Harper v. Kurtz

188 Iowa 1047

• Court: Supreme Court of Iowa
• Decided: December 13, 1919
• Status: Published

Opinions

Evans, J.

shops:0¿obn-cKet grainefypieading. I. It is the contention of the plaintiff that only one of the many grounds contained in defendant’s motion for a new trial was sustained, and that the others were overruled. Without going into the question, we shall take for granted the correctness of the claim of appellant in this regard, and shall consider the propriety of the court’s order as being based upon one ground of the motion only. This ground of the motion charged error in Instruction No. 5, given by the court, in that the court therein failed to take account of Section 4975-d of the Supplement to the Code, 1913. The statutes applicable to the case are Section 4967, Code, 1897, and Section 4975-d, Code Supplement, 1918, which are as follows:

“Sec. 4967. It shall be unlawful for any person, corporation, association or society to keep within the state any store, office or other place for the pretended buying or selling of grain, pork, lard, or any mercantile, mining or agricultural products or corporation stocks, on margins, without any intention of future delivery, whether such pretended contracts are to be performed within or without the state; and no person, corporation, association or society within the state shall make or enter into any contract or pretended contract, such as is above stated and referred to; the intention of this section being to prevent and pro-bibit within the state the business now engaged in and conducted in places commonly known and designated as bucket shops. But this section shall not apply or in any way affect any contract for the actual, buying or selling of any commodity whatever for present or future delivery, where the actual delivery or receipt of the thing sold is contemplated and in good faith intended by either of the parties to the contract.”

“Sec. 4975-d. That a bucket shop, within the meaning of this act, is defined to be an office, store or other place wherein the proprietor or keeper thereof, or other person or agent, either in his or its own behalf, or as the agent or correspondent of any other person, corporation, association or co-partnership within or without the state, conducts the 'business of making or offering to make, contracts, agreements, trades or transactions respecting the purchase or sale, or. purchase and sale, of any stocks, grain, provisions, cotton, or other commodity, or personal property wherein both parties thereto, or. said proprietor or keeper, contemplate or intend that such contracts, agreements, trades or transactions shall be, or may be closed, adjusted or settled according to, or upon the basis of, the public market quotations of prices made on any board of trade or exchange, upon which the commodities or securities referred to in such contracts, agreements, trades or transactions are dealt in by competitive buying and selling, and without a bona-fide transaction on such board of trade or exchange; or wherein both parties, or such keeper or proprietor shall contemplate or intend that such contracts, agreements, trades or transactions shall be, or may be, deemed closed or terminated when the public market quotations of prices made on such board of trade, or exchange, for the articles or ffecurities named in such contracts, agreements, trades or transactions, shall reach a certain figure; and also any office, store or other place where the keeper, person or agent, or proprietor thereof, either in his or its own behalf, or as an agent, as aforesaid, therein makes or offers to make, with others, contracts, trades or transactions for the purchase or sale of any such commodity, wherein the parties thereto do not contemplate or intend the actual or bona-ñde receipt or delivery of such property, but do contemplate or intend a settlement thereof based upon differences in the price at which said property is, or is claimed to be, bought and sold. The said crime shall be complete against any proprietor, person, agent, or keeper thus offering to make any such contracts, trades or transactions, whether such offer is accepted or not. Tt is the intention of this act to prevent, punish and prohibit, within this state, the business now engaged in and conducted in places commonly known and designated as ‘bucket shops,’ and also to include the practice now commonly known as ‘bucket shopping’ by any person or persons, agent, corporations, associations or copartnerships, who or which ostensibly carry on the business or occupation of commission merchants or brokers in grain, provisions, cotton, coffee, petroleum, stocks, bonds or other commodities whatsoever.”

Instruction No. 5, given by the court, contained the following:

“To make such transactions illegal, it is not sufficient to show that one of the parties to such transaction had no intention of delivering the grain sold, and that such party expected and intended only settlement thereof by paying or receiving the difference in prices, but, before such transactions will be held illegal, it must appear that both parties to said transaction mutually intended that no such future delivery thereunder would ever be made, and that the transaction was wholly upon margins and differences in prices between the time of buying or selling and the time of delivery. If you shall find from the evidence in this case that, at the time of the transactions, no future delivery was, in fact', contemplated by the plaintiffs and the defendant in -the purchase or sale of grain by plaintiffs for the defendant, but that the said transactions were based wholly upon margins and the settlement of differences between the price of grain at the time of sale and the time of delivery, then the transactions would be contrary to public policy and void; and, in that event, if you so find, the plaintiffs would not be entitled to recover.”

2. Gaming : bucket shops: statutes compared. It will be noted from the foregoing that the court wholly lost sight of Section 4975-d, which is also known in the record as Chapter 213 of the Acts of the Thirty-third General Assembly. The only, error assigned as a ground of reversal is the court’s error in sustaining the motion for a new trial on such ground. The other assignments of error are wholly formal and precautionary, and charged error of the court in sustaining Paragraphs 8, 10, 11, and 12 of the motion for a new trial. It is the contention of the appellant in argument, however, as already indicated, that none of the paragraphs in question were sustained by the court. The only -assignment of error argued by the appellant is as follows:

“The court erred in sustaining said motion on the ground as stated in his decision and opinion, to wit: The ground based upon the request of defendant to the court that it should instruct the jury upon the law as stated in Chapter 213 of the Laws of the Thirty-third General Assembly; also, the court should have submitted to the jury the questions: (1) As to whether or not the plaintiffs were conducting such business as was prohibited by Chapter 213, Laws of the Thirty-third General Assembly; and (2) whether or not the particular transaction involved in the case was not done in the prosecution of such business.”

The broad contention of the appellant is that the case is governed wholly by Section 4967, and that Section 4975-d has no application thereto. Both of these sections purport to deal with bucket shops. The provisions of both sections are concurrent, in some respects.' But the latter statute adds something to the earlier one. Section 4967 provides that it shall not apply in any case where an actual delivery is contemplated by either of the parties: that is to say, it furnishes no remedy against a fraudulent broker who did not intend delivery of the thing sold, if his customer was honest in his expectations. In this respect, however, the effect of the statute is wholly negative. It issues no permit to the fraudulent broker, if such he be, to conduct his method of business, even with customers of bona-fide intentions.

Section 4975-d does furnish a remedy against the “proprietor” or “keeper” who does not intend delivery, and this even though the customer, in good faith, expects delivery. There is no necessary inconsistency between the two sections.

It is argued for appellant that Section 4975-d did not repeal Section 4967, and that, therefore, Section 4967 stands. Let it stand. But it is further argued that the last sentence of Section 4967, unless repealed, stands in the way of the application of Section 4975-d to the case. There is nothing to be found in such sentence except a limitation of the application of Section 4967. We think it clear, therefore, that the case does involve a consideration of Section 4975-d, as well as of 4967, and that the trial court properly so held, in his consideration of the motion for a new trial.

II. It is argued that the defendant is precluded by his pleading from invoking the aid of Section 4975-d, in that his pleading was predicated wholly upon Section 4967. It is true that the defendant, in his answer, pleaded that it was not contemplated either by plaintiff or defendant that there should be any actual delivery of the commodity sold. If the evidence on behalf of the defendant satisfied the jury that the plaintiff, as proprietor or keeper, did not in.tend actual delivery, would the defendant’s pleading preclude him from resting his case upon such evidence? Or if, in addition to such evidence, he introduced evidence also to the effect that he had no intention of receiving delivery, would it be fatal to his case if the jury were to find adversely to him as to his own intentions, and yet find with him as to the intentions of the plaintiff, as proprietor or keeper? If the defendant pleaded more than he was required to prove, was he, therefore, bound to prove all that he pleaded? We have always held otherwise. If the defendant had satisfied the jury that neither party had intended actual delivery, then he would have prevailed under both statutes.. If he satisfied the jury that only the plaintiff, as proprietor and keeper, did not intend actual delivery, then Section 4967 ceased to be applicable, and defendant would be entitled to prevail under Section 4975-d. The defendant was not required to plead the statutes nor to reduce his allegations to the measure of the one or the other, even though it be true that it would have been sufficient for him to plead that the plaintiff, as proprietor and keeper, did not intend actual delivery.

3. Trial: exceptions to instructions : sufficiency. III. It is further argued that the defendant did not properly except to Instruction 5. The record shows that he did file written exceptions under the statute. His exception to this instruction includes the fob lowing:

“Defendant further objects to said instruction because and for the fact that the ^ame does not correctly state the law, in that it does not instruct the jury that, if Harper & Ward, the plaintiffs, who were the proprietors or keepers of the brokerage office wherein *the transactions involved in this controversy were made, did not intend that delivery should ever be made of the commodity sold or purchased in said transactions, these transactions were illegal, as provided in' Section 4975 of the Supplement to the Code of Iowa, and the other laws of the state of Iowa applicable thereto; and, for the reasons herein stated, defendant excepts to the giving of said instruction.”

Furthermore, Instruction No. 7 contained the same vice as Instruction No. 5, in that it emphasized the fact that there must have been an absence of intention to deliver, on the part of both defendant and plaintiff. To this instruction the defendant made the following written exception:

“Defendant further objects to Instruction No. 7, given to the jury, for the reason that the same incorrectly states the law, and is confusing and misleading, and for the further reason that the instruction places upon the defendant the burden of proving that both he and the plaintiffs had no intention of receiving or delivering any grain in the transactions in controversy, such instruction being in law erroneous and incorrect, and tending to place, a greater burden on the defendant than the law actually places on them; and for such reasons, defendant excepts to the giving of said instruction.”

We see nothing wanting in these exceptions to bring specifically to the attention of the court the very point which was urged in the motion for a new trial, and which was sustained by the trial court.

4. trial : waiver of exceptions, IV. It is further argued that, the defendant waived his exception by his requested instructions. The court having denied his exceptions, and held, in effect, by Instructions 5 and 7, that Section 4967 was controlling, counsel f°r defendant requested the following Instructions 3 and 5:

“3. Defendant in his answer sets up, as a defense, the claim that the transactions concerning which this suit is brought, were what is commonly known as dealing in futures, or options, wherein it was not contemplated by either party to the transaction that actual delivery of the commodity dealt in was to be made by either party, as the case might be, depending on whether the sale or purchase was involved, and that, on tile contrary, all of such transactions were what is commonly known as gambling transactions, because of the fact that no such delivery was contemplated, and that the transactions were to be settled by an offset of the difference between the sale price and the purchase price, as the case might be. You are instructed that, if you shall find from the evidence that the parties to the transaction concerning which this suit has been brought, did not intend nor contemplate that the delivery or deposit of the commodity dealt in was to be made or accepted, and that settlement of such transactions was to be made by offsetting contracts for the sale and purchase of the commodity, as the case might be, and the payment of the difference, then your verdict must be for the defendant, and you will so render it; for the law declares that such transactions are but gambling transactions, and, as such, are illegal and void.

“5. You are instructed that the law declares void all contracts for the purchase or sale of grain or produce where there is no intention to make actual delivery of the grain or produce. You will first determine whether or not, in the case before you, thei’e was actual, bona-fide intention to make actual delivery of the grain or produce, in the instances of the particular sales or purchases out of which the claims sued on by the plaintiff arise.

“If there was no bona-fide, actual intention to make actual delivery of the grain, then the plaintiff cannot recover, and your verdict will be for the defendant; but, if you find there was the actual, b'ona-fide purpose and intent, at the time, to make actual delivery of the grain or produce, then such transactions were valid.”

We think it was the clear right and duty of counsel for defendant, at this point, to adapt themselves to the view of the law already adopted by the court over their exception, and to soften, as much as they could, the emphasis, of the court’s Instructions 5 and 7. Surely, we must recognize the right of an attorney to plead with the court for a modification of erroneous views, where a complete correction of them appears impossible of attainment. Requested Instructions 3- and 5 fairly appear to be an attempt to eliminate the emphasis of the instructions given by the court. In the light of the record, they were clearly not intended as a waiver of the exceptions. Furthermore, the appellant, in his brief, specified his grounds relied on for a reversal, and this is not one of them. See Johnson v. City of Denison, 186 Iowa 949; Cram v. City of Des Moines, 185 Iowa 1292; Cheney v. Stevens, 173 Iowa 288; McDermott v. Ida County, 186 Iowa 736.

6‘ EhopsN-Gnon-cket dense*7 : evl’ V. It is claimed that there was no evidence to sustain the defense, and that the court should have directed a verdict for the plaintiff. A pivotal fact in the case was that of the intent of the plaintiffs. Such fact cou^^ proved by defendant only by conduct and circumstances. It could be determined by the jury only ás a matter of inference. Without going into detail, it was enough to say that the defendant had been a customer 'of the plaintiffs’ for three years, and, during that time, had bought ostensibly 275,000 bushels of corn, 320,000 bushels of wheat, and 135,000 bushels of oats. All the purchases were made from time to time upon small margins, amounting, however, to a sum total of $8,000. Not a bushel of these grains was ever delivered, nor was any warehouse receipt ever delivered. The only kind of delivery claimed by the plaintiff is that it had in its possession warehouse receipts, which it would have delivered to the defendant at any time when he was ready to pay the purchase money. In none of these transactions did the defendant ever, pay the purchase money. This evidence was proper for the consideration of the jury on the question of the intent of both parties or either. We think that the trial court did not err in granting a new trial. The order is, therefore, — Affirmed.

Ladd, C. J., Weaver, Gaynor, Preston, and Stevens, JJ., concur.