State ex rel. Draper v. Lynch

• Decision Date: 25 May 1943
• Docket Number: 30526.
• Citation: 137 P.2d 949,192 Okla. 497,1943 OK 215
• Parties: STATE ex rel. DRAPER, County Attorney, v. LYNCH.
• Court: Oklahoma Supreme Court

137 P.2d 949

192 Okla. 497, 1943 OK 215

STATE ex rel. DRAPER, County Attorney, v. LYNCH.

No. 30526.

Supreme Court of Oklahoma

May 25, 1943

Syllabus by the Court.

1. A lottery is any scheme for the disposal or distribution of money or property by chance, among persons who have paid promised or agreed to pay any valuable consideration for the chance of obtaining such property. Following State v Wokan Amusement Co., 162 Okl. 160, 19 P.2d 967.

2. Operation of any plan or scheme that is a lottery within the definition of the statute, 21 O.S.1941 § 1051, is a nuisance and operation of same may be enjoined.

3. A scheme whereby applicants were registered free of charge and issued a "Box Office Insurance Policy," and on designated nights one such policy would be selected by chance and redeemed, without such person having to purchase a ticket or be present in the theater at the time of his selection the party chosen having the right to appear in a reasonable time to claim such award, is a lottery within the prohibition of our statute, and the evidence of applicants show that they would not have attended and paid admission, except for the privilege of taking part in the drawing.

Appeal from District Court, Johnson County; J. I. Goins, Judge.

Action by the State of Oklahoma, on the relation of Charles E Draper, County Attorney of Johnson County, to restrain E. D. Lynch from conducting a lottery known as "Policy Night". From a judgment for defendant, plaintiff appeals.

Reversed and remanded with directions.

ARNOLD, J., GIBSON, V. C.J., and OSBORN and DAVISON, JJ., dissenting.

Charles E. Draper, Co. Atty., of Tishomingo, and Fred Hansen, Asst. Atty. Gen., for plaintiff in error.

Cornelius Hardy, of Tishomingo, for defendant in error.

CORN Chief Justice.

This action was brought by the state, on relation of the County Attorney of Johnson County, against the defendant as the operator and proprietor of two theatres in Tishomingo, Oklahoma, to restrain and perpetually enjoin defendant from conducting what is known as "Policy Night" or "Box Office Insurance," on the ground that it is a lottery and within the prohibition of our statute, the same being 21 O.S.1941 § 1051.

The material paragraphs of the petition alleged, in substance:

3. To increase the paid attendance and revenues of the two theatres defendant was operating "Policy Night" by registering anyone who applied, on form applications, for "Box Office Insurance," the applications being placed in sealed envelopes in a numerical file.

4. Without any charge for registration each applicant was issued a "Box Office Insurance" policy, of the face value of $20.

5. On designated nights judges were selected from the audience and the audience supplied them with numerals, which formed the number of the application bearing the name of the "policy" to be redeemed. This selection was announced inside and outside the theatres, and the person whose name was announced could appear within a reasonable time, surrender his policy and receive $20. If not claimed this amount was added to the next policy as "accrued value."

6. As a result of the operation of this scheme, and in order to more readily redeem their policies, persons attended the theatres and paid admission who otherwise would not have done so, thereby increasing attendance and revenues as intended by defendant.

7. By purchasing admission tickets such persons not only paid consideration for their own chance of winning, but also paid consideration for those accorded a chance to win without being present inside the theatres.

8. That consideration was paid by each person accorded a chance to win without purchasing a ticket, by reason of the legal detriment sustained in being required to register and appear within a required time after such person's name was called, in order to "redeem" his policy.

Thereafter plaintiff alleged this scheme was a lottery within the prohibition of 21 O.S.1941 § 1051; that same was unlawful and a public nuisance within the prohibition of the succeeding sections, and asked a perpetual injunction against the scheme.

Defendant's answer admitted the allegations of paragraphs 1, 2, 3, and 4, of the petition, but denied the allegations of paragraphs 6, 7, 8, 9, and 10. The substance of paragraph 5 was admitted, except as to the method of selection and the time allowed to appear and claim the prize.

Further answering, and as an affirmative defense, it was alleged that: No consideration was paid for the policies but that they were issued without charge; no part of the admission price constituted a consideration for the policies; no part of such admission price constituted valuable consideration for policies held by persons not purchasing tickets; there was no agreement that legal detriment should exist in the requirement that a policy holder should appear and redeem his policy within the time given, so that this would constitute consideration on the part of those who held policies but did not purchase tickets; that the scheme did not constitute a lottery within the meaning and prohibition of the statute.

The allegations of paragraph three of the amended petition were that "Policy Night" as conducted by defendant was intended, and did, result in increased attendance and revenues for defendant. This could only mean that persons attended the theatres who otherwise would not have attended, in order that they might be able to redeem their policies in the event their name was called.

Paragraph 6 expressly alleged that many applicants paid admission who otherwise would not have done so, thereby increasing attendance and revenues. These allegations of fact were borne out by the testimony of witnesses, two of whom testified, in effect, that they would not have attended except for the privilege of taking part in the drawing.

After hearing such testimony the trial judge stated: "It seems to me you could agree on the facts here. The witnesses are all testifying to the same thing. It is natural that the attendance is larger when money is given away, it is purely a legal question."

At the close of the evidence the court stated he inclined to a liberal construction of the statute; that he could not see where any consideration was paid for the chance of receiving the prize, and thereupon overruled plaintiff's motion for judgment and entered judgment for defendant.

The defendant does not dispute that two of the three elements of a lottery are present in this scheme, viz., "Prize" and "Chance." But, defendant contends that no element of "consideration" is present, since under the scheme anyone could register and win the prize without having to purchase an admission ticket.

Lotteries have been known, in one form or another, from Biblical days to the present time. Innumerable definitions have been given of them, but in all of these it is to be noted that there is little real difference, other than in the mode of expression. Webster's International Dictionary, 2nd Ed., defines a lottery as being: "A scheme for the distribution of prizes by lot or chance, especially a scheme by which one or more prizes are distributed by chance among persons who have paid or promised a consideration for a chance to win them. ***." This definition was approved in Horner v. United States, 147 U.S. 449, 13 S.Ct. 409, 27 L.Ed. 237. See also 34 Am.Jur. 646.

The English definition of a lottery, based upon judicial decisions, states that a lottery is any scheme, device or plan for distributing prizes by lot or chance. While the elements of a lottery are not enumerated, the English concept of a lottery includes "consideration" and follows the same formula that is applied by the American courts, declaring that a lottery is any gambling scheme which contains elements of (1) prize, (2) chance, (3) consideration. In the book, Flexible Participation Lotteries, Williams (1938), Sections 192-195, lotteries are shown to be divided generally into three distinct classes, or types. These are: (1) Closed Participation--this type being any lottery in which the attendant restrictions of purchase of goods, tickets, etc., are a condition precedent to participation. These are uniformly declared to be lotteries. (2) Open Participation--in this class none of the participants are required to do anything in order to participate, and no offer of any kind is extended as an inducement for participation. (3) Flexible Participation--this type professes to be free, but is closely related to the closed participation type. The essential difference lies in the fact that this scheme is relaxed sufficiently to include some who are, theoretically, non-paying participants. Although represented as being free, there are, ordinarily, restrictive conditions which serve to make this scheme much more favorable to paying participants than to nonpaying, although in theory their chances are co-equal. There is a closed participation within the flexible scheme, and a better or deluxe chance at the prize can be had only by payment of money for admission, or the price of participation.

This type of lottery first appeared in this country about 1889, and at that early date provided the basis for extensive litigation in the famous case of Yellow-Stone Kit v. State, 88 Ala. 196, 7 So. 338, 7 L.R.A. 599, 16 Am.St.Rep. 38. Since that time there have been a multitude of schemes put into operation under different names, all of which have been based upon virtually the same plan of operation, with variations only in the name and details of operation.

From the foregoing statement regarding the plan of operation of "Box Office Insurance" it is plain thatthis "Policy Night" is merely the "Gay Nineties" harridan of Yellow-Stone Kit, attired in new raiment of purported legality and...