Alex. Sprunt & Sons v. May

WalKER, J.,

dissenting: I regret always to differ from my brethren; but when an important and valuable right of tbe citizen, which, in my opinion, is recognized by tbe law, is abridged or impaired by a decision of tbis Court, it is my clear duty to enter my dissent, and, when required, as is tbe case here, to give my reasons therefor. I cannot agree to tbe proposition which seems to form tbe basis of tbe Court’s opinion, tbat tbe exception in tbe statute, Revisal, secs. 1689, 1690, as to purchases or sales by manufacturers and wholesale merchants of tbe necessary commodities used in their, business, is restricted to tbe burden of proof or to tbe clause of tbe statute raising a prima facie case of illegality in tbe transaction upon tbe proof of certain facts; nor do I think tbat it was so decided in S. v. McGinnis, 138 N. C., 724, or S. v. Clayton, ibid., 132. An extract from tbe opinion of tbe Chief Justice in tbe former case will show tbe contrary: “Tbat no other businesses or persons are mentioned as authorized to deal bona fide for tbe purchase of commodities on ‘margin’ is not an implied restriction upon others to do an act not forbidden by any statute. Section 1 does not confer any exclusive_ right or privilege ujion manufacturers or wholesale merchants. It does not authorize them to engage in any business prohibited by tbe act of 1889. It does not authorize them to speculate in cotton or other commodities. It simply provides that the courts •shall not construe the act of 1905 to have the effect of preventing them from buying and selling for future delivery the necessary commodities required in their ordinary business.” It is true that the court, in that case, when considering the burden *395of proof, did say: “There may be good reasons why the purchase of ‘necessary commodities required in the ordinary course of their business’ for future delivery ‘on a margin,’ by manufacturers and wholesale merchants, shall not raise a presumption that such dealings are ‘wagering’ contracts, while purchases by them, not of such commodities, or when not ‘required in the ordinary course of their business,’ or the purchase by others of any commodities, when made on the deposit of a ‘margin’ and for ‘future’ delivery, shall raise the presumption of a ‘wagering’ contract. Whether the reason is good and sound for making the purchase of commodities upon ‘margin’ ;prima facie evidence of a ‘wagering’ contract, under a certain state of facts, and providing that upon a different state of facts such purchase upon ‘margin’ does not constitute prima facie evidence of a ‘wagering’ contract, is a matter for the legislature.” But this but emphasizes the correctness of my position, that no such decision was made in that ease, when we connect the two quotations and consider them together. It was evidently in the minds of the Chief Justice and the other members of the Court, at the time, that such manufacturers and dealers could buy cotton and other commodities “on margin,” if done bona fide, and not for the mere purpose of speculation, but for the legitimate purpose of preventing losses in their business by sudden and violent fluctuations of prices in the market. It is said in the McGinnis case, as we have seen, that they may purchase commodities used and. required in the ordinary course of their business, “for future delivery on a margin.”

It is thus conceded that the mere fact that such a dealer buys “on a margin” does not make the transaction unlawful under the statute, but is clearly authorized. The statute covers the whole subject and provides a general scheme of legislation to prevent the vicious practice of dealing, for the purpose of speculation, in “futures,” which have a well-known and definite meaning, being regarded by the law as a cover for gambling, and therefore denounced by it as illegal. Such purchases and sales by manufacturers and wholesale dealers or merchants, being lawful, the Legislature, by section 1689, which declared “future contracts” unlawful, excepted such manufacturers and *396dealers as we have described from the operation of that section, which means, of course, that as to them the purchase of commodities used in their business, “on margins,” should be lawful, or, expressing it negatively, should not be unlawful. That exception is in section 1689 and not in the two sections 1690 and 1691, which relate to the prima facie case and the burden of proof.

I understood, at the time they were decided, that McGinnis’s case and Clayton’s case were in accord with this view, and I believe that they were intended to be; but if they are not, or were not so intended to be, I cannot longer give my assent to them.

The defendants in those two cases were indicted for conducting and maintaining bucket shops, which was plainly unlawful. They were not manufacturers or merchants, in the sense of those terms as used in the statute, and the question now presented was not necessarily involved in those decisions, although the Court, I think, recognized the law to be as I now contend it is. .

Alex. Sprunt & Sons are engaged in a perfectly legitimate business, that of buying spot cotton for export, and_ are not dealing in what are known as “futures” for the purpose of speculation. They are wholesale dealers in the cotton itself, and buy it for resale or to fill orders, and in no view are they gambling in the article. When they buy “on a margin,” it is merely for the purpose of protecting themselves against losses which may arise from the rise or fall in prices in the cotton market, and only to that extent; and this is precisely what they are authorized to do by the last provision in Revisal, sec. 1689.

But it is said that the exception to be found at the end of that section (1689) should be bodily taken therefrom and transferred to sections 1690 and 1691, which relate to. the burden of proof, and the prima, facie case made against the plaintiff by the plea of the defendant that the contract sued on is illegal, it being a gambling contract, for the purchase or sale of cotton “on margins,” to be settled merely by paying the difference in the price of the commodity at a given time, which is determined by the rise or fall of the price in the market, and, therefore, purely speculative.

*397We are permitted to construe statutes in pari materia together and to transfer terms, if necessary, to ascertain the legislative intention; but we are not authorized to take an important exception from one section of the Revisal, withdrawing thereby its qualification of the broad and general provisions of the enactment, and transfer it to another section relating to a different branch of the law. It will be seen at once that this is not ascertaining,' but changing, the legislative meaning; besides, the Laws of 1905, ch. 538, sec. 1, not only refers to transactions therein forbidden, such as bucket shops, but is expressly made applicable to the act of 1889, ch. 221, and to every section thereof, and by section 7 of the act of 1905 i-t is explicitly provided that it shall not apply to commodities bought and sold by wholesale dealers in their business. It was unnecessary to enact such a provision unless reference was had to purchases and sales “on margins,” for those otherwise made, or in a legitimate. manner, were clearly not within the prohibitory terms of the statute. The codifiers inserted the exception at the proper place, not only because the act of 1905 made it applicable to that section by plain and direct words, but also bécause if a purchase or sale on margins by such a dealer was not unlawful under that section, the sections as to the burden of proof and the prima facie case could have no bearing upon the transaction, it being a lawful one. They relate only to gambling contracts. But there is another fact to be taken into account. The Legislature, when it enacted the Revisal of 1905, placed the exception at the end of section 1689, at the very session of that body when the proviso or exception was first adopted, and the Revisal was passed in this form, with a provision repealing all- public and general statutes not contained in the Revisal, with certain limitations not pertinent to this question. The Revisal took effect 1 August, 1905, and became the law of the State from that date, in form and substance as adopted. Revisal, secs. 5453, 5463. The last cited section is in these words: “All the provisions, chapters, sub-chapters, and sections contained in this Revisal shall be in force from and after 1 August, 1905.”

*398It is suggested that, as section 1689 of tbe Revisal does not apply to tbe plaintiff, wbo is a wholesale dealer in cotton, by reason of tbe exception at tbe end of that section, tbe common law is in force as to him, and tbe burden, instead of being upon tbe plaintiff to show, apart from tbe writing, that tbe contract is a lawful one, where illegality of tbe contract is pleaded as a defense, is upon tbe defendant to show, as be was required to do at common law, that it was illegal. But tbe glaring fallacy of this position is seen in tbe well-recognized and established rule by which we construe all statutes. It is conceded by all writers upon tbe subject, and by all the judges wbo have considered it, to be a rule of universal application, and it is thus stated by them:

“1. Tbe common law, of course, gives way to tbe statute which is inconsistent with it. 2. When a statute is designed to be a revision, consolidation, or codification of tbe whole body of tbe law, applicable to a given subject, it supersedes and supplants tbe common law, so far as it applies to tbe subject, and leaves no part of it in force.” Black’s Inter, of Law, p. 236; Hannon v. Madden, 10 Bush, 664; Kramer v. Rebman, 9 Iowa, 114; Com. v. Cooley, 10 Pick., 37; S. v. Witson, 43 N. H., 415.

Tbe courts whose reports I have cited are of very high repute, and could not well go astray upon such a simple proposition. Tbe theory and practical operation of this rule are so well explained and clearly illustrated by tbe Supreme Court of Alabama, in tbe case of Barker v. Bell, 46 Ala., 216, that no room is left for doubt that our statute (Revisal, sec. 1689) takes the place of tbe common law, and is tbe one and only mile upon tbe subject with which it deals. That Court, which is held in high esteem by all courts for its juridical learning and ability, said in tbe case just cited: Tbe Revisal “is intended to contain all tbe statute laws of tbe State of a public nature, designed to operate upon all tbe people of tbe State, up to tbe date of its adoption, unless otherwise directed in tbe code. This law is not merely cumulative of tbe common law, and made to perfect tbe deficiencies of that system, but it is designed to create a new and independent system, applicable to our own institutions and government. In such case, where a statute dis*399poses of the whole subject of legislation, it is the only law. Otherwise, we shall have two systems, where one only was intended to operate, and the statute becomes the law only so far as a party may choose to follow it. Besides, the mere fact that a statute is made shows that, so far as it goes, the Legislature intended to displace the old rule by a new one. On some questions the common law conflicts more or less with our constitutional law, and is necessarily displaced and repealed by it; and in others it has, by the lapse of ages, and by mistakes inevitably attendant on all human affairs, become uncertain and difficult to reconcile with the principles of justice. Hence the Legislature intervenes to remove such difficulties, uncertainties, and mistakes, by a new law. This new law, to the extent that it goes, necessarily takes the place of all others. It would be illogical to contend that the old rule must stand, as well as the new one, because this would not remedy the evil sought to be removed and avoided.”

Even if the statute introduces a new rule, it repeals immemorial custom - and the common law, provided the enactment introduces a new principle or rule sufficient in itself. Black, p. 236; Delaplane v. Crenshaw, 15 Grattan, 457. So we see it is not necessary that a statute should be in direct conflict with the common law in order to repeal it, but it is quite sufficient if the statute introduces into the law a new principle and a new rule sufficient of itself to create or answer for a full provision upon the subject. The Kevisal, sec. 1689, is of this character, and it takes the place of the common law as much so as if there had been an express clause of repeal of that law in it. The exception, therefore, applies to the law as declared in that section, and there is no common law upon the subject left to operate, it having been repealed, and the statute furnishes the only rule.

After careful deliberation, my conclusion is that the charge of the court was correct, regardless of what occurred between the defendant, C. C. May, and the plaintiff’s agent, F. Brock. His Honor appears to have entertained the same views as those herein expressed, and for that reason instructed the jury as he did.

*400I concur with, the majority of the Court in the construction placed upon section 1689 of the Revisal, so far as it relates to the real agreement of the parties. If it is agreed or understood by both parties that there need not be an actual delivery of the cotton, but that the contract may be settled by either one of them by paying the difference in the price, and the transaction is not within the exception, it is void by the terms of the statute; but the undisclosed or unexpressed intention of one of the parties is not sufficient to invalidate it, as a contract is the agreement of both parties, and not merely the intention of one. “A contract, express or implied, executed or executory, results from the concurrence of minds of two or more persons, and its legal consequences are not dependent upon the impressions or understandings of one alone of the parties to it. It is not what either thinks, but what both agree.” Prince v. McRae, 84 N. C., 675. See, also, Brunhild v. Freeman, 77 N. C., 128; Pendleton v. Jones, 82 N. C., 249; Bailey v. Rutjes, 86 N. C., 517. Besides, Revisal, sec. 1689, declares that the contract shall be void, notwithstanding the terms stated therein, if it was not intended, by the parties thereto, that the articles or thing so in form agreed to be sold and delivered should be actually delivered or the value thereof paid, but that it should be settled by paying the differences in the market price, according as the same may be greater or less at the time and place fixed for the performance of the contract. It will be seen that it is the unlawful intention in the understanding of both parties, and not merely the secret- purpose of one of them, that renders the contract invalid.