tonly and recklessly, then the case could not properly be taken from the jury. even if the evidence, admitted under the pleas to the other counts charging simple negligence, as matter of law had shown contributory negligence. It is clear that one who commits a wrong willfully cannot defend by saying that the injured person was guilty of negligence. Cooley, Torts (2d Ed.) p. 810; Beach, Contrib. Neg. (2d Ed.) § 64; Railroad Co. v. Markee, 103 Ala. 160, 15 South. 511, 49 Am. St. Rep. 21. The evidence, we think, to say the least, tended to show wanton negligence, or reckless indifference to the probable consequences of the acts complained of, which is construed to be the equivalent of intentional or willful."

Judge Shelby, delivering the opinion of the court in that case, also quotes from Electric Co. v. Bowers, 110 Ala. 328, 331, 20 South. 345, 346, this language:

"To constitute a willful injury, there must be a design, purpose, intent to do wrong and inflict injury. Then there is that reckless indifference or disregard of the natural or probable consequences of doing an act, or omission of an act, designated, whether accurately or not, in our decisions, as 'wanton negli. gence,' to which is imputed the same degree of culpability, and held to be equivalent to willful injury. A purpose or intent to injure is not an ingredient of wanton negligence. Where either of those exist, if damage ensues, the injury is willful. In wanton negligence, the party doing the act or failing to act is conscious of his conduct, and, without having the intent to injure, is conscious, from his knowledge of existing circumstances and conditions, that his conduct will likely or probably result in injury. These are the distinctions between simple negligence, willful injury, and that wanton negligence which is the equivalent of willful injury, drawn and applied in our decisions."

He also quotes from Railroad Co. v. Hill, 90 Ala. 71, 80, 8 South. 90, 92, 9 L. R. A. 442, 24 Am. St. Rep. 764, to this effect:

"We are satisfied that it tended to show a condition of the track not to know and remedy which was such gross negligence on the part of the company as implied recklessness and wantonness; such indifference to the probable consequences of its continual use as is the equivalent of intentional wrong, or a willingness to inflict the injuries complained of."

He also cites to the same effect from Railroad Co. v. Markee, 103 Ala. 160, 15 South. 511, 49 Am. St. Rep. 21, and Railroad Co. v. Orr, 121 Ala. 499, 26 South. 35.

These Alabama decisions, if based on a statute of Alabama, would be controlling; and even if not based on a statute, would be highly persuasive authority in any United States court held in that state. The cases hold substantially on the question involved here that reckless disregard of what may be the probable consequences of an act calculated to cause injury is wanton negligence, and is the equivalent of willful misconduct. This doctrine seems to us to be entirely sound. To throw cars over a public crossing likely to be used by pedestrians or vehicles at any time, without any one to control their movements or to give warning of their approach, is certainly reprehensible, and might, or might not, be found by the jury, according to the circumstances surrounding the particular case, such a total disregard of the safety of others as that it would amount to wanton and willful misconduct. The practice of making flying switches, which we understand embraces what is here called "kicking" cars over public crossings, is discussed by Beach on Contributory Negligence (3d Ed.) § 217, citing a large number of authorities supporting the text, as follows:

"The method of switching known as making a 'running' or 'flying' switch is constantly a fruitful source of accident to persons walking or being upon the tracks. It consists in detaching the portion of the train to be switched off while the cars are in motion, the forepart of the train advancing with increased speed, while the rear portion, proceeding more slowly, is, at the proper time, switched off upon the desired track; or the engine may push forward a car or part of a train with considerable speed, and then, giving it a strong propulsion, send it off alone on the desired switch. This practice, in many courts, is condemned as negligent, even towards trespassers. And when the cars are suffered to run over a crossing, after being detached from the train, in making a flying switch, whereby travelers are injured, it is held negligence of an aggravated nature, and the practice is not unfrequently sharply denounced by the judges."

As there must be another trial of this case, it would be improper for the court to express any further opinion of the facts than is necessary to state the views entertained on the questions controlling it. The defendant's evidence may change materially the aspect of the case, but in our opinion the plaintiff's evidence, as shown by this record, entitled her to go to the jury.

The judgment of the court below is reversed, with directions to grant a new trial.

PARDEE, Circuit Judge, does not concur.

In re A. B. BAXTER & CO.

In re BLITCH (two cases).

(Circuit Court of Appeals, Second Circuit. January 9, 1907.)

Nos. 104, 107, 242.

1. GAMING-WAGERING TRANSACTIONS-SALES FOR FUTURE DELIVERY. A transaction by which property is bought and sold for future delivery. and which is legitimate on its face, cannot be held void as a wagering contract because one of the parties understood and meant it to be so, but the proof must go further and show that such understanding was mutual. [Ed. Note. For cases in point, see Cent. Dig. vol. 24, Gaming, § 22.] 2. SAME TRANSACTIONS WITH BUCKET SHOP-UNDERSTANDING OF PARTIES. The probability that an intelligent and experienced business man who enters upon a course of speculative dealings with a bucket shop does so with the understanding that the purchases or sales are to be merely colorable is so strong as to amount to a presumption of fact, which is not overcome by his testimony to the contrary given in his own interest, nor by a recital in confirmation slips given on receipt of the orders that actual delivery was in all cases understood, which in itself indicated that it was inserted for some ulterior purpose.

Petition to Review Order of, and Appeal from, the District Court of the United States for the Southern District of New York.

F. M. Czaki and Fried & Czaki, for petitioner.

J. J. Adams, for bankrupt.

Before WALLACE, LACOMBE, and TOWNSEND, Circuit Judges.

PER CURIAM. The executors of Blitch and the alleged bankrupt have each appealed from an order of the court below allowing the claim of Blitch as a creditor, and adjudging the amount at $11,346. It is insisted on the part of the alleged bankrupt that the claim should have been disallowed in its entirety, and in behalf of the executors that a considerably larger sum should have been adjudged owing. The District Court referred it to a special commissioner to take the evidence in respect to the claim and report to the court with his opinion. The case presented is this:

Baxter & Co. was a New York corporation having its principal place of business in New York City, and having also branch offices in various parts of the country, including one at Savannah, Ga. Its ostensible business was that of a broker in the business of buying and selling securities and produce, but its real business was that of a "bucket shop," dealing with customers who deposited small margins and speculated upon the fluctations in the market prices. It received orders and purported to execute them at the market price, and credited or charged the account of the customer accordingly; but it executed the orders only upon its books. These orders were sent by wire from the office at which they were received to the principal office, and a confirmation slip was delivered to the customer, signed by Baxter & Co. These slips contained this clause:

"We receive no orders except with the understanding that the actual delivery of property bought or sold is in all cases contemplated and understood. It is further understood and agreed that on all marginal business the right is reserved to close transactions when the market value indicates an insufficiency of margin in our hands to prevent loss to us, without notice and at public or private sale."

Blitch resided in Georgia, and in January, 1903, opened a speculative account with Gray, the agent of Baxter & Co., at its branch office in Savannah. For three years previously he had had a speculative account with Murphy & Co., a concern carrying on a bucket shop at Savannah. He was a merchant, doing a business of forty or fifty thousand dollars a year, and postmaster of the village in which he lived. Between January and August 7th, Blitch gave the Savannah office numerous orders to buy and sell cotton, and some to buy mining shares, and received for each order a confirmation slip such as has been referred to. On the 7th day of August, 1903, a number of these orders were outstanding. The value of the property, at the market prices represented by the orders to purchase, was nearly $120,000, and of the property represented by his orders to sell was about $40,000. At the market prices, on the opening of business of that day, there would have been a margin in his favor of about $1,000. There was much fluctuation in the cotton market, and his orders were most of them for the purchase or sale of cotton for future delivery. He was informed by Gray that his account needed additional margin by four or five hundred dollars, and thereupon he gave Gray a check, and a note payable in the future, amounting together to $176.81, and received a receipt therefor. August 10th he was notified by Gray that he could not use the note, and more margin must be put up at once "or he (Gray) should have

to hedge the trades in September cotton and in Amalgamated Copper." Blitch protested, but shortly after the market opened Baxter & Co. closed some of the orders by a nominal sale of the September cotton and the shares of Amalgamated Copper. August 18th it closed the rest of the orders except one for the purchase of 50,000 pounds of ribs, and on September 1st it closed the order for ribs. Baxter & Co. duly notified Blitch of the closing of his orders at the respective times thereof. The market advanced subsequently, so that within the next 30 days Blitch could have realized a large profit on his orders to purchase.

The special commissioner found as facts that Gray had received the note given by Blitch as so much cash, and that at the time Baxter & Co. closed the orders Blitch's customary margin was not exhausted. He also made the following findings:

"The evidence forces me to the conclusion that Mr. Blitch never expected to receive and pay for the merchandise that he purchased, or to deliver the merchandise he sold, but that his intention in each instance was to settle on differences. With much doubt I find as a fact that Baxter & Co. had represented to him that in every instance they actually executed each order he gave them, and that he supposed Baxter & Co. were doing a legitimate brokerage business and were actually carrying for him the merchandise he had directed them to purchase or to sell."

As matter of law the special commissioner found that the relations between Blitch and Baxter & Co. were the same as though the representations made by it to Blitch, and believed by him, had been true; that the acts of Baxter & Co. in closing the orders given by Blitch were equivalent to a conversion of the property represented by the orders to purchase; and that Blitch was entitled to recover as damages the highest value of the property intermediate the time of the conversion and a reasonable time after he had been notified thereof. He also found that as to the cotton and the copper stock 15 days was a reasonable time, and as to the ribs 30 days was a reasonable time.

It is contended for the alleged bankrupt that no recovery should have been allowed Blitch for the conversion of the property which he had ordered Baxter & Co. to purchase, because his claim is founded merely upon a breach of an agent's instructions in carrying out wagering contracts. If it was the understanding between Blitch and Baxter & Co. that their dealings would be those ordinarily carried on between a customer and a bucket shop, or that Baxter & Co. would not actually execute the orders according to the custom of brokers, so that there would be no future delivery of the property ordered to be purchased, the transactions between them were in furtherance of a mere gambling scheme, and a recovery could not be permitted.

It is too well settled to need any citation of authority that contracts for the purchase of property to be delivered at a future day are not void as wager contracts merely because the property is not in existence in the hands of the seller and is to be subsequently acquired by him. It is equally well settled that a transaction which is on its face legitimate cannot be held void as a wagering contract by showing that one of the parties to it understood and meant it to be so. "The proof must go further and show that this understanding was mutual-that both parties so understood the transaction." Irwin v. Williar, 110 U. S. 499,

508, 4 Sup. Ct. 160, 28 L. Ed. 225; Bibb v. Allen, 149 U. S. 481, 492, 13 Sup. Ct. 950, 37 L. Ed. 819. As a man cannot gamblen himself, and there must be two parties to a wager, it is not enough that Blitch never intended or expected that the property ordered should be delivered to him nor is it enough that Baxter & Co. never expected or intended to secure such a delivery by executing the orders to purchase. In Farnum v. Whitman, 187 Mass. 381, 73 N. E. 473, the court used this language:

"At common law, in order to render a contract void as a wagering contract, it must appear that both parties understood and agreed, expressly or impliedly, to the things which constituted it as matter of law a wagering contract. This does no rest on grounds peculiar to wagering contracts. The unexpressed or uncommunicated intention of one party to a contract is not binding upon the other party to the contract. In order to be binding, the intention must be common to both."

That this is the law of Georgia sufficiently appears by Forsyth Mfg. Co. v. Castelin, 112 Ga. 199, 37 S. E. 485, 81 Am. St. Rep. 28, where in an action by brokers it was contended that the transactions involved were dealings in fictitious "futures." The court held that transactions of that kind were not invalid unless it appeared "that neither of the parties contemplated an actual delivery of the goods, and that it was the intention of both that there should be no actual delivery, but on the day fixed for delivery there should be a settlement of their differences, based on the market value of the goods on that day."

This is a case where each party intended to engage in a series of wagering transactions, and where it is sufficiently plain that Baxter & Co. understood the intentions of Blitch. The real inquiry consequently is whether Blitch understood the intentions of Baxter & Co. The finding of the special commissioner, that Baxter & Co. had represented to Blitch that in every instance they actually executed the orders given them, was based upon the recital contained in the confirmation slips. But if Blitch did not rely upon these representations, the fact that they were made is not important. Blitch was examined as a witness before the special commissioner, and his testimony indicates that he was a man of keen intelligence and extensive business experience. We are unable to accept the conclusion of the court below, reached with "much doubt," that Blitch believed these representations. He was an experienced business man, and familiar with the business of speculating in futures. It is almost incredible that such a man should not have known that he was dealing with a bucket shop, or that he was not aware of the ordinary business methods of such a concern. According to common understanding the bucket shop "uses the terms and outward forms of the exchanges, but differs from the exchanges in that there is no delivery, and no expectation or intention to deliver or receive securities or commodities said to be sold or purchased." (See Standard Dictionary.) Blitch not only testified that he was not aware that Baxter & Co. was operating a bucket shop, but he testified that he supposed that it was actually carrying the property covered by his orders. It is impossible to contradict the testimony of a witness as to his state of mind by direct evidence, unless he has made impeaching state