State v. Miner

135 S.W. 483, 233 Mo. 312, 1911 Mo. LEXIS 59

• Court: Supreme Court of Missouri
• Decided: March 7, 1911
• Status: Published

Opinion

FERRISS, J.

Defendant was convicted at the February term, 1910’, of the circuit court of the city of St. Louis, upon the charge of setting up and carrying on a bucket shop, and sentenced to five years in the penitentiary. The indictment was as follows:

“The grand jurors of the State of Missouri, within and for the body of the city of St. Louis, now here in court, duly' impaneled, sworn and charged, upon their oath present, that Frank J. Miner, on the twenty-second day of March, one thousand nine hundred and ten, at the city of St. Louis aforesaid, as principal, unlawfully and feloniously did set up and carry on a bucket shop, namely,' a room and place wherein and in which said bucket shop, namely, said room and place, the said Frank J. Miner, carrying on said bucket shop as principal, pretended to buy and sell, and went through the form of buying and selling to and from and for any person and persons, stocks and bonds of certain corporations, petroleum, cotton, grain, provisions and other commodities, and one or more of the same,- at prices fixed and pretended to be fixed by trades and transactions made and offered to be made in the same on boards of exchange and otherwise, but wherein there was in fact no actual purchase and sale and sale and purchase of such commodities for and on account of the party and parties thereto; contrary to the form of the statute, ’ ’ etc.

This indictment is based upon an act of the Legislature passed in 1907. [Laws 1907, p. 236; now section 4772 and following, R. S. 1909.] Sections 4772 and 4773 are as follows:

“Sec. 4772. Whoever, as principal, or as agent of any corporation or person or persons, shall set up and carry on a ‘bucket shop,’ or any person who shall accept employment from any person or persons, or corporations engaged in carrying on a bucket shop, and shall under such employment in any manner or capacity assist in the carrying on of a bucket shop, shall be guilty of a felony.

“Sec. .4773. A bucket shop, in the meaning of the preceding section, is a place wherein the person carrying on the bucket shop., then and there, either as principal or agent, pretends to buy or sell, or goes through the form of buying and- selling, to or for any other person or persons, stocks, bonds, petroleum, cotton, grain, provisions and other commodities, or anyone or more of the same, at prices fixed or pretended to be fixed by trades or transactions made or offered to be made in same on boards of exchange or other.wise, but wherein there is in fact no actual purchase and sale, or sale and purchase of such commodity for or on account of the party or parties thereto.”

The evidence introduced by the State tended to prove that the Merchants’ Stock and Grain Company, a corporation duly organized under the laws of Missouri, was conducting the alleged bucket shop on the northeast corner of Fourth and Pine streets, in the city of St. Louis. The place was fitted up with a black-board on which quotations were posted; also telegraph instruments, counters, desks, etc. Markers, telegraphers, bookkeepers and a cashier plied their respective vocations without any apparent managing head. This place was resorted to by people who bought or sold stocks and grain on margins. Several witnesses testified that they had so bought and sold as customers — three of the witnesses, that they had actually received or delivered stock on these trades. Most of them testified that they were told, or it was understood, that they could get the stock or grain if they desired it. .As a matter of fact, the practice was to make no delivery, but to settle the transactions on the rise or fall of the market. Some of the witnesses testified that they bought through the house, not from the house, and. they all testified that, upon the execution of the order, they received what they called a confirmation — an account in the shape of a written memorandum, showing the name of the article bought or sold, quantity and price. All of these memorandums were signed in the name of the Merchants ’ Stock and Grain Company. Several witnesses testified that they were employees of the aforesaid corporation. One of them, who was vice-president of the corporation, kept the books and was assistant at the cashier’s window. He detailed the method pursued, and testified that the orders were telegraphed to Pittsburg for execution. None of the other witnesses undertook to say how the orders were executed. As far as they were concerned, they merely gave orders to buy or sell, without knowing with whom they dealt. The evidence would justify the inference that the bulk of the transactions, to say the least, were made without any intention of receiving or delivering, but solely with a view to settlement upon the rise of fall of the market. There was also introduced evidence to show that an establishment similarly equipped was operated by the same corporation at Twelfth and Pine streets, in St. Louis, connected with the place at Fourth and Pine streets by wire; that in the place at Twelfth and Pine streets orders were received by wire from outside the State, and filled at Twelfth and Pine.

The testimony tended to show that the Merchants ’ Stock and Grain Company was organized in February or March, 1908, in a lawyer’s office in St. Louis: that the articles of association were subscribed by three persons who were not the substantial owners of the stock. They were employees about the building in which the lawyer’s office was located. It does not appear that the defendant participated in the organization of the corporation. Subsequently, at some ' time not stated, but after the business was in operation, he became president of the company, and signed checks for the company as such president. So far as his connection with the business is concerned, one witness testified that the defendant paid him on one deal. Another testified that he saw the defendant pass through the place two or three times, and saw him once beind the counter. Another witness — a porter in the establishment — testified that the defendant gave 1dm instructions as to cleaning, etc. Another witness testified that the ' defendant gave some orders to a clerk, and also made inquiries about putting in telegraph wires. A policeman found him at Twelfth and Pine streets, which place was. run behind locked doors. He ordered the policeman out, at the same time stating that he, himself, had no position there. There is no testimony tending to show the scope or.nature of his duties or authority as president of the company, nor is there any testimony connecting him directly with any sale or purchase testified to.

At the close of the State’s case the defendant offered a peremptory instruction to acquit, which was refused.

I. The peremptory instruction offered by the defendant at the close of the State’s case should have been given. The indictment charges that the defendant; “as principal, unlawfully and feloniously did set up and carry on a bucket shop,” namely, a room wherein the defendant, “carrying’ on said bucket shop as principal, pretended to buy and sell.”

Here is a direct charge that the defendant, as principal, pretended to buy and sell. The evidence for the State shows that' the. principal in all the transactions testified to by the witnesses was the Merchants’ Stock and Grain Company, a corporation. The State proved that the place was operated under the name of the company; that the accounts of sales or confirmations in writing, delivered to the customers, were in the name of the company; that the bank account was kept in the name of the corporation; that the business with the customers was transacted by various agents of the company, and that all the activities, telegraphing and receiving and recording quotations, were carried on by the agents and servants of the corporation. The State introduced the articles of association and the certificate of incorporation. There is no proof of any trades made by the defendant in 'person, nor any by his direction. He was president of the corporation. We clo not mean to say that a defendant may not be charged as principal, and held as such, where the proof shows that the felonious act was committed hy his direction. But the mere fact that one is president of a corporation, under whose direction and in whose name wrongful acts are done hy others of its agents, cannot make him criminally responsible as principal for the acts so done without his knowledge or direction. If we concede that there is sufficient-proof to show that the defendant was cognizant of the transactions testified to, and that he could be held for them if he were carrying on the place as principal, the fact still remains that he was not the principal; that he was, and could only be, an agent of the principal, to-wit, the Merchants’ Stock and Grain Company, a corporation. But even as such agent, it does not appear that he personally either carried on the place or made any sales or purchases. There was evidence that would tend to sustain a charge that defendant was assisting in carrying on the place. It is sought by the State t-o connect the defendant with the sales and purchases shown .in evidence, through his connection with the corporation as its president, and yet.the State at the same time seeks to throw aside the corporation. The State proved a valid corporation, and then undertook to show that this- corporation was merely a mask behind which the defendant operated as the real principal. The State practically conceded that the ostensible principal, carrying on the place and making the sales, was the corporation, and then, after establishing this fact, as also the further fact that the corporation had been duly incorporated, sought to ignore the corporation as a mere sham. It established the corporation apparently for the sole purpose of demolishing it. But this it could not do. The prosecutor appears to have had a confused idea that the principles sometimes applied in equity proceedings to uncover fraud might be invoked here. If the defendant had been indicted as agent for the corporation, the state would certainly claim that he could not deny his agency on the ground that the corporation was invalid. The validity of a corporation cannot be assailed in a collateral proceeding. Furthermore, it does not appear that the corporation was invalid. The three original incorporators, it appears, were not the substantial owners. This fact is not enough to invalidate the corporation. They were merely the employees about the building wherein was located the office of the lawyer who prepared the articles of association. It does not appear that the defendant had any knowledge of the matter, nor any connection with the'incorporators or the attorney who prepared the papers. At some time subsequently he became president of the company. How it does not appear, nor does it appear what powers or duties he had as such, outside of the power to- sign checks. He may have been the controlling spirit of the enterprise, but the evidence does not show it. But if the evidencó did show the defendant to be the dictator of the doings and policy of the corporation, the fact would still remain that the “person” who carried on the business as principal was the corporation. A corporation cannot be ignored simply because it is acting outside the scope of its charter. That is a matter for-the State to deal with in a direct proceeding.

The act in question seeks to hold whoever carries on a bucket shop. It makes two classes; one composed of those who carry on the shop as “principal” and one composed of those who carry it on as “agent of any corporation or person or persons.” There is also a third class drawn within the scope of the act, namely, a class composed of those who accept employment, and, as employees, assist in the carrying on of the shop. Under the proof in this case, the defendant, if he was in actual charge of the business, belongs to the second class, as agent of the Merchants’ Stock and Grain Company. If he was simply assisting he belongs to the third class. The statute was framed for the purpose, doubtless, of reaching not only men who run bucket shops of which they are proprietors and principals, but those .also who are operating for outside concerns, or for those who do not, for any reason,' appear as proprietors and principals. However this may be, it is obvious that a charge that a man is carrying on a- business for himself as principal is not sustained by proving that he was merely acting as agent for, or was an employee of, a proprietor corporation in whose name the business was done.

II. We think that the indictment should have charged either the names of the customers with whom pretended trades were made, or that their names, were to the grand jurors unknown. The State must prove pretended sales or purchasers.

We are cited to misdemeanor cases in this. State, involving the running of bawdy houses, and selling liquor, where it was held unnecessary to give the names of the customers. In such cases there is no question of the character of the acts permitted or committed. Here it is a vital question whether the act committed was a real or pretended sale. The defendant is charged with making pretended sales. Ought not the defendant to be advised of the particular transactions, so that he may prepare upon the question of bona fidesf

In the Kentner Case (State v. Kentner, 178 Mo. 487), cited by the State, the information charged the names of the customers. So in State v. McKee, 212 Mo. 141, an information charging' a felony in the' setting up. of a gambling device gave the names of certain players, and others “unknown.” The indictment in State v. Rosenblatt, 185 Mo. 120 (a gambling device case), states that the defendant did “entice and permit divers persons to said grand jury unknown.” These gambling device eases are based upon a statute that requires something more than merely setting up and keeping the device to complete the offense. The defendant must also “induce, entice or permit” a person to use the same. [R. S. 1899, sec. 2194.] So, in the case at bar, the mere setting up a room with the appropriate paraphernalia is not the offense. The per-' son setting up must carry it on by making pretended trades. How is he to know what particular sale he is to answer for unless the indictment in some way identifies it? Must he be prepared to prove the legality of any and every one of the numerous transactions made in the place?

In State v. Burke, 151 Mo. l. c. 144, Judge Sherwood, speaking of an indictment for recording bets and wagers by mechanical means, says: “It should have described what were the mechanical and other means employed . . . and stated with whom the. bets, etc., were made.”

In State v. Martin, 108 Mo. 117, the distinction is pointed out between a case charging one with selling liquor without a license, in which case it is not necessary to state the name of the customer, and a case where the charging is selling liquor by a druggist, without a proper prescription, in which latter case the name of the purchaser must be set out in the information. That case is authority for the proposition that where the character of the act is under consideration, i. e., whether the sale or purchase is pretended or actual, the name of the person with whom the trade was made must, if known, be set out, or must be «fated to be unknown.

The motion in arrest should have been sustained.

III. The'statute, in substance and effect, prohibits a place in which the person carrying it on makes pretended sales or purchases, without regard to whether such sales or purchases are innocent or of a gambling nature. It is claimed that the statute is-bad because it does not define the pretended sale or purchase; that the Legislature cannot forbid innocent transactions of this kind, free from any taint of gambling. ¥e are not prepared to accede to this proposition. This statute is doubtless aimed at gambling in futures. We cannot say that the Legislature has not power to forbid the carrying on of a place wherein the person carrying it on makes pretended sales or purchases, whether innocent or not, of the commodities mentioned, if in the judgment of the Legislature the inhibition of innocent pretended sales or purchases in such place is necessary to prevent gambling therein in such commodities. We think the Legislature might safely assume that this law would not deprive any great number of persons of the privilege of resorting to a bucket shop for the purpose of making innocent pretended sales or purchases, free from any element of gambling. We have recently decided in the case of State v. Smith, 233 Mo. 242, that the Legislature has power to forbid the exercise of a right otherwise lawful when it deems such inhibition necessary to protect the public health. The cases cited in that case (Booth v. Illinois, 184 U. S. 425; Ex Parte Lucas, 160 Mo. 218; State v. Addington, 77 Mo. 110) are in point here.

The offense consists in carrying on a bucket shop or place wherein pretended sales and purchases are made by the person in charge. It is the carrying on of the business of making pretended trades that is penalized — not the acts or transactions themselves. If, then, the statute applies to all pretended sales or purchases made in the place, the indictment sufficiently individuates the offense when it follows the language of the statute. A pretended sale needs no definition in statute which covers all pretended sales.

IV. The Act of 1907 is in harmony with sections 28 and 34 of article 4 of the State Constitution.

We are concerned here with so much of the act only as relates to bucket shops. The caption of the act is “Crimes and Punishments, Bucket Shops.” Then follows the title proper: “An Act to repeal sections 2221, 2222, 2223, 2224, 2225 and 2226 of Chapter 15, Article 8, of the Revised Statutes of 1899', and to enact new sections in lieu thereof.” Chapter 15 of the Revised Statutes of 1899 is headed “Crimes and Punishments. ’ ’ Article 8 is headed ‘ ‘ Offenses against Public Morals and Decency, or the Public Police and Miscellaneous Offenses.” The repealed sections 2221 and following, relate to bucket shops. While the title to the Act of 1907 did not, in terms, express the subject of the Act, it is apparent from the title that the sections repealed related to bucket shops. Under the title “Crimes and Punishments, Bucket Shops,” no legislator would be misled to suppose that the act proposed to repeal any laws other than those relating to bucket shops. The title made it obvious that the act related to bucket shops, and one need but to refer to the sections mentioned in the title to ascertain the subjects therein treated. The title, taken as a whole, ' clearly showed that the subject of the bill was bucket shops, and that the sections to be repealed related to bucket shops. In thus ruling we are in line with the case of State v. Doerring, 194 Mo. 398.

We deem it unnecessary to discuss the other questions elaborately argued for defendant.

The judgment is reversed and the cause remanded for such further orders'and proceedings as shall be in harmony with the views expressed herein.

Kennish, P. J., and Brown, 3., concur.