State v. . Lipkin

84 S.E. 340, 169 N.C. 265, 1915 N.C. LEXIS 206

• Court: Supreme Court of North Carolina
• Decided: February 24, 1915
• Status: Published

Opinion

Walker, J\,

after stating the case: It is well settled that laws and regulations necessary for the protection of the health, morals, and safety of society are strictly within the legitimate exercise of the police power, and in the interpretation of such remedial statutes the office of the judges, it has been said, is to make such a construction as will suppress the mischief and advance the remedy, and to defeat all evasions for the continuance of the mischief. Magdalen College case, 11 Co., 71 b. The word “lottery” is not a term of the common law, and to dispose of real or personal property by lot is not an offense which has a recognized and established legal definition, and, therefore, in construing the statute we must be guided chiefly by the meaning of the term as it is ordinarily used in a popular sense, and by reference to the mischief intended to be redressed. S. v. Clarke, 33 N. H., 329. A lottery, for all practical purposes, may be defined as any scheme for the distributión of prizes, by lot or chance, by which one, on paying money or giving any other thing of value to another, obtains a token which entitles him to receive a larger or smaller value, or nothing, as some formula of chance may determine. This definition has generally been approved by the authorities. S. v. Perry, 154 N. C., 616, and cases cited; Long v. State, 74 Md., 565. In the case last cited, as showing the strong trend of judicial thought in this country against lottery enterprises, the Court said that it will appear, from the many cases decided upon the subject, to be difficult, if not impossible, for the most ingenious and subtle mind to devise any scheme or plan, short of a gratuitous distribution of property, which has not been adjudged as in violation of the lottery or gambling laws of the various States, which are mostly alike. And we say that no sooner is a lottery defined, and the definition applied to a given state of facts, than ingenuity is at work to evolve some scheme of evasion which is within the mischief, but not quite within the letter of the definition. But, in this way, it is not possible to escape the law’s condemnation, for it will strip the transaction of all its thin and false apparel and consider it in its very nakedness. It will look to the substance and not to the form of it, in order to disclose its real elements and the pernicious tendencies which the law is seeking to prevent. The Court will inquire, not into the name, but into the game, however skillfully disguised, in order to ascertain if it is prohibited, or if it has the element of chance. It is the one playing at the game who is influenced by the hope enticingly held out, which is often false or disappointing, that he will, perhaps and by good luck, get something for nothing, or a great deal for a very little outlay. This is the lure that draws the credulous and unsuspecting into the deceptive scheme, and it is what the law denounces as wrong and demoralizing.

In Thomas v. People, 59 Ill., 160, it was urged, in defense of a similar scheme, that no plan of distribution had been decided upon; that the purchasers were to receive certain articles in a just and legal manner, and that a plan might be devised, at the proper time, which would neither violate the law nor be in contravention of good morals. The Court replied that if the prizes were distributed “in a just and legal manner” it should be done in an honest, upright, and equitable one, and there should be perfect fairness and equality. The plan would be utterly violated if any .one of the numerous purchasers should fail to receive a prize. The distribution could hot be in a “just and legal manner” unless the number of purchasers was the same as the number of prizes, and the prize received proportional, as nearly as possible, to the amount of money paid. It is barely possible, but most improbable, that the purchasers would be the same in number as the presents. We could not indulge in so unreasonable a presumption, even in a criminal juoceeding. In ordinary affairs we must reason upon probabilities, deduce conclusions from facts, and not indulge in mere conjectures. We have no right to harbor wild imaginings to change a reasonable and probable result. The Court then says: “Had not this plan been watched by the vigilance of the law, can there be any doubt that numerous persons would have purchased tickets, prompted by the hope of gain ? Are there not -inseparably connected with it the same fascination and excitement and intense desire for gain which gather around the gaming table? Like any other species of gambling, lotteries have a pernicious influence upon the character of all engaged in them. This influence may be as direct and the immediate consequences as disastrous as in some kinds of gambling which rouse the violent passions and stake the gambler’s whole fortune upon the throw of a die. The temptations, however, are thrown in the way of a larger number and a better class. The evil may spread more widely and infect more deeply. It is said that the plan was undetermined, and that the wisdom of the ‘advisory committee would have devised one, just and equal.’ So chance is always undetermined. It neither forms nor designs. Intention is never attributed to it; its events are uncertain. The promise of the.handbill, that the distribution shall be in a just and legal manner, is evasive. We are not bound to determine the intention from the language alone, but from all the facts, and the reasonable deductions from facts.”

That case is a fair comment and a just criticism upon the facts of this one, showing the clear illegality of the transaction. It is not pretended here that the projector of this enterprise, either in the matter of volition, as to the giving of presents, or of approbation, as to the recipients of them, founds its action on any settled rule of conduct, or judges by any standard of comparison or selection which would appear reasonable to itself or to others. S. v. Shorts, 32 N. J. L., 398; Com. v. Wright, 137 Mass, 250. So far as appears, the choice among those who are to receive its favors is based upon nothing more than its arbitrary will, exercised for its own benefit, in advancing its scheme by advertising, it may be admitted, but this does not alter the case, as all such concerns are organized and set up for just this purpose. Nor does it matter that the person who buys a chance for a trivial sum, in the expectation of winning something of much larger value, can go on with his contributions, and, after paying the full amount of $17.50, get the piece of furniture he may want. This has been held not to divest it of its gambling quality. S. v. Perry, supra; Deflorin v. State, 121 Ga., 593; S. v. Moren, 48 Minn., 555. In the case last cited it is said that such a feature would probably operate as an additional incentive to purchase a chance in the lottery scheme, and does not take it out of the statute, as the vicious element still inheres in it. The sale of the ticket gave the purchaser the chance to obtain something more than he paid for it, and the other fact became an extra inducement for the purchase, making the general scheme more attractive and alluring. The difference between it and a single wager on the east of a die is only one of degree. They are both intended to attract the player to the game, and have practically the effect of inducing others, by this easy and cheap method of acquiring property of value, to speculate on chances in the hope that their winnings may far exceed their investment in value. This is what the law aims to prevent in the interest of fair play and correct dealing, and in order to protect the unwary against the insidious wiles of the fakir or the deceitful practices of the nimble trickster. Call the business- what you may, a “gift sale,” “advertising scheme,” or what not, but it is none the less a lottery,- and we cannot permit the promoter to evade the penalties of the law by so transparent a device as a mere change in style from those which have been judicially condemned, if the gambling element is there, however deep it may be covered with fair words or deceitful promises. If it differs from ordinary lotteries, it is chiefly in the fact that it is more artfully contrived to impose upon the ignorant and credulous, and is, therefore^ more thoroughly dishonest and injurious to society. So far as those who manage schemes of this character can be supposed to give the credulous persons who deal with them any chance whatever of a return in greater value for their investment, the chance lies in the purchase of the right to participate in the favor offered or held out to tempt the gambling instinct and thereby to. prosper the business of the unlawful concern. Dunn v. The People, 40 Ill., 465. All pay them money, at least in part, for the chcmce of winning a prize of greater or less value in proportion to what they hazard, however it may be glossed with some apparent safeguard against loss. Many will take the chance of the play, not expecting to continue the payments if they should lose at the first, second, or third attempt, or at some later period. According to every correct idea of legal definition or conception, this must be gaming within the meaning of the law, whether we construe it in letter or in spirit. All new artifices designed to evade and cheat the law, and entrap the unwary or ignorant, are but aggravations of the offense, and the more ingenious and deep-laid they are, the greater the wrong. Bell v. State, 37 Tenn. (5 Speed), 507.

In the Deflorin case, supra, referring to the contention of the defendant that the purchaser of a ticket could continue to pay and get the goods, the Court said: “The fact that a member who was unlucky in the drawing of prizes might, by continuing to pay a dollar a week for thirty weeks, receive a suit of clothes, regardless of the result of the drawings, does not make the transaction any the less a lottery; for the lucky members of the club won prizes varying in value from $1 to $29.” And the Court quoted from Shumate’s case, 15 Grattan (Va.), 653, the following passage as a full answer to the position: “It is true that a bet does imply risk, but it does not necessarily imply a risk in both parties. There must be between them a chance of gain and a chance of loss, but it does not follow that each of the parties to the bet must have both these chances. If, from the terms of the engagement, one of the parties may gain, but cannot lose, and the other may lose, but cannot gain, and there must be either a gain by the one or a loss by the other, according to the happening of the contingency, it is as much a bet or wager as if the parties had shared equally the chances of gain and of loss.” See, also, an elaborate and exhaustive discussion of the question by Justice Cobb, in Myer v. State, 112 Ga., 20.

The ingredient of chance is, obviously, the evil principle which the law denounces and will eradicate, however it may be clothed, or however it may conceal itself in a fair exterior. It is by this means that cupidity is solicited or an appeal is made to avarice, for if fortune be propitious, or chance should favor him, either in his selection as the winner of its favor or in the mere turn of a wheel, or the throw of the dice, or the fall of the coin, a return of value is expected for the small consideration or trivial price paid for the privilege of being thus favored. S. v. Shorts, 32 N. J. L., 398.

The case of S. v. Clarke, 33 N. H., 329, appears to be very much in point. The Court said of a similar enterprise: “The jury were well warranted in finding that according to some scheme upon which the defendants professed to act there was a correspondence between the numbers placed on the books purchased and the different articles proposed as gifts or prizes, by which when the book was purchased the defendants ascertained what gift or prize the purchaser was entitled to have according to their scheme. The defendants, on the evidence, appear to have held out that notion to the public, and the jury were at liberty to find that, so far at least, the business was fairly conducted. The purchaser did not know when he bought his book and paid his money what prize or gift the number on it would entitle him to receive, and it was with him as much a matter of 'lot and chance as if he had drawn the number from a hat. He paid more than the book was worth, and the excess must be understood to have been paid for this chance. As to the real nature of the contrivance, it stands as if the excess had been paid for the chance without any sale of a book to color the transaction.”

The same contention was made there as in this case, that the choice of persons to receive the furniture was not by lot or chance, but by the judgment of tbe company wbicb proposed to sell but tbe Court rejected it, and thus showed its fallacy: “"With tbe purchaser, what prize be might obtain was a mere matter of lot and chance. The scheme involved substantially the same sort of gambling upon chances as in any other kind of lottery. It appealed to the same disposition for engaging in hazards and chances with the hope that luck and good fortune may give a great return for a small outlay, and, as we think, within the general meaning of the word ‘lottery/ and clearly within the mischief against which the statute is aimed.” Randle v. State, 42 Texas, 580.

Defendant’s counsel, in their able and learned argument, have cited us to People v. Elliott, 3 L. R. Anno. (O. S.), 403; but upon examining the case we find this stated: “It is not the drawing of the lots, but the disposing and selling of the chances, that brings the case within the statute. It is promoting the lottery for money by paying the money for the chances of receiving more. It is of little consequence where the drawing takes place. These views to some extent will be found supported in the following authorities: (citing many cases). It is thought by counsel for defendant that this case is ruled by People v. Reilly, 50 Mich., 384. That case, however, is different. There the contingency was one upon which the parties interested could exercise their reason and judgment under an agreement upon which the money was paid, and was in its nature executory. In this case'the money was paid when the chance was obtained, and there was no opportunity for exercising the reason or judgment or any other faculty of the mind; and hence the lottery.”

We think this substantially supports our view of the question. So far as we can see from the evidence, the managers of the “Mutual Supply Company” exercised no more than an arbitrary choice of its customers as recipients of its graft; but however that may be in fact, the vice of the whole scheme lies farther back than that, and is found in the “chance” which the customer takes when he pays his money, under the terms of the contract, and the temptation held out to arouse the gambling spirit, which is just as evil and debasing as if there were any other kind of chance taken; and, besides, if he fails once or twice or more times to win the prize, and discontinues paying, he loses all that he has paid. So that if tempted by this cunning device, which so insidiously appeals to this gambling instinct, his money is risked in the hope of drawing a piece of furniture of much larger value, the person so investing it may lose or win, and in either event may retire, forfeiting what he had paid in the one case, and retaining what he has drawn in the other as the profit of his venture.

The only difference between this case and that of S. v. Perry, 154 N. C., 616, is that there the suit of clothing was drawn by lot; but there is the same element of chance here, even if in a less degree, as there is no rule or standard for the investor to determine what his luck will be, nor can the managers of the scheme forecast at the time of hazard what the result will be. Mrs. Jacobs, as the evidence shows, performed no services, if any at all, until after she had received the wardrobe, which she exhibited and extolled to her friends, who doubtless considered it a good return for so small an outlay in money, and concluded to take the same risk, hoping to be favored with the same' kind of good fortune. The temptation was increased by holding out that they might not lose if they continued in the game to the end. S. v. Perry, supra, where we held, citing 25 Cyc., 1639 : “Suit clubs, the members of which pay weekly dues and have weekly drawings for suits, the unsuccessful members being entitled to receive a suit eventually, after the payment of a stipulated amount, or to withdraw and take out in trade the installments which they have paid, are lottery schemes.” "W"e further said in that case: “It will be seen by examination of the authorities that chance is an essential element of a lottery, whether that chance be as to any return or merely as to.the amount or value of the return; and as thus considered, where there is a hazard in which sums are ventured upon the chance of obtaining a greater value, the scheme partakes of the nature of a lottery — that is, something gained or won by lot. 5 "Words and Phrases, pp. 4245 and 4246, where many cases are collected. The definition of the term ‘lottery’ given above has been approved by this Court. S. v. Lumsden, 89 N. C., 572.”

In the view we take of the case, it comes within that principle, and the courts will not be deceived or misled by attractive names or professions of honest intentions. As said by the Court in S. v. Morris, 77 N. C., at p. 516, referring to the language of Justice Grier in Phalen v. Virginia, 8 How. (U. S.), 168: “The ‘North Carolina Beneficial Association’ is an imposing title, but the law has pronounced it in its lottery features to be a cheat and a nuisance to be suppressed like other public pestilences. Of all the forms of gambling, it is the most widespread and disastrous, entering almost every dwelling, reaching every class, preying upon the hard earnings of the poor, and plundering the ignorant and simple.”

Having decided this question against defendant, it follows that, if we are right, there is nothing in the case involving the violation of defendant’s rights under the fourteenth amendment to the Federal Constitution. The State has the right to enforce all needful police laws and regulations for the preservation of the health, morals, and safety of the people, and especially for the suppression of lotteries. Boyd v. Alabama, 94 U. S., 645; Stone v. Mississippi, 101 U. S., 814; Douglass v. Kentucky, 168 U. S. The Legislature may not, under the guise of. protecting the public interests, arbitrarily interfere with private business, or im pose unusual aud unnecessary restrictions upon lawful occupations. In other words, its determination of its police powers is not final or conclusive, but is subject to the supervision of the courts. This must needs be so, and it was so definitely held in Lawston v. Steele, 152 U. S., 133; but no violation of private right is presented in this ease.'

We are also inclined to the opinion that the Legislature intended by the last words of section 3726, being the amendment made by Laws 1874-5, ch. 96, to enlarge the scope of the previous enactment so as to include enterprises of this kind; but it is unnecessary to decide this question, as it is sufficient to hold that the scheme is a lottery within the intent and meaning of the statute.

No error.