kansas City for pretended execution on the Grain Exchange designated in the customer’s pretended order! .
10. All [none] of the transactions of .purchase and sale executed by plaintiff for defendants were fictitious transactions. None' [all], of them were actually executed between clearing members of the Exchange where pretended to have been consummated, [one of whom would be plaintiff. acting for defendant]
11. In all [none] of the transactions [did] plaintiff bet with its customers and took [or take] the other side of the deal.
[In no transaction did plaintiff and defendant settle- the gain or loss of defendant other than by ascertaining the actual difference between the price at which the commodity was bought and that at which it was sold. In no transaction of purchase or sale did .plaintiff and deféndant fix a fictitious profit or. loss to defendant by an ascertainment of the difference between the contract price and the market price on the day fixed for delivery.]
12. In each transaction, after a pretended order to sell.or purchase was purported to have been executed by plaintiff in behalf of defendant, written confirmation thereof was immediately mailed by plaintiff to defendant. Every written confirmation recited that— ¡
"All transactions made by us for your acqount contemplate the actual receipt and delivery of the property and payment therefor.”
The court’s findings did not cover.other matters included in plaintiff’s requests: the scope of its local agent’s authority, whether the orders were made and recorded in accordance with the rules and regulations of the contract markets in which they were executed, and the intent of the parties as to receipt and delivery of wheat bought.