This argument was had at the June Term, 1844, before the Chancellor, and Judges Harrington, Layton and Milligan. Judge Lay-ton resigned before judgment; and the case was at the next term submitted on the previous argument to the Chancellor and Judges Harrington, Milligan and Hazzard.
The Chancellor pronounced the opinion of the court; Judge Hazzard dissenting.
Johns, Jr., Chancellor.
—The legal question in this case submitted to our
consideration is, whether the
defendants have a right to retain out of the money received by them from the purchasers of the lottery scheme, any and what sum as their compensation; the expenses actually incurred having been paid.
The lottery act for the benefit of Delaware College and other purposes, authorized the persons thereinafter appointed managers, to institute, cony on and draw a lottery in one or more classes, for raising a sum of money not exceeding $100,000, clear of all expenses ; and the said sum when so raised, was declared by the act to be applicable in the following manner, namely: $50,000 thereof for the use and benefit of Delaware College, and $25,000 thereof for the use of “ the fund for establishing schools in the State of Delaware, and $25,000 thereof to be paid into the treasury of the State, for the use of the State.”
The second section appointed the managers, and provided that the said managers, or a majority of them, before entering upon the duties required of them by the act, should give separate bonds to the State of Delaware, each in the sum of $10,000, conditioned for the faithful discharge of the trust reposed in them by the several provisions of the act; and that those only of the persons named should
be managers of the said lottery, who should give bonds as above required.
The third section provided for the drawing of the lottery by the managers, and payment of prizes.
The fourth section enacted, that if the said managers shall deem it expedient for effecting the objects of the act, to sell or dispose of the scheme of the said lottery, or of any class or classes thereof, to any person or persons residing out of this State, it shall and may be lawful for the managers so to do:
Provided,
the said managers shall take from the person or persons to whom they may sell or dispose of the scheme of the said lottery, or of any class or classes thereof* a bond to the State of Delaware in such penal sum and with such surety as the governor of the State shall approve, conditioned for the faithful discharge of the trust that may be thus reposed in such person or persons; and in case bond and security be so taken and approved, the said managers shall be exonerated from all liability on account of the person or persons to whom they may so sell or dispose of said scheme, class or classes of said lottery.
The sixth section, provided that all money raised by virtue of the act should be applied to the objects and uses aforesaid; and that the said money “ shall be paid over by the said managers.”-
The seventh enacted, that the act should continue and be in force for ten years from its passage and no longer.
The managers who gave bond as required by the act, and accepted thereby the appointment, proceeded to carry into effect the provisions of the lottery act. Not deeming it expedient themselves to institute, carry on and draw the lottery, they adopted the mode pre scribed by the fourth section, and made sale of one-fifteenth part of the sum authorized to be raised, to-Yates & McIntyre, clear of all deductions and expenses for eight calendar months, from the 13th of April, to the 31st of December, 1835, both days inclusive, for the sum of $6,660 66; and to Dudley S. Gregory fourteen-fifteenth parts of said sum for nine years, one calendar month and ten days, from January 1st, 1836, to February 10th, 1845, both days inclusive, for the sum of $73,333 34, clear of all deductions and expenses. By the terms of the contract expressly providing, and the purchasers agreeing, from time to time well and truly to pay, discharge and satisfy all expenses, costs and charges whatsoever, attending the drawing of each and every class of the said lottery during their several and respective terms aforesaid; and shall and will take upon themselves and pay, bear and sustain all risks, hazards, losses and ex
penses whatsoever, attending the drawing of each and every class of said lottery, with tickets on hand unsold or otherwise, or in any other manner whatsoever arising out of or attending the instituting, drawing, or carrying on the said lottery, or any class or classes thereof. Bonds and security as prescribed by the act were by the contractors executed, approved, and deposited with the State treasurer.
From this brief statement of the case, it is apparent all expenses incident to the instituting, carrying on and drawing of the lottery were fully provided for in the contract of sale; and therefore the money received by the managers is in their hands, clear of all expense that accrued by instituting, carrying on and drawing the said lottery. It represents the value of the grant exclusive of all expense. We thus arrive at the simple question, whether it belongs to the parties, severally, for whose use and benefit the lottery act was passed, or is subject to deduction on account of any claim made by the managers for compensation.
It is not a claim founded on actual expense we are called upon to consider, nor that either in law or equity can be entitled to that character. But for the purpose of arriving at a proper conclusion as to the legal right of the managers to retain,- it may be well to ascertain their relative position under the act. From the manner of their appointment it is evident the act left the acceptance thereof conditional, and altogether voluntary; and by express and clear language defines the duty to be discharged under and according to its provisions to be a trust. Hence we cannot disregard the explicit and unequivocal declaration contained in the act itself, and therefore feel bound to regard the persons appointed managers as trustees; and, inasmuch as their acceptance by executing bonds was optional, and they chose to do it, they are therefore voluntary trustees.
Having thus ascertained the character of the persons appointed, and that of the duty to be discharged, it becomes necessary to consider and inquire whether the lottery act will warrant us in sustaining their claim to compensation, for receiving and paying over the sum paid them by the contractors. Unless the claim can be supported under the first section, it does not appear to be sanctioned in any other part of the act. The first section contemplates the raising of the sum therein mentioned, by instituting carrying on and drawing the lottery, and provides for the payment of all expenses. The contract of sale, transferring this power from the managers to the contractors, has conferred upon them full authority, over and above
the sum of $100,000, to reimburse themselves all expenses. Hence it is manifest, the managers by their own act, have conferred all the power contained in that section of the act, designed by the legislature to provide for the payment of expenses. The whole time having been sold, it has been exhausted.
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This argument was had at the June Term, 1844, before the Chancellor, and Judges Harrington, Layton and Milligan. Judge Lay-ton resigned before judgment; and the case was at the next term submitted on the previous argument to the Chancellor and Judges Harrington, Milligan and Hazzard.
The Chancellor pronounced the opinion of the court; Judge Hazzard dissenting.
Johns, Jr., Chancellor.
—The legal question in this case submitted to our
consideration is, whether the
defendants have a right to retain out of the money received by them from the purchasers of the lottery scheme, any and what sum as their compensation; the expenses actually incurred having been paid.
The lottery act for the benefit of Delaware College and other purposes, authorized the persons thereinafter appointed managers, to institute, cony on and draw a lottery in one or more classes, for raising a sum of money not exceeding $100,000, clear of all expenses ; and the said sum when so raised, was declared by the act to be applicable in the following manner, namely: $50,000 thereof for the use and benefit of Delaware College, and $25,000 thereof for the use of “ the fund for establishing schools in the State of Delaware, and $25,000 thereof to be paid into the treasury of the State, for the use of the State.”
The second section appointed the managers, and provided that the said managers, or a majority of them, before entering upon the duties required of them by the act, should give separate bonds to the State of Delaware, each in the sum of $10,000, conditioned for the faithful discharge of the trust reposed in them by the several provisions of the act; and that those only of the persons named should
be managers of the said lottery, who should give bonds as above required.
The third section provided for the drawing of the lottery by the managers, and payment of prizes.
The fourth section enacted, that if the said managers shall deem it expedient for effecting the objects of the act, to sell or dispose of the scheme of the said lottery, or of any class or classes thereof, to any person or persons residing out of this State, it shall and may be lawful for the managers so to do:
Provided,
the said managers shall take from the person or persons to whom they may sell or dispose of the scheme of the said lottery, or of any class or classes thereof* a bond to the State of Delaware in such penal sum and with such surety as the governor of the State shall approve, conditioned for the faithful discharge of the trust that may be thus reposed in such person or persons; and in case bond and security be so taken and approved, the said managers shall be exonerated from all liability on account of the person or persons to whom they may so sell or dispose of said scheme, class or classes of said lottery.
The sixth section, provided that all money raised by virtue of the act should be applied to the objects and uses aforesaid; and that the said money “ shall be paid over by the said managers.”-
The seventh enacted, that the act should continue and be in force for ten years from its passage and no longer.
The managers who gave bond as required by the act, and accepted thereby the appointment, proceeded to carry into effect the provisions of the lottery act. Not deeming it expedient themselves to institute, carry on and draw the lottery, they adopted the mode pre scribed by the fourth section, and made sale of one-fifteenth part of the sum authorized to be raised, to-Yates & McIntyre, clear of all deductions and expenses for eight calendar months, from the 13th of April, to the 31st of December, 1835, both days inclusive, for the sum of $6,660 66; and to Dudley S. Gregory fourteen-fifteenth parts of said sum for nine years, one calendar month and ten days, from January 1st, 1836, to February 10th, 1845, both days inclusive, for the sum of $73,333 34, clear of all deductions and expenses. By the terms of the contract expressly providing, and the purchasers agreeing, from time to time well and truly to pay, discharge and satisfy all expenses, costs and charges whatsoever, attending the drawing of each and every class of the said lottery during their several and respective terms aforesaid; and shall and will take upon themselves and pay, bear and sustain all risks, hazards, losses and ex
penses whatsoever, attending the drawing of each and every class of said lottery, with tickets on hand unsold or otherwise, or in any other manner whatsoever arising out of or attending the instituting, drawing, or carrying on the said lottery, or any class or classes thereof. Bonds and security as prescribed by the act were by the contractors executed, approved, and deposited with the State treasurer.
From this brief statement of the case, it is apparent all expenses incident to the instituting, carrying on and drawing of the lottery were fully provided for in the contract of sale; and therefore the money received by the managers is in their hands, clear of all expense that accrued by instituting, carrying on and drawing the said lottery. It represents the value of the grant exclusive of all expense. We thus arrive at the simple question, whether it belongs to the parties, severally, for whose use and benefit the lottery act was passed, or is subject to deduction on account of any claim made by the managers for compensation.
It is not a claim founded on actual expense we are called upon to consider, nor that either in law or equity can be entitled to that character. But for the purpose of arriving at a proper conclusion as to the legal right of the managers to retain,- it may be well to ascertain their relative position under the act. From the manner of their appointment it is evident the act left the acceptance thereof conditional, and altogether voluntary; and by express and clear language defines the duty to be discharged under and according to its provisions to be a trust. Hence we cannot disregard the explicit and unequivocal declaration contained in the act itself, and therefore feel bound to regard the persons appointed managers as trustees; and, inasmuch as their acceptance by executing bonds was optional, and they chose to do it, they are therefore voluntary trustees.
Having thus ascertained the character of the persons appointed, and that of the duty to be discharged, it becomes necessary to consider and inquire whether the lottery act will warrant us in sustaining their claim to compensation, for receiving and paying over the sum paid them by the contractors. Unless the claim can be supported under the first section, it does not appear to be sanctioned in any other part of the act. The first section contemplates the raising of the sum therein mentioned, by instituting carrying on and drawing the lottery, and provides for the payment of all expenses. The contract of sale, transferring this power from the managers to the contractors, has conferred upon them full authority, over and above
the sum of $100,000, to reimburse themselves all expenses. Hence it is manifest, the managers by their own act, have conferred all the power contained in that section of the act, designed by the legislature to provide for the payment of expenses. The whole time having been sold, it has been exhausted. But it may be said the words of the section being “ a sum not exceeding $100,000 clear of all expenses,” that the managers have a right to deduct from the sum received by them, inasmuch as the limitation is upon the amount beyond which they could not go, and does not fix any sum certain as a minimum. This mode of expression in the first section was no doubt adopted to authorize the payment out of the sum raised, of all expenses which should accrue or be incurred by the managers in the legitimate exercise of the power granted. But can it be that in authorizing payment of the expenses of the lottery, it was the intention under the expression, “ all expenses,” to provide for an allowance of compensation to the managers. It would seem that such an allowance not being understood according to the common acceptation of the word as included or embraced by it, ought to have been expressly provided for; especially, when the service to be compensated required some rule of adjustment, and ought to have been settled by some mode of estimating the value thereof, either as a salary or a commission upon the amount received and paid over. The expenses or expenditure on account of the lottery, was a matter that could with propriety be left to the managers to adjust, settle and pay, since they could have no interest in increasing the amount so applied. But if under the' authority to pay expenses, they should be allowed to compensate themselves, it is apparent they are constituted their own paymasters, and become the judges of, and estimate the value of their own services, not on the principle of reimbursement for what they have expended, but as compensation for services rendered by them as trustees. We may from such a result perceive the propriety of the rule which precludes a trustee from compensation, unless set-tied by the deed of trust, although he is entitled to be reimbursed all expenses; and, it is further apparent, there is good reason for preserving the distinction between expenses and compensation. In remarking upon the rule, and the distinction, Chancellor Kent, in the case of Green
vs.
Winter, 1
Johns. Cha.
27, observes, nothing can be stronger or more explicit, than the uniform language of the English Court of Chancery upon this point, and even If he was free from the weight of authority, he should hesitate greatly before he undertook to question the wisdom or the policy of the rule.
It has been urged in the argument of this case, with a view to obviate the effect of this rule relative to compensation, that the general policy and universal practice and usage of the State, and every branch of the government, has been to allow compensation for services rendered without any express or previous stipulation. This ground relies upon the practice and usage, and must therefore, be considered independent of the lottery act. The existence of any such policy, general practice or usage, has not been made to appear by any thing presented in this case, or that has occurred within the range of our observation. The two lottery acts referred to in support of the position assumed, appear to recognize a contrary policy, practice and usage, inasmuch, as without the express provision, it may be said the allowance could not have been made. The acts referred to are two, the first, that of 1789, authorizing a lottery to raise a fund for building piers in the river Delaware; and the second, an act for the benefit of Sussex county. These acts respectively imposed upon the managers the additional service or duty, after they had raised and received the money, of disbursing it; the former, in building the piers; and the latter, in constructing the public buildings ; the compensation being made expressly on account of the extra labor and service in applying the fund, in executing the objects of the grant; and limited accordingly, in the first case, by a per cent-age on the amount disbursed ; and in the last, by the determination of the Levy Court of Sussex county, authorizing only such an allowance as that court, on adjusting the accounts, should deem proper. From the special provision upon the subject of disbursements as contained in the two acts referred to, making an allowance for special service, when none is provided for the receipt and payment over of the general fund, we consider nothing can be deduced that would warrant us in recognizing the existence of any such general practice or usage sanctioning compensation to lottery managers independent of express grant.
Another ground relied on in the argument of this case would sustain the claim as legally due to the defendants, in consequence of their balding the appointment officially, and not in the character of trustees; and in support of this view of the case, our attention has been directed to the decisions in favor of claims made by officers of the United States, for compensation on account of extra services. Supposing the defendants to occupy an official station, the reason in favor of extra allowance to the subordinate officers in the United States, performing extra service in obedience to the orders of their
superiors, does not apply; and therefore, those decisions cannot be considered applicable or entitled to any influence in determining the question submitted to our consideration. But independently of the principle established by those decisions, we apprehend the defendants cannot claim as occupying an official character; for the eighth section of the third article of the Constitution of Delaware, provides : That the governor shall appoint all officers whose offices are established by the Constitution,
or by law;
and whose appointments are not therein otherwise provided for. The lottery act we are considering makes the appointments originally, and only authorizes the executive to substitute or supply vacancies. Hence we cannot recognize the defendants as entitled officially—therefore, it necessarily follows they must be regarded as agents; to whom, by a legislative act, power has been delegated, and that power, being confided to their action for the benefit of others, constitutes them on acceptance thereof to all intents and purposes trustees.
Gilpin,
Attorney General, and
Ridgely,
for the State.
Wales
and
Rogers, jr.,
for defendants.
The court ordered a' certificate to the Superior Court, that the defendants were not entitled to any sum as
compensation,
but that there was due to the legal representatives of the late James R. Black, deceased, the sum of one hundred dollars for
expenses;
and also the sum of one hundred dollars to the defendant James Rogers, ascertained and allowed by the court, under the special agreement in this cause; and upon this principle, the amount appearing due from the defendant, James Rogers, on the 10th of June, 1842, was $3,100; and with interest to the 10th of. June, 1845, $3,658 ; and the amount due from the defendant George Platt, on the 10th of June, 1845, $1,652; for which sums and the costs, judgment was directed against the defendants, severally.