Affiliated Enterprises, Inc. v. Waller

Citation5 A.2d 257
PartiesAFFILIATED ENTERPRISES, Inc. v. WALLER.
Decision Date14 March 1939
CourtSuperior Court of Delaware
5 A.2d 257

AFFILIATED ENTERPRISES, Inc.
v.
WALLER.

Superior Court of Delaware. Kent.

March 14, 1939.


[Copyrighted material omitted.]

5 A.2d 258

Action for breach of a license agreement by the Affiliated Enterprises, Incorporated, a corporation of the State of Colorado, against Roland H. Waller, trading as the New Waller Theatre. On demurrer to declaration, the case being certified to the court in banc by the Superior Court.

Demurrer sustained.

LAYTON, C. J., RICHARDS, RODNEY and SPEAKMAN, JJ., sitting.

Max Terry, of Dover, for plaintiff.

Daniel J. Layton, Jr., and Isaac D. Short, 2nd, both of Georgetown, for defendant.

Demurrer to declaration. Case certified to the Court in Banc by the Superior Court for Kent County, No. 36, October Term, 1937.

The plaintiff sued to recover damages for breach of a license agreement in writing, executed at Laurel, Delaware, on May 8, 1936. By the terms of the contract the plaintiff, in consideration of a weekly payment of five dollars, agreed to allow the defendant to make use of an advertising plan designed to promote public interest in motion pictures. The plan in general and the accompanying instructions were alleged to be patented and copyrighted. The plan or scheme is called "Bank Night". Public interest is aroused by the weekly distribution of a money prize to such person duly registered, opposite whose name appears the number corresponding to that number drawn from a box or drum on the theatre stage. The operation of the plan is as follows: The theatre maintains a registration book, and all persons are invited to register their names free of charge; but no person may register more than once. A number is assigned to the registration of each person, and these numbers are deposited in the drum or box. A large sign is placed in front of the theatre, and at or near the place of registration book, announcing that it is not necessary to purchase an admission ticket in order to register or participate in Bank Night. The instructions set forth in detail the instructions to be given theatre employees to insure free participation.

On the night of the week selected by the theatre owner for the drawing, the drum or box is taken to the stage, and the master of ceremonies makes an announcement to the people in the theatre which is relayed or repeated to those on the outside, setting forth the purpose and rules of the plan; stating that the best advertising the theatre can do is to have the public come and see favorite movie stars in photographs of scenes; that it is not necessary to purchase a ticket of admission in order to register or to claim an award; that if the name is called of a person who is outside of the theatre, free admittance to the theatre will be accorded; that the presence of such person must be made known within —— minutes after the drawing. The instructions also provide that the name must be loudly announced in the theatre, must be relayed or announced to those outside, and a reasonable time must be allowed to permit the person outside whose number is called to present himself in the theatre.

If the person appears, the award is made. If he does not appear, the award is carried over to the next week, and the amount is added to a similar amount of money to be awarded in that week.

The defendant, demurring generally, contended that the scheme was a lottery within the prohibition of Article 2, Section 17, of the Constitution and statutes enacted in support thereof.

The constitutional provision is, in part, as follows:

"The sale of Lottery Tickets, pool selling and all other forms of gambling are prohibited in this State * * *."

Section 4056 of the Revised Code, 1935, reads:

"Whoever shall be concerned in interest in lottery policy writing, or in selling or disposing of any lottery policy or certificate, or number or numbers or anything by which such person or any other person or persons promise or guarantee that any particular number or numbers, character, ticket or certificate, shall in the event or on the happening of any contingency in the nature of a lottery, entitle the purchaser or holder to receive money or property or evidence of debt, or shall use or employ any other device by which such person or any other person or persons promise or guarantee as aforesaid, shall be deemed guilty of a misdemeanor, and upon conviction thereof by the Court of General Sessions of this State, shall be fined not less than one hundred dollars nor more than one thousand dollars, and in default of the payment thereof, shall be imprisoned for a term of not less than one month or more than twelve months."

5 A.2d 259

LAYTON, Chief Justice:

It is accepted as a legal truth that the law will not lend its aid to a claim founded on its own violation. If, then, the plan or scheme, which is the substance of the contract declared on, is in violation of the statute, the plaintiff will unavailingly seek the protection of the Court.

There was a time when lotteries were entirely legal in this State, so much so that it was held that lottery tickets sold were properly chargeable in a book account. Gregory & Co. v. Bailey's Adm'r, 4 Har. 256. A changed public opinion resulted in the constitutional provision and the enactment of the statute to effectuate the prohibition of the organic law.

The defendant denies liability on the ground that the contract entered into is offensive to the public policy of this State, in that it embraces a plan or scheme essentially a lottery in its nature. The plaintiff denies that the scheme is a lottery, for the reason that there is lacking the material clement of consideration as that term is, or ought to be, properly understood with respect to lotteries. This is the crucial point of the case.

It is best, perhaps, not to define the word "lottery" too precisely, for the reason that human ingenuity is too frequently successful in evolving a scheme entirely within the mischief, but not quite within the letter of the definition. People v. McPhee, 139 Mich. 687, 103 N.W. 174, 69 L. R.A. 505, 5 Ann.Cas. 835. In this State the word has been judicially denned as "a scheme for the distribution of money or prizes by chance". State v. Sedgwick, 2 Boyce, 453, 81 A. 472, 473; State v. Gilbert, 6 Boyce, 374, 100 A. 410. This is the English definition. Taylor v. Smelton, 112 B.C. 207. It seemingly ignores consideration as an element; but, undoubtedly, that element is implied; and it is agreed that a lottery has three essentials, prize, chance and consideration. An acceptable definition is one offered by the Missouri Courts where a lottery is defined as any scheme or device whereby anything of value is, for a consideration, allotted by chance. State v. Emerson, 318 Mo. 633, 1 S.W.2d 109.

The statute in this state does not attempt formally to define the term. It amounts to a broad and comprehensive denunciation of those persons concerned in interest in selling or disposing of any number, ticket or anything by which such persons promise or guarantee that any particular number shall on the happening of any contingency in the nature of a lottery, entitle the purchaser, or holder, thereof to receive money or property.

The language of the statute is important in determining the quality of the consideration as related to a lottery.

The plaintiff admits that the elements of prize and chance are inherent in the plan; but it contends first, that the requirements of registration and attendance in the lobby of the theatre or outside at a fixed hour are but conditions for a gratuitous promise, and not a consideration of the promise; and second, that peculiarly within lottery agreements, consideration, in the sense of...

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