Castilleja v. Camero

• Decision Date: 19 April 1967
• Docket Number: No. A--11518,A--11518
• Citation: 414 S.W.2d 424
• Parties: Alberto CASTILLEJA, Petitioner, v. Severa CAMERO, Respondent.
• Court: Texas Supreme Court

Page 424

414 S.W.2d 424

Alberto CASTILLEJA, Petitioner, v. Severa CAMERO, Respondent.

No. A--11518.

Supreme Court of Texas.

April 19, 1967.

Rehearing Denied May 24, 1967.

F. B. Godinez, Jr., Alamia & Perkin, Willis G. Perkin, Pharr, Kelley, Looney, McLean & Littleton, Jackson Littleton, Edinburg, for petitioner.

Henrichson & Bates, E. G. Henrichson, Edinburg, for respondent.

GRIFFIN, Justice.

This suit was filed in the 93rd District Court of Hidalgo County, Texas, by Severa Camero against Jose and Famelisa Castilleja, housband and wife, and Alberto Castilleja, their son. Severa Camero sought to recover $17,000.00 which represents one half of the proceeds from a lottery ticket that won in the Mexican National Lottery of September 15, 1964. The case was tried before a jury but before its submission to the jury a non-suit was taken as to Jose and Famelisa Castilleja. Special issues were then submitted to the jury and answered in favor of plaintiff, Severa. Based on answers to the special issues and on the evidence presented, the trial court rendered judgment that plaintiff, Severa, recover the $17,000.00 from defendant, Alberto Castilleja. Defendant was also permanently enjoined from assigning, removing, dissipating, secreting, or hiding that portion of the proceeds found to belong to plaintiff. This judgment was affirmed on appeal, 402 S.W.2d 265. Alberto Castilleja is petitioner here. We affirm.

Severa and the Castilleja family are neighbors and reside in Edinburg, Texas. On or about September 11, 1964, Severa and Famelisa agreed to jointly purchase a lottery ticket in the Mexican National Lottery of September 15, 1964. Famelisa was to go the Reynosa, Mexico, the following day to purchase the joint ticket as well as tickets for several others. The tickets in the lottery were of different prices, and Severa and Famelisa agreed to buy a $4.00 ticket for which Severa contributed $2.00. Famelisa went to Reynosa where she purchased seven tickets in the lottery, two of which were numbers 33870 and 33512. When she returned she told Severa that the ticket which they jointly owned was number 33870, and she gave Severa a written memorandum to that effect. On September 15, 1964, the lottery drawing was held in Mexico, and ticket 33870 was declared a winner of $40,000.00. When Severa asked for her share of the proceeds Famelisa denied joint ownership in the winning ticket. She said that ticket 33870 was the ticket she bought for her son, Alberto, and that ticket 33512 was the one jointly owned. Famelisa gave the winning ticket to her son, Alberto, who went to Mexico; collected the money, $34,000.00 after taxes by the Mexican government; and deposited it in his personal account in the Banco Longoria in Reynosa, Mexico.

The above facts were disputed by petitioner, who contended that Severa contributed only $1.00 toward the purchase of a $4.00 lottery ticket. He also contended that although Famelisa had originally told Severa they jointly owned ticket 33870, this was a mistake which was corrected before the drawing. According to petitioner, he considered 33870 his 'lucky number' and that ticket had been bought for him. Famelisa, it was said, realized her mistake and told Severa before the drawing that 33870 was her son's ticket and 33512 was the jointly owned ticket. However, the jury found that Severa contributed $2.00 toward a $4.00 lottery ticket, and that the ticket purchased for joint ownership was 33870.

The cause of action asserted by Severa is for conversion of the $17,000.00 fund in question. In the trial court she proved that she was owner of the fund and that it is being withheld from her. This is not contested. The basis of this appeal is that in order for Severa to prove her title and right to the fund, she had to rely on and prove an illegal transaction. Petitioner argues that because of this Severa's cause of action cannot be enforced.

The Court of Civil Appeals agreed that the contract between Severa and Famelisa, and by which respondent acquired title, was based on an illegal transaction and unenforceable in Texas courts. However, the court held that the cause of action against Alberto was not dependent upon the contract since he was a stranger to the transaction between Severa and Famelisa. The court further held that as a stranger to the transaction Alberto could not raise the defense of illegality.

The agreement between Severa and Famelisa to jointly purchase a ticket in the National Lottery of Mexico and to divide the proceeds, if any, was not an illegal contract. It neither violated nor aided in the violation of any gaming statute of Texas. The only other jurisdiction involved was Mexico. In Mexico the purpose of the contract had the express approval of the Mexican government in that the Mexican government has a revenue interest in the lottery. Thus the agreement was to do a lawful thing--participate in the National Lottery of Mexico, in a lawful manner--by going to Mexico. This meant that the partnership, in the form of one or more members, had to go to Mexico, buy the tickets in Mexico, and collect the proceeds, if any, in Mexico. It is at this point, collection from the lottery, the Severa's right and title to the money arose, and at this point Texas had not been involved in any manner other than as the place where the agreement was made.

Thus the transaction upon which title is based is one which related solely to Mexico and which required performance in Mexico. A contract which is made in one jurisdiction but which relates to and is to be performed in another jurisdiction is governed by the law of the place of performance, Seiders v. Merchant's Life Ass'n, 93 Tex. 194, 54 S.W. 753 (1900); Fidelity Mut. Life Ass'n v. Harris, 94 Tex. 25, 57 S.W. 635 (1900); Byers v. Brannen, 30 S.W. 492 (Tex.Civ.App., 1894, writ ref.). There is both testimony and demonstrative evidence in the record which establish that the lottery which was the subject of this contract was sponsored by the Republic of Mexico for the purpose of raising public welfare revenue and is therefore legal in that country.

Petitioner relies principally on the case of Crutchfield v. Rambo, 38 Tex.Civ.App. 579, 86 S.W. 950 (1905, writ ref.), for his position that this contract is part of an illegal transaction, contrary to the public policy of Texas, and unenforceable in Texas courts. In that case the parties bought several tickets in the Honduras National Lottery and then agreed that if either won, the winner would divide the proceeds with the other. A ticket held by one of the parties did win, but he refused to divide according to the agreement. The court refused to enforce the claim because the contract was based on an illegal transaction. This case is easily distinguishable from the case at bar. In Crutchfield the entire transaction, i.e. the sale and purchase of the lottery tickets, the collection of the prize, and the agreement to divide the proceeds, took place in Texas. Since no other jurisdiction was involved, it had to be governed by Texas law. In that case an agent of the Honduras lottery was in Fort Worth, Texas, selling tickets. This was a specific violation of Article 394 of the Texas Revised Penal Code (1895), which was based on Article 3, § 47 of the Bernon's Ann.St. Texas Constitution (1976). Although the Buying of the tickets constituted no penal violation, the selling of them did. Thus the parties to the contract were engaged in and aiding in the violation of Texas law. This tainted any agreement they made pursuant to the purchase. A claim based upon or collateral to an illegal transaction is unenforceable. Floyd v. Patterson, 72 Tex. 202, 10 S.W. 526, 13 Am.St.Rep. 787, 789 (1888); DeLeon v. Manuel Trevino & Bro., 49 Tex. 88, 30 Am.St.Rep. 101 (1878); Russell v. Kidd, 37 Tex.Civ.App. 411, 84 S.W. 273 (1904, writ dism'd). As stated above, the agreement in the present case did not relate to or involve Texas law. There was no illegal transaction involved.

The question presented to this Court is whether the Texas courts will recognize this foreign right, a valid claim arising in another jurisdiction, upon which title is based and which gives rise to this cause of action for conversion. It has been demonstrated that Texas law is not involved; thus it becomes necessary to decide whether Texas policies or Texas interests are sufficiently involved to deny recognition of the right by Texas courts. We hold that they are not. The test for refusing to enforce a right lawfully arising in another jurisdiction has been stated in this manner: 'To justify a court in refusing to enforce a right of action which accrued under the laws of another state, because against the policy of our laws, it must appear that it is against good morals or natural justice, or that for some other reason the enforcement of it would be prejudicial to the general interests of our own citizens.' State of California v. Copus, 158 Tex. 196, 309 S.W.2d 227, 232, 67 A.L.R.2d 758 (1958) quoting Herrick v. Minneapolis & St. L. Ry. Co., 31 Minn. 11, 16 N.W. 413, 414 (1883).

The question of Texas public policy in regard to enforcement of claims arising in other jurisdictions and which relate, directly or indirectly, to gambling transactions has been the subject of several cases. Bond v. Hume, 243 U.S. 15, 37 S.Ct. 366, 61 L.Ed. 565 (1917); and Jacob v. Hyman, 286 F. 346 (C.C.A. 5 1923), dealt with the enforcement of claims arising from dealings in cotton futures. The courts held that a federal court sitting in Texas could enforce such a claim, governed by the law of another jurisdiction, without offending Texas public policy even though Texas had statutes prohibiting such 'wagering' transactions. Garza v. Richmond, 249 S.W. 889 (Tex.Civ.App., 1923, n.w.h.); and Springer v. Sahara Casinos Company, 322 S.W.2d 33 (Tex.Civ.App., 1959, w.o.j.), are cases in which a party sought to enforce a check given by a Texas resident for gambling purposes in another...