Commonwealth v. Douglass

• Decision Date: 16 December 1893
• Parties: COMMONWEALTH v. DOUGLASS. DOUGLASS v. COMMONWEALTH.
• Court: Kentucky Court of Appeals

24 S.W. 233

100 Ky. 116

COMMONWEALTH v. DOUGLASS.

DOUGLASS v. COMMONWEALTH.

Court of Appeals of Kentucky.

December 16, 1893

Appeal from Louisville law and equity court.

"To be officially reported."

Proceedings by the commonwealth against J. J. Douglass to prevent the usurpation of the franchise of the Henry county lottery and of the Frankfort lottery. From a judgment for the commonwealth as to the Henry county lottery, defendant appeals. From a judgment for defendant as to the Frankfort lottery, the commonwealth appeals. Affirmed as to the Henry county lottery, and reversed as to the Frankfort lottery.

W. J Hendrick, Frank Parsons, and Reid Rogers, for the Commonwealth.

J. G Carlisle, D. W. Sanders, Thos. H. Hines, Muir, Heyman & Muir and Kohn, Baird & Speckert, for appellee.

BENNETT C.J.

These proceedings were commenced and prosecuted by the commonwealth to prevent the usurpation of the franchise claimed by Douglass, to operate said lotteries. It seems that the legislature, in 1850, authorized J. N. Webb to raise money by lottery for the benefit of the Henry Academy and Henry Female College. The third section of the act empowered the grantees to sell the scheme, which they did, and which fell into the hands, by purchase, of the appellant Douglass, who proceeded to operate the same under said grant. He claims that the legislature having authorized the sale of the franchise, and he having become the purchaser thereof, his right to it became a vested right, which the legislature could not thereafter take away, because it would be impairment of the obligation of contracts, which article 1, § 10, of the constitution of the United States expressly forbids. The lower court, upon the hearing of the case, decided that the grant had expired by limitation, and that decision must stand, and is affirmed.

In 1838 the legislature granted the privilege to certain gentlemen to raise money by lottery for the benefit of the city schools of Frankfort, and in 1872 the said act was amended so as to allow the board of councilmen of the city of Frankfort to sell and convey the privileges granted for the purposes mentioned; and the appellee, in 1875, purchased all the lottery franchises and privileges conferred by the act of 1838, and also the amendatory act of 1869. The appellee Douglass contends that he was the purchaser of said franchise, and claims that by reason of the act authorizing the sale of said lottery, and the purchase thereof, he acquired a vested right, which the legislature could not take away by its act of 1890, repealing said franchise, and relies upon article 1, § 10, of the federal constitution, which prohibits the states from passing any laws impairing the obligation of contracts, as sustaining his contention, and the decisions of this court thus construing his purchase.

This court, in the case of Gregory v. Trustees, 2 Metc. (Ky.) 598, decided that a lottery grant might be repealed by a subsequent legislature, unless rights had been acquired and liabilities incurred upon the faith of the privileges conferred by the grant, in which case the rights thus acquired and liabilities incurred become contractual which the provision supra protected from repeal by subsequent legislation. The appellant contends that the grant of the lottery privilege by the state was an exercise of its police not its contractual, power, which is inherently lodged in the state for the promotion and protection of its welfare and happiness, which the state cannot surrender and barter away either as a gratuity or for pay; that while the legislature may, in the exercise of its police power, grant a lottery privilege, the grant is only a privilege or license, not contractual, and a subsequent legislature, in the interest of good order and morals, may revoke the privilege thus granted, and repeal the grant, although pecuniary interests have been acquired under and by authority of the grant. It seems that this court, in the Gregory Case, supra, decided expressly that, where rights had been acquired and liabilities incurred upon the faith of the lottery grant, such rights and liabilities should be regarded as contracts which are protected by the federal constitution against impairment by the state legislature, and...