Featherstone v. Independent Service Station Ass'n

• Decision Date: 28 July 1928
• Docket Number: (No. 10338.)
• Citation: 10 S.W.2d 124
• Parties: FEATHERSTONE v. INDEPENDENT SERVICE STATION ASS'N OF TEXAS et al.
• Court: Texas Court of Appeals

10 S.W.2d 124

FEATHERSTONE v. INDEPENDENT SERVICE STATION ASS'N OF TEXAS et al.

(No. 10338.)

Court of Civil Appeals of Texas. Dallas.

July 28, 1928.

Rehearing Denied October 13, 1928.

Appeal from District Court, Dallas County; Joel R. Bond, Judge.

Action by M. B. Featherstone against the Independent Service Station Association of Texas and others. Judgment for defendants, and plaintiff appeals. Affirmed in part, and in part reversed and rendered.

Hughes & Monroe, of Dallas, for appellant.

Callaway & Reed, of Dallas, for appellees.

LOONEY, J.

M. B. Featherstone, who operates a general garage business in the city of Dallas, and deals in oils and gasoline, brought this suit against the Independent Service Station Association of Texas, a corporation, the Independent Service Station Association of Dallas, an unincorporated association, and C. M. Proctor, R. E. Tomlinson, and E. L. Haskins, individuals, who are engaged in the same line of business as that pursued by plaintiff, to enjoin an alleged lottery scheme employed by the defendants to attract business and trade from plaintiff to the injury of his property and property rights involved in said competing business.

The case, by agreement, was withdrawn from the jury and submitted to the trial judge, whose findings of fact and conclusions of law are, in substance, that, the defendants, other than the defendant corporation, had, for eight or nine months prior to the institution of the suit, operated, and caused to be operated in Dallas county, a scheme by which automobiles, as prizes, were distributed by chance in substantially the following manner: That is to say, the Independent Service Station Association of Dallas, a voluntary association of retail dealers, including the individuals, defendants herein, through its officers and committees, sold tickets to the members of the association for a money consideration used to purchase automobiles that constituted the prizes at the drawings. That the retail dealers composing this association, including the individual defendants, advertised to the general public that purchasers of merchandise and service from them would receive a ticket for each dollar spent, entitling the holder to a chance to win an automobile. That, when a ticket was issued, a stub, containing a number corresponding to that on the ticket, was retained, and, at the end of stated periods, these stubs were placed in a receptacle and a drawing therefrom was had by chance, and the holder of the ticket corresponding in number to that on the stub drawn won the prize and received the automobile.

The court found: That the defendants were operating this scheme at the time the temporary injunction was issued in this cause, and that they threatened to continue its operation. That they changed the mode of operations to this extent, they not only gave out tickets to customers who bought merchandise, but in some instances to individuals who were not purchasers. That defendants had distributed many prizes in this manner, and had advertised a drawing for a Chrysler car to take place May 23, 1928. That the admitted purpose of such scheme was to attract trade from competitors who did not participate in the scheme and to build up their own business.

The court found: That plaintiff was a competitor of the defendants in the sale of oil, gasoline, and in the general garage business, and that members of said association had opened up places of business immediately surrounding that of plaintiff, at which they displayed advertisements to the effect that customers would receive chances on automobiles by patronizing their places. That various prospective customers of plaintiff left his place without making purchases, on discovering that he did not distribute tickets for the automobile drawing, and that, since and during the operation of the scheme, plaintiff's business declined, he lost money, whilst the defendants' business increased and they made money as the result of the scheme.

The court concluded that the facts showed the existence of a lottery in violation of the penal statutes of the state; that every element of the offense existed — that is, a prize to be distributed, by chance, to the holder of a ticket, who acquired the same on a consideration.

Paragraphs 3 and 4 of the court's legal conclusions are as follows:

"(3) I find that the plaintiff has no property rights involved in the crime committed by the defendants and each of them, and loss of trade and patronage by the plaintiff, caused by the defendants, does not constitute injury to property rights. In this connection, I find that general business, commonly known as `trade,' coming from the general public in the form of patronage, is entitled to go into whatever channel it deems fit, and, although said scheme and device directly injures the plaintiff financially in the operation of his business, that same does not constitute such unfair competition that plaintiff has a legal cause to complain by asking an injunction.

"(4) I further find that the plaintiff, M. B. Featherstone, is not entitled to equitable relief in the form of a permanent injunction for the reason hereinabove stated, to wit, that his property rights are not affected as the term `property right' is construed by this court, and that the plaintiff has an adequate remedy at law, to wit, protection by the criminal courts, and that the plaintiff's adequate remedy would be to file a criminal complaint against the defendants herein in the event he desires to do so."

In harmony with the court's legal conclusions, judgment was rendered denying plaintiff the relief sought, from which this appeal is prosecuted.

Plaintiff's contention in effect is this, that his property and property rights (that is, his business and the right to operate the same without unlawful interference, invasion, or injury) were violated by the lottery scheme conducted by defendants, and therefore he was entitled to the injunctive relief sought, notwithstanding the fact that the lottery constituted a violation of the Penal Code of the state.

Lottery as an offense was unknown to the common law, and only within recent times the scheme was not only tolerated, but employed as a convenient method of raising revenue for governmental, religious, charitable, and educational purposes. Experience, however, demonstrated that the practice was demoralizing in arousing and cultivating the gambling instinct dormant in all human nature, was widespread, casting a baneful influence over entire communities, reaching persons of all ages and classes, entering every fireside, preying especially upon the meager means and earnings of the poor, attracting especially the simple and ignorant, and leading at last to idleness, mendicancy, moral profligacy and debauchery. In view of its malign and demoralizing influence, the lottery has been outlawed in probably every state in the Union, and all propaganda, with reference to such enterprises, has been banished from the mails and interstate commerce, by acts of Congress.

The people of this state were so intent on outlawing the lottery, they refused to commit the subject to the discretion of the Legislature, but commanded, in section 47, art. 3, of the Constitution that:

"The Legislature shall pass laws prohibiting the establishment of lotteries and gift enterprises in this state, as well as the sale of tickets in lotteries, gift enterprises or other evasions involving the lottery principle, established or existing in other states."

In obedience to this mandate of the people, the Legislature enacted the following penal statute (article 654, Penal Code):

"If any person shall establish a lottery or dispose of any estate, real or personal, by lottery, he shall be fined not less than one hundred nor more than one thousand dollars; or if any person shall sell, offer for sale or keep for sale any ticket or part ticket in any lottery, he shall be fined not less than ten nor more than fifty dollars."

It will be observed that the lottery prohibited by this statute is not defined, but the courts of the country are in general accord in regard to the definition and constituent elements of the offense.

A satisfactory definition is given in State v. Lipkin, 169 N. C. 265, 271, 84 S. E. 340, 342, L. R. A. 1915F, 1018, 1022, Ann. Cas. 1917D, 137, as follows:

"A lottery, for all practical purposes, may be defined as any scheme for the distribution of prizes, by lot or chance, by one, on paying money or giving any other thing of value to another, obtains a token, which entitles him to receive a larger or smaller value or nothing, as some formula of chance may determine."

The findings of the trial court in the case under consideration and the undisputed facts fill up to the fullest measure the above definition. They are to the effect that the Independent Service Station Association of Dallas sold to its members, including the individual defendants, tickets in batches of 1,000 that were distributed by the dealers to their customers, one ticket, for every dollar's worth of merchandise purchased, that entitled the holder to a chance to win an automobile at a drawing to be held; thus is revealed all the essential elements of a lottery — that is, the prize, the chance distribution of same, and the consideration passing from the holder of the ticket.

Appellees, however, do not seriously contend that the scheme above outlined was not a lottery within the meaning of the statute, but by appropriate cross-assignments of error challenge the correctness of the findings of the trial court, to the effect that defendants were operating under a lottery scheme at the time the restraining order was issued. Their contention is that the undisputed facts show that this scheme had been abandoned prior to the institution of the suit, and that the scheme, under which they were then operating, was a perfectly legal and permissible procedure.

They insist that, under the plan as...