Ex parte House v. Mayes

GANTT, J.

An Act of the General Assembly of Missouri approved June 8th, 1909' (Laws 1909, p. 519), is in these words:

“An Act to prevent fraud in the purchase and sale of grain and other commodities.

“Be it enacted by the General Assembly of the State of Missouri, as follows:

“Section 1. Every sale of grain, seed, hay or coal shall be made on the basis of the actual weight thereof, and any purchaser of grain, seed, hay or coal, who shall deduct any amount from the actual weight or measure thereof under claim of right to do so by reason of any custom or rule of a board of trade or any pretense, whatsoever, shall be deemed guilty of a misdemeanor, and shall be subject to a fine of not less than ten dollars nor more than one hundred dollars for each and every offense.

“Sec. 2. No agent or broker selling any grain, seed, hay or coal shall have authority, under claim or right to do so by reason of any custom or rule of board of trade, to sell any grain, seed, hay or coal only on the basis of the actual weight thereof, and any contract of sale of any grain, seed, hay or coal made in violation of this act shall he null and void.”

On September 21, 1909, the prosecuting attorney of Jackson county, hy information in due form, charged the petitioner with a violation of the above act as follows:

“Now comes Virgil Conkling, prosecuting attorney for the State of Missouri, in and for the body of the county of Jackson, and upon his oath informs the court that R. J. House, whose Christian name in full is unknown to said prosecuting attorney, late of the county aforesaid, on the first day of September, 1909, at the county of Jackson, State of Missouri, did purchase, from one James Anderson, one carload of wheat, hy weight, and did then and there .willfully and unlawfully, from the actual weight of said wheat so hy him purchased, take and deduct one hundred pounds, he, the said R. J. House, pretending and claiming to have the right to make such deduction, and to have and keep the said one hundred pounds of wheat so deducted free of charge and cost to him under and hy virtue of a rule and custom of the hoard of trade of Kansas City, contrary to the form of the statute in such cases made and provided, and against the peace and dignity of the State.”

Under a warrant issued upon this information, the petitioner was arrested, and thereafter on September 23, 1909, was granted a writ of habeas corpus hy the Chief Justice, returnable to the October term of this court, and a return was made on October 12,1909, justifying his detention hy virtue of the said information and warrant. The cause has been submitted to this court upon the following agreed statement of facts:

“Without admission of either party as to the relevancy of any particular fact herein set forth, the following facts are agreed between the parties:

“There are competitive grain markets at Galveston, Texas, Chicago, Illinois, Omaha, Nebraska, Atchison, and Wichita, Kansas, and St. Louis, St. Joseph and Kansas City, Missouri. That Kansas City is a primary grain market. That a very slight difference in price or condition will influence the market course of grain. That the board of trade of Kansas City, Missouri, is a voluntary organization of buyers and sellers of grain and provisions, supported by dues and assessments and maintained for the purpose of furnishing a marketing place where such persons can meet and, under rules of safety and convenience, transact such business. Its objects are: ‘To maintain a board of trade to promote uniformity in the customs and usages of merchants; to inculcate principles of justice and equity in business; to inspire confidence in the business methods and integrity of the parties hereto ; to collect and disseminate valuable commercial and economic information, and generally secure to its members the benefits of co-operation in the furtherance of their- legitimate pursuits, and to promote the general welfare of Kansas City. ’ Its members are governed by rules and regulations, enacted by the members, and which form part’ of the written contract of association between them. This organization provides for the exclusive use of its-members a trading floor where grain is bought and sold only under and according to said rules. Three of these rules are:

“ ‘Sec. 16. The weight supervising committee shall have supervision, through-the weight department, of the unloading of all cars unloaded at all elevators, mills, warehouses, transfer and team tracks, within the jurisdiction of this board, and shall cause the same to be thoroughly swept and cleaned when unloaded. Sweeping or cleaning of cars subsequently by any operator or employee of any elevator, mill, warehouse, transfer or team track, or by any person or persons under agreement with the same; or the buying or receiving of any such sweepings or cleanings by any member of this association is prohibited.

“ 'Sec. 17. Violation of any of the provisions of section 16 of this article shall subject the member so violating to a fine of fifty dollars for the first offense, to a fine of one hundred dollars for the second offense, to expulsion and forfeiture of membership for the third.

“ 'Sec. 18. On all grain bought by members of the Kansas City Board of Trade, and on which Kansas City unloading weights are given, an allowance of one hundred pounds per car shall be made to the buyer to cover loss on account of dirt and other foreign matter.’

“That said board of trade maintains a bureau of weight which strictly enforces rule 16. That rules 16 and 17 were enacted to secure to the seller the full weight of the entire contents of the car, and rule 18 to secure the buyer from loss through dirt and foreign matter in or swept out with the grain which was unloaded at Kansas City. Before grain is sold it is graded. One of the considerations in grading is the dirt and foreign matter in the grain. Experience has shown that there is a loss from dirt and foreign matter, varying with different cars, which is not fully taken care of in the grade. That there is no method in use accurately determining the percentage of such foreign matter and dirt, and the one hundred pounds quantity was taken as a fair average. The members of said board of trade buy and sell sometimes as commission men for outsiders, and sometimes for their own account, and it is impossible to tell without inquiry whether a buyer or seller is acting for himself or for someone else. The buying and selling of grain on the floor of said board of trade is, as in all other markets, based upon the constantly and rapidly fluctuating market price in that and the other principal grain markets. There is no time nor opportunity to ascertain the capacity (principal or agent) in wheh a member is acting when he buys oi sells, and, if he is really acting as agent, no opportunity to investigate the financial standing of the real principal. Because of this condition and also to secure the prompt and faithful performance of such contracts of sale, there is a rule of said board of trade forbidding the disclosure of outside principals and holding the member in all cases as the principal. There are also rules making a membership responsible for the faithful performance of such contracts. That the State Railroad and Warehouse Commisson has in force a rule requiring cars unloaded at Kansas City to be cleanly swept. That the method of making the reduction is to weigh the loaded car; then, after emptying and cleanly sweeping the car, to weigh the car; the difference in these two weights is entered on the account sales as the weight of the carload of grain, the deduction of the one hundred pounds being also noted on that slip and settlement made for this balance. That is, the weight of the entire contents of the car is shown and also the one hundred pound deduction on the face of the account sales given the seller.

“That upon the first day of September, 1909, petitioner bought upon the trading floor of said board of trade and from a member thereof, a carload of wheat on Kansas City unloading weights. In accordance with the above method, and under said rule 18, he deducted one hundred pounds and made settlement for the balance.

“The member selling this grain did not own it, but was acting as a commission man. He, however, dealt with petitioner as in his own right, and petitioner had no notice or knowlege that such seller was not the real owner of the grain. Nothing had been said between the member selling and his principal as to the allowance of the one hundred pounds.

“Both petitioner and the seller understood at the time of sale that it was made subject to this rule.

“The petitioner insists that the above act of the Legislature is void and is.an unauthorized invasion of his liberty as a citizen under tbe Constitution of this State and tbe Constitution of tbe United States, in that, it arbitrarily interferes with Ms right to contract in an unnecessary and unreasonable manner. It will be observed that the information charges an offense under the first section of the act of June 8, 1909, in that, the petitioner did deduct from the actual weight of a carload of wheat, purchased by him on the first day of September, 1909, from James Anderson, one hundred pounds, under a claim of right to do so under and by virtue of a rule and custom of the board of trade of Kansas City, Missouri, contrary to this statute, and under section one of this law this conduct is made a misdemeanor, and the invalidity of the statute is the sole defense to this prosecution.”

By the agreed statement of facts it is admitted that the petitioner bought a carload of wheat from Anderson on Kansas City unloading weights, and under the said rule 18 of the Kansas City board of trade deducted one hundred pounds and made settlement for the balance, and that Anderson did not own the grain himself but was acting as a commission man. And that Anderson, the member selling the said carload had never derived any authority from his principal, the owner of said carload of wheat, to make such allowance of one hundred pounds. It is, however, agreed that the petitioner dealt with Anderson in his own right, and had no knowledge that Anderson was not the real owner of the grain, but that he and Anderson understood the sale was made subject to rule 18. It further appears from the agreed statement of facts, that there is a rule of the said board of trade forbidding the disclosures of outside principals and holding the member in all cases as a principal.

Before proceeding further, it is essential to a clear apprehension of the issues involved in this case and to free it from extraneous discussion, that we first understand the nature of the law upon which the prosecution of petitioner is bottomed. The act is short and can be easily analyzed. Obviously the statute has a twofold aspect, to-wit, a civil, and a criminal side. Thus, in the first sentence of the first section it is declared: “Every sale of grain, seed, hay or coal shall be made on the basis of the actual weight thereof. ’ ’ A failure to comply with this provision is nowhere made penal, and it relates only to the civil rights of the parties to a sale or contract of sale. Allied to this civil feature of the act is the further provision in section two of the act, which provides: “No agent or broker selling any grain, seed, hay or coal shall have authority under claim or right to do so by reason of any custom or rule of board of trade, to sell any grain, seed, hay or coal only on the basis of the actual weight thereof, and any contract of sale of any grain, seed, hay or coal made in violation of this act shall be null and void.” So that, brought into juxtaposition we have: first, simply a provision that all sales of grain shall be made on the basis of its actual weight, and then, that no broker or agent dealing in grain shall have any authority by virtue of any custom or rule of board of trade to sell grain consigned to him or for another, except upon the basis of its actual weight, and if he does, the contract shall be null and void. These are purely civil features of the law and they are in no sense penal. On the other hand, ,the statute has a distinct criminal aspect. In the second clause of the first section, it ordains: “Any purchaser of grain, seed, hay or coal, who shall deduct any amount from the actual weight or measure thereof, under claim of right to do so, by reason of any custom or rule of a board of trade, or any pretense tohatsoever,” shall be deemed guilty of a misdemeanor, and shall be subject to a fine of not less than ten nor more than one hundred dollars for each offense. Thus we have a clearly defined criminal offense, complete in and of itself, denounced by the statute, and falling fully within the title of the act.

What then is the question presented to us? Is it the validity of any civil contract as to the weight of grain? Not at all. The defendant is being prosecuted by the State for a violation of the criminal feature of this law, which prohibits him as a purchaser of grain, seed, hay or coal from deducting any amount from the actual weight thereof, under a claim of right to do so by virtue of a custom or rule of a board of trade. He has not asserted and does not claim that he has any contract with the seller to deduct the one hundred pounds from the weight of the ear of wheat, but lays claim to such deduction only by virtue of the said rule 18 of the Kansas City Board of Trade, and this is the offense for which he is being prosecuted. And he claims exemption therefrom, because he says the act is unconstitutional because it violates his freedom of contract, because the statute says all sales shall be made on the basis of actual weight. In our opinion the validity of this provision as to actual weight is not involved in this case, and this court is not required upon this record to determine the constitutionality of that feature of the act, and defendant is in no attitude to demand a decision thereon, because its solution would ■neither aid nor injure him. This court has time and again held that it will not pass upon the constitutionality of an Act of the Legislature until the rights of someone can be affected by our judgment. [State v. Hathaway, 106 Mo. 1. c. 240; State v. Seebold, 192 Mo. 1. c. 730, 731; State v. McIntosh, 205 Mo. 1. c. 604.] It will be time enough to consider the validity of the civil features of this act when the validity of some contract as to the weight of grain is involved in some action which requires the determination of the constitutionality of these portions of the act relating to them. They are not involved in this proceeding, which is a prosecution for a violation of the only penal provision in the law and even if invalid would not render the penal clause void, because it can stand on its validity and is not dependent upon the others. The Legislature in this second clause of section one of the act denounces and strikes at a custom and a rule of the hoard of trade which arbitrarily assumes a right to take from every shipper of grain, seed, hay or coal one hundred pounds of every carload thereof, sold on said board, without his knowledge or consent, or if known to him, he is powerless to prevent or obtain any adequate redress. In a concise form, the contention of petitioner is that the General Assembly of this State is powerless to prevent the practice of the Kansas City Board of Trade in taking and appropriating to its members one hundred pounds of the weight of every carload of wheat purchased by them on said board of trade, whether the same be clean or contains dirt, without the knowledge or' consent of the consignor thereof, solely by virtue of this rule or pretense to that effect, made by itself, and without other authority, and that the said custom and rule cannot be abrogated by the General Assembly of this State.

That the inspection and regulation of weights and measures are within the police power of the States, and laws passed by the Legislature for such'inspection and regulation requiring dealers and traders to conform thereto, and for the appointment or election of officers or inspectors thereunder, are in the nature of police regulation and not repugnant to the Constitution of the United States or of this State can no longer be doubted. [Pittsburg Coal Company v. Louisiana, 156 U. S. 590; 30 Am. and Eng. Ency. Law (2 Ed.), 451 and cases therein cited.] Legislation along- these lines is found in almost every country, the underlying purpose of which is to secure uniform weights and measures and to guard the people at large against defective and uncertain weights and measures and fraudulent practices connected therewith. "While the act we are called to construe in this case is not aimed at fraudulent and illegal weighing of the commodities named therein, it is aimed at practices which are closely akin to fraudulent weighing. [State v. Wilson, 61 Kas. 32; Cooley on Const. Lim. (6 Ed.), 744.] Of what benefit would it be to the shipper of grain to the grain markets like Kansas City, to be assured that their grain was properly weighed, if after it had been correctly weighed, the toll of one hundred pounds to the carload or any other amount, which the board of trade might determine, should be taken without the knowledge or consent of the shippers by virtue of this so-called rule or practice? The result to him will be the same as if fraudulent scales were used by which his grain was made to weigh one hundred pounds less on the carload, without his knowledge or consent.

The inhibition of this act is against the deduction of any amount from the actual weight or measure under claim of right to do so by reason of any custom or rule of the board of trade, or by any pretense whatsoever. ' This is the unequivocal language of the act itself, and the agreed statement of facts demonstrated that the board of trade, by section 18 of its rules, claims the right to have an allowance of one hundred pounds per car on all grain bought by the members of the board of trade from the Kansas City unloading weights, and in this case, the petitioner deducted one hundred pounds from the carload of wheat bought by him from Anderson on the first day of September, 1909, under and by virtue of this rule 18 alone, and not by virtue of any contract made with the shipper whom Anderson represented in the sale, and the agreed statement further shows that Anderson had never apprised his principal of this rule and this custom and obtained his consent to such a deduction from the actual weight of the wheat. Obviously this legislation is aimed at this rule and this custom which the board of trade has made for itself.

. With all due respect.to my brethren who take a different view of this case, I am clearly of the opinion that the Legislature had the right to enact this law to prevent and to abolish this self-imposed rule of the board of trade, and in so doing it but exercised a part of the legislative power of the State to prevent unfair and fraudulent practices in the sale of grain consigned to the Kansas City market. That a custom of usage among merchants or others as to what shall constitute a “ton” or other unit of weight can be abolished by the Legislature has been adjudged wherever that question has been raised. [Green v. Moffett, 22 Mo. 529; Evans v. Myers, 25 Pa. St. 114; Noble v. Durell, 3 T. R. 271; St. Cross v. Howard, 6 T. R. 338; Mays v. Jennings, 4 Hum. (Tenn.) 102; Harris v. Rutledge, 19 Ia. 388.]

Tiedeman in his work on State and Federal Control of Persons and Property, vol. 1, p. 260, says: “A fraud is, of course, a trespass upon another’s private rights, and can always be punished, when committed. It is therefore but rational to suppose that the State may institute any reasonable preventive remedy, when the frequency of the frauds, or the difficulty experienced in circumventing them, is so great that no other means will prove efficacious. "Where, therefore, police regulations are established, which give to private parties increased facilities for detecting and preventing fraud, as a general proposition, these laws are free from, all constitutional objections. Laws which provide for the inspection and grading of flour, the inspection of tobacco, the inspection and regulation of weights and measures, the regulation of weight of bread, requiring all lumber to be surveyed by a public surveyor, providing for the weighing of coal and other articles of heavy bulk on the public scales, are constitutional exercises of police power, so far as they permit one party to compel the other to comply with the regulation, in the absence of their agreement to the contrary. For example, it is permissible for a statutory regulation to provide for standard weights and measures, and to compel their use, when the parties have not agreed upon the use of others.” In People v. Wagner, 86 Mich. 594, an ordinance of the city of Detroit providing that all bread manufactured by the bakeries of the city for sale, shall be made into loaves of one, two and four pounds, and no other, and forbidding them to sell or exhibit for sale any bread that shall be deficient in weight, was assailed as unconstitutional, but was sustained by the court. The court said: ‘ ‘ The police power of a State is not confined to regulations looking to the preservation of life, health, good order and decency. Laws providing for the detection and prevention of imposition and fraud, as a general proposition, are free from constitutional objection. [Tiedeman’s Limitations of Police Powers, sec. 89, p. 208.] ” And it is on this principle that the oleomargarine acts and the milk ordinances of St. Louis and other cities, have been sustained. That the act in this regard is clearly within the police power of the State, we think there can be no doubt. In the first place it aims at nothing but simple, common honesty.

But as already said the provision of the act which petitioner is charged with having violated is that part thereof which prohibits any purchaser of grain from deducting any amount from the actual weight under any claim of right to do so by reason of any custom or rule of the board of trade, and it is the rule of the Kansas .City Board of Trade at which this act is really aimed. The petitioner claims that this act is unconstitutional because it prohibits him from deducting an arbitrary amount, to-wit, one hundred pounds, from each and every car of grain irrespective of the fact whether or* not it actually contains any dirt or other foreign substance. While conceding in the agreed statement of facts that there is no method of accurately determining the percentage of such foreign matter and dirt, he assumes that there will be an average of one hundred pounds to each car. He admits that in grading wheat, dirt and foreign matter are taken into account in determining the value of the grain, but the Kansas City Board of Trade has arbitrarily added to this and deducted one hundred pounds from every car, so that if A shipped a car of grain to Kansas City to a member of the board of trade, which was entirely free from dirt or foreign matter, under this rule one hundred pounds would be deducted and he loses the value of this one hundred pounds and receives no compensation therefor, but is told that he must submit to this because some other shipper may ship a carload of grain containing two hundred pounds of dirt or foreign matter; thus the grain of A which contains no dirt is taken without compensation and the man who shipped a carload of grain with two hundred pounds of dirt suffers a deduction of only one hundred pounds. When it is considered that Kansas City is one of the great grain markets of the world; that into its elevators and warehouses go the wheat and grain from Oklahoma, Kansas and Western Missouri, annually to the amount of millions of bushels, and that the producers of grain are to a large extent restricted to it as the most accessible, if not practically the only market, for the grain of those States, it requires but little calculation to estimate the extent of the toll which this rule 18 of the hoard of trade exacts of the shippers of the grain to the commission merchants of that city; neither does it involve any strength of imagination to see that this toll or deduction from the grain shipped to said city falls, not upon the local shippers in those States, but upon the producer whose wheat or other grain must suffer this deduction. When as we know from the general laws of trade, and it is admitted by the agreed statement of facts, that wheat is graded when offered for sale, and that when fixing its grade the dirt or other substances is taken into account and its value fixed with reference thereto, the arbitrary deduction of one hundred pounds from the weight of each carload of wheat or other grain, whether it he clean or not, struck the Legislature as utterly unreasonable and without justification, and that it is but a “pretence” as the statute denominates it, for an unlawful exaction. "When it is considered that this exaction falls upon the producer who in the end must suffer for the loss, and that it is impracticable for each producer to prevent the wrong, because he must sell on the markets afforded him and must submit to the condition imposed, the injury, owing to the large number of producers, is to the public as well as the individual producer. In view of the wide extent of such, an exaction, it falls within “the rule that whenever the public [or the law-making power] deems an act of private wrong to he of a nature requiring its intervention for the protection of the individual it holds the act punishable at its own suit; in other words, it makes it a crime. [1 Bishop’s New Criminal Law, sec. 234.] It seems to us that an act of the Legislature so inherently right in itself according to the laws of fair dealing and morality, needs no,extended reasoning to show that it is clearly within the legislative power conferred upon the General Assembly by the Constitution. It prohibits merely the taking of one man’s property by another without compensation. It imposes no unjust burden upon the purchaser, but simply inhibits his deducting from the wheat he purchases, a part thereof which he would take without paying the seller therefor, by virtue, not of any agreement with the seller, but by virtue of a rule made by an association of which he is a member.

The business of the board of trade and its members in the handling, buying and selling of the grain is such that the public has an interest therein and is so largely affected thereby, that the Legislature controlling it is justifiable, under the decisions of the Supreme Court of the United States in Munn v. Illinois, 94 U. S. 113; Budd v. New York, 143 U. S. 517 and Brass v. North Dakota, 153 U. S. 391.

The Legislature regarded the said rule as a pretence, that is to say, a pretest, something held out as real when it is not so, a deception, and accordingly made it a misdemeanor in order to prevent it, and of its power to punish it as such we think there can be no doubt.

Petitioner insists that by prohibiting him from making the deduction on one hundred pounds his property is taken without due process of law. We agree with the Attorney-General that he has reversed the conditions. To strike down this act will be to permit him to continue to take the shipper’s property without due process of law, and without any compensation therefor.

Without further elaboration, we' are of the opinion that this act is a valid one and it is wisely aimed to prevent unjust and unfair practice and to repeal and nullify a rule of the Board of Trade which is unjust and unfair and contrary to good morals and fair dealings, and the act offends against no provision of the Constitution.

As to the objection that the act does not respond to its title, we think it is without merit or weight. We think the act with which petitioner is charged, to-wit, that of deducting one hundred pounds from the weight of the ordinary carload of wheat purchased by him of Anderson, without any other authority than that of rule 18 of the Board of Trade permitting him to do so, aptly falls within the title of the act, whose purpose is declared therein to prevent fraud in the purchase and sale of grain and other commodities.

• It follows from what we have said that the petitioner is not entitled to be discharged from the information in this case and that he should be remanded to the custody of the marshal in order that prosecution may proceed according to law, and it is so ordered.

Burgess, Lamm and Woodson, JJ., concur; Wood-son, J., in a concurring opinion in which Gantt, Burgess and Lamm, JJ., concur. Valliant, G.' J., Fox and Graves, JJ., dissent; Graves, J., in a dissenting opinion in which Valliant, G. J., and Fox, J., .concur. Fox, J., also files dissenting opinion, in which Valliant, G. J., and Graves, J., concur.