Swain v. Bussell

10 Ind. 438

• Court: Indiana Supreme Court
• Decided: June 19, 1858
• Status: Published

Opinion

Hanna, J.

Swain, on the 4th of February, 1856, filed his complaint alleging that on the 2d day of February, 1855, he sold and conveyed to Bussell certain real estate, in consideration of the transfer to him by said Bussell of 1,533 shares in what was known as the “ Shelbyville Real Estate Gompa/ny;” that said deed was so made upon the •representations and conditions contained in a circular in said complaint set forth, and upon the express condition that said Bussell should truly perform said conditions; that Bus-sell represented that said company was not a scheme for the division of property by chance — was not a lottery — but an honest transaction; that the lands described in the circular were choice, and the titles good; and that on the 15th of May, 1855, they should be distributed among the owners of the shares fairly, and that afterwards he would make to each one a good deed for the lands awarded him.

But he avers that the said Bussell was the sole owner of said scheme; that it was for the division of the lands mentioned, by chance, and the said shares sold him were shares therein; that Bussell’s representafions were false and intended to defraud, &c.; that Bussell did not own, nor could he make title to the same; that the whole scheme and plan set forth in the circular was abandoned, &c., and, therefore, the conditions of said sale were never performed; that the consideration was illegal, and said deed obtained by fraud; that afterwards each of the other defendants purchased of Bussell with full notice, and have not yet paid the purchase-money to him.

The circular referred to states that there would be, on the 15th of May, 1855, at Shelbyville, Indiana, a sale by the said company of choice lands, to the amount of 150,000 dollars; that upon this amount of stock they have issued 50,000 shares, which they would sell at three dollars each, and would distribute, at the time and place stated, all of said property amongst the shareholders, severally, as may be determined by the numbers on their certificates, under the management of a board of responsible gentlemen. Then follows a list of the property, described in the circular as a list of prizes, in which is described this land in dispute, as the “ Sivain Mills on Flat-Roclc, Rush county, Indiana, together with 40 acres of land, and a first class sawmill attached,” and the value set out at 7,200 dollars. It is alleged that the title to all of said lands is good, &c., and that proper conveyances will be made to the lucky owners, immediately after the drawing; that, the number of prizes is 3,329, which gives one chance in 15 to draw— perhaps — a fortune. Then follows a puff of Dr. Bussell, a statement that he is fully empowered by his colleagues to manage the scheme as may best suit their interest, &e., and an offer of a large per cent, to agents to engage in the sale of shares.

The plaintiff asks that the deed to Bussell be annulled and set aside, and, also, from him to the other defendants.

To this complaint the defendants, other than said Bus-sell, filed a demurrer, which was by the Court sustained. Upon this, the question is presented for our consideration.

The first point presented is, whether this transaction was illegal, and one that was prohibited by law.

Without doubt, the whole scheme was an illegal, prohibited, proceeding; and the allegations in the complaint that the defendant verbally represented to the plaintiff that such was not its character, are of no avail against the statements and contents of the printed circular, which is made a part of the complaint, and upon the representations and promises whereof plaintiff avers he made the deed. The scheme was one of the forms of a lottery, whereby several persons might place their property in a common fund, representing such sums as the parties should agree upon, and thereupon issuing and selling to the unwary and the credulous, tickets representing shares in said scheme. These tickets might thus issue to the real value, or twice, or thrice, or any number of times, the real value, of' the property— depending upon the partial honesty, or the total dishonesty of the managers of such scheme. In a word, such schemes for the division of property to be determined by chance, are prohibited by law. 2 R. S. p. 437. — State Constitution, 1 id. 69.

The statute is that, “ If any person shall sell any lottery tickets, or share in any lottery, or scheme for the division of property to be determined by chance, or shall make or draw any lottery, or scheme for a division of property, not authorized by law, such person on conviction shall be fined not exceeding five hundred dollars.”

The constitutional provision is, that “ No lottery shall be authorized; nor shall the sale of lottery tickets bp allowed.”

That the managers of the concern believed it to be a violation of the constitution and the law, is manifest from a clause in their circular, as follows: “ Those who desire

to operate in this enterprise without incurring any risk from law, or violating any oath of office, can do so by forming clubs and ordering the shares through the mail; we have already sold 13,000 shares in this way.”

The following cases are cited from decisions of our sister states, and it is believed correspond with our view of this case as expressed above:

The case of The State v. Clark, 2 Fogg, 33 New Hamp. R. 334, was an indictment for unlawfully disposing of one ring by lottery, and was founded upon the following statute : “ If any person shall make or put up any lottery, or shall dispose of any estate, real or personal, by lottery, he shall be fined,” &c. The facts were, that one Flcmders bought of defendants a book for 1 dollar, which was worth less than that sum, on the back of which was a wnitten number, which number was then compared with certain numbers and entries in a book of defendants; and he was informed that he was entitled to a gold ring worth three dollars, which was delivered to him. He was induced to make the purchase from seeing a handbill headed “ gift-book sale.”

The defendants were convicted, and the Supreme Court held the finding right; and they say “that where a pecuniary consideration is paid, and it is determined by lot or chance, according to some scheme held out to the public, what the party who pays the money is to have for it, or whether he is to have anything, it is a lottery,” &c.

In Den ex dem. Wooden v. Shotwell, said Wooden had divided a parcel of land into fifty-eight lots of unequal value, from 50 dollars to 600 dollars per lot, and disposed of them at 75 dollars each; and the particular lot of land to which each person was to receive a title was determined by lot. The Supreme Court of New Jersey say this was, both in substance and in form, a lottery. 3 Zabriskie, 470. See, also, Thorn and Cory v. Wooden, 2 id.--; 4 Wash. C. C. 129; 4 Serg. & R. 151.

The People v. The American Art Union, 13 Barbour, S. C. 577, was a proceeding against the. Art Union upon substantially the following state of facts: Persons became' subscribers at a fixed price. The society purchased works of art, and. once each year each work was numbered and the number placed in a box. The name of every member of the association was also placed in a similar box. A number was then drawn from the box, and a name drawn from the other box, ancLthe person whose name was drawn ‘was to be the owner of the work represented by the number just drawn. This was declared to be a lottery — a mode of distribution illegal and unconstitutional. The constitutional provision is very similar to ours; it is as follows: “ No lottery shall hereafter be authorized, or any sale of lottery tickets allowed within this state.” This case was afterwards taken to the Court of Appeals, and in October, 1852, that Court decided that it was a scheme having all the attributes and elements of a lottery; that it was a kind of game of hazzard, wherein several lots of merchandise are deposited in prizes for the advantage of the fortunate (Rees’s Cyclopedia); that it is a game of hazzard, &c. (12 Brewster’s Ed. Encyclopedia, 258); that it was prohibited by the constitution. The judgment of the Supreme Court was affirmed. 3 Selden, 235.

In Thatcher v. Morris, the Court of Appeals of New York held, that in a suit upon lottery tickets to recover the prize drawn by such tickets in • a Maryland lottery, the plaintiff must show on the face of his complaint that his title was acquired — his contract made — in a jurisdiction where gambling was authorized by law; because such tickets were a part of the machinery for carrying on a business prohibited by law. 1 Kernan, 438. In the same case, it is stated to be conceded that such a contract is immoral, and that no right of action can accrue to a party by reason of such contracts and dealings. Id. 438, 439.

But it is argued that the purchase of lottery tickets is not an illegal or immoral transaction, and Swain was not acting in violation of law although Bussell might have been; and therefore, Courts of law will aid Swain to amend the executed contract, when such aid would not be extended to Bussell to compel the performance of the contract if 'it had not been executed. This reasoning is unsound. It was evidently the intention of the framers of ora fundamental law, and our statute, to discountenance and, as far as possible, suppress gambling in all its forms, one of the most seductive phases of which is presented in the guise of lottery schemes and chance distributions of property. If the plaintiff, with the facts before him, saw proper to become a participant in such an illegal and prohibited transaction, — a transaction' not only in violation of the statute and the constitutional prohibition, but evidently, from the view taken of it by our law-makers, in contravention of public policy as understood by them, he is not in a condition to ask,.in this form, the aid of a Court of justice to relieve him from the superior skill of his associate. Such combinations were viewed by our legislators as formed to deceive and defraud the public. And if one of the associates should, by his greater disregard of right, succeed, in defrauding his fellows, Courts are not open to administer relief to them in the manner here sought, because of their participation in those acts so much at war with public policy. The plaintiff, in the case at bar, does not stand in Court as a mere purchaser of tickets in this scheme. By his own showing he received 1,533 shares, of- the conventional value of 4,000 dollars, as the consideration for his land; and at the same time he had before him a circular in which the land was held up to the public as of the value of 7,200 dollars, or 3,200 dollars more than he received therefor. The real value of the property he nowhere alleges. Nor is it clearly shown whether it was the intention of the associates in this scheme to really dispose of then-property at exhorbitant prices, or whether they retained in their own hands a majority of the chances, and thus intended to absorb the property, and fleece the public out of the amount for which tickets were in fact sold. Be that as it may, there was, it is clear, an arrangement to violate the law and contravene sound public policy. This is shown by a fair legal interpretation of the circular made a part of the complaint. *

The decisions are not uniform upon the subject of lotteries, either upon the morality or immorality thereof, or of the legal rights of parties directly or indirectly engaged therein.

Several cases are cited by counsel, some of which will be noticed.

In the case in 3 Zabriskie, heretofore cited, it is held as undisputed law, that “ when money or other personal property is paid by one of two parties to an illegal contract to. the other, where both may be considered as particeps crim-' inis, an action cannot be maintained, after the contract is executed, to recover the money. So money lost by illegal, gaming cannot be recovered, except when specially authorized by statute.” See Broom’s Legal Maxims, 325. In the case cited, the opinion does not intimate that a different rule prevails in reference to the recovery of real estate,: in such instances, except in this, that the plaintiff had the right in that case to recover because of his previous untainted title to the land in dispute, and to which alone he appealed on the trial, and against which title the defendant could not set Up, nor the Court give legal effect and validity to, a deed which the statute of that state declared invalid and void. That statute was as follows: “ That every grant, bargain, sale, conveyance, or transfer of any goods, chattels, lands, tenements, hereditaments, or real estate, which shall be made in pursuance of any such lottery, is hereby declared to be invalid and void.” We have no such statute in this state.

The Lessee of Bond v. Swearingen, 1 Ohio R. 403, cited by the appellant, appears, also, to have béen governed by the territorial statute in force at the time the deed, founded on a gambling consideration forbidden by that statute, was made. The effect of that decision is, that the deed was void as against creditors; and indeed, if there had been no creditors, that the title to the land would, in pursuance of that statute, have been vested in the heirs of the grantor, instead of passing by the deed to the grantee therein named.

Lee and Mullikin executed their bond to Bruce, binding themselves, &c., fohnded upon the consideration that the latter would withdraw his opposition to one Elliott's obtaining a discharge under the insolvent act. It was held that the consideration of the bond was illegal, and that the suit could not be maintained. 4 Johns. 412. — 2 id. 386.

In an action by the managers of a lottery against a defaulting agent for the sale of tickets, to recover the price of the tickets delivered to him, it was held, among other things that, “whenever from the plaintiff’s own showing, or otherwise, the cause of action appears to arise from the transgression of a positive law of the country, he has no right to be assisted,” — and that the action could not be sustained. 5 Johns. 327.

In the case of The Inhabitants, &c. v. Eaton, 11 Mass. R. 368, which was a suit brought to recover certain real property transferred by deed as a composition of a felony, it was held that where two parties agree in violating the laws of the land, the Court will not entertain the claim of either party against the other, for the fruits of such unlawful bargain. If a party has foolishly paid his money, repents his folly and brings his action to recover it back, the law will say to him: You have paid the price of your wickedness, and you must not have the aid of the law, to rid you of an inconvenience, which is a suitable punishment for your offense; and that no distinction exists between the payment of money, and a conveyance of land upon such a consideration.

Burger sued Rice on a contract by which Rice agreed to. let Burger have the keeping of one-half of the paupers of Floyd county, the keeping of whom had been awarded to Rice. Burger had partly performed and offered to complete the performance of his part of the contract. The Court instructed the jury that such contract was illegal as against public policy; and that “the law will neither enforce such a contract, nor relieve a party from loss by having in part performed it.” The finding was for the defendant, and was affirmed in this Court. 3 Ind. R. 127.

In a suit upon a promissory note, the consideration of which was the loan of individual small bills, the issue of which for circulation was prohibited by statute, the defendant had judgment because of the illegality of the consideration. Madison, &c., Co. v. Forsythe, 2 Ind. R. 484.

Catts v. Phalen et al., was a suit by the appellees to recover 12,50.0 dollars, money had and received to their use. Catts had been employed by the plaintiffs to do the manual acts necessary, &c., in drawing the numbers of a lottery of which they were managers. He fraudulently pretended that a certain ticket had drawn 15,000 dollars, which ticket he secretly owned. The plaintiffs paid the money to the person who acted for Catts, &c. The suit was to recover it. It was held that the illegality of the lottery was not a defense to the action. 2 Howard (U. S.), 376, 15 Curtis, 142.

In Watts v. Brookes, it was said by the chancellor that he could “ not allow it to be argued that you can break a law covertly. What you cannot do openly you cannot do secretly. A man cannot set np an illegal act of Ms own in order to avoid his own deed.” 3 Vesey’s Ch. 612.

A. W. Hubbard, L. Sexton and P. A. Hackleman, for the appellant (1). J. S. Scobey and W. Cumback, for the appellees (2).

It is thought that the case in 3 Zabriskie, and that in 2 Howard, should weigh much in favor of the position of the appellant. It is not necessary now to determine whether the decision in New Jersey might not have been influenced by the statute of that state, nor to critically examine the reasoning resorted to, and the conclusion arrived at; nor need we decide whether, in our opinion, it is supported by, or is adverse to, the weight of authorities; for it is by that Court placed upon the ground that the plaintiff did not base his claim upon the illegal transaction, and the defendant did attempt to sustain his defense by virtue of it.

Without stopping to carefully consider the reasoning of the case in 2 Howard, we might say that the facts upon which that opinion was pronounced differed widely from those in this case. In that, the plaintiffs had acted merely as managers of a lottery, supposed to be authorized by law, for the benefit of a public work; and if any recovery which might be had by them would be for the benefit of that work, and would not redound to their individual interest, then their position was very different from that of the plaintiff in this case; for he seeks to annul his own act, because of the fraud and illegality that was connected with it, and in which he shows he participated, and that he may individually be benefited thereby. This we do not think he is in a position to ask the Court, in this form of action, to do for him, and the demurrer was, therefore, properly sustained.

Per Cwriam. — The judgment is affirmed with costs.