1 Reported in 275 N.W. 626.
Defendant, convicted of the offense of advertising a lottery on the 18th day of February, 1937, appeals.
The facts were stipulated and a jury waived, the charge being a misdemeanor. For a condensed statement of the facts material for a decision, this may suffice: Defendant is the principal owner and manager of a Minnesota corporation which was employed by Affiliated Distributors, an Iowa corporation, as agent for Affiliated Enterprises, a Colorado corporation, to solicit contracts from moving picture theatres to use a purported copyrighted plan called "bank night" or "bank nite" by which a drawing was had on a certain night each week, upon the stage of the theatre, for a cash prize. Defendant in behalf of his corporation negotiated such a contract for the Colorado corporation with the owners of Dale Theatre, St. Paul, Minnesota, which remained in effect from August, 1935, until after the date upon which the offense was charged. The Dale Theatre owners were to pay $7.50 a week to the Colorado corporation for the privilege of operating bank night. The theatre was to use for that purpose only such "cards, posters, register and record books, film trailers and other accessories" as should be furnished by the Colorado corporation for staging the weekly feature known as bank night. Indorsed on the contract were instructions which the theatre must strictly follow, or its cancellation would result. The here important features of the instructions are that, at least two weeks before the first bank night opens a table or desk for the register book is to be placed near the box office, over which is to be hung a large sign reading, "Register Here to Get that Free $ . . . . . . Bank Account at (name of Bank)." Every person is permitted to register therein without price. The doorman or usher is to call
attention to the public that they must register to get the "Free $ . . . . . Bank Account." Contact with a local bank is advised, and it is suggested that such bank furnish part of the prize. After each registered name a number is placed in succession, the names and corresponding numbers are to be transferred to record book and a coupon of each number is to be placed in a small box, and sometime during the show and upon the stage a blindfolded child is to draw a coupon from the box. The number thereon indicates the person registered who obtains the prize, if he claims it in the theatre within a reasonable time — the time fixed by the Dale Theatre was two and one-half minutes. The winner is announced not only in the theatre but also outside. If he is outside, no admission fee is required of him to enter and receive the prize. The instructions contained also a special notice to the effect that bank night was intended as an advertising plan and not as a means to provide the theatre's patrons with a prize. Therefore the instructions must be followed implicitly. The winner must be announced outside the theatre and permitted to enter and claim the bank account without any admission fee. "All persons must be allowed to register without payment of an admission fee. You must give public notice of the above." Two film trailers were furnished to be used for advertising bank nights, the purport of which was that registration and participation in bank night drawings were absolutely free and that the registration book was located in the lobby of the theatre. For one week in the latter part of December, 1936, Dale Theatre ran a film trailer reading: "In order to be qualified to win the prize [the person must be qualified to win the prize], the person must be the holder of an admission ticket purchased at the theatre on the day of the drawing." This film trailer was purchased by the owners of the theatre. On February 18, 1937, and during several months prior thereto, the Dale Theatre announced a special performance the afternoon preceding the evening of the bank night, at which matinee all persons in attendance could obtain a card upon which to register for the evening bank night prize drawing. Such cards were similarly advertised and used by a majority of the theatres operating bank night in Ramsey county, said theatres having contracts with the
Colorado corporation and making payments to defendant thereon during said period; but neither the trailer referred to nor the cards for registration were supplied or furnished by defendant or any of the corporations above named.
The assignment of error is that the facts stipulated are insufficient to sustain the findings of guilt of the offense charged.
The indictment charges defendant with advertising a lottery, a misdemeanor denounced by 2 Mason Minn. St. 1927, § 1 10210. The preceding section (10209) defines a lottery thus:
"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."
The punishment for contriving, proposing, or drawing a lottery or assisting therein is imprisonment in the state prison for not more than two years, or by fine of not more than $1,000, or by both. There can be no doubt that the bank night operated by the owners of the Dale Theatre pursuant to the film trailer, the last week in December, 1936, was a lottery and a violation of § 1 10209 under our decisions. State v. Powell,170 Minn. 239, 212 N.W. 169. And had the owners been indicted for violation of § 1 10209 for the bank night of February 18, 1937, where the purchasers of that day's matinee tickets registered on cards and thereby participated in the chance of obtaining the prize of that bank night, it is not perceived how they could have escaped conviction. The fact that other registrants for that drawing were permitted to participate without paying admission to the show could not absolve from violation of the law as to those participants who paid for the matinee tickets and by use of the registration cards could participate in the chance.
However, defendant had nothing to do with the film trailer which the owners of the Dale Theatre exhibited the last week in December, 1936, nor with the registration cards furnished matinee ticket purchasers on February 18, 1937, whereby they became participants in the bank night of that evening. The use of either was cause for
cancellation of the contract. There is nothing in the stipulated facts from which the inference can be drawn that defendant had knowledge of the violation of the instructions indorsed on the contract he negotiated. Nor is there anything to show that he had authority to cancel the contract. From the mere fact that defendant as agent of the Colorado corporation collected the $7.50 weekly which the owners of the Dale Theatre paid for license to use bank night, it cannot be inferred that he knew of or had anything to do with advertising the matinee registration.
The next question is: Was the bank night, if carried out strictly according to the contract defendant negotiated, a lottery? Our constitution bars lotteries. Art. 4, § 31, reads: "The legislature shall never authorize any lottery or the sale of lottery tickets." Not only have the legislatures heeded the command, but have enacted laws prohibiting all lotteries and gift enterprises dependent on chance. So it may be said that public policy is against every scheme that includes the three essential features of a lottery.
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1 Reported in 275 N.W. 626.
Defendant, convicted of the offense of advertising a lottery on the 18th day of February, 1937, appeals.
The facts were stipulated and a jury waived, the charge being a misdemeanor. For a condensed statement of the facts material for a decision, this may suffice: Defendant is the principal owner and manager of a Minnesota corporation which was employed by Affiliated Distributors, an Iowa corporation, as agent for Affiliated Enterprises, a Colorado corporation, to solicit contracts from moving picture theatres to use a purported copyrighted plan called "bank night" or "bank nite" by which a drawing was had on a certain night each week, upon the stage of the theatre, for a cash prize. Defendant in behalf of his corporation negotiated such a contract for the Colorado corporation with the owners of Dale Theatre, St. Paul, Minnesota, which remained in effect from August, 1935, until after the date upon which the offense was charged. The Dale Theatre owners were to pay $7.50 a week to the Colorado corporation for the privilege of operating bank night. The theatre was to use for that purpose only such "cards, posters, register and record books, film trailers and other accessories" as should be furnished by the Colorado corporation for staging the weekly feature known as bank night. Indorsed on the contract were instructions which the theatre must strictly follow, or its cancellation would result. The here important features of the instructions are that, at least two weeks before the first bank night opens a table or desk for the register book is to be placed near the box office, over which is to be hung a large sign reading, "Register Here to Get that Free $ . . . . . . Bank Account at (name of Bank)." Every person is permitted to register therein without price. The doorman or usher is to call
attention to the public that they must register to get the "Free $ . . . . . Bank Account." Contact with a local bank is advised, and it is suggested that such bank furnish part of the prize. After each registered name a number is placed in succession, the names and corresponding numbers are to be transferred to record book and a coupon of each number is to be placed in a small box, and sometime during the show and upon the stage a blindfolded child is to draw a coupon from the box. The number thereon indicates the person registered who obtains the prize, if he claims it in the theatre within a reasonable time — the time fixed by the Dale Theatre was two and one-half minutes. The winner is announced not only in the theatre but also outside. If he is outside, no admission fee is required of him to enter and receive the prize. The instructions contained also a special notice to the effect that bank night was intended as an advertising plan and not as a means to provide the theatre's patrons with a prize. Therefore the instructions must be followed implicitly. The winner must be announced outside the theatre and permitted to enter and claim the bank account without any admission fee. "All persons must be allowed to register without payment of an admission fee. You must give public notice of the above." Two film trailers were furnished to be used for advertising bank nights, the purport of which was that registration and participation in bank night drawings were absolutely free and that the registration book was located in the lobby of the theatre. For one week in the latter part of December, 1936, Dale Theatre ran a film trailer reading: "In order to be qualified to win the prize [the person must be qualified to win the prize], the person must be the holder of an admission ticket purchased at the theatre on the day of the drawing." This film trailer was purchased by the owners of the theatre. On February 18, 1937, and during several months prior thereto, the Dale Theatre announced a special performance the afternoon preceding the evening of the bank night, at which matinee all persons in attendance could obtain a card upon which to register for the evening bank night prize drawing. Such cards were similarly advertised and used by a majority of the theatres operating bank night in Ramsey county, said theatres having contracts with the
Colorado corporation and making payments to defendant thereon during said period; but neither the trailer referred to nor the cards for registration were supplied or furnished by defendant or any of the corporations above named.
The assignment of error is that the facts stipulated are insufficient to sustain the findings of guilt of the offense charged.
The indictment charges defendant with advertising a lottery, a misdemeanor denounced by 2 Mason Minn. St. 1927, § 1 10210. The preceding section (10209) defines a lottery thus:
"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."
The punishment for contriving, proposing, or drawing a lottery or assisting therein is imprisonment in the state prison for not more than two years, or by fine of not more than $1,000, or by both. There can be no doubt that the bank night operated by the owners of the Dale Theatre pursuant to the film trailer, the last week in December, 1936, was a lottery and a violation of § 1 10209 under our decisions. State v. Powell,170 Minn. 239, 212 N.W. 169. And had the owners been indicted for violation of § 1 10209 for the bank night of February 18, 1937, where the purchasers of that day's matinee tickets registered on cards and thereby participated in the chance of obtaining the prize of that bank night, it is not perceived how they could have escaped conviction. The fact that other registrants for that drawing were permitted to participate without paying admission to the show could not absolve from violation of the law as to those participants who paid for the matinee tickets and by use of the registration cards could participate in the chance.
However, defendant had nothing to do with the film trailer which the owners of the Dale Theatre exhibited the last week in December, 1936, nor with the registration cards furnished matinee ticket purchasers on February 18, 1937, whereby they became participants in the bank night of that evening. The use of either was cause for
cancellation of the contract. There is nothing in the stipulated facts from which the inference can be drawn that defendant had knowledge of the violation of the instructions indorsed on the contract he negotiated. Nor is there anything to show that he had authority to cancel the contract. From the mere fact that defendant as agent of the Colorado corporation collected the $7.50 weekly which the owners of the Dale Theatre paid for license to use bank night, it cannot be inferred that he knew of or had anything to do with advertising the matinee registration.
The next question is: Was the bank night, if carried out strictly according to the contract defendant negotiated, a lottery? Our constitution bars lotteries. Art. 4, § 31, reads: "The legislature shall never authorize any lottery or the sale of lottery tickets." Not only have the legislatures heeded the command, but have enacted laws prohibiting all lotteries and gift enterprises dependent on chance. So it may be said that public policy is against every scheme that includes the three essential features of a lottery. Generally speaking, courts have reached the conclusion in civil proceedings that bank nights and schemes akin thereto are lotteries. Iris Amusement Corp. v. Kelly, 366 Ill. 256, 8 N.E.2d 648; State ex rel. Attorney General v. Fox Kansas Theatre Co. 144 Kan. 687,62 P.2d 929, 109 A.L.R. 698; Sproat-Temple Theatre Corp. v. Colonial Theatrical Enterprise, Inc. 276 Mich. 127,267 N.W. 602; City of Wink v. Griffith Amusement Co. (Tex. Sup.)100 S.W.2d 695; General Theatres, Inc. v. Metro-Goldwyn-Mayer Distributing Corp. (D.C.) 9 F. Supp. 546; Central States Theatre Corp. v. Patz (D.C.) 11 F. Supp. 566; Affiliated Enterprises, Inc. v. Gantz (C.C.A.) 86 F.2d 597. There are some decisions to the contrary. See Simmons v. Randforce Amusement Corp. 162 Misc. 491, 293 N.Y. S. 745; State ex rel. District Attorney General v. Crescent Amusement Co. 170 Tenn. 351,95 S.W.2d 310; Maughs v. Porter, 157 Va. 415,161 S.E. 242; Affiliated Enterprises, Inc. v. Gruber (C.C.A.)86 F.2d 958. In criminal prosecutions the weight of authority is to the effect that bank nights and similar plans to distribute prizes by chance are not lotteries in that one of the three essential elements, under statutes similar to ours and under the
common law, is absent, namely, a consideration given or paid by the participants in the chance. Defendant here concedes the presence of the elements of prize and chance, but vigorously contends that the participants in bank nights under the contract he negotiated provided for no consideration to be paid or given; in fact, particular pains are taken in the contract, the instructions, and the notices to inform the public that the chance may be had without price. In the following criminal prosecutions it was held that the schemes employed were not lotteries because the participant was not required to pay or give a price or consideration for the chance of winning the prize: Yellow-Stone Kit v. State, 88 Ala. 196, 7 So. 338,7 L.R.A. 599, 16 A.S.R. 38; People v. Cardas, 137 Cal.App. (Supp.) 788, 28 P.2d 99; Cross v. People, 18 Colo. 321,32 P. 821, 36 A.S.R. 292; State v. Hundling, 220 Iowa, 1369,264 N.W. 608; State v. Eames, 87 N.H. 477; City of Roswell v. Jones (N.M.) 67 P.2d 286; People v. Shafer, 160 Misc. 174,289 N.Y. S. 649 (affirmed without opinion 273 N.Y. 475,6 N.E.2d 410); contra, State v. Mumford, 73 Mo. 647,39 Am. R. 532; State v. Danz, 140 Wn. 546, 250 P. 37, 48 A.L.R. 1109; but neither case related to bank nights although similar insofar as concerned the element of consideration.
Whether a consideration is given for the chance of the prize is a question of fact. Where one who purchases an admission ticket for a bank night obtains free another ticket to participate in the chance for the prize, the court affirmed a conviction of the operators of the theatre for maintaining a lottery. People v. Miller, 271 N.Y. 44, 2 N.E.2d 38. The case of Commonwealth v. Wall (Mass.) 3 N.E.2d 28, 30, is cited as sustaining the position that bank night conducted according to the instructions of this contract is not a lottery; but we think that decision justifies a holding that the scheme devised may be found a lottery if facts appear from which a jury may find that a valuable consideration was given by those who obtained a chance for the prize. The court says the jury "could take a realistic view of the situation. They were not obliged to believe that all the ingenious devices designed to legalize this particular game of chance were fully effective in practical operation.
An important feature of the plan was the necessity that the person whose number was drawn should appear at once and claim the deposit. The time allowed for appearance was entirely within the control of the defendant. No definite time seems to have been fixed. A participant inside the theatre would have the advantage of immediate presence in a place of comfort. He could bear the number and the name read. He could identify himself at once. A participant outside the theatre must wait in discomfort in the hope that if his name should be drawn within he would be notified and would hear the call soon enough to crowd through toward the front of the theatre within such time as might be allowed. The object of the defendant was to fill the theatre, not the lobby or the sidewalk. We think the jury could find that the unusual crowds which completely filled the theater on 'Bank Night' paid to come in partly because they had, or reasonably believed they had, a better chance to win the prize than if they had stayed outside, that they paid their money in part for that better chance, and that the scheme in actual operation was a lottery. There was no error in denying the defendant's motion for a directed verdict." However, exception was sustained to the court's charge that any technical and nonvaluable consideration, "whether registration of the name or anything else," sufficed. A similar view is taken of the consideration in Iris Amusement Corp. v. Kelly,366 Ill. 256, 8 N.E.2d 648, and City of Wink v. Griffith Amusement Co. (Tex. Sup.) 100 S.W.2d 695. The argument of the Massachusetts court appears to us sound. The plan of bank night may be advertising the theatre, but, of course, in so doing the object is to increase the sale of admission tickets so as not only to cover the prize but also to increase the profits from the theatre. Since the question whether a valuable consideration is paid by the participants in the chance is one of fact, the proof thereof must be more convincing in a criminal than in a civil action. In other respects what makes a lottery from a legal standpoint ought to be the same in every sort of a case.
But even were bank night conducted in strict conformity with the contract negotiated by defendant, a scheme that in practice developed into a lottery, defendant was not charged with contriving,
conducting, aiding, or abetting a lottery. He was charged with and convicted of having advertised a lottery on February 18, 1937 — a misdemeanor. The statute denouncing that offense (§ 10210) reads:
"Every person who shall sell, give, or in any way whatever furnish or transfer to or for another a ticket, chance, share, or interest, or any paper, certificate, or instrument purporting to be or to represent a ticket, chance, share, or interest, in or dependent upon the event of a lottery, to be drawn within or without the state; or who, by writing, printing, circular, or letter, or in any other way, shall advertise or publish an account of a lottery, in or out of the state, stating how, when, or where the same is to be or has been drawn, or what are the prizes therein, or any of them, or the price of a ticket, or any share or interest therein, or where or how it may be obtained — shall be guilty of a misdemeanor."
It is obvious that this section was intended to cover whatever was not included in § 10209, viz. isolated acts done in furtherance of a lottery, but not in the actual contrivance or conduct of the lottery itself. And the indictment in question charges a violation of the second part of the section — advertising a lottery on a particular day. There is nothing in the stipulated facts from which an inference can be drawn that defendant on that day or any other specific day advertised a lottery. For that reason, we are of the opinion that the conviction is not sustained.
Judgment reversed.