Burks v. Harris

• Decision Date: 28 June 1909
• Citation: 120 S.W. 979,91 Ark. 205
• Parties: BURKS v. HARRIS
• Court: Arkansas Supreme Court

120 S.W. 979

91 Ark. 205

BURKS v. HARRIS

Supreme Court of Arkansas

June 28, 1909

Appeal from Benton Chancery Court; T. Haden Humphreys, Chancellor affirmed.

Affirmed.

Dick Rice, for appellant.

In order to avoid the contracts, the vice pleaded must go to the substance of the contracts as and at the time executed. If the vice and illegality go only to the mode of execution which is not a part of the contract at its inception, it is not vitiated. The burden of proof is on the party alleging the illegality of the transaction. 8 Am. & Eng. Enc. of L 1008 and cases cited in note 2; Id. 1010.

McGill & Lindsey, for appellees.

Conceding that the benefits to be derived from the building of the hotel constituted a valuable and legal consideration, the contract is not enforcible because the other consideration is illegal. 21 Ind.App. 347; 69 Am. St. Rep. 360. The method of distributing the lots was a lottery. The drawing being illegal, there can be no recovery. 18 Am. & Eng. Enc. of L., 993; 47 Ark. 378; 67 Ark. 480; 25 Cyc. 163; 19 Am. & Eng. Enc. of L. 591; 144 Ind. 86; 21 Ind.App. 347; art. 19, § 14, Const. 1874; 15 Am. & Eng Enc. of L. 937; 19 Id. 592; Kirby's Dig. §§ 1862-3, 1732-3.

OPINION

MCCULLOCH, C. J.

At a mass meeting of citizens of Bentonville, Arkansas, the plaintiff, W. A. Burks, proposed, on condition that the citizens of Bentonville should, within fifteen days from that date, purchase from him, at the price of $ 50 per lot, two hundred lots, fifty by one hundred fifty feet in size each, to be surveyed and platted out of a certain tract of land adjoining said city of Bentonville, to erect near Spring Park, on a tract of land known as "Spring Park Addition," a hotel building of certain dimensions and capacity, and to make certain other improvements on the premises so as to make the place an attractive resort. The lots were to be selected after the plat should be made, and the same were to be paid for as follows: One-half when the walls and roof of the hotel should be completed, and the balance when the whole improvements were completed. A committee was appointed by the assembled citizens to solicit purchasers in order to accept the plaintiff's proposition.

The committee secured a large number of subscribers or purchasers, each agreeing to purchase a certain number of lots at the price named, and out of these the plaintiff selected two hundred, and they each executed to him an obligation in writing which, after reciting the plaintiff's undertaking with respect to erecting the hotel building, etc., is as follows:

"Now, therefore, in consideration of the above agreement and the benefits arising to the undersigned and the citizens of Bentonville, and the further agreement that the said W. A. Burks is to execute and deliver or cause to be executed and delivered a warranty deed conveying to J. W. Harriss one lot, the particular location to be hereafter determined, each lot to be 50 x 150 feet, situate on the following described tract of land situate in Benton county, Arkansas, to-wit: the S. E. 1/4 of the S. E. 1/4 of section 19, and the N. E. 1/4 of the N. E. 1/4 of section 30, township 20, range 30, we, the undersigned, promise to pay the said W. A. Burks the sum of fifty dollars at the Fidelity Savings Bank & Loan Company, in the city of Bentonville, upon the following terms: One-half of said sum when the walls of the said hotel building and roof thereon shall be completed, the remaining half to become due and payable when the said hotel, the dam and the six cottages shall have been completed according to contract, and that this note shall bear interest at the rate of ten per cent. per annum from date when said payment shall fall due until paid."

The plaintiff then caused the tract of land in question to be surveyed and platted into 330 lots, out of which number the committee selected two hundred, to be conveyed to the purchasers as soon as it should be determined what particular lot or lots each purchaser should receive. These lots were of unequal value, some worth practically nothing, and some worth double the price named.

The committee decided to distribute or apportion the lots to the respective purchasers by a chance, each purchaser to take the lot drawn by him, and this plan was accepted and carried out. The plaintiff did not propose this plan, but he acquiesced in it, and was present at the drawing. It was proposed and carried out by the committee who represented the citizens and purchasers. The plaintiff erected the proposed building and other improvements, and demanded payment from the purchasers of their respective obligations. He also executed and tendered to them deeds conveying the several lots apportioned to them in the drawing. Defendants Harriss, Armstrong, Crowell, Duckworth, Bates, Stevenson, Porter, Maxwell, Hildebranth and Graham each declined to accept the lots so apportioned to them and refused to pay the price. The plaintiff instituted separate suits in equity against them, to recover the several amounts due, and to foreclose his alleged lien on the lots apportioned to them. These suits were consolidated and tried together, and a decree was rendered dismissing the complaint for want of equity, and the plaintiff appealed.

The defense asserted by each of the defendants was, among other things, that the scheme for the sale and distribution was a lottery, in violation of the law. "A lottery is a species of gaming, which may be defined as a scheme for the distribution of prizes by chance among persons who have paid, or agreed to pay, a valuable consideration for the chance to obtain a prize." 25 Cyc. 1633.

The Constitution and statutes of this State make it unlawful to conduct a lottery or to sell or otherwise dispose of lottery tickets, gift concert tickets, or the like. Constitution of 1874, art. 19, § 14; Kirby's Dig., §§ 1862, 1863. Contracts for the sale of tracts of land of unequal value, to be apportioned among the purchasers by lot, are held in many cases to be within the statute against lotteries; and it is immaterial that every purchaser is to receive some return. Paulk v. Jasper Land Co., 116 Ala. 178, 22 So. 495; Elder v. Chapman, 176 Ill. 142, 52 N.E. 10; Lynch v. Rosenthal, 144 Ind. 86, 42 N.E. 1103; Den v. Shotwell, 24 N.J.L. 789; Seidenbender v. Charles, 4 S. & R. 151.

It is insisted, however, that where it is no part of the original contract of sale that the lots shall be divided by chance and the vendor does not direct or make himself a party to the unlawful distribution, the contract is not vitiated, and that a recovery may be had thereon. The principle thus stated in the contention is undoubtedly sound, for where a number of par...