Kayden Industries, Inc. v. Murphy
| Decision Date | 09 May 1967 |
| Citation | 34 Wis.2d 718,150 N.W.2d 447 |
| Parties | KAYDEN INDUSTRIES, INC., Respondent, v. Roger MURPHY, Appellant. |
| Court | Wisconsin Supreme Court |
Bronson C. La Follette, Atty. Gen., William A. Platz and Donald P. Johns, Asst. Attys. Gen., Madison, for appellant.
Grootemaat, Cook & Franke, Harry F. Franke, Milwaukee, Francis R. Croak and Robert A. Nuernberg, Milwaukee, of counsel, for respondent.
The principal issues are:
(1) Is the 1965 amendment to sec. 24, art. IV of the Wisconsin constitution self-executing?
(2) Did the subsequent legislative acts effectively reestablish the prohibition against the type of game sold by the plaintiff?
The problem confronting the court is the construction of a constitutional amendment and the related statutory enactments.
The original constitutional provision (sec. 24, art. IV) which stood unamended until 1965, provided as follows:
In April of 1965, the voters of Wisconsin adopted an amendment designed to permit specified types of lotteries. Sec. 24, art. IV, Const., as amended, now provides:
The legislature, the courts, and the attorney general of Wisconsin have traditionally taken a restrictive view of games, schemes, and plans involving a prize, chance, and consideration, condemning them as lotteries prohibited by the constitution.
Prior to the 1965 amendment the definition of a lottery under sec. 24, art. IV, and the concrete application of that definition, was left to the courts. The leading modern case, State ex rel. Cowie v. La Crosse Theaters Co. (1939), 232 Wis. 153, 286 N.W. 707, involved a 'bank night' scheme whereby registrants and theater patrons were given a chance to win cash prizes on a drawing regardless of whether they had purchased a theater ticket. The court first reiterated the long-standing common law rule that a lottery involves three elements[34 Wis.2d 725] --a prize, chance, and a consideration. Since the theater scheme admittedly involved the first two elements, the only question was whether it involved consideration. This court held that furnishing of free chances, even though without the requirement of a paid admittance fee, was consideration and that the scheme was therefore a lottery forbidden under sec. 24 of art. IV. Cowie, supra, at p. 159, 286 N.W. 707.
State ex rel. Regez v. Blumer (1940), 236 Wis. 129, 294 N.W. 491, involved a plan whereby a drugstore gave away money to persons whose names were drawn from a card list of registrants, although no fee was charged and no purchase was necessary for registration. We held the plan was a lottery because the elements of prize and chance were manifestly present, and the element of consideration was supplied by the requirement that registrants were required to visit the store to register, even though no purchase was required. The general definition of consideration for use in lottery cases was stated to be:
'Consideration consists in a disadvantage to the one party or an advantage to the other.' Regez, supra, at p. 132, 294 N.W. at p. 492.
One short-lived exception was old sec. 348.01(2), Stats., passed by the 1951 legislature, which provided that listening to or watching television or radio shows were not consideration.
In the early 1950's the legislature began its work on the revision of Wisconsin's criminal laws which eventually bore fruit with the adoption of the Criminal Code in 1955. The 1953 draft of the code contained proposed sec. 345.01(2) relating to lotteries, which provided:
'Lottery. (a) A lottery is an enterprise wherein for a consideration the participants are given an opportunity to win a prize, the award of which is determined by chance.
Wisconsin Legislative Council Reports, 1953, Vol. V, p. 151.
The Legislative Council attached this comment to the proposed subsection:
'Subsection (2) defines a lottery which, like a bet, is a wagering contract. It is defined and treated separately because it is a common type of gambling and because the constitution specifically prohibits the legislature from authorizing a lottery. Wis.Const. Art. IV, sec. 24. A lottery differs from an ordinary wager in that it always involves mass participation. Subsection (2) (b) defines the term Wisconsin Legislative Council Reports, 1953, Vol. V, pp. 152--153.
Before the final passage of the Criminal Code this court decided State v. Laven (1955), 270 Wis. 524, 71 N.W.2d 287, wherein we held that sub. (2) of sec. 348.01, 1953 Stats., passed in 1951, and relating to watching or listening to radio and television, was void as violating sec. 24, art. IV of the Wisconsin constitution. As a consequence of Laven, the final sentence of the proposed lottery section relating to radio and television was omitted from the Criminal Code as passed in 1955. In 1963, the legislature did attempt to modify Laven as it might affect some free contests. 2
Thus prior to the adoption of the 1965 amendment, the Wisconsin statutes contained the following provision with respect to lotteries:
'945.01(2) Lottery. (a) A lottery is an enterprise wherein for a consideration the participants are given an opportunity to win a prize, the award of which is determined by chance, even though accompanied by some skill.
'(b) 'Consideration' in this subsection means anything which is a commercial or financial advantage to the promoter or a disadvantage to any participant, but does not include any advantage to the promoter or disadvantage to any participant caused when any participant learns from newspapers, magazines and other periodicals, radio or television where to send his name and address to the promoter.'
It is apparent that this statute was a mere codification of the interpretation given to sec. 24, art. IV of the constitution by the court. The legislative council report indicates that the legislature consciously restated the substance of Cowie and Regez, supra, in its original draft. The definition of consideration is taken directly from the language of Regez. In addition, the elimination of and subsequent change in the sentence regarding radio and television is a restatement of the interpretation given the constitution by Laven, supra.
The foregoing is the historical context in which the people passed the following amendment to sec. 24 of art. IV of the constitution in April, 1965:
'Except as the legislature may provide otherwise, to listen to or watch a television or radio program, to fill out a coupon or entry blank, whether or not proof of purchase is required, or to visit a mercantile establishment or other place without being required to make a purchase or pay an admittance fee does not constitute consideration as an element of a lottery.'
After adoption of the amendment, the 1965 legislature enacted ch. 122, 1965 Laws, which provided:
'Published
June 29, 1965.
'CHARTER 122
'AN ACT to renumber 945.01(2)(b); and to create 945.01(2)(b) 2 of the statutes, relating to implementing the recent constitutional change by redefining consideration as an element of a lottery.
'The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
'Section 1. 945.01(2)(b) of the statutes is renumbered 945.01(2)(b) 1.
'Section 2. 945.01(2)(b) 2 of the statutes is created to read:
'945.01(2)(b) 2. To listen to or watch a television or radio program, to fill out a coupon or entry blank, whether or not proof of purchase is required, or to visit a merchantile establishment or other place without being required to make a purchase or pay an admittance fee does not constitute consideration under this subsection.
'Approved June 24, 1965.'
Later, in the same session, the legislature repealed ch. 122 and created ch. 654, which provides:
'Published
'August 11, 1966
'AN ACT to repeal and recreate 945.01(2)(b) 2 of the statutes, as created by chapter 122, laws of 1965, relating to consideration as an element of lottery.
'The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
'945.01(2)(b) 2 of the statutes, as created by chapter 122, laws of 1965, is repealed and recreated to read:
'945.01(2)(b) 2. In any game, drawing, contest, sweepstakes or other promotion, none of the following shall constitute consideration under this subsection:
'a. To listen to or watch a television or radio program.
'b. To fill out a coupon or entry blank which is received through the mail or published in a newspaper or magazine, if facsimilies thereof are...
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