Fortenbury v. State

• Citation: 1 S.W. 58
• Parties: FORTENBURY <I>v.</I> STATE.
• Decision Date: 05 June 1886
• Court: Supreme Court of Arkansas

1 S.W. 58

FORTENBURY

v. STATE.

Supreme Court of Arkansas.

June 5, 1886.

Appeal from Pulaski circuit court.

Indictment for keeping a "bucket shop," and gambling in "grain futures." Respondent was convicted, and appeals in error.

John McLure and R. C. Newton, for plaintiff in error. Dan W. Jones, Atty. Gen., for the State.

SMITH, J.

The plaintiff in error (Fortenbury) was convicted of gambling in grain futures, and was fined $250. Motions in arrest of judgment and for a new trial were denied. The indictment charges the offense in the language of the statute, which is as follows:

"Section 1. That the buying or selling, or otherwise dealing, in what is known as `futures,' either in cotton, grain, or anything whatsoever, with a view to profit, is hereby declared to be gambling."

The second section makes such dealing a misdemeanor, punishable by fine and, for the second offense, by thirty days' imprisonment in the county jail. Act March 30, 1880, (Mansf. Dig. §§ 1848, 1849.)

It is argued that this act is void as being in restraint of trade; and it may be conceded that it is loosely drawn. It does not define the offense that was intended to be prohibited, except in the most general terms. It does not declare of what a dealing in futures consists, and it does not draw the line between lawful contracts for the future delivery of commodities and gambling ventures. Certainly the legislature did not intend to impose any restrictions upon legitimate commerce, but only to destroy the parasite that infests it. Contracts for future delivery, if entered into in good faith, and with an actual intention of fulfillment, are as valid as any other species of contract. A farmer may sell and agree to deliver his wheat or his cotton for a stipulated price before it is harvested. Nay, one may sell goods to be delivered at a future day which he has not in actual or potential possession, but which he intends to go into the market and buy. But this is not what is commonly known as "dealing in futures." This phrase has acquired the signification of a mere speculation upon chances, where the grain, cotton, or stock dealt in exist only in imagination, and where no delivery is contemplated, but the parties expect to settle upon the difference in the market. When so limited by judicial interpretation, the statute is not inconsistent with public policy. It forbids and punishes wagering contracts; that is, contracts in which the parties stipulate that they shall gain or lose upon the happening of an uncertain event, in which they have no interest, except that arising from the possibility of such gain or loss. Fareira v. Gabell, 89 Pa. St. 89; Thompson v. Cummings, 68 Ga. 124; Flagg v. Baldwin, 38 N. J. Eq. 219.

This court has often said that it is sufficient for an indictment to describe a statutory misdemeanor in the words of the statute. If dealing in futures means contracts of sale or purchase for purposes of speculating upon the course of the market, where no actual transfer of property is intended, but one party is to pay to the other the difference between the contract price and the market price of the goods at the date fixed for executing the contracts, there is no uncertainty in the description of the offense.

A jury was waived, and the case was tried by the court. There was no conflict in the testimony. The plaintiff in error kept a "bucket-shop" in Little Rock. This term seems, from the explanations of the witnesses, to denote a place where wagers are made upon the fluctuations in the price of grain and other commodities. The course of dealing corresponded with that described in the note to the case of Cobb v. Prell, 5 McCrary, 85. A speculator comes to a commission firm, and orders them to purchase a quantity of grain or stock for him. He does not pay for it, but simply deposits with the commission firm, as a "margin," a proportion—say 10 per cent.—of the cash value of the grain or stock "bought" for him. The grain or stock is then purchased and held by the commission man subject to the order of the speculator. If prices advance, he orders a sale at the advance, and pockets the profits. If prices recede, the "margin" stands as security to protect the commission man, if he is compelled to sell at a loss. If prices go so low as to absorb the entire "margin," more "margins" are called for; and if the speculator fails to respond, he is "closed out;" that is, the commission man sells the grain or stocks at a loss, and reimburses himself out of his customer's margin.

Any person who was able to put up the necessary margin could buy or sell an unlimited quantity of grain or cotton, without regard to his financial ability to meet such obligations. He was required to sign a printed form, importing, on its face, a contract for the future delivery of the article contracted for; but in none of...