The statute fixes the legal effect of a deed, and determines the rights and liabilities of the parties, as if the law were written into the deed in extenso. Why not enact a common statute that will clearly define the status of lessor and lessee, and in detail outline their reciprocal duties and obligations? Under such a law a lease in these words would be sufficient:

John Doe demises and lets to Richard Roe the following described premises: ; for a term of day of

years, from the
monthly rental of
payable monthly in advance.

at a dollars,

Mercantile Company, of Mart, Tex., party of the first part, and J. M. Pate, party of the second part, witnesseth:

""That J. M. Pate has this day sold to Wilson Bros. Mercantile Company ten bales of cotton at twelve cents per pound, basis middling, weight of bales to average 525 pounds (over or under weight settled for at market value at time of delivery), to be delivered to said Wilson Bros. Mercantile Company on or before November 1, 1916, delivery to be made at Riesel, Tex., all cotton to be delivered at one time.

"It is further agreed that, if grades different from middling be tendered, then the pre

vailing differences on and off middling shall govern. No cotton commonly known as "half and half" cotton shall be tenderable on this contract, and no cotton staple below one inch shall be acceptable.

"And it is agreed, if J. M. Pate should fail to carry out this contract, then he, J. M. Pate, shall be liable to Wilson Bros. Mercantile Company for such difference as exists between twelve cents basis middling cotton and the price of middling cotton above twelve cents on November 1, 1916, f. o. b. Riesel, Tex. And it is also agreed: If Wilson Bros. Mercantile Company should fail to carry out thiis contract, then they, Wilson Bros. Mercantile Company, shall be liable to J. M. Pate for such difference as exists between twelve cents basis middling cotton and the price of middling cotton below twelve cents on November 1, 1916, f. o. b. Riesel, Tex.

"It was admitted by the defendant that he did not deliver to said Wilson Mercantile Company any cotton on November 1, 1916, or on any other date under said contract.

"It was further admitted that the price of middling cotton on November 1, 1916, at Riesel, Tex., was 18 cents per pound."

The court rendered judgment for the appellee for the sum of $304.50. Appellant excepted to appellee's petition, which alleged the breach of the above contract, in that it showed: (a) That it was a contract in violation of the public policy of this state; (b) that it was a contract in violation of sections 1 and 2, art. 1013, McIlwaine's Penal Code of the State of Texas; (c) because the contract shows upon its face that it was a wager, in this, that it was a contract for future delivery of the arti cles sought to be sold, and provided that the settlement on the date given might be determined, not by delivery of the articles sought

to be purchased, but by the difference between the price named in the contract and the market price of the product.

These exceptions were overruled, and the appellant assigns error upon the action of the court in rendering judgment upon the evidence.

(1) A contract for future delivery of an article, where it is contemplated by the parties thereto that such article should not be delivered, but that settlement might be made by paying the difference in the market price at the time of such delivery and the price named in the contract, is a wager contract. A wager contract was enforceable at common law, unless it was contrary to public policy, or immoral, or in any other wise tended to the detriment of the payee. Seeligson v. Lewis, 65 Tex. 219, 57 Am. Rep. 593, citing Monroe v. Smelly, 25 Tex. 5886, 78 Am. Dec. 541; Floyd v. Patterson, 72 Tex. 205, 10 S. W. 526, 13 Am. St. Rep. 787.

(2) If it was the intention of the parties to the contract above set out that no cotton should be delivered, but that said contract should be complied with by payment of the difference in the market value of cotton at the time and place of such delivery and the price named in the contract, it was a wager contract, and not enforceable, without reference to the statute in this state with reference to dealing in futures. Burney v. Blanks, 136 S. W. 808-810.

(3) In the absence of our statute on this subject, we think it would have devolved upon the defendant in the court below to prove that actual delivery was not intended, but Our statute changes the rule upon this subject.

Chapter 86, General Laws of the Thirtieth Legislature, p. 172, the purpose of which, among other things, was to define futures, dealing in futures, and future contracts, and prohibit the making of same, made it a criminal offense to make, or offer to make, any "future contract."

Section 6 of said act makes a contract for "futures," as defined in said act, an offense against the criminal law, and therefore void.

Section 2 of said act, in so far as it is applicable to the instant case, reads as follows:

"By each of the expressions 'futures,' 'dealing in futures,' and 'future contracts,' as these terms are used in this act, is meant: First, a sale or purchase, or contract to sell or any offer to sell or purchase any cotton

* * *

to be delivered in the future when it was not the bona fide intention of the party being prosecuted under this act, at the time that such sale, contract, purchase, or offer to sell or purchase, was made that the thing mentioned in such transaction should be delivered and paid for as specified in such transaction."

So far the statute does not alter the rule as to the burden of proof.

The second subdivision of said section defines "futures" as follows:

"Any such sale, purchase, offer, or contract where it was the intention of the party being prosecuted hereunder at the time of making such contract or offer that the same should, or at the option of either party might be settled by paying or receiving a margin or profit on such contract."

The contract above set out shows upon its face that it might be settled at the option of either party, by paying the profit or loss, without delivering the cotton. This, we think makes it prima facie an illegal contract, and would cast the burden upon the plaintiff in the court below to prove that there was a bona fide intention that such cotton should be delivered.

Section 88 of said contract does not leave the issue as to the burden of proof in doubt. It reads as follows:

"Sec. 8. In any prosecution under this act in which it shall be a material issue as to whether or not in the offer to or contract to sell or purchase for future delivery anything mentioned in this act, it was the intention of the defendant that such thing should be delivered and paid for in accordance with the terms of such offer or contract, proof by the state that such contract was for the future delivery of such thing, shall constitute a prima facie case for the state on this issue."

In other words, where the proof shows that the "contract was for the future delivery" of any of the things mentioned in said act, such contract is prima facie a criminal act. The contract, the judgment of the court is not susthat it was for the future delivery of cotton, and is therefore prima facie illegal; and the burden of proving its legality by showing a bona fide intention that such cotton should be delivered was upon the plaintiff. No evidence as to such intention was offered on the trial of the case.

(4) It is true that this is not a criminal prosecution, but that which would show in a criminal prosecution that a contract was in violation of the criminal law will also show in a civil action that such contract is illegal.

No proof having been offered as to the intention to deliver the cotton mentioned in the contract, the judgment of the court is not sustained by the evidence.

For the reasons stated, the judgment in this case is reversed, and this cause is remanded. Reversed and remanded.

NOTE. Recovery from Broker of Profits in Futures. The instant case involves merely the interpretation of a statutory rule and not the

general question of an executed agreement, whereby one of the parties is in possession of proceeds from such an agreement. With brokers who merely agree to stand by and watch the market and close out a deal upon orders of another, the service the broker renders is merely one of diligence so as to save himself from loss. As against the proposition that in a deal with a broker, the parties stand in the relation of principal and agent, there are many cases which proceed upon the theory, that where the purpose is to set on foot a violation of law there can be no relationship of principal and agent.

Thus, in Morton v. Blinn, 39 Ohio St. 145, it was said: "In offenses against trade and the like, the law regulating the administration of penal justice does not recognize the relation of principal and agent, unless the agent be an innocent instrument merely. In such cases the guilty offenders against the law are all principals; hence as against such, with some show of reason, it might be said that the law will afford no redress by civil remedies." To the same effect is Lester v. Buel, 49 O. St. 240, 30 N. E. 821, 30 Am. St. R. 556.

In Anderson v. Holbrook, 128 Ga. 233, 57 S. E. 500, 11 L. R. A. (N. S.) 575, a broker is spoken of as bringing parties together when prior to a wagering contract and therefore being barred from recovery of the money he advances on margins.

In Ware v. Shinney, 76 Kan. 289, 91 Pac. 787, 13 L. R. A. (N. S.) 267, 13 Ann. Cas. 1181, the relation of principal and agent is spoken of as subsisting between a customer and a broker, and it is held that the principal's remedy is only as to funds not yet undisposed of, there remaining to the principal the right to revoke the agency.

In Peters v. Grim, 149 Pa. 163, 24 Atl. 192, 34 Am. St. R. 599, it was held that when a broker has settled his account with his customer by paying over the profits on deals for his customer, he still may be compelled to turn over the deposit, he not being allowed to set up the illegal character of his transaction to defeat such suit.

In Samuels v. Oliver, 130 Ill. 73, 22 N. E. 499, it was ruled otherwise than in the Grim case, it being said: "The court cannot say, as a matter of law, that the principal may recover of the agent and not the agent of the principal," showing that something more enters into the matter than a simple status of principal and agent.

An old English case says: That if a man gives his agent money to expend illegally and he so does, yet the principal may bring his action for money had and received. Wilkinson v. Kitchin, 1 Ld. Raym. 89. But this case stands quite alone and the reverse is taken as true in Smith v. Bromley, 2 Doug. (K. B.) 696, it being there said: "His lordship being clearly of opinion that this action would not be against the plaintiff's own agent, who had actually applied the money to the purpose for which it was paid to him."

In Benton v. Singleton, 114 Ga. 548, 40 S. E. 811, 58 L. R. A. 181, an action was held to lie to recover so much of money put in an agent's hands as had not been used in carrying an illegal purpose into effect.

In Sampson v. Shaw, 101 Mass. 145, 3 Am. Rep. 327, action for money advanced to "corner

stock," an action would lie for what was unexpended, because so much was "not money paid under an illegal contract."

There is quite a respectable line of authority that a speculative transaction for the purchase and sale of stock on margin does not, of itself, constitute gambling and one alleging that such is the transaction has the burden to show that actual stock was never intended to be delivered or was demandable. Richter v. Poe, 109 Md. 20, 71 Atl. 420, 22 L. R. A. (N. S.) 174; Richardson v. Shaw, 209 U. S. 565, 53 L. Ed. 835, 28 Sup. Ct. 512.

And the mere fact that remittances with orders for grain for future delivery were merely margins with no intent that grain should be actually delivered, does not justify inference that the transaction was merely gambling on futures. Hallet v. Aggergaard, 21 S. D. 554, 114 N. W. 69%, 14 L. R. A. (N. S.) 1251.

Sprague v. Warren, 26 Neb. 326, 41 N. W. 1113, 3 L. R. A. 679, ruled that circumstances may shift the burden of proof in a deal of this kind, as for example that a broker's client was not inquired of as to his business standing and financial responsibility.

But the question of original burden of proof is quite generally as stated in the Richter case. There is no doubt, that, where a contract of sale only contemplates a settlement on market quotations, with no specific property to pass, this is a gambling contract. C.

ITEMS OF PROFESSIONAL

INTEREST.

RECENT DECISIONS BY THE NEW YORK COUNTY LAWYERS ASSOCIATION COMMITTEE ON PROFESSIONAL ETHICS.

QUESTION No. 176.

Counsel Employment—Employing and accepting employment as additional counsel in litigation without the knowledge or consent of existing local counsel; disapproved.

Beneficiary sues insurance company, in a western town which we will call X, on a life insurance policy. A, chief counsel of the insurance company, with his headquarters in the east, employs B, local counsel, to defend the suit. Later, C, an attorney and a policy holder, living in X, writes the insurance company to send him several hundred dollars to employ D to "sit in" at the rehearing and to "read the record." A, chief counsel, sends the money and D is employed without the knowledge or consent of B, local counsel.

Is the action of A and C in employing D, or the action of D in accepting employment mentioned, unprofessional?

ANSWER No. 176.

The committee understands the question to refer to a local practice with which it is not entirely familiar. It is advised that to "sit in" on a rehearing and to "read the record" implies participation in the conduct of a trial. With this understanding, the committee is of the opinion that proper professional conduct on the part of the counsel last retained requires him to communicate the fact of his retainer to the attorney of record, in order to afford the latter an opportunity to determine his course. Canon 7, American Bar Association.)

(See

[This question was submitted to the Central Law Journal by one of our subscribers in a western city and forwarded by us to the New York Committee on Professional Ethics. We wish publicly to thank this committee for their courtesy in the matter and to say also that the work they have been doing to raise the standards of professional ethics is deeply appreciated by the bar of the whole country.-Ed.]

CORRESPONDENCE.

IS THE PROHIBITION AMENDMENT ILLEGAL AS NOT BEING GERMANE TO THE PURPOSES OF THE UNION?

Editor Central Law Journal:

The publication, of the letter of Everett P. Wheeler, Esq., in your number for February 21, 1919, encouraged me to send you the following suggestions:

I have seen no argument which assailed the prohibition amendment itself as being beyond the scope of Article V of the Constitution of the United States, and that it therefore cannot be entertained without the formation of an entire new union, between the states. The latter is the proposition to which I address myself in this communication.

In order to judge whether any proposed amendment to the Federal Constitution is within the provisions of Article V of that document, that article must be construed.

The sole provision therein relating to the nature of the amendments which can be made, consistently with the compact between the states, consists of the words: "The Congress whenever two-thirds of both houses shall deem it necessary shall propose amendments to this Constitution, etc." The use of the word "nec

It is evident, therefore, under the rules of legal construction, that congress can only propose amendments when they deem it necessary. "Necessary for what?" The only legal answer that can be given is, "Amendments necessary for the better carrying out of the express provisions of the original constitution," and not such as would be invasions of the usages, customs, and common law of the peoples of the several states.

The original constitution, and the present amendments thereto, constitute the present unalterable compact between the several states. These usages, customs, and common law, cannot be infringed upon without the formation of a new union. The present constitution and its amendments embody all that the several sovereign states surrendered of their No sovereignty to form the present union. further part of that sovereignty can be taken away from any individual state, except with the consent of that individual state, which means that the amendments now pending before the country would have to be ratified, not by three-fourths of the several states, but by every one of the several states, none excepted.

There can be no valid amendment to the constitution which in the least trenches upon the internal life of the several states, as sovereign states, beyond the present provisions of the constitution, until ratified by every state of the Union. But amendments which invade state rights are not contemplated by said Article V, for the reason that a number less than all the states can validly ratify such amendments as Article V provides for.

What are the inherent rights of the peoples of the individual státes not surrendered to form the present Union, and which form the boundary between the states and the union; which cannot be constitutionally overstepped by any amendment to the constitution, without the concurrence of every one of the individual states so invaded?

In the charters under which all the American colonies composing the original Union, with a single exception, that of Pennsylvania, were settled, there was an express declaration that all subjects and their children inhabiting

therein, shall be deemed native born subjects, and shall enjoy all the privileges and immunities thereof.

The universal principle has been that the common law is our birthright and inheritance, and that our ancestors brought hither with them all which was applicable to their situation.

In Wheaton v. Peters, 8 Pet. 658, Justice McLean, delivering the opinion of the Supreme Court of the United States, says, "The Federal Government is composed of twenty-four sovereign and independent states, each of which may have its local usages, customs, and common law."

At no time has there been any deviation in the trend of the opinions of our highest court, from the doctrine there enunciated, which is "that this Union is an indissoluble union, of indestructible sovereign states," each with its local usages, its local customs, and its local common law.

Is it not clear that no amendment is germane to the present constitution, which in any way invades the local usages, the local customs, and the local common law as they now exist in the several sovereign states?

Can any right be more certain, as a right belonging strictly to the individual states, than the right to manufacture alcohol for any purpose for which that article may be used, as part of the rights brought with them from England by its citizens?

No one can deny that it is the right of an English subject today to manufacture alcohol, a right which he has been exercising continuously since long before the colonies were chartered, and is one of our birthrights.

It is the constitutional right of every citizen of the respective states of the Union to manufacture and use alcohol. There has been no change in the law of England upon the subject of the manufacture of alcohol from long before the time that the states of this Union severed their relations with that country, down to the present time.

Nothing but the will of the people of the respective states, uncontrolled by the people of any other state, can lawfully deprive them of this right to manufacture alcohol, which they brought with them as subjects of Great Britain, and which was in existence at the time the Union was formed and was not surrendered to form the present Union.

Mobile, Ala.

FREDERICK G. BROMBERG.

HUMOR OF THE LAW.

Tommy had to write an essay on "Income Tax.' Here it is:

"I got a dog. His name is Tacks. I opened the door and income Tacks."

Hodge: Do you favor uniform divorce laws? Podge: Yes. I think some of the ones the women are wearing these days ought to be good grounds for divorce.-Cartoons Magazine.

"Yes," said the garage keeper, with a wink at his assistant. "I call all these cars I keep for rent Excelsior cars."

"And why, pray?" asked Bilkins. "Because they are for higher," roared the garage keeper.

The grand jury later acquitted Bilkins on the plea of justifiable homicide.

"What ye been doin' down the cellar so long?' snarled Grocer Boggs at his new boy.

"Been cleanin' out the quart molasses measure, sir,' the boy answered lightly. 'It was so clogged up it only held about a pint.'

""Say, you're fired,' growled the grocer. You go home and tell yer father to edicate ye for the ministry.'

A former railroad brakeman, now serving in France, was bringing in a bunch of prisoners. "What have you here?" inquired an officer whom he met back of the lines.

"Just a string of empties, sir," was his prompt reply.-Cartoons Magazine.

The wit should surely not be lost

Of this ingenious, oft-recurring jest— Of love, if you don't count the cost, Why weep when Hymen's bonds lose interest? -Cartoons Magazine.

The talesman had wriggled and wriggled, and finally the Judge lost patience.

"Do you mean to state on oath that you don't think you have sufficient intelligence to render a just verdict on the evidence?" he shouted.

"Not exactly that Judge," said the talesman, "but the fact that my mind has been made up for me by my wife and mother-in-law, and as I understand this jury stunt, I shall not be allowed to communicate with them."

"Excused!" cried the Judge. "I'm a married man myself."