LAW.coLAW.co

STATE v. L. H. POWELL AND OTHERS

Minnesota Supreme Court1927-02-11No. No. 25,779
170 Minn. 239

Summary

Holding. The association's prize-drawing scheme constituted an unlawful lottery, and the injunction prohibiting further lottery operations was properly granted. However, the order directing the sheriff to seize and destroy the unused tickets was reversed because proper seizure and judicial forfeiture procedures were not followed, and the tickets were not inherently unlawful articles incapable of lawful use.

The Marshall Business Men's Association, an unincorporated civic organization, conducted a prize-drawing scheme to promote local commerce. Merchants gave customers consecutively numbered tickets with each dollar of merchandise purchased, and at a designated time, duplicate tickets held by merchants were placed in a receptacle for a random drawing; winners received cash or other prizes. The state sought an injunction to stop the lottery and abate it as a nuisance, and the trial court granted the injunction and ordered the sheriff to seize and destroy unused lottery tickets held by the association.

The court affirmed that the association's scheme constituted an unlawful lottery under state law because it contained all three essential elements: a prize, a distribution of property determined by chance, and consideration paid by participants. The purchaser's dollar payment for merchandise provided the required consideration, and the chance to win a prize was the inducement to purchase. However, the court reversed the order requiring seizure and destruction of the unused tickets, reasoning that seizure and destruction require the tickets to be brought within judicial control through proper legal process, which had not occurred. The court also noted that the tickets were not inherently vicious instruments and could have legitimate residual value as raw materials.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a merchant prize-drawing scheme coupled with consumer purchases constitutes a lottery under state law
  • Whether consideration exists when customers receive both merchandise and a chance to win by paying for the merchandise
  • Whether courts may order destruction of lottery tickets without formal seizure and judicial condemnation

Procedural posture

The trial court granted an injunction against the defendants' lottery operation and ordered seizure and destruction of unused tickets; the defendants appealed from denial of their motion for a new trial.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Dibell, J.

Action to enjoin the defendants from maintaining a lottery and to abate it as a nuisance. There were findings for the plaintiff, an injunction was ordered, and the sheriff was directed to seize and destroy tickets prepared for use in the drawing of prizes. The defendants appeal from the order denying their motion for a new trial.

The Marshall Business Men’s Association is an unincorporated association, composed of business and professional men of Marshall, and the individuals named as defendants are its officers. Its purpose is to promote tbe interests of the city. Its activities are financed by dues and assessments paid by its members. It maintains a public rest room, a summer Chautauqua, a municipal band, and contributes to other enterprises of civic value. Its prize drawing plan, against which this action is directed, is briefly this:

The association furnishes the merchants duplicate tickets consecutively numbered. For each dollar’s worth of merchandise purchased the merchant gives the purchaser a ticket. At a stated time the duplicates retained by the merchants are put together in a receptacle, a chance drawing is made of a designated number, and the purchasers who have tickets bearing corresponding numbers receive cash or other prizes.

The statute defines a lottery as follows:

“A lottery is a scheme for the distribution of property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance, whether it shall be called a lottery, raffle, gift enterprise, or by any other name, and is hereby declared unlawful and a public nuisance.” G. S. 1923, § 10209.

It is essential to a lottery that there be a prize, a chance to get it, and a consideration given for the chance. The plan of the association comes within the definition of a lottery. There are prizes. There is a “distribution of property by chance.” There is a consideration. The purchaser pays a consideration when he buys his merchandise. When he pays his dollar he gets in return the merchandise and a chance to get a prize. The association is the agency or instrumentality through which prizes are offered and paid.

Our cases do not furnish one entirely similar in its facts, but the principle is definitely enough held. State v. Moren, 48 Minn. 555, 51 N. W. 618; State ex rel. Hathorn v. U. S. Exp. Co. 95 Minn. 442, 104 N. W. 556; State v. Wolford, 151 Minn. 59, 185 N. W. 1017. Oases from other jurisdictions are in accord in principle and in some the facts resemble those in the case at bar. State v. Danz, 140 Wash. 546, 250 Pac. 37; Standridge v. Williford-Burns-Rice Co. 148 Ga. 283, 96 S. E. 498; Davenport v. City of Ottawa, 54 Kan. 711, 39 Pac. 708, 45 Am. St. 303; State v. Kansas Mercantile Assn. 45 Kan. 351, 25 Pac. 984, 11 L. R. A. 430, 23 Am. St. 727; State v. Mumford, 73 Mo. 647, 39 Am. Rep. 532; Utz v. Wolf, 72 Ind. App. 572, 126 N. E. 327; Lohman v. State, 81 Ind. 15; Society Theater v. City of Seattle, 118 Wash. 258, 203 Pac. 21; Ballock v. State, 73 Md. 1, 20 Atl. 184, 8 L. R. A. 671, 25 Am. St. 559; U. S. v. Zeisler (C. C.) 30 F. 499; Horner v. U. S. 147 U. S. 449, 13 Sup. Ct. 409, 37 L. ed. 237.

The propriety of the direction to the sheriff to seize the unused tickets in the hands of the secretary of the association and destroy them is questioned.

By G-. S. 1923, § 10538 (3), provision is made for a search and seizure of gambling apparatus or implements, and by § 10540 provision is made for the destruction, under the direction of the court, of property seized. See 27 C. J. 1044-1046, §§ 258, 259; 38 C. J. 318, 319, §§ 77-79; 12 R. C. L. p. 733, § 34; Dec. Dig. §§ 58-61. If it be conceded that these provisions apply to lotteries, still a destruction of the tickets was not warranted. There was no seizure. The tickets were not brought within the jurisdiction of the court. They were not judicially condemned or forfeited. The direction to the sheriff was to find and destroy the tickets mentioned in the findings.

Besides, the tickets can be put to a proper use. They are not inherently vicious, like counterfeiting tools, in which there cannot be a property right. In State v. Derry, 171 Ind. 18, 85 N. E. 765, 131 Am. St. 237, it is said: “It is the use of such articles as a means of accomplishing unlawful acts, and not the articles themselves, that the law condemns.” The defendants will not use the tickets for further drawings. They will obey the injunction. The tickets may have a value for use in their present condition. They have at least a raw material value. There are more than a million of them.

The direction that the sheriff seize and destroy the tickets should be stricken from the conclusions of law and judgment entered as otherwise directed thereby.

Remanded.