Opposition Brief — Edwards v. Dine

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FEB 12 1947

CHARLES ORSPLIY

IN THE

Supreme Court of the United States

Ocroper Term, 1946,

No. 985

J. B. EDWARDS, RUTH BROUGHER and

MONTE PRESTON,

Petitioners,

Vs.

JOSEPH DINE,

Respondent.

RESPONDENT’S BRIEF IN OPPOSITION TO THE

PETITION FOR A WRIT OF CERTIORARI.

J,

CuarRLes Rivers AIKEN, and

/ Emer J. Cizary,

Attorneys for Respondent.

UNITED STATES LAW PRINTING CO., PHONE LAKEVIEW 6561, CHICAGO. ILL.

INDEX.

SuMMaRY OF ARGUMENT.

PAGE

A

There is no conflict of decisions presented by the

record and the Circuit Court of Appeals followed the

a 8 ke ee enton 1-13

Il.

On appeal the courts will adhere to the theory pur-

eR 8, SR a ee ee 13-14

CI inten coincecteee entice oases 14

TasLeE or Cases CITED.

Boddie v. Brewer & Hoffman Brewing Co., 204 Tl. 352,

OE Te. FR wccibnnpaabicieeniitcndnamaicaied 5, 6, 12

Brelesford v. Stoll, 304 Ill. App. 222, 26 N. BE. 24 159 6

Brooks v. Brady, 53 Tl. App. 155..................c.ccscessesseseee 5

Harris v.:MeDonald, 194 Ill. 75, 62 N. E. 310............ 10, 12

Mulcahy v. Vehon, 229 Ill. App. 454.0000... eeeeeeeeeee 12

St. Paul Fire and Marine Ins. Co. v. Kaufman, 93 F.

SOE Ney sialendiatihcincacaccceivtiicaiebicalasen i lbbavusedihitbapdhacdocaapacidaegan east 13

Shaffner v. Pinchback, 133 Ill. 410, 24 N. EB. 867.0... 5

Sternberger v. Wright, 239 Ill. App. 490......000000000000.2... 5

Suttle v. Finnegan, 86 Ill. App. 423.000.0000. 5

West v. Carter, 129 Ill. 249, 21 N. E. 782.................... 11,12

Texts, STaTUTES AND RULEs.

Ill. Rev. Stat., 1945, Chap. 38, Sees. 329, 333............... 3,4

IN THE

Supreme Court of the United States

Ocrosner TERM, 1946,

No. 9385

J. B. EDWARDS, RUTH BROUGHER and

MONTE PRESTON,

Petitioners,

vs.

JOSEPH DINE,

Respondent.

RESPONDENT'S BRIEF IN OPPOSITION TO THE

PETITION FOR A WRIT OF CERTIORARI.

I.

May It Please The Court:

There is no conflict of decisions presented by the record, and

the Circuit Court of Appeals followed the law of the

courts of Illinois.

The only chaos resulting from the decision is in the

minds of the petitioners, arising from their refusal or in-

2

ability to comprehend the Statute upon which the action

is predicated.

The chancellor in his opinion said (R. 24):

‘**Both sides agree that the indebtedness which was

the consideration for the chattel mortgage and bill

of sale here in question was a gambling transaction.

**... It is agreed that this case arises out of certain

gambling transactions between Dine and Edwards in-

volving betting on various race horses.”’

The trial court further concluded that the action was

brought under the Illinois Statute providing for the can-

cellation and setting aside of any instrument which has

for its consideraton the reimbursement or repayment of

any money lent or advanced for use in betting on race

horses.

In his opinion the chancellor said (R. 23) :

‘Plaintiff seeks to have set aside a chattel mortgage,

a bill of sale and an option to repurchase three race

horses, Valdina Lamar, First Command and Colonel

Al, on the ground that they were executed and de-

livered as a result of certain gambling transactions,

and under the statute of Illinois are therefore void and

of no effect. In count 1. of his complaint plaintiff

sets out that his action is brought under sections 329

and 333, chapter 38 (Criminal Code), Ill. Rev. Stat.,

1945, which provide: ‘(Section 329) All . . . agree-

ments, . . . mortgages, or . . . conveyances . . . where

the whole or any part of the consideration thereof

shall be for any money ... won by any gaming or...

wager or bet upon any race, ... or for the reimbursing

or paying any money or property knowingly lent or

advanced . . . to any person . . . so gaming or betting

. . Shall be void and of no effect.’ ‘(Section 333)

All... mortgages, . . . agreements, ... or convey-

ances, given, granted, drawn or executed, contrary to

3

the provisions of this Act, may be set aside and va-

cated by any court of equity, upon bill filed for that

purpose by the person so granting, giving, entering

into, or executing the same’.. .”’

The respondent prayed an appeal from the judgment

dismissing the case (R. 27). No error was assigned nor

exception taken by petitioners to the order of dismissal

and judgment.

It is evident from the record that the matter was pre-

sented squarely to the chancellor on the proposition that

the indebtedness which was the consideration for the chat-

Je morteage and bill of sale was a gambling transaction

and void under Section 329 of Chapter 38, Illinois Revised

Statutes, 1945, and that the cause of action was further

predicated upon Seetion 333, Chapter 38, Tllinois Revised

Statutes, 1945, providing for the cancellation and setting

aside by bill in equity of any instrument, conveyance, ete.,

which has for its consideration any money won by gaming

or wager or bet upon any race, or for the reimbursing

or paying of any money knowingly lent or advanced for

use in hetting on horse races.

The chancellor in spite of these conclusions (R.. 238)

dismissed the cause on grounds of ‘‘public policy’’ or

‘‘nublie morals’? and in conformity with the fundamen-

tal principles of equity (R. 25, 26), thus giving support to

the grounds advanced by petitioners in their motion to

distuiss (R. 22).

The petitioners in their petition for rehearing (R. 45)

at no time asserted that the Cireuit Court of Appeals had

decided the ease according to wrong principles or in con-

{iiet with cited authorities (R. 55). They were ‘‘in accord

=

4

with most of the propositions advanced by respondents,

except that Pearce v. Rice is far from being in point when

applied to the case at bar’’ (R. 56).

The history of the decisions of the reviewing courts of

Illinois as advanced in the supporting brief of the petition

for certiorari (pp. 13-18) is grossly misleading, due to the

confusion of the petitioners and their apparent inability to

properly analyze these cases.

Sections 329 and 333, chapter 38, Illinois Rev. Stat.,

1945, were first enacted in 1874. They have from time to

time in the reclassification of the Statutes borne different

numbers, but the text has remained the same. This par-

ticular group of Statutes under different sections pro-

hibits the renting of premises for gambling purposes,

gambling in grain futures, gambling at dice, gaming,

betting on horses and (Sec. 329) declares all promises,

notes, covenants, conveyances, ete. drawn or entered into

where the whole or any part of the consideration shall be

money won at gaming or for the reimbursing or paying

any money knowingly lent void and of no effect. This

Section 329 is one of the sections under which the com-

plaint was filed (R. 2).

Section 333 of Chapter 38 provides the method for set-

ting aside judgments, mortgages, covenants and agree-

ments given contrary to the provisions of the Act—the

method being by bill in chancery filled for that purpose

by the person so granting or entering into such agree-

ment. For convenience, we set out Section 333:

‘All judgments, mortgages, assurances, bonds,

bills, specialties, promises, covenants, agreements,

ments, and other acts, deeds, securities, or convev-

ances, given, granted, drawn or executed, contrary to

as

5

the provisions of this Act, may be set aside and va-

cated by any court of equity, upon bill filed for that

purpose, by the person so granting, giving, entering

into, or executing the same, or by his executors or

administrators, or by any creditor, heir, devisee, pur-

chaser or other person interested therein; or if a judg-

ment the same may be set aside on motion of any per-

son aforesaid, on due notice thereof given.’’

Taking the cases in the order cited by petitioners, we

will show their impertinence to the case at bar.

Shaffner v. Pmmchback, 133 Ill. 410, was a suit at law

between persons engaged in a gambling transaction. It

was not a suit brought under the Statute to set aside con-

veyances and has no application here.

Boddie v. Brewer & Hoffman Brewing Co., 204 Ill. 352,

was a suit instituted under Sections 329 and 333 of Chap-

ter 38, Ill. Rev. Stat., 1945, and is strongly adverse to the

petitioners. We shall analyze this case later.

Brooks v. Brady, 53 Til. App. 155, one of the ‘‘overlooked

cases”’ cited by petitioners (R. 46) was a suit at law on a

note. Defense was interposed that the consideration was

a gambling transaction. Held that it was not a gambling

transaction and not within the inhibiton of the Statute.

‘Ths was not a suit in equity brought under the Statute for

the purpose of setting aside a conveyance, the considera-

tion for which was a gambling transaction.

Suttle v. Finnegan, 86 Ill. App. 423, another ‘‘over-

looked case,’’ was likewise a suit at law on a note. The

Statutes invoked in the case at bar were not in issue.

Sternberger v. Wright, 238 Ill. App. 490, the third of

the ‘‘overlooked’’ cases was, like its two predecessors, a

suit at law on a note.

6

Apart from the fundamental difference that none of the

above cases were suits in equity brought under the Statute,

with the exception of Boddie v. Brewer & Hoffman Brew-

ery Co., there is the salient difference that in each of these

cases there was a dispute as to whether these transactions

between the parties were gambling transactions, whereas

in the case at bar the petitioners admit the transactions

were gambling and the consideration for the chattel mort-

gage and bill of sale was based on a gambling transaction

(R. 24).

Brelesford v. Stoll, 304 Ill. App. 222, was a suit in

equity for dissolution of a partnership and an accounting.

The business of the partnership was that of making gam-

bling machines prohibited by law. Upon general equit-

able principles the action was dismissed.

It is difficult to understand the petitioners’ persistent

refusal to become cognizant of the fact that the case at

bar is taken out of the general equitable rules of law by

the Statute and that the respondent is proceeding solely

and exclusively under Sections 329 and 333, Chap. 38,

Ill. Rev. Stat., 1945.

Boddie v. Brewer & Hoffman Brewing Co., 204 Ill. 352,

distinctly gives the Illinois courts’ interpretation of the law

involved in the instant case and is in complete harmony

with the decision of the Circuit Court of Appeals here.

The facts in the Boddie case are: Boddie sued the Brewing

Company and obtained judgments in two separate suits at

law in the Superior Court of Illinois, one in March, 1897,

and the other in March, 1899. The judgments were for

installments of rent due upon a lease executed by Boddie

to the Brewing Company and others. The Brewing Com-

ee

| —

7

pany defended these suits and the judgments were based

upon the verdict of a jury after trial. The Illinois Ap-

pellate and Supreme Courts affirmed these judgments. The

defenses interposed to these suits were other than that the

premises were leased for the purpose of carrying on gam-

bling. The Brewing Company then filed a bill in equity

under the Illinois Statute, Sections 127 and 135 (Section

135 then being Section 333 now) to vacate these judgments.

The Illinois Supreme Court in this case went so far in

upholding the right of the Brewing Company to come into

equity under the Statute for the purpose of setting aside

judgments, conveyances, ete., that it held the failure of

the Brewing Company to set up in its defense of the two

cases at law that the lease was void because the premises

were rented for gambling purposes did not preclude it from

asserting this for the first time in the suit in equity under

the Statute. We quote from the decision (p. 354):

‘As the defense could have been interposed in the

actions at law in which the judgments sought to be

set aside were rendered, did the fact that appellee

company knew the premises were leased for a gambling

house make it necessary that it should plead that fact

when sued for rent upon the lease, or could it appear

and interpose other defenses to the actions, and after

judgments had been rendered against it, raise the

question that the premises had been leased for use as

a gambling house by bill in equity to set aside the

judgments. We think under the authority of Mallett

v. Butcher, 41 Ill. 382, Lucas v. Nichols, 66 Ill. 41, West

v. Carter, 129 Ill. 249, and Harris v. McDonald, 194

Ill. 75, it could. . . . It was the intention of the legis-

lature to make all judgments, like all contracts on which

they were founded, absolutely void and of no vitality,

and they cannot be vitalized by the action of any court.’’

8

And at page 355 the Court said:

‘*In the cases above referred to the general doctrine

is recognized that where a party has a defense to an

action at law and he fails to make it or fails to bring

forward his entire defense, a court of equity will not

relieve him, but it is said in cases falling within the

statute passed for the purpose of prohibiting gambling

are by force of the Section 135 (now 333) taken out

of the general rule.’’

Pearce v. Rice, 142 U.S. 28, is claimed by the petitioners

as having no bearing on the issues in the case at bar. In

order to demonstrate clearly the applicability of Pearce

v. Rice, 142 U. S. 28, and to show its remarkable similarity

to the case at bar, we wish to quote from the opinion by

Mr. Justice Harlan (pp. 34-37) :

‘“‘The statute of Illinois referred to—being the part

of the Criminal Code of that State, relating to ‘Gam-

bling and Gambling Contracts’—provides: . . .

** *See. 131. All promises, notes, bills, bonds, cove-

nants, contracts, agreements, judgments, mortgages or

other securities or conveyances made, given, granted,

drawn or entered into, or executed by any person

whatsoever, where the whole or any part of the con-

sideration thereof, shall be for any money, property

or other valuable thing, won by any .. . wager or bet

upon any... chance, .. . or unknown or contingent

event whatever, or for the reimbursing or paying any

money or property knowingly lent or advanced at the

time and place of such ... bet, to any person or per-

sons so gambling or betting, . .. shall be void and of

no effect.

** “See. 135. All judgments, mortgages, assurances,

bonds, notes, bills, specialties, promises, covenants,

agreements and other acts, deeds, securities or con-

veyances, given, granted, drawn or executed, contrary

to the provisions of this act, may be set aside and

vacated by any court of equity, upon bill filed for that

e=_7—~“7™

9

purpose, by the person so granting, giving, entering

into or executing the same’...

‘The (defendant) invokes .. . the rule recognized

in the courts of the United States, that equity will not,

at the instance of one against whom a judgment at law

has been rendered restrain the operation or effect of

that judgment, unless there be equitable circumstances

justifying its interference... .

‘The courts of Illinois have not regarded these rules

as strictly applicable in cases under the law relating

to gambling and gambling contracts. In Mallett v.

Butcher, 41 Mlinois 382, 385, the Supreme Court of

that State, construing the statute in question held that

all contracts having their origin in gaming were void,

not voidable only, and that it was entirely immaterial

when or how the fact was disclosed to the court; con-

sequently, a suit in equity would lie to set aside a

judgment at law on a note given for money lost in

eaming with cards . . . The same question arose in

West v. Carter, 129 Mlinois, 249, 254 . . . The judg-

ments, promises and instruments therein specified heing

void and of no effect, it is not,’ said the court, ‘in the

power of the party to whom made, granted, given or

executed, or in whose interests they are drawn or en-

tered into, to give the contract validity. Nor can the

court, at the instance of such party, any more than it

could have by the confession or consent of the defend-

ant, vitalize the contract, and by its judgment defeat

the effectiveness of the proceeding in equity authorized

by the... statute to set aside the void: contract .. .

The rule in equity that courts of chancery will not

take jurisdiction when there is an adequate defence

or remedy at law, must vield to the requirements of

this statute, that relief may be granted in a court of

equity to vacate and set aside judgments and contracts

obtained in violation of this provision.”’

We think it plain from petitioner’s comment on the

Pearce ease that they not only misapprehend the purport

—_—

A NO A Oe ibis AWS Dy

10 —

of Pearce v. Rice, but also of the case at bar. They are

in a whirlpool created by their belief on one hand that it

is a cause based on general equitable proceedings to which

the doctrine of pari delicto will apply, and, on the other

hand, that it is a suit at law to which they can interpose

the defense of illegality by reason of gambling. Nowhere

in the entire record do they perceive that the case at bar

is a suit in equity brought under a specific Illinois Statute

to set aside a conveyance, the consideration for which is

gambling. Nor do they comprehend that the record clearly

shows that they admitted that the transactions were gam-

bling transactions. It is further evident that they are

unable to discern that the Illinois Courts and the United

States Supreme Court have upheld the provisions of these

Statutes in passing upon contentions analagous to those

made by the respondent in the instant case.

Harris v. McDonald, 194 Ill. 75, was a bill in equity filed

under the Statutes relied on in the case at bar to set aside

a judgment. Harris proceeded against McDonald on the

latter’s guaranty for the payment of rent on a lease be-

tween Harris and one Hogan, and to set aside and cancel

a certificate of sale of McDonald’s premises, which had been

sold under fiert facies execution issued on the judgment

and for an injunction restraining Harris from bringing

any more suits on the guaranty. The relief prayed for

was granted and appeals to the Illinois Appellate and IIli-

nois Supreme Courts were affirmed.

The Court in Harris v. McDonald, 194 Ill. 75, said (p.

79) :

‘*And it follows that if the contract of guarantee of

the appellee (McDonald) and the judgment thereon

rendered against him fall within the things enumerated

in Section 135 (now Section 333) as ‘all judgments,

—

_ mortgages, assurances, bonds, notes, specialties, prom-

ises, covenants, agreements, ands other acts, deeds,

securities or conveyances, given, drawn or executed

contrary to the provisions of this act’ (the act in ques-

tion), such guarantee may be set aside in equity... .

It cannot be doubted then that the lease and the cove-

nant therein to pay rent were contrary to the provi-

sions of Section 127 and that it and the judgment would

on sufficient proof be set aside in equity under Section

135 (now Section 333).’’

West v. Carter, 129 Ill. 249, was a case brought under

the same sections of the Illinois Statutes as the case at

bar. The relief prayed for was granted and affirmed by

the Appellate Court. On appeal to the Supreme Court the

case was reversed only because Carter was not an inter-

ested person within the purview of the Statutes. It has

not heen contended by the petitioners that Dine is not such

an interested person. The Supreme Court of Illinois states

(p. 253) :

‘“We should perhaps notice the contention of counsel

for appellant that Sections 131 and 135 can have no

application unless rendered by confession. .. . We are

not prepared to so restrict the operation of this statute.

By Section 131 all promises . . . executed . . . where

the consideration thereof shall be for money won by

any gaming... or wager or bet upon any horse race,

ete., are made not only voidable but absolutely void-

able and of no effect. Being void it is not in the power

of the party to whom made . . . to give them vitality.

Nor can the court at the instance of such party any

more than it could by the confession or consent of the

defendant vitalize the contract and defeat the effec-

tiveness of the proceedings in equity authorized by

the 135th section (now 333) of the statute to set aside

the void contract. .. . It was the intention of the legis-

lature to make all judgments like the contracts upon

which they are founded absolutely void—of no vital-

ity.’’

11

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12

In Mulcahy v. Vehon, 229 Ill. App. 454, it was held that

this language was not dictum, page 461.

It is evident that the courts of Illinois with monotonous

repetition, even in cases relied upon by the respondents,

assert that gambling contracts are void and the Illinois

legislature has provided that by suit in equity these con-

tracts may be set aside. With the same monotonous repe-

tition they state that these contracts can not be vitalized.

To disturb the opinion of the Cirenit Court of Appeals

would be giving vitality to the chattel mortgage and the

bill of sale.

Mulcahy v. Vehon, 229 Ill. App. 454, seems to the peti-

tioners a further case that has no bearing on the issues

in the case at bar. It is obvious that petitioners have

failed to read this case. Counsel for the appellant in the

Mulcahy case were somewhat less confused than counsel

for the petitioners here. The court in its decision in the

Mulcahy case interprets West v. Carter, 129 Ill. 249, Harris

v. McDonald, 194 Ill. 75, Boddie v. Brewer & Hoffman Brew-

ing Co., 204 Tl]. 352, and Pearce v. Rice, 142 U. S. 28, to

the same effect that the Cireuit Court of Appeals does in

the instant case. We submit that Mulcahy v. Vehon, 229

Ill. 454, is a rather complete analysis of those eases which

petitioners have been unable to decipher, and it is positive

argument in favor of denying their petition for certiorari.

Manifestly, the petitioners have confused the special

statutory proceeding commenced by the respondents in the

case at bar, with a suit which invokes the inherent equitable

jurisdiction of a court of chancery and with a suit at law

to enforce payment of a note the consideration for which

was based upon gambling transactions.

a

13

It is difficult to conceive of a sincere mistake being made

as to the character of the action brought by the respondent.

In his complaint the respondent clearly and definitely set

forth the Illinois Statutes under which he invoked the

court’s jurisdiction.

In giving a party to a gambling transaction the right

to go into a court of equity and by decree have set aside

a contract, note or mortgage arising out of a gambling

transaction, the Illinois legislature made clear its intent

to create an extraordinary remedy unknown to courts of

equity and which would otherwise be barred by the limi-

tations on chancery jurisdiction. To permit invocation of

general equitable doctrines in bar of a proceeding expressly

eranted by Statute would nullify the legislative enactment.

A right of action given by the legislature may not be de-

stroyed by legal reasoning or equitable philosophizing.

Neither will usurpation of the legislative provinee by the

judiciary be tolerated.

The Cireuit Court of Appeals did rely on and apply the

law of the Illinois Courts and the United States Supreme

Court to the case at bar. It did not construe the Statutes

in question for itself in conflict with the established law,

but, on the contrary, followed the legislative intent and the

decisions of the Illinois and United States Supreme Courts.

II.

On appeal the Courts will adhere to the theory pursued

in the trial court.

In the district court in support of the motion to dismiss

ihe petitioners asserted that a court of equity will not

ad ust disputes arising out of gambling transactions (opin-

ion of the Cireuit Court of Appeals, page 24 of Petition

14

for Certiorari), and admitted the consideration for the

chattel mortgage and bill of sale was based on a gambling

transaction (R. 24).

In the Cireuit Court of Appeals the petitioners reiter.

ated the arguments advanced in the trial court.

It is well settled that the court on appeal will adhere

to the theory of the case pursued in the trial court and will

not consider contentions resting upon a different theory.

St. Paul Fire and Marine IIns. Co. v. Kaufman, 93 F. 2nd

156.

Petitioners now seek to cast aside this theory in their

anxiety to present a case meriting the consideration of

this Court. They say in the petition that ‘‘it must be

remembered that this is not a case where the whole or

any part of the consideration was for money won by

gaming.”’

We submit that they can not now change their theory.

They directly and positively conceded in the trial court

and the Court of Appeals that it was a gambling trans-

action.

Conclusion.

We respectfully submit the petition sets forth no proper

grounds for issuance of the writ of certiorari, that the

judgment of reversal and remandment by the Circuit Court

of Appeals is right, and that the petition for certiorari

should be denied.

Respectfully submitted,

Cuar.tes Rivers AIKEN, and

Emmet J. Cieary,

Attorneys for Respondent.