Miller v. Radikopf

• Citation: 394 Mich. 83,228 N.W.2d 386
• Decision Date: 05 May 1975
• Docket Number: No. 3,3
• Parties: Lewis F. MILLER, Plaintiff-Appellant, v. Ronald L. RADIKOPF, Defendant-Appellee.
• Court: Supreme Court of Michigan

Page 386

228 N.W.2d 386

394 Mich. 83

Lewis F. MILLER, Plaintiff-Appellant, v. Ronald L. RADIKOPF, Defendant-Appellee.

No. 3.

Supreme Court of Michigan.

May 5, 1975.

McCroskey, Libner, Van Leuven, Kortering, Cochrane & Brock by Vernon D. Kortering, Muskegon, for plaintiff-appellant.

Scholten & Fant by R. Neal Stanton, James P. Piper, Grand Haven, for defendant-appellee.

Before the Entire Bench, except J. W. FITZGERALD, J.

LEVIN, Justice.

The question is whether a contract to share the proceeds of an Irish Sweepstakes ticket is judicially enforceable.

Miller claims that he and Radikopf jointly sold sweepstakes tickets. For each 20 sold, they received 2 tickets as compensation. Although each would put his name on one of the tickets, Miller claims they agreed that the tickets were jointly owned and all winnings would be divided equally.

A ticket bearing Radikopf's name won and yielded in excess of $487,000. After Radikopf refused to surrender any of the proceeds, Miller commenced this action.

The trial court, stating that the alleged agreement was 'spawned in violation of statute,' granted Radikopf a summary judgment.

The Court of Appeals, referring to § 372 of the Penal Code ¹ which prohibits the 'set(ting) up or promot(ion of a) lottery,' affirmed:

'It is true that receiving a lottery award voluntarily paid, is not prohibited. People v. Watson, 75 Mich. 582, 42 N.W. 1005 (1889). The general policy of this state against the holding of lotteries, M.C.L.A. 750.372 Et seq.; M.S.A. 28.604 Et seq., would be seriously compromised, however, if lottery winners were allowed to successfully bring suit for their prizes. Although the Court will not interfere where a lottery prize is voluntarily given the winner, public policy demands that courts not give support to the maintenance of lotteries in this state by allowing prize winners judicial process to collect their winnings.' Miller v. Radikopf, 51 Mich.App. 393, 395, 214 N.W.2d 897, 898 (1974).

This is not, however, an action to collect prize winnings from a lottery promoter.

The narrow question to be decided is whether a contractual claim to a share of money legally paid by the Irish Sweepstakes and legally possessed by the defendant may be enforced.

We would hold that the public policy of this state does not preclude Miller from attempting to enforce his claim and, accordingly, would reverse and remand for trial.

It is a crime to 'set up or promote' a lottery in this state. ² It is similarly a crime for a person 'sell,' 'offer for sale,' or 'have in his possession with intent to sell or offer for sale' lottery tickets. ³

However, it does not appear that Irish law prohibits the payment of money to holders of winning sweepstakes tickets. Nor does any statute or rule of law of this state prohibit the holder of a winning ticket from receiving and retaining proceeds paid voluntarily by a lottery without legal action. ⁴

There being no statute barring enforcement of the claim asserted in this case, the question whether its enforcement would be in accord with public policy is for judicial decision.

There were several contracts preceding the contract sued upon. Miller and Radikopf agreed to sell sweepstakes tickets and to accept as consideration 'free' tickets. Each ticket so received by them was a separate contract binding the lottery promoters to pay the holder of a winning ticket.

As neither Miller nor Radikopf is presently attempting to enforce the antecedent contracts, their possible illegality and attendant public policy ramifications need not concern us. Whatever their legality, those contractual obligations were fulfilled. A different question would be presented if Miller or Radikopf sought by legal action to collect either their compensation for selling tickets or lottery winnings directly from the promoters of the sweepstakes.

Miller in this action seeks to enforce the agreement he claims was made by him and Radikopt 'that should either of the tickets win any prize, the prize would be split equally between the two of them.' The consideration exchanged by each was a promise to the other to pay one-half of any proceeds won on tickets held in his name. Since receipt and retention of sweepstakes winnings voluntarily paid by the Irish promoter violates no Irish or Michigan statute or rule of law, a promise to share amounts so received constitutes legal consideration. A contract based on the exchange of legal consideration is a legal contract and its enforcement does not violate public policy.

Agreements to share possible proceeds from Irish Sweepstakes tickets are not an 'essential part' of the sale and distribution of those tickets. ⁵ The continued success of the Irish Sweepstakes in this state is in no way dependent on the enforceability of agreements to share winnings. Miller's and Radikopf's collateral agreement to divide their prospective winnings was not an essential part of their sale and distribution of those tickets. Nor was their agreement dependent on illegal conduct in the acquisition of the lottery tickets; they might have acquired the tickets in a manner free of any suggestion of illegality and then entered into an agreement to share proceeds.

However this case is decided, the courts of this state will continue to refuse to entertain actions seeking an accounting of proceeds obtained from illegal enterprises such as the illegal sale of narcotics and bank robberies. Additionally, enforcement or an accounting will be denied, without regard to whether the proceeds sought to be divided have been legally obtained, if the consideration offered is illegal.

Judicial nonenforcement of agreements deemed against public policy is considered a deterrent for those who might otherwise become involved in such transactions. While nonenforcement of Miller's claim might tend to discourage people from agreeing to split their legal winnings, nonenforcement would not tend to discourage people from buying or selling Irish Sweepstakes tickets. Both Miller and Radikopf have been compensated for selling the tickets and Radikopf has received the winnings as the holder of a particular ticket. No interest of the state would be furthered by nonenforcement of Miller's claim that he is the owner of one-half of those legal winnings.

It is consonant with the public policy of this state to encourage performance of legal contracts and to foster the just resolution of disputes. Nonenforcement of the agreement claimed by Miller would not tend to discourage the sale of Irish Sweepstakes tickets. It could reward, without any corresponding benefit, promissory default. We conclude that public policy would not be offended by enforcement of the claimed agreement. ⁶

We would reverse and remand for trial with costs to abide the event.

T. G. KAVANAGH, C.J., and WILLIAMS and SWAINSON, JJ., concur.

COLEMAN, Justice (to affirm).

Through no moral recoil or illusion of piety, but as a matter of law, I am compelled to dissent from my colleagues' decision. It is true that the Irish Sweepstakes lottery is well operated and legal at its source. It is also true that it is illegal to sell the tickets in Michigan.

The statement of the controlling question by the majority is not as I see it. To me, it is whether a contract to share remuneration for an illegal act is judicially enforceable.

In December 1970 plaintiff and defendant began on a regular basis to participate in the sale of Irish Sweepstakes tickets. For every 20 tickets they sold, they received two free tickets. Each would place his name upon one. Plaintiff alleges--and defendant denies--an oral agreement between them that the free tickets were to be jointly owned and that all prizes won by either would be divided equally. In June 1972 defendant, a super prize winner, won approximately $487,000. Plaintiff requests that a constructive trust be impressed upon half that amount. The lower court found the alleged contract illegal and granted defendant summary judgment.

I also would affirm.

Plaintiff submits that there is no law against the ownership of an Irish Sweepstakes ticket. He admits--and correctly so--that M.C.L.A. § 750.372; M.S.A. § 28.604 and M.C.L.A. § 750.373; M.S.A. § 28.605 forbid the setting up, promoting and selling of lottery tickets. However, he finds those statutes of little consequence. He bases his claim upon his one-half interest in the winning ticket. He requests this Court to impose a constructive trust upon half the winnings paid to the defendant.

Unlike the plaintiff, I do not find the statutes insignificant. They make unlawful the activity engaged in by these parties and enunciate state policy. When an agreement to share concerns the proceeds of illegal activity, the Court should not be available to enforce the agreement.

The Court in Dettloff v. Hammond, Standish & Co., 195 Mich. 117, 136, 161 N.W. 949, 955 (1917), said:

'A contract is void if it contemplates acts that are illegal or contrary to public policy. Drake v. Lauer, 182 N.Y. 533, 75 N.E. 1129 (93 App.Div. 86, 86 N.Y.S. 986). A contract which in its execution contravenes the policy and spirit of a statute is equally void as if made against its positive provisions. Hunt v. Knickerbacker, 5 Johns. (N.Y.) 327; Wetmore v. Brien, 3 Head (40 Tenn.) 723.'

The Court of Appeals was correct when it stated that beneficiaries of illegal schemes should not be heard to complain that they did not receive their contemplated rewards. Here the plaintiff illegally sold Irish Sweepstakes tickets. He cannot be heard to complain that the consideration he sought from his illegal activities failed.

Plaintiff relies strongly upon Manning v. Bishop of Marquette, 345 Mich. 130, 76 N.W.2d 75 (1956). Mrs. Manning, after a bingo game, had stepped into a hole in the church parking lot. She sued the bishop. In allowing her suit, the Court observed that 'even a rogue may have a cause of action', but the Court continued to say that it did not lend its aid 'to...