Texas, where the Act of 1889, after defining trusts, provides forfeiture for corporations and punishment for individuals who violate its provisions, declares such violation a conspiracy against trade, and prescribes the necessary allegations of an indictment under the act, and the proof required. It was held that the statute is not a nullity for failure to expressly declare trusts unlawful, nor the acts constituting a trust punishable, nor any act a violation of its provisions, such declarations being clearly implied. In another case, before the same court, where the Act of 1889, relating to conspiracies against trade, forbids combinations of persons or corporations to prevent competition in the purchase, sale or transportation of merchandise, and all agreements not to sell or transport below a certain or graduated price, or to establish "the price of any article or commodity between themselves and others to preclude free competition among themselves or others in its sale or transportation, it was held that a contract between liquor dealers in a city for the control of the beer traffic there and in all markets tributary thereto, each turning "all the beer he or they may handle or control into this co-partnership," violates the above statute, and is void, although the persons so combining are the only dealers in the city, and the price was not increased to the consumers.2 the control exercised by the stockholders in determining the agencies selected for managing its business, the business as thus conducted, managed and controlled is against public policy or in contravention of a statute of the State, such acts of the corporate body and of the individual shareholders are the combined acts of all, and courts are not so powerless that they or may not prevent the success of ingenious schemes to evade violate the law. There can be no immunity for evasion of the policy of the State by its own creations.” Ibid.. 179. Queen Ins. Co. v. State, 86 Tex. 250; s. C., 24 S. W. Rep. 397. 2 Anheuser-Busch Brewing Ass'n v. Houck (Tex. Civ. App.). 27 S. W. Rep. 692. § 89. $94. The Creating of a Corner in Stocks. 95. Where Contracts for Future 96. Rights and Liabilities of 97. Statutory Prohibitions. Introductory.—The modern idea of cornering the market is closely allied to the early common law offense of engrossing or forestalling. The difference is such as has grown out of the changed industrial conditions of the nineteenth century. Engrossing or forestalling was the buying up or otherwise obtaining possession of a large quantity of grain or of other commodities on its way to market, with a view to selling again, and of increasing the price; or of pursuading any person who held such commodities from offering them in the market, or of inducing any one to increase the price. At common law the complete engrossing of any commodity with the intention of selling it at an unreasonable price was an indictable offense. This rule was abolished by a statute of the 7th & 8th Victoria. As business was conducted at the time that the common law rule was established, a few persons, or even a single individual, might be able to create a monopoly and control the market. The act was dangerous to the public because in many instances the supply was only adequate to the demand, and, in consequence, the creating of a monopoly a comparatively simple matter. On this account the offense was treated by the courts with great severity, and it was only after a great change in business conditions that the law was abrogated by statute. The creating of a "corner" in the produce or stock market is an act similar to that of the early engrossing or forestalling, but in some important respects differing from it. It differs from the earlier methods in that the business is conducted on a larger scale; a large amount of capital is employed and the means employed are adapted to the industrial conditions of the present time.' 1In Kirkpatrick v. Bonsall, 72 Pa. St. 158, Agnew uses the following pertinent language: "We cannot pronounce this agreement a gambling contract on the face of the writing. A bargain for an option such as it presents may be legitimate and for a proper business object. We can imagine such cases. But it is evident such agreements can be readily prostituted to the worst kind of gambling ventures, and, therefore, its character may be weighed by a jury in connection with other facts in considering whether the bargain was a mere scheme to gamble upon the chances of prices. The form of the venture when aided by evidence may clearly indicate a purpose to wager upon a rise or fall in the price of oil at a future day, and not to deal in the article as men usually do in that business. We must not confound gambling, whether it be in corporation stocks or merchandise, with what is commonly termed speculation. Merchants speculate upon the future prices of that in which they deal, and buy and sell accordingly. In other words, they think of and weigh, that is, speculate upon the coming market, and act upon this lookout into the future in their business transactions; and in this they often exhibit high mental grasp, and great knowledge of business, and of the affairs of the world. Their speculations display talent and forecast, but they act upon their conclusions and buy or sell in a bona fide way. Such speculation cannot be denounced. But when ventures are made upon the turn of prices alone, with no bona fide intent to deal in the article, but merely to risk the difference between the rise and fall of the price at a given time, the case is changed. The purpose then, is, not to deal in the article, but to stake upon the rise or fall of its price. No money or capital is invested in the purchase, but so much only is required as will cover the difference, a margin, as it is figuratively termed. Then the buyer represents not a transfer of property, but a mere stake or wager upon its future price. The difference requires the ownership of only a few hundreds or thousands of dollars, while the capital to complete an actual purchase or sale may be hundreds of thousands or millions. Hence, ventures upon prices invite men of small means to enter into transactious far beyond their capital which they do not intend to fulfill, and thus the apparent business in the particular trade is inflated and unreal, and like a bubble only needs to be pricked to § 90. The Corner Defined.-In general the creating of a corner is such a manipulation of any commodity, and, especially, of any article of produce, or of stocks, as to enable the parties conducting the business to control the price. The schemes devised and worked for the accomplishment of this end are too numerous and too intricate to admit of explanation in this work, but the object of each and all of them is an arrangement to force a ficticious rise in the market, for the purpose of obtaining an advantage of dealers who are compelled to buy and of the public to which the commodity cornered is an article of necessity. In a recent case in Missouri, it was held that a sale of goods to be delivered in the future is valid, notwithstanding there is an option as to the time of delivery, and the seller has no other means of getting them than to go into the market and buy them. But if, under the guise of such a contract, valid on its face, the real purpose and intention of the parties is merely to speculate in the rise, or fall, of prices, and the goods are not to be delivered, but the difference between the contract and market price only paid, then the transaction is a wager and the contract void. In a leading case in Illinois, the rule disappear; often carrying down to accomplish his ends. If it be the bona fide dealer in its collapse. merchandise, e. 9., grain, the Worse even than this, it tempts poor are robbed and misery enmen of large capital to make bar- gendered." gains of stupendous proportions, and then to manipulate the market to produce the desired price. This, in the language of gambling speculation, is making a corner, that is to say, the article is so engrossed or manipulated as to make it scarce or plenty in the market at the will of the gamblers, and then to place its price within their power. Such transactions are destructive of good morals and fair dealing, and of the best interests of the community. If the article be stocks, corporations are crushed and innocent stockholders ruined to enable the gambler in its price 1 Crawford v. Spencer, 92 Mo. 498. See also Lyon v. Culbertson. 83 Ill. 33; Beveridge v. Hewitt, 8 Ill. App. 467; Pickering v. Case, 79 III. 328: Whitesides v. Hunt. 97 Ind. 191; s. c., 49 Am. Rep. 441; First Nat. Bank v. Oskaloosa P. Co.. 66 Iowa, 41; Gregory v. Wendell, 40 Mich. 432; Clay v. Allen, 63 Miss. 426: Cockrell v. Thompson, 85 Mo. 510; Tatum v. Arnold, 42 N. J. Eq. 60; Flagg v. Baldwin. 38 N. J. Eq. 219; Kingsbury v. Kirwan, 77 N. Y. 612; Williams v. Tiedeman, 6 Mo. App. 269: Johnson v. Kaune, 21 Mo. App. 22: Waugh v. Beck. 114 Pa. St. 452: in the case of contracts relating to corners, is stated, as follows: "Although the statutes being considered are highly penal, there is no warrant for construing them with any unreasonable strictness. They ought rather to have a just, if North v. Phillips, 89 Pa. St. 250; McGrew v. City Produce Exchange, 85 Tenn. 572; Seeligsohn v. Lewis, 65 Tex. 215; Lowry v. Dillman, 59 Wis. 197; Barnard v. Backbaus, 52 Wis. 593; Irwin v. Williar, 110 U. S. 499; Cobb v. Prell. 15 Fed. Rep. 774; Bartlett v. Smith, 13 Fed. Rep. 263; s. C., 4 McCrary, 388; Bigelow v. Benedict, 9 Hun, 429; Cassard v. Hinman, 1 Bosw. 207. "But what is the transaction termed 'futures?' It is this: One person says I will sell you cotton at a certain time in the future for a certain price. You agree to pay that price, knowing that the person you deal with has no cotton to deliver at the time, but with the understanding that, when, the time arrives for delivery, you are to pay him the difference between the market value of that cotton and the price you agreed to pay if cotton declines, and if cotton advances he is to pay you the difference between what you promised to give and the advanced market price, if this is not a speculation on chances—a wagering and betting between the parties -then we are unable to understand the transaction. A betting on a game of faro, brag or poker, cannot be more hazardous or uncertain. Indeed, it may be said that these animals are tame. gentle and submissive, compared to this monster. The law has caged them and driven them to their dens. They have been outlawed, while this ferocious beast has been allowed to stalk about in open mid day, with gilded signs and flaming advertisements. to lure the unhappy victim to its embrace of death and destruction. What are the consequences of these speculations on futures? The faithful chroniclers of the day have informed us. as growing directly out of these nefarious practices, that there have been bankruptcies, defalcations of public officers, embezzlements, forgeries, larcenies and death. Certainly no one will contend for one moment that a transaction fraught with such evil consequences is not immoral, illegal and contrary to public policy." Cunningham v. National Bank of Augusta, 71 Ga. 400. "Certainly the legislature did not intend to impose any restraints 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 bis 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 stocks dealt in exist only in the imagination, and where no delivery is con |