Kaszuba v. Zientara
| Decision Date | 28 July 1986 |
| Docket Number | No. 3-885A219,3-885A219 |
| Citation | 495 N.E.2d 761 |
| Parties | Chester KASZUBA and Bernice Kaszuba, Defendants-Appellants, v. Richard ZIENTARA, Plaintiff-Appellee. |
| Court | Indiana Appellate Court |
Max Cohen, Cohen & Thiros, Merrillville, for defendants-appellants.
Joseph M. Skozen and Richard S. Tebik, Skozen & Tebik, Munster, for plaintiff-appellee.
This case originates from a dispute over entitlement to the proceeds of a winning ticket in the Illinois lottery.
The parties are residents of Indiana. Plaintiff/appellee Zientara requested that his friend and co-worker, Chester Kaszuba, purchase an Illinois lottery ticket for Zientara. Bernice Kaszuba was employed in an Illinois tavern where lottery tickets were sold and Kaszuba had previously obtained tickets for Zientara. Kaszuba agreed and Zientara gave him an envelope containing the purchase price and the number selections for the ticket. Zientara's was a winning number combination and is worth $1,696,800.00. However, Kaszuba refused to give Zientara the ticket and made an effort to collect the winnings. Zientara filed suit claiming the proceeds on the bases of fraud, bailment, breach of contract, conversion and agency. Defendants/appellants Kaszubas filed a motion to dismiss or for summary judgment on the basis the parties had entered into an illegal, and therefore unenforceable, transaction. The motion was denied, the cause went to trial to a jury and a verdict was returned in favor of Zientara. The Kaszubas allege the trial court erred in denying their motion to dismiss or for summary judgment since the agreement between the parties was in contravention of the public policy and laws of the State and is thereby rendered unenforceable in the courts of this State.
The established rule in Indiana denies citizens the use of the Indiana courts to enforce contracts which are illegal because violative of the statutory law or immoral because violative of the public policy of the State. Sumner v. Union Trust Co. of Indianapolis (1946), 116 Ind.App. 684, 66 N.E.2d 621. By refusing to aid either party, the court leaves the parties where it finds them and the status quo is maintained. Van Orman v. Edwards (1970), 148 Ind.App. 66, 263 N.E.2d 746. The fact that this refusal to assist either party may result in what appears to be an inequitable conclusion whereby one party receives a windfall, is a fact on which the judiciary cannot focus. Van Orman v. Edwards, supra. An illegal or immoral contract is void, Sumner v. Union Trust Co., supra, and "[a] void contract cannot be enforced, no matter what hardship it may work, or how strong the equities may appear." Pipecreek School Tp. v. Hawkins (1912), 49 Ind.App. 595, 599-600, 97 N.E. 936. The law on the effect of illegal and/or immoral contracts being so well established, the inquiry in this case must focus on whether or not such a contract was involved.
Contrary to the reasoning expressed in the dissenting opinion, the contract with which this litigation is concerned is that between Zientara and Kaszuba whereby Kaszuba took Zientara's money and number selections and agreed to furnish Zientara with an Illinois lottery ticket reflecting those numbers. This agreement was made in Indiana, by Indiana residents. The ticket was to be supplied to Zientara in Indiana. Indiana law therefore applies to this contract.
We are not concerned at this time with the contract created by the drawing of the winning numbers. That is the contract to which Judge Staton addresses his dissenting opinion. That contract is with the Illinois Lottery Commission, is not established until the drawing of the winning numbers and compels the Commission to pay to the owner of a ticket displaying those numbers a sum of money. That contract has not been placed in issue. The Commission has agreed to pay the owner of the ticket once the owner is determined. Such ownership being dependent on the contract between these two Indiana residents entered into in Indiana, the issue before this Court is the enforceability of that agreement pursuant to Indiana law.
Appellants rest their argument of error on the Indiana Constitution, Art. 15, Sec. 8 which provides:
This provision is said to evince the long-standing public policy against gambling in general and lotteries in particular, and is broad enough to cover a prohibition against all aspects of gambling.
Appellee in reply asserts that the constitutional provision is more narrow and prohibits only State authorization of a lottery or sale of tickets for same. He urges that this proviso in conjunction with the professional gambling statute 1 evinces a public policy and legislative intent prohibiting only professional gambling, not social pastimes which were involved herein. Therefore the transaction between the parties did not abridge public policy and/or statutory laws and was not unenforceable as illegal or immoral.
The exact scope of the constitutional provision need not be determined to decide the issue presented herein. A public policy against organized gambling is without doubt evidenced by the clause. This policy is examined and explained in detail in State et al. v. Nixon (1979), 270 Ind. 192, 384 N.E.2d 152 and need not be repeated. For purposes of this case, it is sufficient that the drafters of our Constitution found lotteries to be a means of preying on the poor and plundering the ignorant, State v. Nixon, supra, and this belief has led to a constitutional prohibition of lotteries and subsequent criminal statutes prohibiting gambling.
IND.CODE Sec. 35-45-5-1 defines gambling:
IND.CODE Sec. 35-45-5-2 criminalizes gambling:
These code sections together prohibit the act of putting money or property at risk to gain by lot or chance. Under this statutory scheme, the purchase of a lottery ticket is an unlawful act based on the commonly accepted definition of the term lottery:
Tinder, Pros. Atty., et al. v. Music Op. Inc. (1957), 237 Ind. 33, 40, 142 N.E.2d 610.
Therefore, the agreement involved in this case was to accomplish an act, i.e. purchase of a lottery ticket, which was illegal and against the public policy of this State.
The determination that the act of purchasing a lottery ticket is illegal and within the scope of public policy against gambling is supported by the scant Indiana case law on the subject. In Rothrock v. Perkinson (1877), 61 Ind. 39, the parties were southern Indiana residents. Rothrock and nine others purchased a ticket in a state authorized Kentucky lottery with each participant to receive a one-tenth interest. After the scheduled date of the drawing but before any collection of proceeds, Perkinson purchased from Rothrock a one-tenth interest in any proceeds to which Rothrock might become entitled. Rothrock refused to give Perkinson his share and Perkinson sued for same. The trial court found in favor of Perkinson and the Indiana Supreme Court affirmed. The Court stated:
Rothrock v. Perkinson, supra, 61 Ind. at 45.
The Court pointed out that the elements of chance had been eliminated and the funds had become a prize by the time Perkinson entered into the agreement. Further:
"The possession, control or ownership of the ticket seems not to have entered into the negotiation at all, nor does it appear, even inferentially, that the appellee had any connection with the purchase or sale of the tickets in the first instance, or with any of the chances which entered into the drawing upon it...." Rothrock v. Perkinson, supra, 61 Ind. at 46.
The Court distinguished the original, illegal participation in the lottery from the Perkinson contract which was said to be a new contract with new consideration even though it concerned the illegally gained proceeds, and the Court affirmed Perkinson's right to enforce the agreement. In contrast, the present case is the case distinguished by the Rothrock Court: the original contract to do an illegal act is at issue and the possession, control and ownership of the ticket is the subject of the suit.
In Swain v. Bussell and Others (1858), 10 Ind. 438, the Court refused to aid the recipient of shares in a real estate scheme in obtaining the benefit of the shares. Swain argued that the receipt of the shares for property conveyed to Bussell was not an illegal...
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