Houston v. Younghans

• Decision Date: 03 July 1978
• Docket Number: No. C-1387,C-1387
• Parties: Ervin HOUSTON, Petitioner, v. Michael A. YOUNGHANS, Respondent.
• Court: Colorado Supreme Court

Page 801

580 P.2d 801

196 Colo. 53

Ervin HOUSTON, Petitioner, v. Michael A. YOUNGHANS, Respondent.

No. C-1387.

Supreme Court of Colorado,En Banc.

July 3, 1978.

Jerry L. Stevens, Denver, for petitioner.

Wollrab & Younghans, P. C., Sandra Younghans, Boulder, for respondent.

KELLEY, Justice.

We granted certiorari to consider the question of whether a debt arising from social gambling may be enforced. We answer the question in the affirmative and therefore affirm the Superior Court.

The following facts are undisputed. Respondent, Michael A. Younghans, was playing poker with friends at the home of the petitioner, Ervin Houston, in July 1975. All of the players "purchased" poker chips from the petitioner, which were to be redeemed by petitioner at the end of the game. When the game was over, petitioner had lost and, not having paid for his chips, he did not have sufficient funds to redeem all the poker chips which were "cashed in" by the other players. In order to redeem the chips of the other winners, petitioner borrowed from respondent. In return, petitioner gave respondent two checks in the amounts of $140 and $100. Upon presentment of the checks by respondent, the bank dishonored them due to insufficient funds. Thereupon, petitioner gave respondent $75 in cash and an undated check for $165. This check was also dishonored.

Respondent then brought suit in county court to recover the $165. The petitioner testified that he had issued the check but decided not to honor it because someone had cheated during the poker game. At the conclusion of respondent's case, petitioner moved for a directed verdict on the grounds that a claim to recover upon an instrument given in consideration of gambling activities is against public policy and is therefore unenforceable. The motion was denied. The trial court entered judgment for respondent, ruling that the new gambling code, section 18-10-101, et seq., C.R.S.1973, changed the common law and specifically exempted "social gambling" from the ambit of forbidden conduct. The Superior Court affirmed, and we granted certiorari.

In enacting the new gambling code, the legislature expressly stated in section 18-10-101:

"(1) It is declared to be the policy of the general assembly, recognizing the close relationship between professional gambling and other organized crime, to restrain all persons from seeking profit from gambling activities in this state; to restrain all persons from patronizing such activities when conducted for the profit of any person; to safeguard the public against the evils induced by common gamblers and common gambling houses; and at the same time to preserve the freedom of the press and to avoid restricting participation by individuals in sport and social pastimes which are not for profit, do not affect the public, and do not breach the peace.

"(2) All the provisions of this article shall be liberally construed to achieve these ends and administered and enforced with a view to carrying out the declaration of policy stated in subsection (1) of this section." (Emphasis added.)

In promulgating this new policy, the general assembly redefined "gambling" to exclude the activity which is the subject of this litigation. The definitional section specifically excludes from gambling:

"Any game, wager, or transaction which is incidental to a bona fide social relationship, is participated in by natural persons only, and in which no person is participating, directly or indirectly, in professional gambling."

Section 18-10-102(2)(d). Professional gambling, the proscription of which is the real focus of the code, is defined in section 18-10-102(8) as:

"(a) Aiding or inducing another to engage in gambling, with the intent to derive a profit therefrom; or

"(b) Participating in gambling and having, other than by virtue of skill or luck, a lesser chance of losing or a greater chance of winning than one or more of the other participants."

Nevertheless, the petitioner contends that the enactment of the gambling code has not changed the common law public policy of this state as to the nonenforcement of gambling debts. He points to C.R.S.1963, 40-10-13, ¹ cited by the court of appeals in Condado Aruba Caribbean Hotel v. Tickel, Colo.App., 561 P.2d 23 (1977). He also relies upon earlier Colorado cases, e. g., Eldred v. Malloy, 2 Colo. 320 (1874) and Maher v. Van Horn, 15 Colo.App. 14, 60 P. 949 (1900). Petitioner fails to recognize the distinctions...