Heitfeld v. Benevolent and Protective Order of Keglers

• Citation: 220 P.2d 655,36 Wn.2d 685
• Decision Date: 29 June 1950
• Docket Number: 31273.
• Court: United States State Supreme Court of Washington
• Parties: HEITFELD, v. BENEVOLENT & PROTECTIVE ORDER OF KEGLERS.

220 P.2d 655

36 Wn.2d 685

HEITFELD, v. BENEVOLENT & PROTECTIVE ORDER OF KEGLERS.

No. 31273.

Supreme Court of Washington, en Banc.

June 29, 1950

George W. Young, Spokane, Allen, Hilen Froude & DeGarmo, Seattle, Edge, Davenport & Edge, Spokane for appellant.

Thomas Mallott, Spokane, Jerome Williams, Spokane, for respondent.

SCHWELLENBACH Justice.

This is an appeal from a judgment obtained against the defendant corporation for losses sustained in gambling games.

The plaintiff commenced action against Benevolent and Protective Order of Keglers, a corporation, (hereinafter called Keglers) and Orien W. Gross and Theresa Gross, husband and wife. At the close of the plaintiff's case a motion was granted to dismiss Gross and wife from the case, and we shall not further concern ourselves with them.

As to defendant Keglers, the amended complaint alleged the adjudication of MacGillivray as a bankrupt in the United States District Court for the Eastern District of Washington, Northern Division. ^[1] This was admitted. It was further alleged that plaintiff was elected and qualified as trustee of the bankrupt's estate, and as such had succeeded to the causes of action alleged; that the action was brought pursuant to the authority of the bankruptcy court. This was denied. It was further alleged that the defendant was a corporation organized under the laws of Washington and had its principal place of business in Spokane. This was admitted.

It was further alleged that each of the games was opened, conducted, played carried on and owned by the Keglers, as the proprietor for whose benefit the games were played; that they were games of chance prohibited under § 1, page 97, Laws of 1879. This was denied.

Then followed thirty-nine causes of action alleging that between February 20, 1945 and November 22, 1946, the bankrupt participated in games of dice at the Keglers in which he lost money. The allegations were briefly as follows: First cause of action, February 20, 1945, lost $1,800; Second, March 26, 1945, $1,157; Third, April 4, 1945, $5,900; Fourth, April 20, 1945, $1,100; Fifth, April 24, 1945, $1,000; Sixth, May 1, 1945, $1,000; Seventh, May 3, 1945, $3,300; Eighth, May 5, 1945, $800; Ninth, May 8, 1945, $400; Tenth, May 11, 1945, $1,500; Eleventh, May 22, 1945, $1,500; Twelfth, June 16, 1945, $1,595; Thirteenth, June 22, 1945, $500; Fourteenth, July 17, 1945, $2,000; Fifteenth, July 23, 1945, $1,343; Sixteenth, September 22, 1945, $4,500; Seventeenth, November 9, 1945, $1,385; Eighteenth, March 26, 1946, $600; Nineteenth, April 2, 1946, $100; Twentieth, April 15, 1946, $1,900; Twenty-first, April 23, 1946, $8,000; Twenty-second, May 17, 1946, $1,400; Twenty-third, July 15, 1946, $4,400; Twenty-fourth, July 23, 1946, $2,600; Twenty-fifth, August 3, 1946, $950; Twenty-sixth, August 10, 1946, $500; Twenty-seventh, August 19, 1946, $1,000; Twenty-eighth, September 5, 1946, $3,300; Twenty-ninth, September 11, 1946, $200; Thirtieth, September 15, 1946, $1,750; Thirty-first, September 27, 1946, $1,530; Thirty-second, October 4, 1946, $2,205; Thirty-third, October 10, 1946, $750; Thirty-fourth, October 21, 1946, $1,500; Thirty-fifth, October 29, 1946, $3,500; Thirty-sixth, November 7, 1946, $5,400; Thirty-seventh, November 15, 1946, $3,500; Thirty-eighth, November 19, 1946, $1,400; Thirty-ninth, November 22, 1946, $19,605. This was all denied.

As a first affirmative defense, it was alleged that any and all causes of action were not commenced within the time required by law, and were barred by the statute of limitations. As a second affirmative defense, it was alleged that all gambling losses, if any, of MacGillivray, occurred in games promoted by him. As a third affirmative defense, it was alleged that MacGillivray won more than he lost. These allegations were denied by plaintiff.

The selection of the jury commenced February 5, 1949. The statement of verdict March 2, 1949. The statement of facts consists of 880 pages of testimony. One hundred sixty-five exhibits were offered, consisting mostly of checks, deposit books, deposit slips, etc.

MacGillivray testified that his losses were incurred in playing 4-5-6 games in an upstairs room at the Keglers Club, on an egg shaped table with sides on it to prevent the dice from rolling off; that the 'bank' would range from $200 to $4,000; that the games were presided over by a stickman, who would take a cut out of the bank every time there was a winning or losing point, or a new bank; that the 'rake-off' would be from $40 to $60 an hour; that the games would usually start about 10 o'clock in the evening and would sometimes continue into the next afternoon.

As to his losses, he refreshed his memory by referring to checks which he issued to various players or to 'cash.' By referring to deposit books, he testified as to whether he won or lost on each particular night. One night he won $920 and that cause of action was withdrawn from the jury. In all, fourteen causes of action were withdrawn, either because he could not remember the games, or because the money was used in gambling elsewhere. He owned an interest in the Bonair Club at Coeur d'Alene, Idaho, where he played frequently. He also played the reces.

Several stickmen, who were professionals, testified that they were called to the club by Mr. Gross, the manager; that they were paid $10 or $15 for the night's work; that, in addition, they sometimes received tips from the players, who told them to put the money in their pockets; that the 'rakeoff' or 'cut' which was voluntary by the players, and not in any particular amount, was put in a box which was Before them; that they got their pay out of the box and that when they left they turned in the box, with what money remained in it, to Mr. Gross or some other employee of the club.

Several members, officers and employees of the club testified for the defendant. Their testimony was that these games were organized by the players for their own amusement, and that the club had no part in them; that the money in the box was donated by the players; that part of the money was used to buy drinks and sandwiches for the players; that any money remaining was divided among the stickmen at the close of each game and that none of it went to the club; that MacGillivray usually promoted the games; that he was a big time professional gambler; that he was in the habit of cashing checks at the club and then taking the proceeds and playing elsewhere; that he was known as a 'pack rat' because he would obtain money from players by issuing checks to them and then scoop up his winnings and leave without making the checks good; that he usually won. One of the players testified that he was in New York the night MacGillivray claimed to have lost $1,500 to him.

The testimony was in conflict. In returning a verdict for the respondent on twenty-five of the causes of action pleaded, the jury found that MacGillivray lost a total of $53,095, and that the defendant was the proprietor of the games, which were played for its benefit. We cannot say, from an examination of the record, that the evidence preponderates against such findings.

The main points stressed by appellant are that the right of action for the losses claimed by the bankrupt is an action for the recovery of a penalty to which the trustee in bankruptcy could not succeed; error in giving certain instructions; error in refusing to give certain requested instructions; error in refusing to grant a mistrial because of claimed misconduct of counsel; Violation by the court of Art. IV, § 16 of the Washington constitution in commenting on the evidence; and error of the court in refusing to take from the consideration of the jury certain causes of action claimed not to have been commenced within the time limited by law.

Rem.Rev.Stat. § 5851, provides: 'All persons losing money or anything of value at or on any of said games shall have a cause of action to recover from the dealer or player winning the same, or proprietor for whose benefit such game was played or dealt, or such money or things of value won, the amount of the money or the value of the thing so lost.'

11 U.S.C.A. § 110, sub. a, (5) and (6) are the two sections of the Bankruptcy Act setting forth what property of the bankrupt passes to the trustee. The applicable portions thereof specify: '(5) property, including rights of action, which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him, or otherwise seized, impounded, or sequestered: * * * (6) rights of action arising upon contracts, or usury, or the unlawful taking or detention of or injury to his property; * * *.'

Could these claims have been assigned by the bankrupt prior to his adjudication as such? The right of assignability of the bankrupt's claim must be determined by Washington law. Charness v. Katz, D. C., 48 F.Supp. 374; Dooley v. Pease, 180 U.S. 126, 21 S.Ct. 329, 45 L.Ed. 457. In general, a cause of action for the recovery of a penalty is not assignable unless specifically made so by statute. 23 Am.Jur. 635, Forfeitures and Penalties, § 43. So our first problem is to determine whether this right, granted by Rem.Rev.Stat. § 5851, is remedial or penal in nature. Is it the purpose of the statute to compensate the loser for his losses, or to punish the winner or proprietor for whose benefit the games were played?

At common law there could bo no recovery of money lost at gambling, not because the winner acquired title to the money won, but on the theory that both parties had engaged in a wrongful act, and since they were in pari delicto, the courts denied either of them any remedy, even though in equity and good conscience one...