of any board of trade, with certain excep- The statute was leveled particularly at the Chicago board of trade, which is the greatest grain market in the world. In 1922, its cash sales of grain amounted to 350,000,000 bushels. Cash sales consist of grain sold on the exchange, sales to arrive, and that very small percentage of grain which is actually delivered on contracts for future delivery. Concerning this flow of grain through Chicago the court said: "It is impossible to distinguish the case at bar, so far as it concerns the cash grain, the sales to arrive, and the grain actually delivered in fulfillment of future contracts, from the current of stock shipments declared to be interstate commerce in Stafford v. Wallace, 258 U. S. 495. * "The sales on the Chicago board of trade are just as indispensable to the continuity of the flow of wheat from the West to the mills and distributing points of the East and Europe, as are the Chicago sales of cattle to the flow of stock toward the feeding places and slaughter and packing houses of the East." Pages 34, 36, of 262 U. S., 43 Sup. Ct. 476. is subject to constantly recurring abuses which are a burden and obstruction to interstate commerce in grain. And further, are they such an incident of that commerce and so intermingled with it that the burden and obstruction caused therein by them can be said to be direct? "It is clear from the citations, in the statement of the case, of evidence before committees of investigation as to manipulations of the futures market and their effect, that we would be unwarranted in rejecting the finding of Congress as unreasonable, and that in our inquiry as to the validity of this legislation we must accept the view that such manipulation does work to the detriment of producers consumers, shippers and legitimate dealers in interstate commerce in grain and that it is a real abuse. * "It is said there is no relation between prices on the futures market and in the cash sales. This is hardly consistent with the affidavits the plaintiffs present from the leading economists, already referred to, who say that dealing in futures stabilizes cash prices. * * "Prices of grain futures are those upon which an owner and intending seller of cash grain is influenced to sell or not to sell as they offer a good opportunity to him to hedge comfortably against future fluctuations., Manipulations of grain futures for speculative profit, though not carried to the extent of a corner or complete monopoly, exert a vicious influence and produce abnormal and disturbing temporary fluctuations of prices that are not responsive to actual supply and demand and discourage not only this justifiable hedging but disturb the normal flow of actual consignments. A futures market lends itself to such manipulation much more readily than a cash market. "The question of price dominates trade between the states. Sales of an article which affect the country-wide price of the article directly affect the country-wide commerce in it. By reason and authority, therefore, in determining the validity of this act, we are prevented from questioning the conclusion of Congress that manipulation of the market for futures on the Chicago board of trade may, and from time to time does, directly burden and obstruct commerce between the states in grain, and that it recurs and is a constantly possible danger. For this reason, Congress has the power to provide the appropriate means adopted in this act by be restrained and avoided." Pages 36, 40, of 262 U. S., 43 Sup. Ct. 477. Turning to the subject of future sales, the which this abuse may court said: "The question under this act is somewhat different in form and detail from that in the From the foregoing, he who runs may read Stafford Case, but the result must be the same. that Congress constitutionally assumed auIt is not the sales and deliveries of the actual thority over trading in grain futures because grain which are the chief subject of the supervision of federal agency by Congress in the of the relation to and effect upon interstate Grain Futures Act although a record of cash commerce of that business. Before the grain sales is required and a corner in cash sales company may be enjoined from doing busiwould be a violation of it, and there are other ness in this state, two conditions must appear from the findings of fact: First, that provisions equally regulatory of them. the contracts of sales of grain for future de- the grain company has been denied the privlivery, most of which do not result in actual de-ilege of trading on contract markets, or is livery but are settled by offsetting them with other contracts of the same kind, or by what operating wholly outside the field of such privilege; and, second, that it is maintainis called 'ringing.' Chicago Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 246, ing a nuisance under the state law. Since 247 [25 Sup. Ct. 637, 49 L. Ed. 1031]. The the first condition does not exist, the inquiry question is whether the conduct of such sales is ended, because the grain company does It is not have two masters over its handling of grain futures. Citation of authority would be superfluous. The state bases its right to an injunction on the ninth finding, that probably in no case was an order given by a customer to the grain company to buy or sell with the intention or expectation on the part of the customer of actual delivery of grain. The argument is that because of this mental attitude the transactions were gambling, the grain company knew, or must have had notice of, the wagering character of the transactions, and so was accessory to them, and going through the form of executing contracts on the board of trade was mere pretense. There was evidence to sustain the findings, including the fifth and the concluding portion of the ninth. Leaving at one side the subjects of bona fides and enforceability mentioned in the fifth finding, and the intention of customers mentioned in the ninth finding, the findings and the evidence on which they are based are conclusive that all transac tions were conducted from beginning to end as genuine transactions for legitimate purposes, according to contract market rules. They were transactions affecting interstate commerce regulated by the Grain Futures Act, and it is not for the courts or the Legislature of this state to approve or disapprove contract market rules and practices which are subject to federal supervision. There are men who study all the conditions affecting the marketing of grain, and make it their business to seek profit from exercise of their judgment respecting the future price of grain. They are called "speculators," and their operations help to make and stabilize the market price of grain to the farmer, the elevator man, the miller, and all others interested in that price. The Grain Futures Act does not prohibit speculation. It recognizes speculation as lawful, and one of the patent purposes of the act was to protect, as an insurance expedient, that form of speculation known as "hedging." the grain and provision business of the world. Of course, in a modern market contracts are not confined to sales for immediate delivery. People will endeavor to forecast the future and to make agreements according to their prophecy. Speculation of this kind by competent men is the self-adjustment of society to the probable. Its value is well known as a means of avoiding or mitigating catastrophes, equalizing prices and providing for periods of want. It is true that the success of the strong induces imitation by the weak, and that incompetent persons bring themselves to ruin by undertaking to speculate in their turn. But legislatures and courts generally have recognized that the natural evolutions of a complex society are to be touched only with a very cautious hand and that such coarse attempts at a remedy for the waste incident to every social function as a simple prohibition and laws to stop its being are harmful and vain." Page 247 of 198 U. S., 25 Sup. Ct. 638. Congress knew all about the manner in which trading in futures is conducted. The volume is enormously greater than the sup ply of grain deliverable in satisfaction of contracts, and delivery is effected by offset and ringing: "A set-off is in legal effect a delivery * which is no more wonderful than the enormous disproportion between the currency of the country and contracts for the payment of money, many of which in like manner are set off in clearing houses without any one dreaming that they are not paid, and for the rest of which the same money suffices in succession, the less being needed the more rapid the circulation is." Board of Trade v. Christie Grain & Stock Co., supra, page 250 of 198 U. S., 25 Sup. Ct. 638. The availability, under board of trade rules, of set-off by purchasing against a sale and selling against a purchase, has become so familiar that, for many persons, actual delivery fades into a legal theory, or vanishes altogether, instead of being a fact actively influencing their minds when dealing. When a miller hedges on the wheat in his mill, or Speculation is not confined to large opera- on wheat purchased and under contract of tors on boards of trade. The general public delivery to him, by selling short, he distinctspeculates, and the act does not prohibit the ly does not intend to deliver that wheat, begeneral public from speculating. The deal-cause he intends to grind it into flour; and ings of innumerable suckers bear relation to the market price of grain, which is the burden of the act. The act affords them a measure of protection by undertaking to prevent manipulation of the market by large operators, but it was apparently framed in accordance with the views expressed by Mr. Justice Holmes, in the opinion in the case of Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 25 Sup. Ct. 637, 49 L. Ed. 1031: "As has appeared, the plaintiff's [Chicago board of trade's] chamber of commerce is, in the first place, a great market, where, through its 1,800 members, is transacted a large part of getting down to the naked truth, he does not contemplate buying and delivering any other wheat on his contract of sale. He may know that delivery would be involved if he allowed his short sale to mature, but allowing it to mature does not occur to him. He fully intends, from the beginning, to buy against his hedging contract when the need for insurance is passed. Considered merely in the aspect of relation to interstate commerce, there is no difference between transactions of the miller and transactions of the man who only understands that if he sells short he can buy against the deal, taking the profit or paying the loss. (222 P.) The Grain Futures Act gives much attention to keeping records of board of trade transactions. By proviso annexed to the exception of section 4, lawful trading at a contract market involves evidencing every contract by writing, showing date, parties, and addresses, property covered, price, and terms of delivery. Each board member shall keep such record for a period of three years, or longer if the Secretary of Agriculture shall so direct, which record shall at all times be open to inspection of the departments of agriculture and justice. By section 5 (U. S. Comp. St. Ann. Supp. 1923, § 8747%d), one of the conditions to obtaining designation as a contract market is that the board of trade must make provision for keeping a record showing all the details of all cash and future grain transactions,, and for making reports thereof to the Secretary of Agriculture. From these records and reports the Secretary of Agriculture derives information on which, if necessary, he may base disciplinary action. Every order given to a broker to buy or sell is an offer to make a contract, within the statute. When the broker executes an order, he does make what for all purposes of the statute is a contract. Whether or not a customer had in mind delivery in fact, and even although he intended to gamble, the contract goes upon record, for all purposes of the act, as one for delivery of grain and, as a matter of law, the customer's undis closed intention will not defeat it. Browne v. Thorn, 260 U. S. 137, 43 Sup. Ct. 36, 67 L. Ed. 171. Suppose the broker has reason to believe, when an order is received, that his customer intends to provide an offset for his trade by subsequent purchase or sale. If the broker does not bucket the order-that is, take the other side of the trade without executing the order in a contract market-and if the broker has no understanding or agreement with the customer that they will depart from the contract market rules, but the broker does proceed to effectuate a recorded contract according to the rules of the market on which he trades, he does precisely the things which Congress has brought within the scope of its regulation. The result of the foregoing is: The business the grain company is doing lies within the field of federal regulation annexed by the Grain Futures Act; until the grain company is deprived by competent authority of contract market privileges, it may not be enjoined from conducting its business in this state; and the telegraph company may not be enjoined from furnishing interstate telegraphic facilities necessary to conduct of the grain company's business. The judgment of the district court is affirmed. All the Justices concurring. CRAMER v. OVERFIELD. (No. 24938.)* (Supreme Court of Kansas. Jan. 12, 1924.) (Syllabus by the Court.) 1. Appeal and error 1170(3)-That petition contains matters pertaining to different cause of action not ground for reversal. The fact that a petition, stating a cause of action for damages for fraud in effecting the sale of shares of corporate stoek, also makes statements and asks relief pertinent to breach of contract and rescission is held not to be a ground of reversal. 2. Fraud 23-Knowledge of purchaser of stock as to receivership and corporate organization held not fatal to recovery for fraud. plaintiff to purchase shares of stock in a corIn an action for damages for inducing the poration by the false representation that it had been merged with another, the fact that he knew that one of the companies was in the hands of a receiver and the other was in the process of organization is not necessarily fatal to his recovery. 3. Fraud 58(4)—Finding plaintiff relied on representations justifiable. In an action for damages on account of fraud where evidence is given of a false representation likely to influence the conduct of the plaintiff, and he testifies that he believed it, the jury may find that he relied upon it, although he did not say so in express terms. 4. Fraud 59(1)-Damages amount paid by purchaser of property never delivered. One who is induced by false representations to contract for the purchase of property which is never delivered, and brings action for damages on account of the fraud, may recover the amount of his payment. 5. Appeal and error 1068(5)—Failure to Instruct as to what representations material held not prejudicial. In an action for damages on account of fraudulent representations the omission to instruct as to what representations are material is not prejudicial where a particular representation, which the jury find was made, is material. (Additional Syllabus by Editorial Staff.) 6. Appeal and error 1170(1)—Judgment not reversed for procedural rulings unless prejudicial. Under Code Civ. Proc. § 581 (Gen. St. 1915, § 7485), procedural rulings are not ordinarily a ground of reversal unless they are affirmatively shown to have been prejudicial. Appeal from District Court, Montgomery County; Joseph W. Holdren, Judge. Action by J. A. Cramer against John F. Overfield. From a judgment for plaintiff, defendant appeals. Affirmed. T. H. Stanford, L. G. Seacat, and Charles Seacat, all of Independence, for appellant. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes Rehearing overruled 223 Pac. 1100. W. N. Banks, O. L. O'Brien and Walter | puted to the plaintiff is doubtful, and need McVey, all of Independence, for appellee. MASON, J. J. A. Cramer sued John F. Overfield and recovered a judgment based upon the plaintiff's claim that the defendant had sold him shares of stock in the U. S. Consolidated Oil Shale & Refining Corporation, a new company, under the false representation that it had been merged with the Consolidated Gas, Oil & Manufacturing Company of Independence, Kansas, an established concern. The defendant appeals. not be here determined. Although the words "merger" and "consolidation" in connection with corporations have distinct meanings and where employed with technical accuracy apply to definite forms of union, both are permissibly used to indicate various arrangements by which two companies become united in interest. 14 C. J. 1054, 2 Bouvier's Law Dictionary, Rawle's 3d Revision, 2205; Chicago & E. I. R. Co. v. Doyle, 256 Ill. 514, 100 N. E. 278. The defendant denied telling the plaintiff that the companies had been merged, but testified that the new company had had a contract for the purchase of a majority of the stock in the old one for $275,000, on which $10,000 had been paid, but which was not carried out because of the failure of the former to make any further payments. Even if such a contract, not having been performed, could fairly be spoken of in a prac [1] 1. Complaint is made of the overruling of a demurrer to the petition on the ground that several causes of action were improperly joined. The contention is that the petition, besides setting out a cause of action for damages on account of fraud, included statements and asked for relief pertinent to breach of contract and rescission. Reliance is placed upon the opinion in Grent-tical sense as a completed merger, there is ner v. Fehrenschield, 64 Kan. 764, 68 Pac. 619. There a petition was held to be subject to demurrer, not because several causes of action were improperly joined, but because two theories were presented as to the basis of recovery, and on either theory some vital fact was omitted from the pleading. It was said in the syllabus however that a petition is insufficient if the court cannot de[3] 3. It is argued that there was no evitermine from it upon which of several the-dence of the plaintiff having relied upon the ories a recovery is sought. [6] Since the adoption of the present Code in 1909, procedural rulings are not ordinarily a ground of reversal unless they are affirmatively shown to have resulted in prejudice. Civil Code, § 581 (Gen. St. 1915, § 7485). Here the case was tried out, being submitted to the jury on the theory of fraud alone, and there is no doubt of the judgment being based on that theory. It is not apparent that the allegations of the petition, if they were open to technical objection, hindered the presentation of the defense. See, also, Wendel v. Implement Co., 112 Kan. 336, 210 Pac. 1100, and cases there cited. Morever as the demurrer to the petition was passed upon April 15, 1922, and the appeal was taken March 13, 1923, the ruling is not reviewable. Smith v. Griffith, 105 Kan. 357, 358, 184 Pac. 725. [2] 2. The plaintiff testified that the defendant told him the two corporations had been merged. The office manager of the old company testified that there was nothing on its books showing a merger, and the defendant admitted that the companies had not been merged. In behalf of the defendant it is argued that the plaintiff knew that the old company was in the hands of a receiver and that the new one "was in the preorganization stage," and, therefore, being charged with knowledge of the law, must have known that there could not have been a formal, technical merger between the two companies. Whether such legal knowledge may be im no finding that it was in fact made, and the jury must be regarded as believing the contrary if that is necessary to support the general verdict. No instruction defining the word merger was given or asked. In answer to a special question the jury found that the defendant had represented that he had merged the two companies. representation that a merger had been effected. He testified that he gave credit to the representation, saying of the defendant: "Yes, I believed his statements; I had known him for a good many years, and I thought he was telling me the truth." The representation concerning merger was obviously one likely to exert an influence on the sale, and from the evidence the jury could reasonably infer that the plaintiff relied upon it, although he did not say so in express terms. [4] 4. The plaintiff recovered the amount he had paid for the stock. The defendant, admitting that the stock had become valueless and was never delivered, contends that no damages were proved. The claim was for damages occasioned by the plaintiff being fraudulently induced to enter into the contract. One of the measures of recovery in that situation is the amount paid. Trapp v. Refining Co., 114 Kan. 618, 220 rac. 249. [5] 5. Complaint is made of an instruction as omitting certain essential matters. These matters were all supplied in other parts of the charge, except that the jury were not told what fraudulent representations were material. No specific instruction having been asked on this point, the defendant is hardly in a position to complain of its omission, but as the jury found specifically that the representation of merger, which we re (222 P.) gard as material, had been made, no preju-, ant returned to the restaurant. A crowd of dice can have resulted. (Syllabus by the Court.) I. Homicide 254-Evidence held to sustain conviction of murder in second degree. In a murder case, the evidence examined, and held sufficient to support a judgment of conviction. 2. Criminal law 486-Evidence of physician as to location and probable result of gunshot wound held admissible. Errors complained of in admission of state's evidence considered, and held to be unfounded. colored people came from the dance to the restaurant at about the same time for refreshments. Some time after the defendant returned to the restaurant Ruby Thompson went to the cash drawer, took out some money, went to an adjoining room, which she occupied as sleeping quarters, secured some of her things, and left. After the guests had been served and had gone the defendant took a hatchet and went to Ruby Thompson's room and broke open her trunk. He was in an angry mood, and stated, "That girl has taken the money;" and, in the presence of Jane Middleton, another colored woman who worked at the restaurant, said "Get out of here," or "Get to hell out of here." Jane Middleton left the restaurant. The defendant and the deceased were the only ones remaining. An officer who had been observing the restaurant from a point in or near the alley heard a loud voice, and start3. Criminal law 1153(4), 11702 (5)-Wit-ed toward the restaurant. As he approached nesses 267 Scope of cross-examination he heard a sound something like the striking of a drum. He ran around toward the front door, found some other officers, whom he directed to go in at the front, while he ran to the back door, and entered the kitchen of the restaurant. The deceased had been largely discretionary; judgment not reversed for scope of cross-examination unless prej udice or abuse of discretion appears. Rule followed that the extent to which a witness may be cross-examined is largely in the discretion of the trial court, and that, unless prejudice is shown, or that the court abused its discretion, there will be no reversal. State v. Smith, 114 Kan. 186, 217 Pac. 307. 4. Remarks by court held not prejudicial. Claims of prejudicial remarks by the trial court considered, and held to be without merit. 5. Instructions approved. The instructions examined, and found to have fairly stated all the material elements of the case. shot, was lying an the floor, gave a gasp, and expired. The defendant was seen crouching in or near a corner of the room. A search disclosed a revolver hidden under the rug at about the place where he had been seen crouching down. He admitted ownership of the revolver, which had been recently fired. When asked who shot Wade Lindsey, he shook his head, and said "You know Wade," and refused to talk. This was defendant's second conviction. The trial court set aside the first verdict, Appeal from District Court, Neosho Coun- and granted a new trial. ty; S. C. Brown, Judge. Estell Morrison was convicted of murder in the second degree, and he appeals. Af firmed. H. P. Farrelly and T. R. Evans, both of Chanute, and Archie D. Neale, of Chetopa, for appellant. C. B. Griffith, Atty. Gen., John F. Rhodes, Asst. Atty. Gen., and T. F. Morrison, Co. Atty., of Chanute, for the State. HOPKINS, J. The defendant was convicted of murder in the second degree, and appeals. Defendant contends that the case should be reversed because the evidence was insufficient to warrant a conviction. [1] We have examined the record, and find that there was evidence on every material point to support the verdict. On some matters there was disputed testimony. The dispute, however, was resolved by the jury against the contention of the defendant, and the verdict has received the approval of the trial court. Under such circumstances the verdict should not be disturbed. See City of Cherokee v. Fox, 34 Kan. 17, 7 Pac. 625; State v. Baldwin, 36 Kan. 1, 12 Pac. 318; State v. Smith, 35 Kan. 618, 11 Pac. 908; The defendant and Wade Lindsey were State v. McLain, 43 Kan. 439. 23 Pac. 651; colored men. They were partners conduct- State v. Hunter, 50 Kan. 302, 32 Pac. 37; ing a restaurant business at Chanute. State v. Brubaker, 56 Kan. 90, 42 Pac. 353. the night of August 19, 1922, Lindsey was [2] Defendant made various objections to murdered. That night the defendant attend- the state's evidence. He complains that the ed a dance of colored people. While he was court overruled his motion to strike out the in attendance at the dance the deceased and testimony of Dr. Light, who examined the a sweetheart of the defendant, Ruby Thomp- body of the deceased a short time after the son, had charge of the restaurant. The murder, because the doctor made no autopsy, dance ceased about midnight, when defend- and did not testify directly as to what vital For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes On |