Maughs v. Porter
157 Va. 415, 1931 Va. LEXIS 331, 161 S.E. 242 (1931)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A contract or promise based on a promotional giveaway is unenforceable as an illegal lottery if it contains the elements of prize, chance, and consideration. Consideration for the chance is present when the promisor's goal is to attract a crowd for commercial benefit, even if participants are not required to pay or purchase to enter the drawing.
Facts:
- Defendant placed an advertisement in a newspaper for an auction of residence lots.
- The advertisement promised a "New Model Ford Free" would be given away at the auction.
- The ad stated, "Every white person over sixteen (16) years of age has an equal chance at the new Ford regardless of buying or bidding."
- Plaintiff, a white person over sixteen years of age, attended the auction in response to the advertisement.
- At the auction, Plaintiff wrote her name on a slip of paper and deposited it into a box held by the auctioneer.
- Plaintiff's slip was drawn from the box, and she was declared the winner of the automobile.
- At the auctioneer's demand, Plaintiff paid him $5.00 for his services in drawing the number.
- Defendant placed an order for the car but subsequently refused to pay for it or to give Plaintiff the car's value.
Procedural Posture:
- Plaintiff filed a notice of motion against Defendant in the trial court, seeking $461.00 as the value of the car.
- Defendant filed a general demurrer, arguing lack of consideration and that the scheme was an illegal lottery.
- The trial court sustained the demurrer, entering judgment for the Defendant.
- Plaintiff was granted a writ of error to appeal the trial court's judgment to the Supreme Court of Appeals of Virginia.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a promotional drawing where attendees of an auction are given a chance to win a prize, without any requirement to purchase, constitute an illegal lottery, thereby making the promise to award the prize unenforceable?
Opinions:
Majority - Prentis, C. J.
Yes. A promotional drawing that requires attendance for a chance to win a prize constitutes an illegal lottery and any promise arising from it is unenforceable. Although the plaintiff's attendance at the auction was sufficient consideration to form a contract, the contract is void because it is founded upon an illegal lottery. A lottery consists of three elements: prize, chance, and consideration. Here, the car was the prize, the drawing was the element of chance, and the plaintiff's attendance—which provided a commercial benefit to the defendant by increasing the crowd—was the consideration. Because the transaction was an illegal lottery prohibited by statute, the court will not aid the plaintiff in enforcing the agreement as it is contrary to public policy.
Analysis:
This case is a classic contracts example illustrating how courts analyze promotional giveaways under anti-lottery laws. It establishes that "consideration" sufficient to form a contract can also be the same consideration that renders the scheme an illegal lottery. The decision broadens the concept of consideration in this context beyond direct monetary payment, finding it in the indirect benefit a promoter receives from increased attendance or store traffic. This precedent reinforces the strong public policy against enforcing illegal contracts, showing that courts will leave the parties as they find them, even if it results in one party benefiting from their own illegal scheme by reneging on a promise.
