Opinion
3-12-1958
CALIFORNIA GASOLINE RETAILERS, a corporation, and Philip M. Hudson, Plaintiffs and Respondents, v. REGAL PETROLEUM CORPORATION OF FRESNO, Inc., a corporation, et al., Defendants and Appellants. * Civ. 5391.
A. E. Stebbings, C. Neil Ash, James D. Garibaldi, Los Angeles, Frank C. Lerrigo, Eckhart A. Thompson, Fresno, Martin J. Weil, Brewster L. Arms, Los Angeles, Robert R. Rosson, and A. Hugo Pearson, Hanford, for appellants. Rowell, Lamberson & Thomas, Milo E. Rowell, Richard Z. Lamberson, and Breckinridge Thomas, Fresno, for respondents. Edmund G. Brown, Atty. Gen., Clarence A. Linn, Asst. Atty. Gen., and Victor Griffith, Deputy Atty. Gen., for amicus curiae.
CALIFORNIA GASOLINE RETAILERS, a corporation, and Philip M. Hudson, Plaintiffs and Respondents,
v.
REGAL PETROLEUM CORPORATION OF FRESNO, Inc., a corporation, et al., Defendants and Appellants. *
A. E. Stebbings, C. Neil Ash, James D. Garibaldi, Los Angeles, Frank C. Lerrigo, Eckhart A. Thompson, Fresno, Martin J. Weil, Brewster L. Arms, Los Angeles, Robert R. Rosson, and A. Hugo Pearson, Hanford, for appellants.
Rowell, Lamberson & Thomas, Milo E. Rowell, Richard Z. Lamberson, and Breckinridge Thomas, Fresno, for respondents.
Edmund G. Brown, Atty. Gen., Clarence A. Linn, Asst. Atty. Gen., and Victor Griffith, Deputy Atty. Gen., for amicus curiae.
MUSSELL, Justice.
The original plaintiff in this action for injunctive relief is the California Gasoline Retailers, a nonprofit California corporation, which has sixty-four members engaged in the operation of gasoline stations in the Fresno area, the area covered in the complaint. The corporation members distribute the products of Standard Oil, Shell Oil, Union Oil and other major oil companies. The defendants are the Regal Petroleum Corporation of Fresno, Inc., Regal Stations of Fresno, Inc., and approximately seventy corporations, partnerships and individual independent service station operators. The various defendants were divided into three groups at the time of trial, depending upon the products they handle, and are referred to in the briefs as the 'Regal', 'Beacon' and 'Norwalk' groups. The Regal defendants handle Regal products and the other defendants handle Beacon and Norwalk products. The third cause of action in the complaint herein involves the Regal group. The sixth cause of action involves the Norwalk group and the ninth involves the Beacon defendants. It is alleged in these causes of action that the defendants were engaged in a scheme for the disposal of property by chance among persons who had paid or promised to pay valuable consideration for the chance of obtaining such property in violation of section 319 of the Penal Code.
The trial court held that the acts of the defendants described in the third, sixth and ninth causes of action constituted a lottery within the meaning of the provisions of said section 319 of the Penal Code. Judgment was entered in accordance with this holding and defendants appeal from this portion of the judgment and from the portion thereof decreeing that plaintiffs are entitled to an injunction restraining the defendants from directly or indirectly operating a lottery or furnishing tickets or chances thereon.
The principle contention of all the appellants is that their respective advertising, merchandising and give-away programs did not constitute a lottery. Regal Stations
The record shows that the Regal defendants operate three gasoline stations in the Fresno area. These stations conduct what is generally known as a give-away program. During the first ten months of 1955, 1,690,000 tickets were distributed to the Regal stations in Fresno for redistribution to the public. Anyone entering a Regal station was given four tickets. Tickets were distributed at four drive-in theatres in Fresno and were given away at baseball games and from house to house. Whenever tickets were given away at locations away from the stations, they were distributed with the stubs attached, so that the recipient was required to go to a Regal station to deposit the stub in order to participate in the drawing. One station, in September, 1955, distributed about 6,000 tickets away from the station, and the tickets distributed at locations other than the gasoline stations amounted to less than 6,000 per month. The Regal give-away was conducted under a set of rules posted in each service station and the first of these rules provided that any person over eighteen years of age would be given free an officially numbered ticket for the drawing under the program. Tickets were given away at the stations irrespective of any purchase and those who purchased products received their tickets before any purchases were made. The rules provided that the winner would not have to be present at the time of the drawing and the winning numbers were posted at the Regal stations for seven days. Periodic drawings were held at which the holder of the winning ticket was awarded the prize, an automobile, cash, or other personal property. Norwalk Stations
The operation conducted by the Norwalk defendants was similar to the program initiated by Regal and consisted of newspaper, radio, and billboard advertising to the effect that each month, commencing with May, 1955, Norwalk stations would give away three new Buicks, together with eighteen household appliances. When the Norwalk program was started, the distributors, to defray the cost of the tickets, advertising and expenses, increased the price of gasoline to the retailers one cent per gallon. This raise commenced May 1st, simultaneously with the commencement of the give-away program. Norwalk dealars who chose not to participate in the give-away program were not charged the extra one cent per gallon by the distributor and did not raise their retail price to the public. The number of tickets furnished to all Norwalk dealers in the Fresno area for distribution to the public was about 110,000 per month. In the month of May, 150,000 tickets were distributed by Norwalk to each station in the Fresno area, the greater part of which was redistributed to the public.
William Kim, a student at Fresno State College, distributed 5,000 Norwalk tickets at the Fresno County Fair grounds by placing them under the windshield wipers of automobiles, one ticket to each car. The stubs were attached to these tickets and each had Norwalk advertising attached to it. Recipients of these tickets were required to go to a Norwalk station to deposit the stub in order to participate in the drawing.
Sample testimony of Norwalk dealers was taken to show the typical operation of the program. In this connection, Frank Tashima, a Norwalk service station dealer, stated that he was told by the Norwalk distributors that he was to give a ticket to anyone who came in and asked for one. When asked how many tickets he gave to persons who did not purchase any products, he replied, 'not very much'. He distributed between 8,000 and 15,000 tickets per month from May through August, 1955, and did not distribute any away from the station. He gave a larger number of tickets for larger purchases and passed along the one cent per gallon price raise to the public.
Appellant Donald McKelvey, a Norwalk service station dealer, stated that he distributed some 34,000 tickets in May, 1955, when the program started, and up to 65,500 in August; that Norwalk dealers are arbitrarily issued four tickets to the customer; that he probably distributed less than 1,000 tickets per month at the station to noncustomers and that he averaged between 3,500 and 4,000 tickets distributed per month away from the premises.
Conrad Herzog, a Norwalk service station dealer, stated that at his station tickets were given to persons when they drove into the station and after a purchase, a person was given more tickets, the greater the purchase the more tickets he received; that he gave approximately 1,000 tickets each month away from the station and distributed about 2,500 tickets at the station each month to persons who made no purchase. The record of Currie Bros. shows that Herzog received for distribution at his station 24,000 tickets in May, 42,300 in June, 35,700 in July and 52,000 in August. Beacon Stations
The secretary of the United Stations, Inc., an association of gasoline stations formed by the operators for the purpose of operating give-away programs, stated in his deposition that the United Stations distributed 500,000 tickets per month and that they were distributed to retailers on the basis of one ticket for each two gallons of gasoline the dealer had sold the previous month; that the purpose of the United Stations in conducting this program was to induce more persons to patronize the stations and thus secure financial gain to the members of the United Stations.
Roger C. Ingraham, vice-president in charge of sales of Caminol Company, stated in his deposition that when the Beacon and Caminol give-away, which was integrated with the United Stations give-away program April 1, 1955, was commenced, the service station dealers increased the price of gasoline to the consuming public one cent per gallon. Caminol did not raise the price of gasoline to the dealers on the invoices, but the dealers remitted to Cominol the extra one cent per gallon which they received from the customer by raising the retail price. This extra one cent was used to pay for prizes, advertising and similar expenses incidental to the give-away program.
Peter Seibert, a Beacon distributor, stated in his deposition that it was generally understood at the commencement of the giveaway program that the dealers would raise the price of gasoline one cent per gallon if they desired to participate in the program; that if, for example, a dealer sold 10,000 gallons, he (Seibert) gave him a receipt for $100 to apply on the United Stations and this receipt represented the one cent per gallon used to pay for the prize; that originally the Beacon dealers received for distribution two tickets for each gallon of gasoline sold the previous month and that all the tickets, except a very small amount, were distributed at the dealer's station.
In this connection, a letter was introduced in evidence from Mr. Rouda to the dealers, dated July 18, 1955, advising them of a new system, and stating that they should give away two tickets when a person drove into the station, and 'at least once each month' they should give a 'small quantity of tickets to purchasers away from the station'.
Fred Gabel, a Beacon service station dealer, testified that he gave away 8,000 chance tickets in May and another 8,000 in April, of which 390 were distributed away from the station. These tickets still had the stubs attached so that the persons holding them would have to come to the station to deposit the stubs in order to participate in the drawing. Gabel further stated that he distributed a maximum of 90 tickets to persons at the station who made no purchase; that he distributed about 200 tickets away from the station each month, or two or three a day at the station, so that approximately 400 to 500 tickets out of the 9,000 tickets distributed each month were given away.
Joseph Foristiere, a Beacon dealer, testified that he gave away approximately 35,000 tickets per month, of which approximately 15,000 were given to persons who made no purchase; that at the commencement of the give-away program he increased his price per gallon to the buying public and that on the average he gave away 3,000 tickets away from the station and that he gave another 1,000 to persons who did not purchase anything.
Article IV, Section 26, of the California Constitution provides in part: 'The Legislature shall have no power to authorize lotteries or gift enterprises for any purpose and shall pass laws to prohibit the sale in this State of lottery or gift enterprise tickets or tickets in any scheme in the nature of a lottery. * * *'
A lottery is defined in section 319 of the Penal Code as '* * * (a)ny scheme for the disposal or distribution of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property or a portion of it, or for any share or any interest in such property, upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle, or gift enterprise, or by whatever name the same may be known.'
It is conceded by all of the appellants herein that the elements necessary to constitute a lottery are (1) Disposition of property (2) upon a contingency determined by chance (3) to a person who has paid a valuable consideration for the chance of winning a prize. Appellants further concede that the first two elements are present in the instant case. However, they claim that the third element is not present and that therefore no lottery existed. It is further stated by appellants that the question here to be determined is whether under the evidence and the law of this state the third element, to wit, consideration, is present.
The precise question here involved apparently has not been passed upon by the courts of this state. However, there are four California decisions to which our attention has been directed. The first is that of People v. Cardas, 137 Cal.App.Supp. 788, 28 P.2d 99, decided by the Appellate Department of the Superior Court of Los Angeles County. This case involved the question whether the defendant was conducting a lottery as defined by section 319 of the Penal Code. The defendant therein was the operator of a motion picture theatre. He advertised by means of theatre programs, newspapers, placards, and on the screen that the theatre would give away a prize consisting of two fully paid round trip tickets to Santa Catalina Island to the holders of the lucky tickets. The tickets were placed in the hands of the public by the distribution in the vicinity of the theatre of 5,000 theatre programs, each containing one of the tickets, and by handing 2,000 tickets to passing motorists. Also, an employee of the theatre was stationed between the street and the entrance to the theatre, who gave prize tickets to all who asked for them, and offered them to any person who approached her. No charge was made for any of these prize tickets, nor was it necessary that an admission to the theatre be purchased. The cashier in the box office sold only admission tickets and did not have any prize tickets in her possession. A receptacle was placed outside the theatre in which were deposited the stubs from the prize tickets. The stubs were placed therein by persons who purchased admission tickets, by those who were admitted to the theatre free, and by others who did not attend the show. The drawing was held on the theatre stage and any one who held the winning prize number was entitled to enter the theatre without charge for the purpose of claiming the prize. The winner of one of the prizes was a patron who had not purchased an admission ticket. The court said (137 Cal.App.Supp. at page 791, 28 P.2d at page 100): 'The question is: Did the holders of prize tickets pay a valuable consideration for the chance? Certainly those who received prize tickets without buying an admission ticket did not pay anything for the chance of getting the prize. They did not hazard anything of value. If would then seem to follow that those who purchased admission tickets and received prize tickets, not at the box office, but from another employee, could not be said to have paid a consideration for the prize tickets since they could have received them free.'
The court then stated that the principles set forth in Cross v. People, 18 Colo. 321, 32 P. 821, 822, 36 Am.St.Rep. 292, were sound and were, in general, applicable. In the Cross case the proprietors of a Denver shoe store distributed numbered cards which carried advertisements of their goods and information about drawings for prizes. Anyone, including noncustomers, could get one card upon request, either by personal call or by mail. A card was given with any purchase of $1 or under and additional cards in proportion on larger purchases. Winners were not required to be present at the drawing. It was held therein that 'The element of gambling that is necessary to constitute this a lottery within the purview of the statute, to wit, the paying of money, directly or indirectly, for the chance of drawing the piano, is lacking, and the transaction did not constitute a violation of the statute.' The court therein further stated that the fact that such cards or chances were given away to induce persons to visit the store with the expectation that they might purchase goods, and thereby increase their trade, is a benefit too remote to constitute a consideration for the chances.
In the Cardas case it was further said, 137 Cal.App.Supp. at page 792, 28 P.2d at page 101: 'An examination of the cases holding certain schemes, apparently somewhat similar to the one here in question, to be lotteries, discloses vital points of distinction. In general they fall into two groups. In one group it will be found that the prize tickets were only furnished to customers--those who purchased something. The payment made by the customer was for both the articles purchased and the prize ticket--part of the consideration was for the ticket.'
In People v. Gonzales, 62 Cal.App.2d 274, 144 P.2d 605, the court held that a valuable consideration was paid for the chance of obtaining property upon an understanding that it was to be distributed by chance. In that case 'cash night' tickets were given to each patron of a theatre at the time he paid the regular admission price and another ticket was delivered to each patron as he was leaving the theatre. The record did not show that any ticket was delivered by the theatre to any person or 'customer' for the asking or at all, who did not pay admission. There was no announcement by the theatre employees that drawing tickets would be given gratuitously to 'customers' or other persons if they would ask for them, or that such tickets would be given gratuitously, or at all. There was no general or indiscriminate distribution of drawing tickets to persons, irrespective of whether they paid admission and the court held that (62 Cal.App.2d at page 281, 144 P.2d at page 608) 'Even if the evidence had shown that drawing tickets were distributed to 'persons' gratuitously in accordance with the qualifying statement of that witness, it would not have presented a conflict in the evidence which would have supported a finding that there was an indiscriminate distribution of tickets to persons irrespective of whether they paid admission, unless such distribution to non-customers was of a substantial number of tickets in relation to the 180,000 tickets issued to customers for each six weeks period. The distribution of a negligible number of tickets to non-customers would not have presented a substantial conflict in the evidence.'
In discussing the case of People v. Cardas, supra, the court (in the Gonzales case) said (62 Cal.App.2d at page 281, 144 P.2d at page 609): 'That decision was based upon the fact that there was a general and indiscriminate distribution of the drawing tickets irrespective of whether admission was paid; that attendance inside the theater was not a prerequisite to participation in the drawing; and announcement was made outside the theater for the benefit of non-customers. The method of distributing the prize tickets in that case was different very materially from the method of distribution herein.' The court further pointed out that in the case of Cross v. People, cited in the Cardas case, it was stated that the tickets or chances were given indiscriminately to persons whether they purchased goods of the plaintiff in error or not--to those who registered their names at their shoe store, and to those, who, from a distance, sent the return postage. The court also cited State v. Danz, 140 Wash. 546, 250 P. 37, 48 A.L.R. 1109, which involved a lottery statute substantially the same as section 319 of the Penal Code of this state. In that case the defendant, who operated the motion picture theatre, distributed groceries and other articles from the stage of the theatre to the holders of winning tickets. The articles distributed did not cost the defendant anything but were obtained from various merchants whose names were mentioned as the articles were distributed. On the night of each drawing each adult patron, upon paying the admission charge, received a drawing ticket. There was a sign at the front of the theatre stating that the drawing tickets were free and it was not necessary to purchase tickets to the theatre. Announcement of the winning number was made outside the theatre, and anyone outside who held a winning ticket had the right to enter the theatre without charge to claim the prize. The court (in State v. Danz, supra) said, 140 Wash. at page 548, 250 P. at page 38: "Manifestly, it was the plan and purpose of the appellants to get additional money by putting on the chance drawing. The testimony shows it was put on as an additional drawing card. The patrons knew it was 'country store' night. They paid a valuable consideration to participate. The fact that they paid the same price charged on other nights when the theater was running a more popular play without an added attraction is not conclusive or controlling in favor of the appellants. A valuable consideration was paid. What did the purchaser get? Not simply a ticket for the screen show, but a ticket to that, and to the chance drawing. The appellants and their patrons so understood and intended it. That was the plan and purpose for which the consideration was paid. Nor is the fact that free tickets were offered to outsiders material in any controlling sense. None such was given out as a matter of fact, and, if there had been, it would not of itself have made any difference."
In commenting on the quoted language, the court in the Gonzales case said: 'Apparently the explanation of the last statement just quoted, to the effect that if free tickets had been given to non-customers it would not of itself have made any difference, was that if the free distribution to non-customers was negligible as opposed to a general free distribution of a substantial number of tickets to non-customers it would not have made any difference.'
In the Gonzales case the court held that the three elements of lottery were present. Citing Darlington Theatres, Inc. v. Coker, 190 S.C. 282, 291, 2 S.E.2d 782, and the annotation in 103 A.L.R. 866-872.
In Holmes v. Saunders, 114 Cal.App.2d 389, 250 P.2d 269, the defendants offered to subscribers to the Associated Bulletin, during its circulation drive, for a consideration of $1 paid for a six months subscription thereto, said subscription being evidenced by numbered ticket delivered to the subscriber, and entitling the holder and subscriber of the numbered ticket to participate in a drawing in which the prize was a Buick automobile. It was held that the transaction was a lottery and that the consideration to make such a transaction a lottery need not be paid exclusively for the chance to win the prize; that it was sufficient that the consideration be paid for something else and the chance to win the prize; that under the pleadings and findings there was no element of gratuity so that cases such as People v. Cardas, supra, where free chances were widely given away without consideration, were not in point. The court further quoted from 34 American Jurisprudence, Lotteries, Section 7, page 650, where it is said that '(n)o sooner is the term 'lottery' defined by a court, than ingenuity evolves some scheme within the mischief discussed, although not quite within the letter of the definition given; but an examination of the many cases on the subject will show that it is very difficult, if not impossible, for the most ingenious and subtle mind to devise any scheme or plan, short of a gratuitous distribution of property, which has not been held by the courts of this country to be in violation of the lottery laws * * *. The court will inquire, nor into the name, but into the game, however skilfully disguised, in order to ascertain if it is prohibited. * * *'
People v. Carpenter, 141 Cal.App.2d 884, 297 P.2d 498, is a case relied upon strongly by the appellants herein. In that case the appellant was convicted of conspiracy to cheat and defraud and of the crime of grand theft. The case arose out of a bank night drawing at the Lakewood Theatre at Lakewood, California. The operators of the theatre solicited registrations from house to house and gave registration blanks to people in the theatre asking them whether they would like to register for a bank night. This continued until several thousand names had been registered before bank nights were started. Thereafter registration blanks were kept at the snack bar and sometimes at the box office and given to anyone who asked for them. It was not necessary to buy a ticket in order to register for bank night. Drawings were held once a week and the name of the winner was announced over the microphone within and without the theatre. The winner was given two minutes to reach the stage where he was required to identify himself. It was not necessary to pay admission to be present for the drawing or to claim the reward. Persons who wished to do so were permitted to enter the theatre free for the purpose of seeing and hearing the drawing and announcement. The record in that case shows that defendants Jones and Landon entered into a scheme to win at one of the drawings. Jones told Landon that somebody working for the theatre had entered his name in the book and that it was all set up. Landon was to be present at the drawing on a certain date when his name would be called and he would win the money. Thereafter, at one of the bank night drawings, the appellant contacted the manager of the theatre and asked questions about how he handled the drawing. The manager felt from appellant's conversation that he was not satisfied that the management was handling the drawing right. As a consequence, appellant was asked to draw the ticket that night. Jones gave appellant a ticket which contained a number corresponding to Landon's name, which had been added to the registration book, and appellant, pretending to draw a ticket from the drum, palmed the ticket he had received from Jones. Landon's name was called and he was announced as the winner. He later called at the theatre and was given a check for $4,000. This money was later divided between Jones, Landon and appellant. The court held that the appellant could not successfully maintain that the game in which he and his co-conspirators secured the bank night award was a lottery, inasmuch as he, by his own acts, eliminated the element of chance in the determination of the winner. The court further held, on the basis of the Cardas case, supra, that the element of consideration was lacking, and stated that there was nothing in the case of People v. Gonzales, supra, inconsistent with the decision in the Carpenter case. A petition for a hearing by the Supreme Court was denied in this case. However, it appears that the evidence therein was amply sufficient to sustain the judgment without passing upon the question of whether a lottery was being conducted by the theatre.
The foregoing California decisions seem to indicate (1) That where, as in the case of People v. Cardas, supra, all tickets were distributed free, outside the theatre, none were in the box office or delivered with the admission tickets, the element of consideration is lacking and there is no lottery; (2) That where, as in the case of People v. Gonzales, supra, tickets were given to each paying customer with the price of admission and also an additional ticket as the patron left the theatre, and more if he asked for them, the element of consideration was present; and (3) Where, as in the case of People v. Carpenter, supra, there were several thousand registration blanks solicited from house to house and registration blanks were given to all who asked for them and none were sold with the admission tickets, there was no lottery.
It is apparent in the instant case that the holders of free tickets did not pay a consideration for the chance of winning a prize, and that the purchasers of gasoline at the various stations operated by the defendants did pay a consideration for such chances. This is so, because the funds derived from the sale of gasoline were used to pay for the prizes, and in the sales of Norwalk and Beacon gasoline, the price per gallon was increased to pay for the give-away program.
Under the California decisions cited it appears that if there were no free drawing tickets distributed, the program conducted by the appellants would constitute a lottery as defined by section 319 of the Penal Code. The question is whether free tickets sufficient in number were distributed and given away to prevent the court from holding that the give-away program was a lottery.
In General Theatres v. Metro-Goldwyn Mayer Distributing Corp., D.C., 9 F.Supp. 546, a bank night case in Colorado, it was held that the wholly free distribution of 180,000 tickets as against 354,000 actually given to paying patrons did not eliminate consideration. In State ex rel. Hunter v. Fox Beatrice Theatre Corporation, 133 Neb. 392, 275 N.W. 605, it was held that registered buyers of admission tickets made a contribution to increased income out of which a prize could be paid; that this contribution, under the practical operation of bank night, is the consideration actually paid by the registered ticket holders for a chance for a prize and it is no less effective for that purpose because larger numbers of registrants do not pay for theatre tickets or occupy seats at the drawing.
Knox Industries Corp. v. State, Okl., 258 P.2d 910, involved the giving of an automobile by chance to the holder of a lucky number on a ticket which he had received at one of defendant's service stations. These tickets could be secured at such service stations without charge and no purchase was required. However, the court held that since the participants were required to visit the station to secure tickets and all prospective participants were subjected to the sales appeal of the merchandise offered for sale at defendant's stores, and since a winning participant was required to claim the prize at defendant's main office, a sufficient consideration moved from the participant to the defendant.
In Featherstone v. Independent Service Station Ass'n, Tex.Civ.App., 10 S.W.2d 124, 127, tickets entitling the holders to a chance on an automobile were distributed indiscriminately to customers and noncustomers for the purpose of promoting good will and the court held that while some tickets were distributed to noncustomers, the tickets were 'in the main' still distributed to customers; that the giving of the tickets, the drawings, and the distribution of the prizes were successful inducements to obtain patronage, and that this patronage constituted consideration, making this game a lottery.
In Lucky Calendar Co. v. Cohen, 19 N.J. 399, 117 A.2d 487, 496, the court, in discussing the element of consideration required in a lottery, stated: 'Viewing the element of consideration in the aspect most favorable here to the plaintiff--that the participant need not come to the Acme Stores; that he need purchase nothing; and that he need pay nothing for the Lucky Calendar--still, sufficient consideration exists in the form of completing the coupon and arranging for the deposit of it in the box 'just inside the door of his nearest Acme Supermarket.' 'Quite apart from having obtained from the promisee something to which the promissor had no previous right, thereby obtaining a benefit, Willison, supra, 102, 102A, it is transparently clear that the real benefit which the plaintiff and its customer, American Stores Company, were seeking--and in fact has been obtaining--is an increase in volume of business. The whole advertising scheme is artfully directed to enticing customers to the Acme Supermarkets to the resultant benefit of American Stores Company and incidently of the plaintiff. The motives of the plaintiff and its customer, American Stores Company, are in nowise altruistic. Somebody must pay for the program and the prizes--and the ultimate bearer of the burden is of course the 'lucky' calendar holder.'
In McFadden v. Bain, 162 Or. 250, 91 P.2d 292, 295, theatre tickets for drawings were given to patrons of the theatre and were also distributed throughout the neighborhood. The tickets were placed in a receptacle outside the theatre. The court held that 'To constitute a lottery, it is not necessary for all participants to pay for their chances, but it is sufficient if some do though many do not pay a valuable consideration. The legal effect of the transaction is not changed by the fact that some do not pay. If it is a lottery as to those who do pay, it necessarily is a lottery as to those who do not pay for their chances. 'As was said in Commonwealth v. Wall, supra, 295 Mass. 70 (3 N.E.2d 30), '* * * a game does not cease to be a lottery because some, or even many, of the players are admitted to play free, so long as others continue to pay for their chances. (Citing authorities.) So here the test is not whether it was possible to win without paying for admission to the theatre. The test is whether that group who did pay for admission were paying in part for the chance of a prize.' See also Glover v. Malloska, 238 Mich. 216, 219, 213 N.W. 107, 52 A.L.R. 77, where the above was quoted with approval.'
In Federal Communications Commission v. American Broadcasting Co., 347 U.S. 284, 74 S.Ct. 593, 98 L.Ed. 699, it is said that when the question of whether schemes devised to circumvent the lottery laws reached the courts, the decision of necessity usually turned on whether the scheme, on its own peculiar facts, constituted a lottery. And in Central States Theatre Corporation v. Patz, D.C., 11 F.Supp. 566, 568, the court held that 'The question whether or not there is a paid consideration for the opportunity to win a prize necessary to constitute a lottery is a question of fact which must be determined from the facts and reasonable deductions and inferences to be drawn therefrom in each case.'
In the instant case, the record shows that the number of free tickets distributed by the appellants was relatively small in comparison to those which were distributed to patrons of the various stations, and the trial court found, in effect, that the give-away program operated by the appellants constituted a lottery as defined in section 319 of the Penal Code. We cannot here hold as a matter of law that this finding is unsupported by substantial evidence.
Appellants argue that plaintiff corporation is not a proper party plaintiff. We are not in accord with this contention. Section 382 of the Code of Civil Procedure provides that when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all. Agricultural Prorate Commission of California v. Superior Court, 31 Cal.App.2d 518, 524, 88 P.2d 253; Jellen v. O'Brien, 89 Cal.App. 505, 509, 264 P. 1115. In Rosicrucian Fellowship v. Rosicrucian, etc., Church, 39 Cal.2d 121, 139, 245 P.2d 481, it was held that one or more members of a church may prosecute an action for the benefit of all if sufficient facts are pleaded to make it a representative suit. In the instant case the record shows that there is a community of interest in the questions of law and facts presented. There is an ascertainable class and each member of plaintiff corporation would be required to show the same basic facts concerning the activities of appellants. Under these circumstances the plaintiff corporation was a proper party plaintiff. Fanucchi v. Coberly-West Co., 151 Cal.App.2d 72, 81, 311 P.2d 33.
Appellants contend that injunctive relief is not a proper remedy for alleged violation of criminal laws. It is true that in the absence of special injury an injunction will not be granted on the application of a private individual merely to prevent violation of a penal statute. Carter v. Chotiner, 210 Cal. 288, 291, 291 P. 577. However, section 526, Subdivisions 5 and 6, of the Code of Civil Procedure provides that an injunction may be granted where it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief and where the restraint is necessary to prevent a multiplicity of judicial proceedings. In In re Wood, 194 Cal. 49, 55, 227 P. 908, 910, the court said: 'It is true, as a general rule, that an injunction will not be granted to restrain an act merely criminal, where no property rights are endangered thereby, but, where property rights are endangered, the fact that the acts are criminal will not prevent a court of equity from exercising its jurisdiction.' In Orloff v. Los Angeles Turf Club, 30 Cal.2d 110, 116, 180 P.2d 321, 171 A.L.R 913, it was held that equity will protect by injunction not only property rights but, in a proper case, personal rights; that business rights are valuable rights of economic value, and the reasons for protecting them are identical with the reasons for protecting property rights in lands or chattels.
In the instant case, it is apparent that it would be extremely difficult to ascertain the amount of compensation which would afford adequate relief to plaintiffs. However, the members of plaintiff corporation, the corporation itself, and plaintiff Hudson have an interest of a pecuniary nature and rights of substance and economic value in the businesses which they conduct.
In Featherstone v. Independent Service Station Ass'n, supra, injunctive relief was held to be proper, and the court, quoting from Glover v. Malloska, 238 Mich. 216, 213 N.W. 107, said: 'No one should be permitted to employ criminal means in trade rivalry. The law proscribes a lottery, and those injured thereby in their rights of property are not required to suffer successive inflictions of pecuniary injury until a criminal prosecution is launched. Courts do not depart from the rule that equity may not interfere, except to protect property rights of a pecuniary nature, in enjoining criminal acts exercised by one dealer to enhance his sales to the calculated pecuniary injury of a law-abiding competitor. Defendant Malloska adopted the lottery scheme for profit, admits its employment increased his sales, and plaintiffs established the fact that such increase was directly traceable to their loss of customers.' [10 S.W.2d 128.]
Appellants further contend that the court erred in allowing plaintiff to amend the complaint by adding the name Philip M. Hudson, president of plaintiff corporation and an individual retailer, as a party plaintiff. This argument is without merit, for the court, in furtherance of justice may allow a party to amend any pleading by adding the name of a party. Code Civ.Proc. Sec. 473. In Klopstock v. Superior Court, 17 Cal.2d 13, 19, 108 P.2d 906, 135 A.L.R. 318, it is said that this statutory provision giving the courts the power to permit amendments in furtherance of justice has received a very liberal interpretation by the courts of this state. No new cause of action was stated by the amendment adding Hudson as a party plaintiff. No new facts were alleged and no new facts were alleged as a ground of recovery. No prejudicial error appears from the order allowing the amendment.
All reasonable inferences must be indulged herein to support the judgment (Memorial Hospital Ass'n of Stanislaus County v. Pacific Grape, etc., Co., 45 Cal.2d 634, 635, 290 P.2d 481, 50 A.L.R.2d 442) and we cannot here hold, as a matter of law, that the findings of the trial court are unsupported by substantial evidence, under the circumstances shown by the record, or that the trial court erroneously concluded that the acts of the appellants constituted a lottery.
Judgment affirmed.
BARNARD, P. J., and GRIFFIN, J., concur. --------------- * Opinion vacated 330 P.2d 778.