(on rehearing). Counsel for the defendant earnestly insists that the court erred in holding the statute under which the defendant was convicted to be constitutional, and also in holding that the evidence was legally sufficient to support a directed verdict.
As pointed out in our original opinion, our former statute, which has .been upheld by this court, forbade and punished 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. Under that statute it was necessary, in order to convict, for the court or jury trying the case to find that there was no intention on the part of the parties to deliver the cotton or other commodity in question. Under it the intention not to deliver must have been participated in by both parties. Section 2653 of Crawford & Moses’ Digest has changed the rule, and provides in effect that transactions in wheat, cotton, corn, or other commodities and stocks or bonds, by way of margin, settlement or differences, and payment of the gain or loss, without any intent to deliver the article by the parties or either of them, are mere wagers, and fall within the penalty provided in the statute. In Pennsylvania and New Jersey, it has been held that one who enters into a stock speculation on margin, with a stock broker, is to he considered as dealing with the broker as a principal, and not as an agent. Flagg v. Baldwin, 38 N. J. Eq. 219, and Puchizky v. DeHaven, 97 Pa. St. 202.
The effect of our present statute is to make the customer and the broker principals in contracts like the one under consideration. If this end could be accomplished by the decisions of the courts of last resort in the States named, it is equally certain that the result could be obtained by the Legislature by the passage of a statute to that effect. The whole policy of dealing with wagering contracts as an offense against the State falls within the province of the Legislature. No good reason is given and none is perceived why the Legislature might not make contracts like the present one wagering contracts where either of the parties did not in good faith intend a delivery of the commodity in question as well as where the delivery was not contemplated by both parties. The subject of prohibiting wagering contracts falls within the police power of the State, and the Legislature no doubt felt that it might more effectively stop the practice by making such contracts unlawful where either of the parties intended nothing but the wager on the rise or fall in the price of the article and not to deal in it as a bona fide purchase. Hence we adhere to our original opinion that the act is constitutional.
We also adhere to our original opinion that the court was justified in directing the jury to find the defendant guilty under the evidence. Carpenter was engaged in buying and selling cotton in Conway in the fall of 1923; but he testified that there was no intention on his part that the cotton in question should be delivered to him. He does not recollect what the market price of the cotton was at that time, but says that it was something like 30 or 31 cents per pound. This would amount to $150 per bale or $15,000 for the hundred bales. Carpenter was only required to put up $750 for the hundred bales. No money was invested in the purchase of the cotton, but only so much was required of him as would cover the “margin,” as it is called. The contract represents not a purchase of cotton, but a mere stake or wager upon its future price. The broker did not care whether or not the customer had the actual money with which to purr chase the cotton. He was only interested in his having the necessary margin when the contract was made. The broker could close out the customer if it became necessary for him to put up more margin and he refused to do so. It was never intended, according to the testimony of Carpenter, that he. should’be required to pay anything whatever towards the purchase price of the cotton.
His testimony is corroborated by all the attending circumstances, and is not contradicted by any testimony introduced in evidence.
It follows that the motion for a rehearing will be denied.