Commonwealth of Kentucky v. Bassford

By the Court. Ingraham, First J.

The referee in this case has found upon the facts that the bond was executed by the defendants ; that the ticket referred to was held by the plaintiff ; but that such ticket was not made by Jewett & Smith ; and upon all the other facts raised by the.pleadings, he found for the defendants.

So far as he has found upon matters of fact, there is no reason for an interference with his report,, unless we should adopt the views suggested by the plaintiff’s counsel, that such finding was rather afinding of law than of fact ; that the referee, in finding against the plaintiff, did so upon the presumption that the provisions of the law authorizing the lottery had not been complied with. So far as any thing appears in the report of the referee, there is nothing to justify such an opinion. But in the paper, annexed, containing the reasons for the referee’s decision, it appears that he was of the opinion that the original managers could not sell the whole grant made to them by the act. That before selling a scheme of the lottery, the managers were bound to publish the scheme as adopted by them ; and that as no such proceedings ever took place ; on the part of the managers, that there could not be a lottery drawn by the purchasers under that act, and, therefore, that there was nothing due from the defendants.

I am inclined to concur with the referee in his conclusion, that under the act of the legislature of Kentucky the managers could not sell the whole grant, and with it the entire arrangement of the lottery. That they were bound to arrange the scheme of the lottery before they sold it, and that unless such preliminaries are complied with, the defendants are not responsible under this bond.

The authority to dispose of a scheme, or a class or classes, did not extend to a sale of the whole grant under the act. The act contemplated responsibility on the part of the managers, and required from them security for $100,000. If their duties could be discharged by a sale of the whole power vested in them, on a security for merely $8,500, such a condition would have been idle. The fair construction of that section is, that they were to make and publish the scheme of the lottery in a class or classes, and then that they might sell the same as provided in the third section.

The argument used by the plaintiff’s counsel, that the defendants are estopped by the recitals in the bond from showing that the proceedings of the managers were contrary to law, is not sound. Such a rule would hold a party in opposition to the usury law, or the statute of frauds, or any other statute which makes a contract void for the violation of it.

But there is no such admission in the bond. It only recites that Jewett & Smith had purchased the grant of a lottery authorized by an act of the general assembly of Kentucky, &c. It does not recite or admit any authority to sell, or any compliance with the provisions of the statute which were necessary to authorize the sale.

There is more difficulty in the point, that this bond being given to the state, and the lottery having been drawn under it, the state has a right to enforce it, without reference to the statute. Treating it as a mere voluntary bond, not given in pursuance of any statutory provision, such a position might perhaps be maintained. But in such a case there is no evidence of any damage to the state upon a breach of such a bond. A voluntary bond given to a state, to do some act for a third person, would not, in the breach of it, afford any ground of damage upon which the state could recover. It would require some legislative authority for the taking of such a bond, before the state could recover upon it beyond nominal damages.

But although the referee has in his opinion discussed the legal questions applicable to this case in a manner unsatisfactory to the plaintiff’s counsel, still I think he has placed his decision also upon a finding on the facts reaching the whole grounds of the claim on which this action was brought. He has found, as matter of fact, that Jewett & Smith did not issue or sell this ticket—and without the finding that the ticket came from them, these defendants, who were their sureties, could not be liable. There is nothing in the act authorizing the purchasers from the managers, under any conditions, to sell out to third persons, either in whole or in part. To make the defendants liable, the tickets must have been issued by Jewett & Smith, or their authorized agents in their names. The referee’s finding is to the contrary, and such finding is not contrary to the evidence. Upon this point the evidence is defective, and the plaintiff must fail, even under a different construction of the law from that which I have stated.

Judgment affirmed.