State v. Hawkins

51 A. 850, 95 Md. 133, 1902 Md. LEXIS 156

Opinion

Boyd, J.,

delivered the opinion of the Court.

The Criminal Court of Baltimore City sustained a demurrer and quashed an indictment againt the appellee for an alleged violation of the Act of 1898, ch. 207, known as secs. 263A, 263B and 263C, of Art. 27 of the Code of Public General Laws. From that judgment the State appealed and the question before us is whether that is a valid law—the Court below having determined that it was not.

There are three counts in the indictment and a demurrer to each one was sustained. The first charges that the traverser “unlawfully did use, hold for use and sell to one, Walter J. Gregory, a certain stamp, commonly called a trading stamp, and a certain ticket and check ” which was a scheme and device for the sale, etc., of certain goods, wares and merchandise, holding out as an inducement for such sale, etc., the giving and issuing of such stamp, ticket and check which was to be and might have been presented to and redeemed by some person and association of persons other than the traverser, the holder “ getting and receiving in exchange therefor a certain gift, prize, gratuity and divers other things uncertain, undetermined and unknown to him, the said Walter J. Gregory, the said purchaser of said goods, wares and merchandise at the time of the purchase thereof.”

That count is for the violation of sec. 263A, and follows very closely the language of that section. The second and third are based on section 263B—intending to embrace the two methods of redemption of the stamps therein prohibited, namely, “ at any other place than that where said sale, barter or trade was made, or in any other manner than by something certain and known to the purchaser at the time of said sale, barter or purchase.” At the argument and in the briefs of counsel a good deal was said about the methods adopted by those dealing in trading stamps, but in our consideration of the case we are confined to the allegations in the indictment, so far as the facts are concerned, and as the three counts substantially follow the language of the statute and embrace all of the acts therein prohibited, we are to determine whether they, or any of them, charge the traverser with doing what 4he Legislature had the power to prohibit. The case of Long v. State, 74 Md. 565, established as the law of this State that a statute prohibiting all gifts to purchasers of goods, wares or merchandise, as inducements to make the purchases, was invalid, and could not be enforced, in so far as it related to gift enterprises not involving chance. The Court said “Such a regulation of trade is, in our opinion, not only unwise but unlawful, and unlawful because it is necessary neither for the health, safety nor welfare of the people, and which in its operation would be oppressive and burdensome.” But the language of the statute then under consideration differs materially from the one now before us and the concluding paragraph of that opinion shows that this Court recognized the distinction contended for by the Attorney-General in this case. It says “ It follows that the Act of 1886, ch. 480, by reason of its general terms, including as it does all gift enterprises, those involving the element of chance, as well as those that do not, is invalid so far as it relates to gift enterprises not involving chance.” The Court had previously stated that “ In so far as the object of an Act is to protect the morals and advance the welfare of the people by prohibiting every scheme and device bearing any semblance to lottery or gambling, it undoubtedly would be a valid exercise of power, and the citation of authorities is not necessary to sustain a proposition so well settled.” The Act of 1886 prohibited “holding out as an inducement for any such barter, sale or trade, or the offer of the same, any scheme or device by way of gift enterprises of any kind or character whatsoever,” and the Court said that that broad language not only included “a lottery in which a valuable consideration is given for the chance to win a prize, but also a gratuitous distribution not involving the element of chance.” The statute was only held to be invalid so far as it related to the latter.

But section 263A of the Act of 1898 is not thus broad and comprehensive in its terms. It only condemns the giving or issuing of a stamp (we can omit the other things mentioned) to be presented to some person or association of persons other than the vendor of the goods sold, which entitles the holder to get or receive in exchange therefor “any gift, prize or gratuity, or anything uncertain, zmdetermined or unknown to the purchaser of said goods, wares or merchandise at the time of the purchase thereof.” If the vendor holds out as an inducement to purchase his goods, wares and merchandise the giving of a stamp which will thus entitle the purchaser to something which is uncertain, undetermined and unknown to him at the time of the purchaser, the transaction is certainly one bearing some “semblance to lottery or gambling”—“involving the element of chance.” Although the facts relied on to hold the appellee guilty are not before us, excepting in so far as they are to be found in the indictment, we cannot decline to consider such things as are of common knowledge to all persons acquainted with business dealings, and we must assume that neither a merchant nor trading stamp company would intentionally engage in a business by which loss must necessarily be sustained. If the merchant only received the actual value of the goods sold, he could not very long continue the practice of having a third party furnish some other article at his expense, and unless the third party in some way gets value for the articles delivered by him, his business career' would ordinarily be shortlived. And it would seem to be equally clear that if purchasers from the merchant always paid full value for the goods purchased and for the article obtained from a trading stamp company, there would be but little inducement for them to make purchases in that way. But when they are led to believe that they have the chance of getting something in addition to their 'purchases, and especially when they do not know what' it is to be, then it is unfortunately true that there aré very many persons who would be thereby induced to make' purchases who would not otherwise do so. The “uncertain, undetermined .or unknown” is what attracts a large class of people in évéry community and it is dealing with the “uncertain, undetermined or unknown” that has ruined many and the tendency to thus deal (appealing to the gambling instinct) is one of the evils of the present day. Lotteries, which were at one time expressly authorized by law, are now generally prohibited throughout this country—there are provisions against them in the constitutions of many States, including our own. Numerous statutes have been passed to prevent transactions which, while not technical lotteries, are so akin to them that they have some of the same evil results, and when a statute is before a Court for construction which apparently seeks to correct such evils, it should not be too ready to declare it invalid but on the contrary should sustain it, unless it clearly violates some rights guaranteed to those affected by it. If the inducement for the sale was a stamp which would enable the holder to get something which was uncertain, undetermined and unknown to him at the time of the purchase, it would seem to be clear that the transaction involved the element of chance referred to in Long v. State, and therefore not only cannot be justified by that decision, but is, by implication at least, condemned by it.

Nor do we find in the other cases relied on by the appellee any authority for declaring a statute such as this invalid, on constitutional grounds. The one before the Court in People v. Gillson, 109 N. Y. 389, was of the same character as our Act of 1886 above referred to. In State v. Dalton, 46 Atl. Rep. 234; s. c., 22 R. I. 77, the Supreme Court of Rhode Island was construing a statute which did not have such a provision in it as the one now being considered (section 263A.) Although the Court held the Act before it to be unconstitutional and void, in disposing of the case it said : “As to the argument before referred to, that the scheme is in the nature of a lottery because the precise nature and value of the premium are unknown to the purchaser, it is enough to reply that nothing appears in the Act or in the record before us to show this and again it was there said : “If the Act had prohibited the giving away of any stamp or device in connection with the sale of an article, which would entitle the holder to receive, either directly from the vendor, or indirectly through another person, some indefinite and undesctibed article, the nature and valtie of which were unknown to the purchaser, there would then be introduced into the prohibited transaction enough of the element of uncertainty and chance to condemn it as being in the nature of a lottery." It would be difficult to find an authority more applicable to the language used in our statute-than that just quoted, especially the part italicized by us.

In Commomvealth v. Emerson, 165 Mass. 146, the Court-said in reference to the statute before it that it was not intended to prevent the sale of two things at once: “But the aim of this statute is to prevent offers of bargains which appeal to the gambling instinct, and induce people to buy what they do not want by the promise of a gift or prize, the precise nature of which is not known at the moment of making the purchase. There was nothing of the sort in the present case.” And in Commonwealth v. Sisson, 60 N. E. Rep. 385; s. c. 178 Mass. 578, (decided by the Supreme Court of Massachusetts in May, 1901), the Court said it is presumed that when the Act then under consideration was passed, the Legislature had before it the decision in Commonwealth v. Emerson, and after referring to what we have quoted from that case said : “When then it is enacted by the latter statute that the provisions of the one last mentioned should apply to the giving of a stamp, or coupon, entitling the purchaser to other property from other persons, the same limitations to the generality of the words used must be understood.” Nor is there anything in the case of Yellow-Stone Kit v. State, 88 Ala. 196, opposed to the conclusion we have reached, as the statute there does not have such a provision' as the one we are considering.

The case of Lansburgh v. District of Columbia, 11 App. D. C. 512, went further than we are required to do to uphold the validity of this statute, and sustained one which was not so clearly directed against transactions involving the element of •chance as our Act of 1898.

The second count relies on the allegations that the stamp was to be redeemed by the traverser “at a certain place other than that where said sale, barter and trade was made.” The mere fact that it was to be so redeemed does not introduce into the transaction such an element of chance as would distinguish it from Long v. State. We therefore are of the opinion that the demurrer to that count was properly sustained.

What we have said of the first is applicable to the third •count. It charges that the stamp was to be redeemed by the traverser “in other manner than by something certain and known to' the said purchaser, the said Walter J. Gregory, at the time of said sale, barter and purchase.” Whether or not the stamp is to be redeemed by the party selling the goods, wares or merchandise, or by a third party, is not of itself material. At the trial of a case under this statute it may be a circumstance proper to be proven as reflecting upon the un certainty of the article to be received by the holder of the stamp, but the mere fact that it is to be redeemed by a third person would not necessarily change the nature of the transaction. If the stamp entitles the holder to something which is uncertain and unknown at the time of the purchase, it matters not whether the vendor of the goods, wares and merchandise, or some other person, redeem it. It is then so far of the nature of a lottery, or gambling transaction, as to bring it within the power of the Legislature to prohibit it.

(Decided April 1st, 1902.)

We have not thought it necessary to enter into a discussion of the police power of the State, as that has been so frequently considered by this and other Courts and in one of the recent cases before us, involving that question, it is fully and ably discussed by the Chief Judge. State v. Broadbelt, 89 Md. 565. Without further prolonging this opinion by referring to other questions so ably presented by the counsel, we think the first and third counts of this indictment are sufficient and that the statute is valid, excepting in so far as it undertakes to make it a criminal offense merely to have the stamp or other article mentioned redeemed “at any other place than where such sale, barter or trade was made.” The demurrer to the first and third counts should have been overruled, and that to the second sustained. For error in sustaining the demurrer to the first and third counts the judgment will be reversed.

Judgment reversed, the appellee to pay the costs, and new trial ordered.