Albert Lea Amusement Corp. v. Hanson, 35116

• Court: Supreme Court of Minnesota (US)
• Citation: 231 Minn. 401,43 N.W.2d 249
• Decision Date: 23 June 1950
• Docket Number: No. 35116,35116
• Parties: ALBERT LEA AMUSEMENT CORPORATION v. HANSON, County Attorney, et al.

Page 249

43 N.W.2d 249

231 Minn. 401

ALBERT LEA AMUSEMENT CORPORATION v. HANSON, County Attorney, et al.

No. 35116.

Supreme Court of Minnesota.

June 23, 1950.

Syllabus by the Court

1. M.S.A. § 614.01, which defines a lottery as 'a scheme for the distribution of property by chance Among persons who have paid, or agreed to pay, a valuable consideration for the chance,' construed in the light of this court's previous consideration thereof and the decisions of other courts construing similar or identical statutory provisions.

2. Courts of a number of states, in construing similar statutory provisions as applied to a plan similar to that submitted here, hold that, in the absence of a showing that any consideration is paid by anyone for the right to participate in a chance to win a gift, no statutory violation is established.

3. Other courts have rejected the validity of similar plans where it was shown that as a result thereof paid theater patronage of the sponsors has been increased, such facts being regarded as sufficient to establish that a consideration was paid in violation of statutory provisions.

4. In a number of cases, plans have been rejected because of a finding that participants, or at least some of them, paid a consideration for the right to participate therein by purchase of the sponsor's theater tickets with participation coupons attached, even though such plans provided for free participation, the latter fact being more or less concealed from the public.

5. State v. Schubert Theatre Players Co., 203 Minn. 366, 281 N.W. 369, appears to commit this court to the doctrine that a plan which provides for No payment of consideration by Any of the participants, either by purchase of tickets or otherwise, is valid, notwithstanding the fact that plan results in increased paid theater admissions for sponsor.

6. Since plan here does not provide for payment of consideration of Any kind by Any participants, and purchase of theater ticket carries with it no participation rights, the latter being gained only by free registration in lobby open to ticket purchasers and non-ticket purchasers alike, plan Held not to constitute a lottery in violation of § 614.01, even though it results in an increase in paid theater patronage to sponsor.

7. Whether plaintiff in the instant action had the right to seek an injunction is not determined in the light of this opinion.

Meighen, Knudson, Sturtz & Peterson, Albert Lea, Samuel P. Halpern, Minneapolis James E. M. Gottlieb, Minneapolis, for appellant.

J. A. A. Burnquist, Attorney General, Lowell J. Grady, Assistant Attorney General, Kenneth W. Green, Special Assistant Attorney General, Rudolph Hanson, County Attorney, Albert Lea, for respondents.

THOMAS GALLAGHER, Justice.

Plaintiff seeks a declaratory judgment construing M.S.A. § 614.01, which provides:

'A lottery is a scheme for the distribution of property by chance among persons who have paid, or agreed to pay, a valuable consideration for the chance, whether it shall be called a lottery, raffle, gift enterprise, or by any other name, and is hereby declared unlawful and a public nuisance.

'Every person who shall contrive, propose, or draw a lottery, or shall assist in contriving, proposing, or drawing a lottery, shall be punished by imprisonment in the state prison for not more than two years, of by a fine of not more than $1,000, or by both.'

Plaintiff, the operator of all commercial motion picture theaters in Albert Lea, for some years prior to the commencement of this action had adopted, evolved, and used a gift plan in connection with the theater business whereunder certain cash prizes were given to the holders of certain numbers each week. It is plaintiff's contention that the plan under which it operated did not constitute a violation of § 614.01, but was entirely legal. Some time prior to this action, defendants, in their official capacity, notified plaintiff that unless it ceased to operate such gift plan, frequently designated as 'bank night,' criminal proceedings under the foregoing statute would be instituted against it. Solely because of this threat, plaintiff discontinued the operation and commenced the present action. At the close of the testimony, the trial court made findings and ordered judgment in favor of defendants. Subsequently, upon plaintiff's motion for amended findings or a new trial, the trial court amended its findings, setting forth the facts in greater detail, but otherwise denied plaintiff's motion.

The plan evolved, the validity of which this court is now called upon to determine, as established by the findings of the trial court, is as follows:

'The Bank Night drawing was held on the stage of plaintiff's New Broadway Theatre on Thursday night of each week. For about six weeks before the first drawing in December, 1934, the plan, including the first nine rules set forth in paragraph 10(b) of the complaint, was extensively advertised locally by the general distribution of hand bills around the City, by posters outside the theatres, by motion picture trailers at the shows and by going from place to place, to homes, business houses, stores and hotels with a registration book and inviting people in general to register, explaining that it would not cost them anything. A registration book was thereafter kept on a table or stand in the lobby of the New Broadway Theatre with said first nine rules posted in plain view.

'Plaintiff furnished the prizes for such drawings at the rate of $50.00 each week until a maximum of $1,000 in prizes was offered. If no winner qualified at any given Bank Night drawing, the sum of $50.00 would be added by the theatre to the amount theretofore advertised to be given away, and such gross amount would constitute the prize offered at the drawing on Thursday night of the following week. The prize, if no winner thereof qualified, would accumulate from week to week until it reached the sum of $400. If no winner qualified for the prize when it reached $400, then a second prize would commence to accumulate at the rate of $50 per week until the second prize, if not won by a qualified winner, would reach a total of $400. Thereupon, if no award had taken place, a third prize would commence to accumulate at the rate of $50.00 per week until the third prize had reached a limit of $200.00. By that method it was possible, as oftentimes happened, to have three prizes, aggregating $1,000, offered on a given Bank Night; one prize for $400, a second for $400, and a third for $200. The gross sum of $1,000 was made the limit for the gross prizes.

'Commencing about 1942, Rule No. 10, set forth in the complaint, was added to the other nine rules. It was publicized by motion picture trailers at the shows and was prominently displayed at the table in the theatre lobby where registrations were made. It provided that any person could obtain an 'absentee card' (sometimes identified as a 'Bank Night Identification Card') by calling at the theatre during business hours of the day before Bank Night and until 4:00 P.M. of the day of Bank Night. Business hours, for such purposes, were from 1:30 P.M. to 4:00 P.M. and from 6:30 P.M. to about 11:00 P.M. These 'absentee cards' were placed on a table in the lobby of the theatre. A person executing the 'absentee card' left it on the table, and an attendant would from time to time gather these 'absentee cards' and file them alphabetically in a file kept for that purpose. At the time of the Bank Night drawings on the stage, this file was consulted, and, if the number drawn had been assigned to a person who subscribed to such an 'absentee card' so filed, such absentee winner would have 48 hours after the drawing and announcement of his name to call at the theatre, identify himself, and claim the prize. If the number of a person who signed an 'absentee card' was drawn, plaintiff attempted to locate such winner immediately after the drawing. If such winner was located, he was required, within 48 hours of the drawing at which his name was drawn, to identify himself as the winner and claim the prize, but he was requested to, and invariably did, come to the Bank Night drawing on Thursday evening of the succeeding week and receive his prize. After each drawing, the remaining 'absentee cards' were destroyed, and anyone wishing to again participate in the drawing by way of 'absentee card' was required to fill out another 'absentee card' within the time limited preceding the next drawing. Whereas registration was permanent in the sense that one registered but once, the 'absentee card' expired with each weekly drawing.

'A person could register without the purchase of an admission ticket. The registration book was kept on a stand in the outer lobby of the New Broadway Theatre, where any person not under 18 years of age might register at any time while the theatre was open.

'If a participant wished to be present in the theatre at the time of the drawing, he was required to purchase an admission ticket. A winner who stood in the lobby or on the sidewalk outside the theatre or who had executed an 'absentee card' could enter the theatre for the purpose of identifying himself and claiming the prize without purchasing an admission ticket.

'No registrations were made at the ticket window in connection with the purchase of admission tickets and no coupons, numbers, 'absentee cards' or other items connected in any way with the Bank Night drawings were handled at the ticket window.

'Persons wishing to participate in a drawing were required to sign a register. The signatures were posted in a permanent record book and a number was assigned to each signature. Tickets, or small cards, bearing these numbers were placed in a receptacle or drum. The original registrations were made upon ordinary composition books and the registrant had no connection with, or knowledge of, the posting in the permanent record books, the assignment of numbers, or the placing...