Chenard v. Marcel Motors

• Court: Maine Supreme Court
• Writing for the Court: Before DUFRESNE; DELAHANTY
• Citation: Chenard v. Marcel Motors, 387 A.2d 596 (Me. 1978)
• Decision Date: 02 June 1978
• Parties: Alphee CHENARD, Jr. v. MARCEL MOTORS.

Page 596

387 A.2d 596

Alphee CHENARD, Jr. v. MARCEL MOTORS.

Supreme Judicial Court of Maine.

June 2, 1978.

Marshall, Raymond & Beliveau by Paul R. Dionne (orally), Lewiston, for plaintiff.

Rocheleau & Fournier, P. A. by Ronald P. Lebel (orally), Lewiston, for defendant.

Before DUFRESNE, C. J., and POMEROY, WERNICK, ARCHIBALD, DELAHANTY and GODFREY, JJ.

DELAHANTY, Justice.

On Sunday, October 6, 1974, the Lewiston Lodge of Elks sponsored a golf tournament at the Fairlawn Country Club in Poland, Maine. The defendant, Marcel Motors, an automobile dealership, was asked to donate an automobile as a prize. To promote its business, the defendant accepted the proposal and agreed to give any golfer who shot a hole in one a new 1974 Dodge Colt. Fliers advertising the tournament were posted in the Elks Club and sent to potential participants. On the day of the tournament, an agent of the defendant drove a new 1974 Dodge Colt to the golf course and parked it near the clubhouse. One of the above-mentioned posters was placed conspicuously on the vehicle. The plaintiff, Alphee Chenard, Jr., registered for the tournament and paid the requisite entrance fee. ¹ While playing the thirteenth hole of the golf course, and in the presence of the other members of his foursome, the plaintiff allegedly shot a hole in one. The plaintiff notified the defendant and requested his prize. Disbelieving the plaintiff, the defendant refused to tender the automobile and litigation ensued. An Androscoggin County Superior Court jury found for the plaintiff and awarded damages of $2,984.00. From this judgment, the defendant appeals. We deny the appeal.

I.

In response to the plaintiff's complaint, the defendant interposed a defense inter alia of illegality. Both in Superior Court and on appeal, the defendant argues that the golf tournament was a form of gambling, viz., a prohibited "game of chance." Since the "contract" in which the defendant promised to give an automobile in return for shooting a hole in one was illegal, it may not be enforced; "(t)he law leaves the parties to an illegal contract 'where it finds them.' " Jolovitz v. Redington & Co., 148 Me. 23, 29, 88 A.2d 589, 592 (1952), citing Conley v. Murdock, 106 Me. 266, 76 A. 682 (1909), and Groton v. Waldoborough, 11 Me. 306 (1834).

At the time of the golf tournament, an anti-gambling statute and an anti-lottery statute were in effect ² as evidenced by 17 M.R.S.A. § 1803 which provides: "Whoever gambles, or bets on any person gambling, shall be punished by a fine . . ." and 17 M.R.S.A. § 2301 which reads in pertinent part: "Every lottery, policy, policy lottery, policy shop, scheme or device of chance, of whatever name or description, whether at fairs or public gatherings or elsewhere, and whether in the interests of churches, benevolent objects or otherwise, is prohibited." (emphasis supplied).

An exception to the anti-gambling and anti-lottery statutes exists in 17 M.R.S.A. §§ 330-346 which exception permits various nonprofit organizations to raise funds through the use of "games of chance" defined as

a game, contest, scheme or device in which a person stakes or risks something of value for an opportunity to win something of value and in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestant or participant may also be a factor therein. 17 M.R.S.A. § 330(2).

Arguing from this definition, the defendant contends that the golf tournament constituted a scheme or device of chance prohibited under 17 M.R.S.A. § 2301 in which each participant risked something of value (the entrance fee) for a chance to win something of value (a new 1974 Dodge Colt), the outcome depending in a material degree upon an element of chance (shooting a hole in one).

Recognizing that a potential weakness in its argument is whether a participant "risked" his entrance fee, the defendant invokes prior case law. In Lang v. Merwin, 99 Me. 486, 59 A. 1021 (1905), the defendant owned a cigar store which contained a slot machine. Each nickel deposited in the machine would entitle a player to a five-cent cigar and, depending upon his luck, up to fifty extra cigars. Notwithstanding that the operator of the machine could not "lose," for at the very worst he would be entitled to a cigar worth the value of his play, the Court concluded that the device constituted gambling. Adopting what it referred to as the broadest possible definition of gambling, the Court found that

it is not essential that both parties should stand to lose by chance; it is enough if one party stands to lose, or to win by chance. Id. at 488, 59 A. at 1022.

As long as the scheme contemplated the possibility of obtaining "something for nothing," id. at 489, 59 A. at 1022, it would be condemned as gambling. Lang v. Merwin was not an isolated decision, and its rationale was followed in State v. Googin, 117 Me. 102, 102 A. 970 (1918); State v. Baitler, 131 Me. 285, 161 A. 671 (1932), and somewhat more recently in Jolovitz v. Redington & Co., supra. ³

Applying the Lang rationale, the defendant asserts that just as the customer in the cigar store on any given play could not lose and the store owner could not win, here the participant could not lose by chance for he would in any event be entitled to his round of golf and the defendant could not win by chance. Moreover, the underlying rationale of our prior cases, the possibility of obtaining something for nothing, was present in the case at bar for a meager entrance fee yielded the possibility of winning a new automobile. Since the case is on all fours with Lang, the defendant asserts that the scheme must be struck down as gambling.

We disagree.

It is true that the earlier-quoted portion of 17 M.R.S.A. § 2301, allegedly controlling, is the very language that was construed by Lang and its progeny. ⁴ A significant difference, however, is that when Lang, Googin, and Baitler were decided there were no exceptions to the lottery and gambling laws. Subsequent to these opinions, the Legislature has legalized pari-mutuel betting at harness ⁵ and running ⁶ horse racetracks, licensed beano games ⁷ and gambling ⁸ conducted by nonprofit organizations and a state-operated lottery. ⁹ These exceptions have riddled the gambling and lottery statutes to the point where it can no longer be said that it was "the intention of the legislature to prohibit every pecuniary transaction in which pure chance has any place." Lang v. Merwin, supra at 489, 59 A. at 1022. ¹⁰

Juxtaposed with these cases is the black-letter explanation of the difference between illegal gambling or lotteries and legal competitions.

(A)ccording to the definition of "wager," there must be two or more contracting parties, having mutual rights in respect to the money or other thing wagered or, as sometimes said, "staked," and each of the parties necessarily risks something, and has a chance to make something upon the happening or not happening of an uncertain event. But a purse or prize offered by a party, and to be awarded to the successful competitor in a contest in which such party does not engage, nor has any chance of gaining, but only, perhaps, of losing, is without the element of a chance of gain or a risk of loss which characterizes the wager agreement. Misner v. Knapp, 13 Or. 135, 139, 9 P. 65, 66 (1885). (emphasis supplied).

Although the above-quoted emphasized language may rub against the language in some of our former gambling opinions, there can be no gainsaying that this distinction accurately reflects the general state of the law. Accord, Alvord v. Smith, 63 Ind. 58 (1878); Toomey v. Penwell, 76 Mont. 166, 245 P. 943 (1926); Las Vegas Hacienda, Inc. v. Gibson, 77 Nev. 25, 359 P.2d 85 (1961); Harris v. White, 81 N.Y. 532 (1880). See Annot., 87 A.L.R.2d 649 (1963); 38 Am.Jur.2d Gambling § 264 (1968); 38 C.J.S. Gaming § 5 (1943).

Beyond certain public policy considerations, it is said that a gambling contract is unenforceable because the promisor, if required to perform upon the happening of a stated event, will not have received anything of commensurate value with the performance which he himself renders, and the promisee will have suffered no detriment equal with the promisor's performance. 14 Williston, On Contracts § 1665 at 628 (3rd ed. 1972). As set forth in Restatement of Contracts § 520 (1932):

A bargain in which a promisor undertakes that, upon the existence or happening of a condition he will render a performance

(a) for which there is no agreed exchange . . .

is a wager and is illegal.

Similarly, a contract is unenforceable in a lottery situation where the promisee pays a definite sum in return for the promise of receiving a greater sum upon the happening of a certain contingency.

(A)lthough there is sufficient consideration, there is no agreed exchange of performances. The only loss a buyer of ticket can suffer is the cost of it; and that is incurred when the bargain is made. Id., comment b.

However, in a tournament, the promisee's performance of the requested act is the agreed exchange for the promised prize. 6A Corbin, On Contracts § 1489 at 656 (1962). The result is an enforceable unilateral contract. Las Vegas Hacienda, Inc. v. Gibson, supra.

Payment of an entrance fee does not turn a legal competition into an illegal wager, at least where the fees do not make up the purse. Toomey v. Penwell, supra; Las Vegas Hacienda, Inc. v. Gibson, supra; People ex rel. Lawrence v. Fallon, 152 N.Y.12, 46 N.E. 296 (1897). Of course, labels will not bind the courts, and if the "entrance fees" collectively constitute a prize to be won by one of the contestants the scheme will be found to be a wagering transaction. Porter v. Day, 71 Wis. 296, 37 N.W. 259 (1888). A competition will also become a wager if the one offering the prize may compete to win it. In such a case, there is no agreed exchange of performances since the promisor has to pay nothing if he wins the contest,...