If, looking at all the circumstances which attend or may
ordinarily attend the pursuit of a particular calling, a state
thinks that certain admitted evils cannot be successfully reached
unless that calling be actually prohibited, the courts cannot
interfere unless, looking through mere forms and at the substance
of the matter, they can say that the statute, enacted professedly
to protect the public morals, has no real or substantial relation
to that object, but is a clear, unmistakable infringement of rights
secured by the fundamental law.
It must be assumed with regard to section 130 of the Criminal
Code of Illinois touching options to sell or buy grain or other
property at a future time, that the legislature of the state was of
opinion that an effectual mode to suppress gambling grain contracts
was to declare illegal all options to sell or buy at a future time,
and this Court cannot say that the means employed were not
appropriate to the end sought to be attained and which it was
competent for the state to accomplish.
This Court cannot adjudge that the Legislature of Illinois
transcended the limits of constitutional authority, when it enacted
the statute in question.
Page 184 U. S. 426
The case is stated in the opinion of the Court.
MR. JUSTICE HARLAN delivered the opinion of the Court.
By section 130 of the Criminal Code of Illinois, it is provided
that
"whoever contracts to have or give to himself or another the
option to sell or buy at a future time, any grain, or other
commodity, stock of any railroad or other company, or gold, or
forestalls the market by spreading false rumors to influence the
price of commodities therein, or corners the market, or attempts to
do so in relation to any of such commodities, shall be fined not
less than ten dollars nor more than one thousand dollars, or
confined in the county jail not exceeding one year, or both, and
all contracts made in violation of this section shall be considered
gambling contracts, and shall be void."
Rev.Stat.Ill.Crim.Code (by Hurd, 1902) ยง 130.
The defendant was indicted in the Criminal Court of Cook County,
Illinois, being charged with violating this statute so far as it
related to options to buy grain or other commodities at a future
time.
The memorandum of the option purchased by the defendant was as
follows:
"B. Al. v. Booth, Grain and Provision Broker"
"10 Weare Com. Co. Chicago, Aug. 16, 1899"
"Sep. corn, 1899. C., 31 1/2. Paid."
"Good till close of 'change, Sat., Aug. 26, 1899."
"Weare C. Co."
"J.C.C."
The defendant was found guilty and adjudged to pay a fine of one
hundred dollars and the costs of the prosecution.
At the trial, by motions to quash the indictment, in arrest
Page 184 U. S. 427
of judgment, and for a new trial, the accused insisted that the
statute under which he was prosecuted was repugnant to that clause
of the Fourteenth Amendment of the Constitution of the United
States declaring that no state shall
"deprive any person of life, liberty, or property without due
process of law, nor deny to any person within its jurisdiction the
equal protection of the laws."
This contention was overruled both in the trial court and in the
Supreme Court of Illinois. 186 Ill. 43.
There was no dispute as to the meaning of the above memorandum.
It meant that, on the 16th day of August, 1899, the defendant, a
grain and provision broker, and the Weare Commission Company, made
an agreement whereby, in consideration of the sum of ten dollars
paid by Booth, he obtained from the company and was given the
option of purchasing from it 10,000 bushels of corn at 31 1/2 cents
a bushel -- the option to remain good until the close of business
on the 26th day of August, 1899.
In
Schneider v. Turner, 130 Ill. 28, 39, the question
was whether the statute embraced an agreement in these words:
"Chicago, November 11, 1885. In consideration of one dollar and
other valuable considerations, receipt of which is hereby
acknowledged, I hereby agree to sell to George Schneider, Walter L.
Peck, and Fred W. Peck seventeen hundred and eighty-six shares of
the capital stock of the North Chicago City Railway at six hundred
dollars per share, if taken on or before the 15th day of December
1885. V. C. Turner."
It was contended that that agreement was not prohibited by the
statute; that the legislature only intended to make such option
contracts unlawful as were gambling contracts -- that is, option
contracts that did not contemplate the delivery or acceptance of
any property and which only required a settlement by "differences,"
whereas, it was insisted, the option there in question had no
element of gambling, being only one that entitled the parties
obtaining it to elect on or before a named day whether they would
buy the stock described in the agreement.
The Supreme Court of Illinois in that case observed that, at
common law, all gambling contracts were void, and that an
Page 184 U. S. 428
agreement for the sale of property was a mere wager or gambling
contract and void if made with the understanding of the parties
that no property was to be delivered or accepted, but could be
satisfied by an adjustment simply on the basis of the difference
between the contract and the market price. It said:
"It must be presumed that the object of the legislature was to
declare that unlawful which theretofore had been lawful. Prior to
this act, it was lawful to contract to have or give an option to
sell or buy at a future time, grain or other commodity. Such
contracts were neither void nor voidable at the common law. The
statute makes them unlawful and void in Illinois."
That such is the scope and effect of the statute in question was
recognized by the Supreme Court of Illinois in the present case.
Booth v. People, 186 Ill. 43.
Taking the statute to mean what the highest court of the state
says it means, is it unconstitutional?
In support of the position that the statute is repugnant to the
Fourteenth Amendment, the learned counsel for the plaintiff advance
many propositions that meet our entire approval. They cite as in
their judgment controlling what this Court said in
Allgeyer v.
Louisiana, 165 U. S. 578,
165 U. S. 589,
namely, that the liberty mentioned in the Fourteenth Amendment
"means not only the right of the citizen to be free from the
mere physical restraint of his person, as by incarceration, but the
term is deemed to embrace the right of the citizen to be free in
the enjoyment of all his faculties, to be free to use them in all
lawful ways, to live and work where he will, to earn his livelihood
by any lawful calling, to pursue any livelihood or avocation, and
for that purpose to enter into all contracts which may be proper,
necessary, and essential to his carrying out to a successful
conclusion the purposes above mentioned."
These declarations state in condensed form principles which had
been announced in previous cases, and which may be regarded as
expressing the deliberate judgment of this Court. But those
declarations do not in themselves determine the question now
presented. When it is said that the liberty of the citizen includes
freedom to use his faculties "in all lawful ways" and to earn his
living by any "lawful calling," the inquiry remains
Page 184 U. S. 429
whether the particular calling or the particular way brought in
question in a given case is lawful -- that is, consistent with such
rules of action as have been rightfully prescribed by the
state.
It is, however, said that the statute of the state, as
interpreted by its highest court, is not directed against gambling
contracts relating to the selling or buying of grain or other
commodities, but against mere options to sell or buy at a future
time without any settlement between the parties upon the basis of
differences, and therefore involving no element of gambling. The
argument then is that the statute directly forbids the citizen from
pursuing a calling which in itself involves no element of
immorality, and therefore by such prohibition it invades his
liberty as guaranteed by the supreme law of the land. Does this
conclusion follow from the premise stated? Is it true that the
legislature is without power to forbid or suppress a particular
kind of business where such business, properly and honestly
conducted, may not in itself be immoral? We think not. A calling
may not in itself be immoral, and yet the tendency of what is
generally or ordinarily or often done in pursuing that calling may
be towards that which is admittedly immoral or pernicious. If,
looking at all the circumstances that attend or which may
ordinarily attend the pursuit of a particular calling, the state
thinks that certain admitted evils cannot be successfully reached
unless that calling be actually prohibited, the courts cannot
interfere unless, looking through mere forms and at the substance
of the matter, they can say that the statute enacted professedly to
protect the public morals has no real or substantial relation to
that object, but is a clear, unmistakable infringement of rights
secured by the fundamental law.
Mugler v. Kansas,
123 U. S. 623,
123 U. S. 661;
Minnesota v. Barber, 136 U. S. 313,
136 U. S. 320;
Brimmer v. Rebman, 138 U. S. 78;
Voight v. Wright, 141 U. S. 62.
We cannot say from any facts judicially known to the Court or
from the evidence in this case that the prohibition of options to
sell grain at a future time has in itself no reasonable relation to
the suppression of gambling grain contracts in respect of which the
parties contemplate only a settlement on the basis
Page 184 U. S. 430
of differences in the contract and market prices. Perhaps the
legislature thought that dealings in options to sell or buy at a
future time, although not always or necessarily gambling, may have
the effect to keep out of the market, while the options lasted, the
property which is the subject of the options, and thus assist
purchasers to establish for a time what are known as "corners,"
whereby the ordinary and regular sales or exchanges of such
property based upon existing prices may be interfered with, and
persons who have in fact no grain, and do not care to handle any,
enabled to practically control prices. Or the legislature may have
thought that options to sell or buy at a future time were in their
essence mere speculations in prices, and tended to foster a spirit
of gambling. In all this the legislature of the state may have been
mistaken. If so, the mistake was not such as to justify the
conclusion that the statute was a mere cover to destroy a
particular kind of business not inherently harmful or immoral. It
must be assumed that the legislature was of opinion that an
effectual mode to suppress gambling grain contracts was to declare
illegal all options to sell or buy at a future time. The Court is
unable to say that the means employed were not appropriate to the
end sought to be attained and which it was competent for the state
to accomplish.
The supreme court of the state in this case said:
"The practice of gambling on the market prices of grain and
other commodities is universally recognized as a pernicious evil,
and that the suppression of such evil is within the proper exercise
of the police power has been too frequently declared to be open to
discussion. The evil does not consist in contracts for the purchase
or sale of grain to be delivered in the future, in which the
delivery and acceptance of the grain so contracted for is
bona
fide contemplated and intended by the parties, but in
contracts by which the parties intend to secure not the article
contracted for, but the right or privilege of receiving the
difference between the contract price and the market price of the
article. The object to be accomplished by the legislation under
consideration is the suppression of contracts of the latter
character, which are in truth mere wagers as to the future market
price
Page 184 U. S. 431
of the article or commodity which is the subject matter of the
wager. Clearly a contract which gives to one of the contracting
parties a mere privilege to buy corn, but does not bind him to
accept and pay for it, is wanting in the elements of good faith to
be found in a contract of purchase and sale where both parties are
bound, and offers a more convenient cover and disguise for mere
wagers on the price of grain than contracts which create the
relation of vendor and vendee. Such contracts are in the nature of
wagers, that contracted for being the mere privilege to buy the
grain should its market value prove to be greater than the price
fixed in the contract for such privilege. The prohibition of the
right to enter into contracts which do not contemplate the creation
of an obligation on the part of one of the contracting parties to
accept and pay for the commodity which is the purported subject
matter of the contract, but only to invest him with the option or
privilege to demand, the other contracting party shall deliver him
the grain if he desires to purchase it, tends materially to the
suppression of the very evil of gambling in grain options which it
was the legislative intent to extirpate for the reason such evil
injuriously affected the welfare and safety of the public. The
denial of the right to make such contracts tended directly to
advance the end the legislature had in view, and was not an
inappropriate measure of attack on the evil intended to be
eradicated. So far as that point is concerned, the act must be
deemed a valid law of the land, and as such must be enforced though
it infringe in a degree upon the property rights of citizens. To
that extent, private right must be deemed secondary to the public
good."
186 Ill. 51.
We are unwilling to declare these views of the state court to be
wholly without foundation, and therefore cannot adjudge that the
Legislature of Illinois transcended the limits of constitutional
authority when enacting the statute in question. In reaching this
conclusion, we have recognized the principle, long established and
vital in our constitutional system, that the courts may not strike
down an act of legislation as unconstitutional unless it be plainly
and palpably so.
The statute here involved may be unwise. But an unwise
Page 184 U. S. 432
enactment is not necessarily for that reason invalid. It may be,
as suggested by counsel, that the steady, vigorous enforcement of
this statute will materially interfere with the handling or moving
of vast amounts of grain in the West which are disposed of by
contracts or arrangements made in the Board of Trade in Chicago.
But those are suggestions for the consideration of the Illinois
Legislature. The courts have nothing to do with the mere policy of
legislation.
The judgment of the Supreme Court of Illinois is
Affirmed.
MR. JUSTICE BREWER and MR. JUSTICE PECKHAM dissented.