State ex rel. Evans v. Brotherhood of Friends

• Decision Date: 02 September 1952
• Docket Number: No. 31939,31939
• Citation: 41 Wn.2d 133,247 P.2d 787
• Court: Washington Supreme Court
• Parties: STATE ex rel. EVANS, Pros. Atty. v. BROTHERHOOD OF FRIENDS.

Page 133

41 Wn.2d 133

247 P.2d 787

STATE ex rel. EVANS, Pros. Atty. v. BROTHERHOOD OF FRIENDS.

No. 31939.

Supreme Court of Washington, en Banc.

Sept. 2, 1952.

Rehearing Denied Oct. 29, 1952.

Donald Simpson, Vancouver, James M. Ballard, Chavelle & Chavelle, Cornelius C. Chavelle, Seattle, Edward J. Lehan, Spokane, Charles C. Ralls, Seattle, amici curiae.

Joseph L. Thomas, Joseph A. Albi, Ennis & Herman, Spokane, for appellant.

Hugh H. Evans, Prosecuting Atty., John J. Lally, Spokane, Frederick A. Clanton, Spokane, amici curiae, for respondent.

FINLEY, Justice.

This appeal involves a quo warranto proceeding. It was initiated by the prosecuting attorney for Spokane county in compliance with a writ of mandate, issued by the superior court of that county. Specifically, the purpose of the proceeding is to determine whether slot machines of the usual type, more particularly described hereinafter, may be operated by The Brotherhood of Friends, a corporation or 'club,' organized under the laws of the state of Washington as a non-profit, benevolent, educational, fraternal, athletic or social variety. The trial court entered a judgment of ouster and enjoined the operation of the slot machines by The Brotherhood of Friends in the club premises or quarters in the city of Spokane. The corporation, The Brotherhood of Friends, has appealed.

The significant questions involved are:

(1) Whether there was a legal basis or justification for the initiation and prosecution of the quo warranto proceeding by the county prosecuting attorney; or stated somewhat differently, can the county prosecuting attorney challenge the constitutionality of Laws of 1937, chapter 119, p. 468, Rem.Rev.Stat. (Sup.) §§ 2472-1 and 2472-2, RCW 9.47.040, 9.47.050, (hereinafter referred to as chapter 119), in this quo warranto proceeding? (Chapter 119 penalizes possession, use, or operation of slot machines as a felony, but attempts to exempt or immunize non-profit clubs as defined thereunder.)

(2) a. Does Art. II, § 24, of the Washington constitution, prohibit the legislature from authorizing lotteries of any or all kinds and varieties? or does the section constitute merely a prohibition of 'chartered' or 'ticket' lotteries as these were known and operated in 1889, when the state constitution was adopted?

b. Is a slot machine (of the type involved in the case at bar) a lottery?

(3) Was the appellant corporation entitled to rely upon chapter 119? and is the corporation immune from attack in this quo warranto proceeding because chapter 119 has not previously been declared unconstitutional? Stated somewhat differently, are the acts of the corporation in operating the slot machines violative of state criminal statutes requiring or justifying a judgment of ouster enjoining operation of the slot machines?

Succinctly stated, we are convinced that all of the above questions must be answered adversely to the claims of appellant, and that the judgment of the trial court must be affirmed.

This case was presented to the trial court on an agreed statement of facts. The Brotherhood of Friends was incorporated on January 11, 1935, as what is commonly regarded as a non-profit, benevolent, educational, fraternal, athletic, or social club. It apparently has approximately 8,600 members, ostensibly in good standing. The corporation owns and operates club quarters in Spokane, Washington. When this action was instituted, appellant was operating fifty-five slot machines. There were four 50-cent machines, twenty-six 25-cent machines, nine 10-cent machines, and sixteen 5-cent machines. Members and guests are entitled to use the club facilities.

The slot machines are mechanical devices of the usual variety, operated with coins of the United States of the denominations indicated above. A coin is inserted in a slot. The player pulls and releases a lever. This actuates three wheels or drums in the machine, causing them to revolve rapidly for a matter of seconds. A variety of symbols are imprinted or painted upon the outside surfaces of the revolving wheels or drums. The internal mechanism stops the revolving drums, and the symbols on each of the wheels line up in parallel designs or patterns, several of which are visible under a glass viewplate on the front of the machine. When certain combinations are thus lined up, the machine may return nothing, or, automatically, it may award from three to eighteen coins to the player. Additional special awards are received by a player when the symbols line up in either a so-called 'jack pot' combination or a 'B.O.F.' (Brotherhood of Friends) award, or combination. These special awards are not paid automatically by the machine. They are paid by someone in charge of the machines at the time the particular combinations of symbols are lined up behind the glass viewplate. Such awards are paid out of the general funds of The Brotherhood of Friends. The general funds are made up of receipts from all sources of revenue of the club, including receipts from all slot machines operated by the club. The mechanism of the various machines is set, or the general scheme for their operation is so worked out, ostensibly covering both the automatic and the special awards, so that ninety-five per cent of the coins inserted by the players of all the machines, as an overall general proposition, are returned to the various players of the machines. This does not mean that every player receives back ninety-five per cent of all that he puts into a machine. The amounts received by some players are obviously greatly in excess of the amounts inserted by them into the machines. Quite as obviously, the amounts returned to other players are less than the amounts inserted into the machines by them. In other words, stated simply, some players win money; many other players lose money in playing the slot machines.

Appellant's gross operating income from its slot machines is taxed both by the state of Washington and the city of Spokane. Up to and including the 28th day of February 1951, appellant has paid the sum of approximately $849,627.72 in taxes to the state of Washington, and the sum of approximately $102,301.72 to the city of Spokane in taxes regarding the operation of the slot machines. Approximately the sum of $28,540.33 has been paid to the United States Government in license fees upon the slot machines. On the basis of these tax figures, in the amicus brief supporting the prosecuting attorney's position in this matter, it is estimated that more than twenty million dollars has been put through the machines by club members and others. There are more than two hundred so-called non-profit clubs or organizations operating slot machines in this state. (Parenthetically, we are inclined to observe that on the basis of the foregoing statistics the aggregate slot machine play in our state over the past several years must run into astronomical figures). Appellant has made rather large contributions to recognized charitable organizations, including the sum of approximately $105,000 contributed by it to the Spokane Memorial Stadium Fund. Recreational, dining and dancing facilities are maintained by appellant for the benefit and enjoyment of its members and guests. The club holds a class 'H' license from the Washington state liquor control board. Guest privileges are extended in accordance with the rules and regulations of that board.

Mention should be made of the facts relative to the initiation of the quo warranto proceedings by the prosecuting attorney of Spokane county. Three resident citizens, taxpayers of Spokane county, applied to the superior court of the county for a writ of mandate directing the prosecuting attorney to bring an action in quo warranto against The Brotherhood of Friends. In their application the petitioners alleged that they had demanded of the prosecuting attorney that he institute an action in quo warranto against The Brotherhood of Friends, contesting its right as a corporation to do business and to operate slot machines, but that the prosecutor had refused to proceed, as demanded, on the ground that chapter 119 permitted the operation of slot machines in clubs such as the one operated by The Brotherhood of Friends. It was further alleged by petitioners that the operation of slot machines by The Brotherhood of Friends constituted corporate acts amounting to misuser of its corporate franchise, subjecting the corporation to ouster and injunction against the further operation of the slot machines. The petitioners alleged that chapter 119 was unconstitutional, and conferred no immunity or privileges upon The Brotherhood of Friends to operate slot machines in its corporate club or in any other capacity. In the mandamus action (Cause No. 128,775, State ex rel. Noel C. LeRoque, John Finney, Jr., and Joe Wilkening, versus Hugh Evans, Spokane county prosecuting attorney), the prosecuting attorney filed a demurrer. It was overruled, and the prosecutor was ordered to institute quo warranto proceedings in accordance with the application and the relief sought by the petitioners. In compliance with the order of the superior court, the prosecuting attorney promptly instituted Cause No. 31939, the instant quo warranto proceedings, and therein, as indicated heretofore, the trial court entered a decree of ouster, enjoining and prohibiting The Brotherhood of Friends from operating the slot machines. The case has now reached this court on appeal.

Appellant contends that the prosecuting attorney had no authority to institute the quo warranto proceedings. More specifically, it is argued that the prosecutor's interest in the matter did not justify nor provide a proper basis for institution of the action; that the power and authority of his office were insufficient and did not permit him to attack the constitutionality of chapter 119; that The Brotherhood of Friends relied in good faith upon chapter 119 for permission and authority to operate the slot...