Eastman v. Armstrong-Byrd Music Co.

• Decision Date: 23 February 1914
• Docket Number: 3897.
• Parties: EASTMAN et al. v. ARMSTRONG-BYRD MUSIC CO.
• Court: U.S. Court of Appeals — Eighth Circuit

212 F. 662

EASTMAN et al. v. ARMSTRONG-BYRD MUSIC CO.

No. 3897.

United States Court of Appeals, Eighth Circuit.

February 23, 1914

Isaac D. Taylor, Asst. U.S. Atty., of Guthrie, Okl. (Homer N Boardman, U.S. Atty., of Oklahoma City, Okl., on the brief) for appellants.

Frank M. Lowe, of Kansas City, Mo., for appellee.

Before HOOK and SMITH, Circuit Judges, and AMIDON, District Judge.

SMITH Circuit Judge.

This was a suit in equity by the Armstrong-Byrd Music Company, a corporation engaged in the purchase and sale of pianos and other musical instruments at Oklahoma City, Okl., against H G. Eastman, the postmaster, and John L. Graham, the assistant postmaster, at said city. An injunction was sought and obtained forbidding the defendants from refusing the plaintiff permission to mail certain letters, and defendants appealed.

It appears that the plaintiff widely distributed the following circular:

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It appears that the H. P. Nelson Company, of Chicago, was aiding in this project, and one of its employes, L. M. Chaney, was in actual charge of it and wrote this advertisement. When the time for filing answers had expired, and on or about May 10, 1912, the judges selected to determine the contest met to determine who had furnished the neatest correct solution. These judges consisted of the presidents of two banks and the vice president of a third, all of Oklahoma City. When they assembled, there were about 6,500 answers. Of these the vast majority were filled out on the original advertisement. Some were on separate papers; but a number were very unique in design. Some were on burnt wood, some in the shape of pillows with the problem worked out in embroidery, and the like. These unique designs exceeded the 105 entitled to special awards, and the judges made the special awards all on this class of answers. The first five were awarded the prizes promised. To each of the next hundred was awarded a voucher in the form of a draft by the H. P. Nelson Company, of Chicago, to Armstrong-Byrd Music Company, for $117, good only on the purchase price of a new piano until May 25, 1912, and to each of the other contestants a similar award was made of a voucher for $105. The Armstrong-Byrd Company then desired to mail to each of the contestants notice of the result, but the assistant postmaster, John L. Graham, under instructions from the postmaster, H. G. Eastman, refused to permit the mailing of said letters upon the ground that the entire plan rendered the scheme a lottery and gift enterprise based upon chance or lot under the Criminal Code, Sec. 213, and section 499 of the Postal Laws and Regulations of 1902, as amended.

It appears that, after the adoption of the Penal Code, section 499 of the Postal Laws and Regulations was so amended as to correspond with section 213 of the Penal Code, which is as follows:

'Sec. 213. No letter, package, postal card, or circular concerning any lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance; and no lottery ticket or part thereof, or paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest in or dependent upon the event of a lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance; and no check, draft, bill, money, postal note, or money order, for the purchase of any ticket or part thereof, or of any share or chance in any such lottery, gift enterprise, or scheme; and no newspaper, circular, pamphlet, or publication of any kind containing any advertisement of any lottery, gift enterprise, or scheme of any kind offering prizes dependent in whole or in part upon lot or chance, or containing any list of the prizes drawn or awarded by means of any such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prizes, shall be deposited in or carried by the mails of the United States, or be delivered by any postmaster or letter carrier. Whoever shall knowingly deposit or cause to be deposited, or shall knowingly send or cause to be sent, anything to be conveyed or delivered by mail in violation of the provisions of this section, or shall knowingly deliver or cause to be delivered by mail anything herein forbidden to be carried by mail, shall be fined not more than one thousand dollars, or imprisoned not more than two years, or both; and for any subsequent offense shall be imprisoned not more than five years. Any person violating any provision of this section may be tried and punished either in the district in which the unlawful matter or publication was mailed, or to which it was carried by mail for delivery according to the direction thereon, or in which it was caused to be delivered by mail to the person to whom it was addressed.'

It is agreed by the parties that the three elements of a lottery are: First, prize; second, consideration; and, third, chance-- and it is conceded by the plaintiff that the first two elements were present. It is, of course, conceded that these prizes were not to be awarded upon lot, but it is claimed that they were to be awarded upon chance, and the sole question arising on the issues is whether there was such an element of it here as to make the scheme a lottery. It must be borne in mind that this law like other laws must be construed in the light of reason. Standard Oil Co. v. United States, 221 U.S. 1, 31 Sup.Ct. 502, 55 L.Ed. 619, 34 L.R.A. (N.S.) 834, Ann. Cas. 1912D, 734; United States v. American Tobacco Co., 221 U.S. 106, 31 Sup.Ct. 632, 55 L.Ed. 663.

Attention is called by the defendant to the fact that section 213 of the Penal Code provides that there shall be excluded from the mails any letter, package, postal card, or circular, concerning any lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance.

While it is true that, if the scheme be a lottery, gift enterprise or similar scheme, it is not necessary that it shall be determined wholly by chance, but if it rests upon a determination in whole or in part by chance it is sufficient, yet it must be first a lottery, gift enterprise, or similar scheme, and even then the word 'chance' is not used in its broadest signification. Originally there was considerable controversy as to the legality of life insurance policies because the ability to mature them was dependent upon the number of lapses, and it was contended that, as the number who would thus lapse was a matter wholly of chance, the policies were invalid, but it has uniformly been held otherwise. So the giving of trading stamps, so called, is not a lottery, although the system is dependent on how much the purchaser buys at some future time as to what article he can obtain from a trading company. State v. Caspare, 115 Md. 7, 80 A. 606; State v. Felzer, 115 Md. 7, 80 A. 614; City and County of Denver v. Frueauff, 39 Colo. 20...