State ex rel. Beck v. Fox Kansas Theatre Co.

• Decision Date: 12 December 1936
• Docket Number: 33026.
• Parties: STATE ex rel. BECK, Atty. Gen., v. FOX KANSAS THEATRE CO.
• Court: Kansas Supreme Court

62 P.2d 929

144 Kan. 687

STATE ex rel. BECK, Atty. Gen., v. FOX KANSAS THEATRE CO.

No. 33026.

Supreme Court of Kansas

December 12, 1936

Syllabus by the Court.

"Bank night" theater plan held to include elements of prize chance, and consideration, sufficient to make it an illegal "policy" or "scheme of drawing in nature of a lottery," authorizing forfeiture of license of corporation conducting bank night (Rev.St.1923, 21--1501; Const. art. 15, § 3).

1. The "bank night" theater plan, as set out in the answer of the defendant in this quo warranto action, and copied in the opinion, is held to include the three necessary elements of prize, chance, and consideration, sufficient to make it a policy or scheme of drawing in the nature of a lottery as prohibited by article 15, § 3, of the Constitution of the State of Kansas , and as described and defined in R.S 21--1501.

2. Any gift enterprise, policy or scheme of drawing, in the nature of a lottery, is prohibited and made illegal in this state and the "bank night," as outlined by the defendant is at least in the nature of a lottery.

Original quo warranto proceeding by the State, on the relation of Clarence V. Beck, Attorney General, against the Fox Kansas Theatre Company, a corporation.

Judgment for plaintiff.

Clarence V. Beck, Atty. Gen., and Morton B. Cole, Asst. Atty. Gen. (F. E. Williams, of St. Loius, Mo., of counsel), for plaintiff.

Roland Boynton, of Topeka (Emmett Thurmon, of Denver, Colo., and S. P. Halpern, of Minneapolis, Minn., of counsel), for defendant.

HUTCHISON Justice.

This is an original proceeding in quo warranto brought in the name of the state of Kansas on relation of the Attorney General of the state, to oust and enjoin the Fox Kansas Theatre Company, as a corporation, from exercising or doing business within the state of Kansas because of the misuse and abuse of franchises, privileges, and authority conferred upon it by the laws of the state of Kansas, in that it conducted, operated, managed, and superintended at its theaters, and particularly at the one in the city of Fort Scott, on February 26, 1936, a lottery, gift enterprise, policy or scheme in the nature of a lottery, advertised and commonly known as "bank night."

The first six paragraphs of the amended petition describe the parties to the action, the plaintiff in its official capacity and the defendant in its corporate capacity, and then devotes the last four paragraphs to describing the method and way of conducting the "bank night" plan, concluding that such conduct was not within the corporate privileges of the defendant, that it was in violation of the laws of Kansas, and was a great harm and injury to the general public and the state of Kansas. The defendant in its answer admits the allegations of the first six paragraphs of the amended petition, but denies all the other allegations thereof, and then pleaded at length a defense of its operation of "bank night" and that it is not in any way or manner violating any of the laws of the state or exceeding its corporate privileges.

The plaintiff then moved the court for judgment for plaintiff on the pleadings for the reason that they show plaintiff to be entitled to the relief for which it prayed. Under such motion the exact language of the amended petition is not of particular importance, the nature of the plaintiff's claim having been heretofore briefly stated, but the language and grounds of the defense are especially important in meeting the allegations of the amended petition, so the entire answer except a few formal portions is here set out and is as follows:

"1. It denies each and every material allegation contained in plaintiff's amended petition except those which are hereinafter specifically admitted.

"3. Defendant specifically denies that it has been and now is doing acts in the state of Kansas which amount to a surrender and forfeiture of its rights and privileges as a corporation within the state of Kansas, and that it is now abusing its powers and exercising powers not conferred on it by the laws of the state of Kansas.

"4. Defendant specifically denies that it is now conducting through its agents, and that it did on or about the 26th day of February, 1936, advertise, in violation of the provisions of R.S. 21--1501, by sundry means of advertising, a lottery, gift enterprise, policy, or scheme in the nature of a lottery, at the Liberty Theater in the city of Fort Scott, or at any other theater, and specifically denies that it has at any time, or at any place, conducted, operated, managed, or superintended a lottery, gift enterprise, policy, or scheme in the nature of a lottery.

"5. The Affiliated Enterprises, Inc., of the state of Colorado, is the owner of a plan or system known as 'bank night,' which plan is a method of orderly procedure, process, or plan of advertising formulated, contrived, and devised to stimulate interest in the motion-picture industry, and for which application for United States patents has been filed, and the special registers, numbered pads, record books, instructions, contracts and literature pertaining thereto have been copyrighted and the name trade-marked; that said trade-mark has been registered in the office of the secretary of state of the state of Kansas.

"7. The defendant has entered into a contract with the Affiliated Enterprises, Inc., whereby said defendant has been licensed to operate the plan of 'bank night' in connection with its motion-picture theaters in the state of Kansas; that printed on such license contract, and as a part thereof, is contained the following notice:

"'Special Notice

""'Bank Night" is an advertising plan designated to stimulate public interest in the motion-picture industry and in your theater. It is not intended to provide a means whereby you can give a prize to your patrons. You, therefore, are instructed to follow the copyright instructions below implicitly, particularly those pertaining to the awarding of the bank account. The name of the winner must be announced outside your theater and if the winner is outside the theater, he must be permitted to enter and claim the bank account without any admission fee. All persons must be allowed to register without payment of an admission fee. You must give public notice of the above. Affiliated Enterprises, Inc., will cancel your license immediately upon receipt of information that you have departed from said instructions in any manner.'

"8. The defendant operates the Liberty Theater in the city of Fort Scott, Kan., as well as motion-picture theaters in other towns in the state of Kansas; that at said theaters said defendant has operated the plan of 'bank night' under its license with the Affiliated Enterprises, Inc., in full compliance with the copyrighted plan and the terms of the license contract, in the following manner:

"In a special copyrighted register, hereinafter known as register No. 1, persons over the age of sixteen register, free, by signing their respective names and setting forth their addresses, and opposite each name is a number, in regular order from one up. A special copyrighted register No. 2 is provided, in which defendant places, in alphabetical order, the names from the special register No. 1, and opposite each respective name the number corresponding to the number opposite the respective names in special register No. 1. The plan of registration and transferring of the names from special register No. 1 to register No. 2 eliminates any duplicate registration, and affords a convenient method of finding the name and address of the lucky person at the time of the drawing. The said special register No. 1 is placed about or near the entrance or exit of defendant's theater, or at some other place convenient or satisfactory to the defendant, and so the public may conveniently register without buying a ticket. Each person when registering places the prefix 'Mr.,' 'Mrs,' or 'Miss' before the name in order to designate whether the person is single, married, male or female. No person, during the particular period wherein the system is in use, at any place, is required or allowed to register more than once.

"A bank is chosen by the defendant, as a part of the plan, wherein a certain designated amount of money is deposited for each selected period by the defendant, for the use or benefit of designated persons hereinafter mentioned. The name of said bank is exhibited over the special register No. 1. It is distinctly provided that no additional sum or compensation shall be added to the regular admission to said place of amusement or entertainment by reason thereof, and that registration and the purchase of tickets shall be entirely separate and apart and have no connection with each other; that no person is required to buy a ticket before registering, and the mere fact of buying a ticket does not entitle the holder thereof to participate in the award unless he voluntarily registers in special register No. 1; that the purpose of the plan is for advertising only and in no event is anyone required to pay anything for registration, and the registration is open and free to all alike.

"At a certain time or times fixed by the defendant the numbers corresponding to those set opposite the names in the special register No. 1 are placed into a box or container, from which is chosen one number by some person other than one connected with the theater; and in the event the person whose name is written in special register No. 1 opposite the number so chosen or selected shall be present in that particular theater or place of amusement, in the lobby, on the outside, or wherever he may be, provided that he appears and identifies himself within a reasonable time after the drawing, such person is

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