253 S.W. 229 | Mo. | 1923
Lead Opinion
Relator seeks to compel the Commissioner of Finance to license it under Section 10263, Revised Statutes 1919, as an unincorporated association of individuals "formed for the purpose of accumulating a fund or funds to be used for the purpose of enabling contributors to such fund, or their assigns, to secure a loan or loans for the purpose of acquiring a dwelling house . . . or discharging a mortgage or other encumbrance thereon." The surety bonds required by the section named have been tendered and no objection is made to them. The questions raised relate to the validity of Section 10263 and the legality of relator's plan of business.
Relator's declaration of trust sets out its plan and powers. It declares its purposes, generally speaking, in *532 accordance with the provisions of the statute, and prescribes the method of electing trustees, and defines their powers and duties and relations to each other and those who shall become subscribers. It is provided that the certificates to be issued under the trust shall be issued in numerical order and be of like tenor except as to face value, and that all settlements and requirements with respect to certificates shall be in proportion to the face value. Monthly payments of $4 for each $500 of the face of each certificate is required for a period not exceeding 120 months. The trustees are empowered to provide options for settlement in various circumstances. "Certificates shall be eligible for loans, not to exceed the face value thereof, for the purposes enumerated in this declaration of trust, from the available funds of the loan fund, in its regular order according to the day, hour and minute the application to secure the certificate was made and signed, providing however, that if such certificate matures for a loan prior to the accumulation of thirty per cent of the face value the holder is entitled to advance the difference required to make up the amount of thirty per cent." Loans are to be made on real estate security. At the time of receiving loans certificate holders "may surrender their certificates and receive credit on the principal sum of their loans for the loan credit, under the terms of the certificate, or may reject such credit and carry the certificate according to its tenor; in either event the amount due on the loan shall be paid at a minimum rate of $8 monthly on each $1,000 borrowed, including three per cent interest computed yearly in advance and payable monthly, except in cases of misfortune," when extensions are allowed. "Certificate holders who have paid all installments required in accordance with the certificate terms and who have not obtained or accepted a loan, or made other settlements provided under their certificates, shall be entitled to a cash settlement of a sum equal to all credits to a loan fund, derived from the installments paid thereon, plus its pro rata *533 share of the net earnings, if any, of the loan fund of the series to which it belongs; such sums to be ascertained by the trustees hereunder, and their determination shall be conclusive as to such amounts, provided that no such settlements shall be in excess of the face of the certificate plus an additional fifty per cent of the face of the certificate." It is provided that the payment on certificates, less deductions for expenses under other provisions, shall constitute a loan fund for payment of obligations on certificates. The first five monthly payments, one dollar per thousand of face value from each of the next seven payments and fifty cents per thousand from each subsequent payment are taken to constitute the expense fund.
It is provided that the trust shall continue until the expiration of twenty years after the death of the last survivor of the named trustees, except that the trustees may terminate the trust sooner by unanimous vote. At such termination the trustees are to distribute the property of the trust "ratably and in due and in proper share or proportion among those entitled thereto." The record contains the "Declaration of Trust of the Home Planners Fiscal Agency," which organization relator apparently intends to employ in the active management and handling of its affairs. The form of the certificate intended to be used is set out as an exhibit. It includes a table of values for settlements under several sets of conditions. A contract between relator and the fiscal agent also appears. Respondent avers he refused a permit because he found the business of relator would be in conflict with the Constitution and laws of the State in that: (a) it is a scheme in the nature of a lottery; (b) Section 10263, Revised Statutes 1919, is void for conflict with named constitutional provisions; (c) relator's plan and business bring it within Section 11 of Article 12; (d) that relator is not within the terms of Section 10263 for several reasons; (e) that the proposed plan is fraudulent in its nature.
The first question argued is whether relator's plan or scheme is a lottery or in the nature of a lottery within *534
the meaning of Section 10 of Article XIV of the Constitution which forbids the authorization of lotteries or gift enterprises for any purpose. The term "lottery," thus used, includes every device whereby anything of value is, for a consideration, allotted by chance. [State v. Becker, 248 Mo. l.c. 560; State v. Mumford,
The only decision in a case in all respects like the instant case is in Fisher v. Ohio, Ohio Court of Appeals of the Eighth District. A certified copy of the opinion is on file. The right to loans is determined the same way and the rate of interest charged is the same. The court held the scheme a lottery. As in this case, it was argued that the chance for profit must depend upon a "subsequent event or there could be no lottery." The court held, in substance, as was held in State v. Clarke, 33 N.H. l.c. 335, that the important feature was that the applicant himself did not know and could not ascertain in what order his certificate would stand when the returns were all in. This state of mind made it, "with him, as much a matter of lottery as if he had drawn the number from a hat." If the fact that the winning number is determined before the tickets or chances are sold, though *537
the number is not disclosed, renders the scheme unassailable as a lottery, then the "Louisiana Lottery" could still operate under our law by the simple device of determining the winning numbers first, keeping them secret and then selling chances based upon correspondence of ticket numbers with the numbers already drawn but kept secret from the ticket buyers; or, publishing the winning numbers and selling secretly numbered tickets. None will contend this can be done. It overlooks the whole reason for the law against lotteries. It is the appeal to the gambling instinct which is condemned, and no mere juggling of the order of business can serve to evade the constitutional provision. State ex rel. v. Lee,
For the reasons given the alternative writ is quashed. All concur, except Graves, J., who dissents in separate opinion.
Dissenting Opinion
It is true that the Legislature has wiped out the right to organize a business of the kind here involved. That law was not in effect when we granted our alternative writ, and will not be in effect for a month, or nearly so. Relator's rights are therefore dependent upon existing law. They were so dependent when this alternative writ was awarded, and the case submitted, long since. Delay in filing briefs has in a large measure delayed the disposition of the case. But this is of but little importance. The present scheme is condemned in the opinion on the theory that it is a lottery. The case of State ex rel. v. Lee, 288 Mo. l.c. 708, determines that question against the contention of the respondent, and in favor of the relator. That case cannot well be distinguished from this case, upon that issue. The alleged lottery feature is no more apparent in the one case than the other. The opinion of my learned brother draws a distinction without a difference. If *539 we want to overrule the Lee Case, well and good, but to distinguish it, does not lie within the two records, when both schemes are read. The mere difference in interest rate does not increase the visions of a lottery. People can contract for such interest rate as they please. In either scheme the time or opportunity of a loan was dependent upon the filing of the application. It makes no difference when or with whom it was to be filed, so that the loan was dependent upon the order of filing. Without overruling Lee's Case, and one other following it, the peremptory writ should go, and I so vote. I think the Lee Case was right. In this situation I dissent from the opinion.