Stern v. Miner , 239 Wis. 41 ( 1941 )

This is an action by J. L. Stern, plaintiff, to recover certain license fees under a written contract whereby Affiliated Enterprises, Inc., granted to George Miner and Miner Amusement Company, a corporation, defendants, a limited license to use and operate an advertising plan known as "bank night," under certain copyrights and patents pending at a weekly license rental of $7.50 per week for fifty-two weeks from August 1, 1936, and from year to year thereafter unless canceled by a notice within thirty days before the expiration of the contract. Plaintiff, J. L. Stern, sues as the assignee of this contract. The complaint alleges that Affiliated Enterprises, Inc., furnished defendant with all books and other equipment provided for in the contract and completely performed its contract; that defendants gave no, notice within the thirty-day period of desire to terminate the license, and that on April 9, 1940, defendants were indebted to Affiliated Enterprises, Inc., in the sum of $1,007.50. Several defenses were set up in the answer, the only one of which is important here being that the plan licensed to defendants constitutes a lottery; that the contract is illegal and that there can be no recovery from defendants. Defendants thereafter moved for summary judgment. The supporting affidavits set forth the plan in detail as follows: Persons might register with the theater by writing their names on sheets or cards provided for that purpose, each registrant being given a distinct serial number. The card bearing such number was placed in a receptacle from which drawings were made on a designated day and hour of a particular night each week. The number drawn was referred to the list of registrants to determine the name and the name was announced both inside and outside the theater. If the person whose name was so announced responded within a specified time he was awarded a cash prize. Otherwise, the money was added to the amount awarded the following week. Any person was allowed to register without payment of admission fees, and if the winner was not already in the theater he was not required to purchase a ticket in order to enter and claim his prize money. The affidavit states that in practical application the vast majority of registrants bought admission tickets and paid for the opportunity to participate in the drawings, most of them attending the show but some remaining in the lobby during the drawing; that the plan was intended to and did result in greatly increasing the paid attendance at the theater on the day or nights of the weekly drawings, and that it necessarily tended to, and did demoralize winners and impoverish losers; that the plan is in all essential respects identical with the plan used by the La Crosse Theaters Company at La Crosse, Wisconsin, held to be a lottery by the supreme court of Wisconsin, State ex rel. Cowie v. La CrosseTheaters Co. 232 Wis. 153, 286 N.W. 707; that the tabulation of paid admissions indicates a large increase in attendance on bank nights.

Plaintiff's affidavits are to the effect that the scheme is nothing but an advertising device; that it has no connection with admission to the theater at all; that persons in or about the theater were usually allowed about three minutes to claim their award. Plaintiff's affidavit denies that the practical operation of the plan is that a vast majority of registrants buy admission tickets for the privilege of participating in the drawings; admits that the purpose of the plan is advertising; denies knowledge as to the manner in which defendants operated bank night; denies that the plan is like the La CrosseCase, supra, because in the La Crosse Case absentee registrant cards were sold; and disclaims any personal knowledge as to the amount of business done.

Upon these affidavits the trial court entered summary judgment for defendants on January 18, 1941. Plaintiff appeals. The question in this case is whether upon the pleadings and affidavits enough facts are disclosed to bring the contract sued upon within the rule of State ex rel.Cowie v. La Crosse Theaters Co. 232 Wis. 153,286 N.W. 707, and State ex rel. Regez v. Blumer, 236 Wis. 129,294 N.W. 491. Plaintiff asserts that in the La Crosse Case,supra, the consideration for bank night found by this court out of facts admitted by pleadings was that hundreds of people go to bank night, not to see the show, but to participate in the drawing, and that in effect the money is paid not to see the show, but as a consideration for participation in the lottery; that in the Regez Case, supra, the consideration found from conceded facts was the daily attendance at the drugstore to get a premium card which had to be in the possession of the person whose name was drawn, as a condition to receiving the prize. In this case plaintiff says that he is not in a position to do more than deny knowledge or information sufficient to form a belief, (1) as to whether facts deemed important in the La Crosse Case, supra, exist here, or (2) the manner in which defendant actually administered the plan, and that since, under the rules of pleading, issue may be taken in this manner, he ought not to have summary judgment entered against him, merely because by reason of his lack of knowledge or information he cannot meet the defendant with counteraffidavits.

The point raised is interesting, but we conclude that the issues to which it relates are immaterial, and that upon the undisputed facts it conclusively appears that the scheme outlined by the contract is a lottery. It appears to be assumed by plaintiff that there is a question of fact in every case involving "bank night" schemes whether in the particular case the vast majority of registrants actually buy tickets for the opportunity of participating in the drawing, rather than to see the performance. Upon this theory an elaborate investigation into the facts of each case would be necessary to determine whether a particular "bank night" project was illegal, and the result would be that identical schemes would be held lawful or unlawful, in accordance with the resolution of this fact issue. The mere statement of this contention should indicate its fallacy. The reaction of patrons in a particular community toward the scheme ought not to be a determining factor. What the court had in mind in the La Crosse Case, supra, was that as a matter of fact the purpose, intent, and almost inevitable tendency of such a scheme is to induce registrants to pay out money to participate in the drawing, rather than to see the entertainment, and that this constitutes the consideration for the lottery and condemns it as such. Many things may constitute the consideration for a contract. It is the fact that they are the intended consideration that imports them into, a contract. What was held in the La Crosse Case was that the contemplated consideration was increased attendance at bank nights for the purpose of the drawing, rather than to see the show. This purpose and intent is evident from a consideration of the entire scheme. The drawing has no possible connection with the entertainment offered. It does not advertise the merits of the show, and it would be quite naive to suppose that it has no purpose connected with attendance at the show for the purpose of the drawing. It was because of the fact that these items were upon the face of the contract the contemplated and expected advantages in the scheme that the court in the La Crosse Case treated increased attendance and attendance at theaters without reference to the entertainment to be material factors. It was not proposed to submit to the trial court and jury in each individual case an investigation of what actually happened in a particular community, assuming the contract to have been carried out in strict accordance with the plan. Further than this, the Regez Case, supra, indicates very plainly that the mere attendance at the drugstore to obtain a premium certificate is a sufficient legal detriment to constitute consideration for the prize, and under the doctrine of this case it follows that the requirement of registration and appearance within the theater within a specified time after the announcing and drawing is also a sufficient consideration to put the scheme within the definition of a lottery.

It follows that the issues of fact sought to be raised by plaintiff are immaterial in this case and as the contract must be judged as to its legality not by what happens afterwards but by its purpose and intended effect as declared by its terms, we hold that under its terms it constitutes a lottery, and that the trial court properly granted a summary judgment for defendant.

By the Court. — Judgment affirmed.