Municipal corporations, acting within the limits of the powers
conferred upon them by the legislature, in the exercise of a
special franchise granted to them, and the performance of a special
duty imposed upon them are responsible for the acts and contracts
of their agents, duly appointed and authorized, within the scope of
the authority of such agents in the same manner as other
corporations and private individuals are responsible on their
promises, express and implied.
Where, by the charter granted by Congress to the City of
Washington, the corporation was empowered "to authorize the drawing
of lotteries," for effecting certain improvements in the city, and
upon certain terms and conditions,
held that the
corporation was liable to the holder of a ticket in such a lottery
for a prize drawn against its number, although the managers
appointed by the corporation to superintend such lottery were
empowered to sell and had sold the entire lottery to a lottery
dealer for a gross sum who was, by his agreement with them, to
execute the details of the scheme as to the sale of the tickets,
the drawings, and the payment of the prizes.
It seems that the power granted in the charter "to authorize the
drawing of lotteries" cannot be exercised so as to discharge the
corporation from its liability, either by granting the lottery or
selling the privilege to others or in any other manner, but the
lotteries to be authorized by the corporation must be drawn under
its superintendence for its own accounts and on its own
responsibility.
This was an action of assumpsit brought by the plaintiff in
error to recover of the defendants the amount of a prize drawn in a
lottery called "the fifth class of the national lottery." A verdict
was found for the plaintiff in the court below, subject to the
opinion of the court, on a case agreed, on which judgment was
rendered for the defendants, and the cause was brought by writ of
error to this Court.
By the Constitution of the United States, Congress has
Page 25 U. S. 41
power to exercise exclusive legislation in all cases whatsoever
over the District, which being ceded by particular states, may
become the seat of the government of the Union. The District of
Columbia having been ceded for that purpose, Congress passed an act
creating a municipal corporation for the City of Washington, and by
the Act of 4 May, 1812, for amending the charter, gave the
corporation
"full power and authority to authorize the drawing of lotteries
for effecting any important improvement in the city, which the
ordinary funds or revenue thereof will not accomplish, provided,
that the amount to be raised in each year shall not exceed the sum
of $10,000, and provided also that the object for which the money
is intended to be raised shall be first submitted to the President
of the United States and shall be approved by him."
For the purpose of carrying this power into execution, ten
successive resolutions were passed by the corporation, the first of
which was approved by the President of the United States on 23
November, 1812, and the last on 21 May, 1821, each of them for
raising $10,000 by lottery, for the several objects of endowing two
public schoolhouses on the Lancasterian system; of building a work
house and penitentiary, and a town house or city hall. On 24 July,
1815, the corporation passed an ordinance for carrying into effect
the three first of the above resolutions, and appointed certain
managers by name,
viz., John Davidson, Thomas H. Gillis,
Andrew Way, Jr. Moses Young, William Brent, Daniel Rapine, and
Samuel N. Smallwood, whose duty it was made to agree on and propose
a scheme or schemes of a lottery or lotteries, to raise the sum of
$30,000 (clear of all expenses), and to sell and dispose of the
tickets therein to the best advantage with the least possible
delay, and diligently to attend the drawing of the said lottery or
lotteries, which should be in the City of Washington and within 60
days after the drawings of the same, respectively (the time of each
drawing not to exceed two years), to pay and satisfy the fortunate
adventurers for prizes, and, within 70 days, to pay over the
balance after deducting all necessary expenses, into the city
treasury, and giving to said managers full power and authority to
appoint all necessary
Page 25 U. S. 42
agents, clerks, and servants to do and perform all such acts and
things as might be necessary to carry into effect the provisions of
the ordinance. Another ordinance was passed on 17 November, 1818,
for the purpose of carrying into effect the 4th, 5th, 6th, and 7th
of the aforesaid resolutions, by which (
inter alia) the
mayor was authorized to appoint seven citizens to act as managers
for the purpose aforesaid, whose duty was declared to be to agree
on a scheme of a lottery to raise the sum of $40,000 (clear of
expenses), and to sell the said lottery or dispose of the tickets
therein to the best advantage, with the least possible delay and
diligently to attend the drawing of the said lottery, which should
be in the City of Washington, provided, however, that if the said
managers or a majority of them, should sell the said lottery, the
individual or individuals purchasing the same, should have the
power of making a scheme for the aforesaid lottery, and within 60
days after the drawing (the time of drawing not to exceed one
year), to pay and satisfy the fortunate adventurers for prizes, and
within 70 days to pay over the balance, after deducting all
necessary expenses, into the city treasury, with the like power and
authority to the managers as in the former act, to appoint all
necessary agents, clerks, and servants, &c. The mayor
appointed, under the authority of the last mentioned act, seven
citizens to act as managers for the purposes aforesaid, the same as
those appointed by name in the former act, except that in the last,
Roger C. Weightman takes the place of Samuel N. Smallwood.
On 25 October, 1819, another ordinance was passed by which the
managers appointed under the ordinance of 1815 were empowered to
sell and dispose of the lotteries to which that ordinance refers,
or so much thereof as yet remains to be drawn, in such classes and
on such terms and conditions as should appear to them right and
expedient.
In pursuance of the ordinances of 1815 and 1819, the managers
sold to David Gillespie, of New York, a lottery called the "Fifth
Class of the Grand National Lottery," for the sum of $10,000, to be
paid before the commencement of the drawing thereof, and the
following articles of agreement were entered into for that
purpose.
Page 25 U. S. 43
"Memorandum of an agreement, made and entered into this 4 May,
1821, between Roger C. Weightman, John Davidson, Thomas H. Gillis,
Andrew Way, Jr., Moses Young, William Brent, and Daniel Rapine, as
managers of the lotteries authorized by an act of the Board of
Aldermen and Board of Common Council of the City of Washington for
the purposes therein mentioned, approved July 24, 1815, of the one
part, and David Gillespie, of the City of New York, in the State of
New York, of the other part:"
"Whereas, by an act of the Board of Aldermen and Board of Common
Council of the said City of Washington approved October 25, 1819,
supplementary to the act aforesaid, the said managers are
authorized and empowered to sell and dispose of the said lotteries
in such classes and on such terms and conditions as shall appear to
them right and expedient and according to the true intent and
meaning of the act aforesaid, and that the said managers, for the
purpose of raising the sum of $10,000 in conformity with the
provisions of the said first mentioned act and in pursuance of the
power and authority in them vested by the said supplementary act,
have agreed to sell and dispose of, to the said David Gillespie, a
lottery, denominated the Fifth Class of the Grand National Lottery,
to be drawn according to the scheme hereunto annexed; and the said
David Gillespie, in consideration thereof, hereby agrees to pay to
the said managers the sum of $10,000, before the commencement of
the drawing the said lottery, or class, at his own proper cost,
charge and expense; to pay and defray all, and all manner of costs,
charges, and expenses of the said lottery, or class, excepting the
expense of drawing the same, and to draw the same in the City of
Washington, in the presence of the said managers, and to finish and
conclude the said drawing within two years from the date hereof,
and to pay all the prizes within sixty days from the completion of
the said drawing. It is further understood and agreed by and
between the said parties that the said David Gillespie is to
provide, at his own cost and expense, two competent clerks to
assist in the drawing of the said lottery or class, and to execute
and deliver, before the commencement of the drawing of the said
lottery or class and within thirty days from the date hereof to the
said managers a bond with such security
Page 25 U. S. 44
as may be approved by them in the penal sum of $35,00,
conditioned for the true, fair, and faithful drawing of the said
lottery or class and according to the said scheme, for the punctual
payment of all prizes, and for conducting the said lottery or class
fairly and honestly and according to this agreement and the true
intent and meaning of the said acts of the said Board of Aldermen
and Board of Common Council."
The bond with security, as required by the above agreement, was
given by Gillespie on 28 May, 1821.
On the 22d of the same month, an ordinance of the corporation
was passed authorizing the managers to appoint a president, whose
duty it should be, in addition to the duties imposed by the
ordinances of 1815 and 1819, to sign all contracts with the
concurrence of a majority of the managers and to sign all the
lottery tickets in every scheme or schemes sold by them. The 2d
section of the ordinance allowed each of the managers of the city
lotteries $3 each day he had been or should be employed, and the
7th section enacts that this compensation, "except for the class
now contracted for," should be provided for and paid out of the
proceeds of lotteries thereafter contracted for.
Under this authority, Thomas H. Gillis was appointed president,
who signed the following ticket, No. 2929, on which the suit was
brought, and which was endorsed, "Undrawn 29th day over. D.
Gillespie, per J. James." The ticket was purchased by the
plaintiff, from an agent of Gillespie, at Richmond, Virginia, and
drew the prize of $100,000, in the fifth class of the lottery.
"National Lottery, Number 2929. $100,000 highest prize. William
Brent, John Davidson, Thomas H. Gillis, Andrew Way, Jr., Moses
Young, Daniel Rapine, R. C. Weightman, managers. This ticket will
entitle the possessor to such prize as may be drawn to its number
if demanded within twelve months after the completion of the
drawing, subject to a deduction of fifteen percent. Payable sixty
days after the drawing is finished. Washington City, February,
1821. Thomas H. Gillis, Manager. By authority of Congress."
In the margin, on one side -- "Fifth Class." On the other, "For
erecting two public schoolhouses, a penitentiary, and town
hall."
Page 25 U. S. 45
The drawing of the lottery was advertised in two newspapers
printed in the City of Washington; in the National Intelligencer
from 18 May, 1821, and in the Washington City Gazette from 17 July,
1821, until the completion of the lottery. These advertisements
exhibited the scheme agreed upon between the managers and Gillespie
and annexed to their contract, gave notice of the time when the
drawing would take place, of the number of days to be employed in
the drawings, and that they would be completed as soon as possible,
under the superintendence of the managers, whose names were
annexed. To each of these advertisements was appended an
advertisement signed by Gillespie as "agent for the managers," for
the sale of tickets at his "Fortunate Office, Pennsylvania Avenue,
Washington City." The lottery was drawn in pursuance of the
advertisements, and the managers superintended the drawing. In its
progress, a postponement took place, and an advertisement appeared
purporting to be signed by three of the managers, giving notice of
the postponement and its cause. Another advertisement soon
afterwards followed purporting to be signed by the President, by
order of the board, giving notice when the drawing would
recommence.
As soon as the scheme was agreed on, all the tickets, amounting
to 50,000 in number, were delivered by the managers to Gillespie,
some of them signed and others unsigned by the President, the
latter of which it was necessary to take to him to be signed before
they could be sold. Sometime after the drawing commenced, the
president refused to sign tickets unless an equivalent in prize
tickets, either paid or taken in by Gillespie or drawn on hand, or
unless the notes of individuals which Gillespie had taken, payable
to himself, for tickets sold, were deposited with them. When
Gillespie's clerk and agent, Webb, presented tickets to be signed,
he was obliged at the same time to deposit such prize tickets or
promissory notes, and on some occasions when tickets were called
for and wanted, the managers refused to sign the same for want of
such equivalent. The amount of the prize tickets so deposited with
the managers was about $141,779. The managers on such occasions
Page 25 U. S. 46
objected to trusting Gillespie with the disposal of the tickets
much beyond the penalty of his bond, and Webb, who was a witness in
the cause, understood from the conversations and transactions
between the parties at the time that this precaution arose from
doubts which had been circulated respecting Gillespie's
solvency.
Page 25 U. S. 52
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
This cause depends on the liability of the corporation to pay
the ticket on which the suit was instituted. In considering this
question, that part of the charter which contains a grant of power
on the subject of lotteries, the ordinances of the corporate body
in execution of the power, and the proceedings of its agents must
be reviewed.
The charter enacts
"That the corporation shall have full power and authority . . .
to authorize the drawing of lotteries for effecting any important
improvement in the city which the ordinary funds or revenue thereof
will not accomplish, provided that the amount to be raised in each
year shall not exceed the sum of $10,000. And provided also that
the object for which the money is intended to be raised shall be
first submitted to the President of the United States and shall be
approved of by him."
Some doubt has been expressed whether this power is to be
exercised by drawing the lottery on account and at the risk of the
corporation or by selling the privilege to individuals and
authorizing them to draw it on their own account. This doubt is
founded on the word "authorize." Congress, we are told, has not
granted the power to draw lotteries, but to "authorize" their being
drawn.
Page 25 U. S. 53
We cannot admit the correctness of this criticism. We do not
admit the justice of that construction, which denies to the
corporation the power of causing the lottery to be drawn on its own
account. A corporation aggregate can legislate within its
prescribed limits, but can carry its laws into execution only by
its agents. Any legislative act directing a lottery to be drawn is
literally an act "to authorize the drawing of lotteries."
The object for which the lottery may be authorized is "any
important improvement in the city." Its produce is to come in aid
of the ordinary funds or revenue thereof, and "the amount to be
raised in each year shall not exceed the sum of $10,000." The
language of the charter is not that the sum to be brought into the
treasury of the city shall not exceed the sum of $10,000, but that
"the amount to be raised shall not exceed that sum." This language,
it is admitted, comprehends the net proceeds of the lottery, but it
comprehends all those net proceeds, and does not allow a partition
of profit so as to retain $10,000 for the treasury, and reserve a
residue for others. The single object for which the lottery can be
drawn is "any important improvement in the city," not the emolument
of individuals. The motive with Congress for this restriction on
the amount is not to limit the sum to come into the city treasury,
but to limit the extent of gaming which the corporation may
authorize. Congress must have perceived that to bring $10,000 into
the treasury, either "the amount raised must exceed that sum" or
the lottery must be drawn on account of the city, for no man will
purchase a lottery from which he can make nothing.
The counsel of the plaintiff in error have remarked, and the
remark is certainly entitled to attention, that in describing the
power, Congress has used no words indicating the idea that the
corporation might grant or sell lotteries. "To authorize the
drawing of lotteries," is, as has been said, an appropriate term
for a corporate act instituting a lottery for the benefit of the
city, but if the granting a lottery to others or a sale of the
privilege to others had been in the mind of Congress, it is to be
presumed that some words would have been used indicating the
idea.
Page 25 U. S. 54
There is great weight, too, in the argument that it is a trust,
and an important trust, confided to the corporation itself for the
purpose of "effecting important improvements in the city," and
ought therefore to be executed under the immediate authority and
inspection of the corporation. It is reasonable to suppose that
Congress, when granting a power to authorize gaming, would feel
some solicitude respecting the fairness with which the power should
be used, and would take as many precautions against its abuse as
was compatible with its beneficial exercise. Accordingly we find a
limitation on the amount to be raised and on the object for which
the lottery may be authorized. It is to be for "any important
improvement in the city, which the ordinary funds or revenue
thereof will not accomplish," and is subjected to the judgment of
the President of the United States. The power thus cautiously
granted is deposited with the corporation itself, without an
indication that it is assignable. It is to be exercised, like other
corporate powers, by the agents of the corporation, under its
control. While it remains where Congress has placed it, the
character of the corporation affords some security against its
abuse; some security that no other mischief will result from it
than is inseparable from the thing itself. But if the management,
control, and responsibility may be transferred to any adventurer
who will purchase, all the security for fairness, which is
furnished by character and responsibility, is lost.
We think, then, that the most obvious if not the exclusive
construction of the charter is that the lotteries to be authorized
by the corporation are to be drawn under its superintendence and on
its own account.
We will next advert to the measures which have been adopted for
carrying this power into execution.
Ten successive resolutions were passed, the first approved on 23
November, 1812, and the last on 21 May, 1821, each of them for
raising the sum of $10,000, by lottery, for particular improvements
mentioned in the resolution.
The ordinance of 24 July, 1815, which was passed for carrying
the three first of these resolutions into effect, contemplates and
authorizes lotteries to be drawn
Page 25 U. S. 55
entirely under the management, for the benefit, and on the
responsibility of the corporation. Seven managers are appointed by
the ordinance and they, or a majority are authorized to employ
agents, fill up vacancies in their own body, and to do every act
which may be necessary for carrying its provisions into effect.
The ordinance passed on 17 November, 1818, for carrying the 4th,
5th, 6th and 7th resolutions into effect, authorizes the may or to
appoint seven managers, whose duty it was to agree on a scheme, to
sell the said lottery, or dispose of the tickets to the best
advantage. A proviso is inserted that, should the lottery be sold,
the purchasers may make the scheme, but the ordinance enacts
generally (and the enactment makes no distinction between a sale of
the lottery itself, and a disposition of the tickets), that it
shall be the duty of the managers to attend diligently to the
drawing of the lottery, and to pay the fortunate adventurers for
prizes drawn by them. The ordinance, however, adds the further duty
of paying over the balance, after deducting all necessary expenses,
into the city treasury. From this it has been inferred that these
provisions are made for the contingency that the tickets should be
disposed of for the benefit of the city, and are entirely
inapplicable to the contingency of an entire sale. Certainly in the
event of an entire sale, the balance, after deducting all necessary
expenses, would not be payable into the treasury unless we suppose
it to mean the balance of the sum for which the lottery might be
sold. But this is the only part of the clause which is inapplicable
to a lottery sold out and drawn for the benefit of the
purchaser.
In October, 1819, the managers appointed under the act of 1815
were empowered to sell and dispose of the lotteries to which that
act refers, or so much thereof as yet remains to be drawn, in such
classes, and on such terms and conditions as shall appear to them
right and expedient. The duty of the managers to superintend the
drawing and to pay the prizes is not changed by this act unless the
mere power to sell implies such change.
The managers sold to David Gillespie, of New York, in pursuance
of the acts of 1815 and 1819, a lottery denominated
Page 25 U. S. 56
the 5th class of the Grand National Lottery for the sum of
$10,000, to be paid before the commencement of the drawing the said
lottery or class, and articles of agreement in pursuance thereof
were executed on 14 May, 1821. The ticket held by the plaintiff is
in this class.
On the 22d of the same month, an ordinance was passed
authorizing the managers to appoint a president, whose duty it
should be, in addition to the duties imposed by the acts of 1815
and 1819, to sign all contracts, with the concurrence of a majority
of the said managers, and to sign all the lottery tickets in every
scheme or schemes sold by them.
This ordinance recognizes the duties prescribed by the acts of
1815 and 1819. Its 2d section allows each of the managers of the
city lotteries $3 for each day he has been or shall be employed,
and the 7th section enacts that this compensation, "except for the
class now contracted for," shall be provided for and paid out of
the proceeds of lotteries hereafter contracted for.
This act is understood to recognize it as a part of the duty of
the managers to continue their superintendence of the drawing of
the very class which had been sold and which comprehended the
ticket that drew the prize for which this suit is brought.
The defendant has excepted to the admissibility, as well as
sufficiency of the testimony offered by the plaintiff in the
circuit court, and the objection is made in general terms. We
presume, however, that it cannot apply to the charter or to the
resolutions and ordinances of the corporation. Nor do we suppose
that any exception was intended to be made to the testimony which
establishes the ownership of the tickets or to the admissibility of
the deposition of Mr. Webb. The first document on which a question
can arise is the ticket itself. Is this admissible in a suit
against the corporation?
In considering this question, we must inquire into the
connection between the ostensible managers and the corporation.
The persons who were held out as managers to superintend the
drawing of the lottery comprehending this ticket
Page 25 U. S. 57
were, with one exception, the same persons who were appointed in
the ordinance of 1815, as managers for the lotteries established by
that act. The name of R. C. Weightman is substituted for that of S.
N. Smallwood. No other change appears. It is in proof that S. N.
Smallwood was elected mayor, and, as the managers have, by the
ordinance, a right to fill up vacancies in their own body, their
acting uniformly with R. C. Weightman, is a proof that they had
chosen him to fill the vacancy made by Mr. Smallwood.
But it is contended that this lottery was drawn under the act of
1818, and there is no proof that the individuals who appeared and
acted as managers, had any authority under that act.
There is undoubtedly some confusion in this part of the case,
and there is not much difficulty in ascribing it to its real cause.
The mayor was authorized by the ordinance of 1818 to appoint
managers to carry that act into execution, and the probability is
that he appointed the persons who were in office under the
appointment of the corporation. The fitness of this proceeding
renders it probable, and the subsequent proceedings of the
corporation itself, turn this probability almost into certainty. In
a case where written evidence of appointment is not in the power of
the plaintiff, if indeed it exists, circumstances must be relied on
to prove the fact, should it be deemed necessary.
The act of 1821 takes no notice of any appointment under the act
of 1818, and makes it the duty of the managers, created under the
act of 1815, to elect a president to sign all contracts, "and to
sign all the lottery tickets, in every scheme or schemes sold by
the said managers." Class No. 5, was then sold by these managers.
Lotteries, under seven resolutions, to raise the sum of $70,000,
were either sold or for sale, either in mass or in detail, under
the acts of 1815, 1818, and 1819. The language of this ordinance
appears to extend to them all, and if it does, certainly admits the
authority of the managers appointed under the act of 1815, to
extend to all. The 7th section of the act of 1821, which provides
the fund for their compensation, expressly excepts "the class now
contracted for." The contract for the 5th class was executed a few
days before
Page 25 U. S. 58
the passage of this ordinance, and it is difficult to resist the
conviction that the allusion is to this contract. These provisions
in the ordinance of 1821 go far to establish the authority of these
managers in this very case. The receipt of the purchase money under
this very contract, is also a strong circumstance in support of the
authority of those who made it. But we think the corporation has
waived all exception to the authority of the managers by producing
and relying on their contract for the sale of this very lottery.
That body defends itself from the claim of the plaintiff, by
alleging that their managers sold this lottery. Their attorney
produces the contract in court, and insists that it exempts his
clients from all liability. Can he in the same cause deny the
authority of those who made it? We think the connection between the
managers and the corporation is established beyond controversy.
If the persons who made this contract are the persons appointed
under the authority of the corporation, as managers for class No.
5, no doubt exists whether the ticket has emanated from them. The
ordinance of 21 May, 1821, authorizes them to appoint a president
from their own body, whose duty it shall be "to sign all the
lottery tickets in every scheme or schemes sold by the said
managers." The scheme for the 5th class was annexed to the
agreement between Gillespie and the managers, and has been produced
in court with it. Mr. Webb proves that the ticket 2929, on which
this suit was brought, was signed by T. H. Gillis, whose name is
subscribed to it, and that T. H. Gillis was at that time president
of the board of managers.
It is then satisfactorily proved that the ticket was issued and
sold under the authority of the corporation, and was consequently
admissible in a suit brought against that body. The remaining
inquiry is does it bind the defendants to pay the prize it has
drawn in the lottery?
Had the managers, instead of selling the whole scheme in mass,
sold the tickets in the usual manner and received the purchase
money of the several tickets, instead of a sum in gross, for the
use of the city, this question could not have arisen. No person
would have denied the liability of the
Page 25 U. S. 59
corporation. The sole inquiry then is whether the agreement of
14 May, 1821, has discharged this liability.
If the exposition of the charter in the early part of this
opinion be correct, this question is answered. If the corporate
body was not empowered to vest in an individual the independent
right of drawing lotteries for himself, and on his own
responsibility, uncontrolled by the city government, then the
agreement with Gillespie can operate only as a sale of the profits
for a given sum, leaving the responsibility of the corporation as
if that agreement had never been made. The contract would be
between the corporation and the ticket purchaser, and although the
price of the ticket was paid to Gillespie, yet the corporation had
consented that he should receive it for the purpose of performing
their engagements to such ticket holders as should draw prizes, and
had consented to receive from him $10,000, as full compensation for
that portion of it which would remain after satisfying those
engagements.
If the charter did grant the power to the corporation which is
now claimed, the whole transaction must be considered in order to
determine its actual character. We must inquire whether the
corporation has so acted as to devest itself entirely of all
connection with, control over, and responsibility for this lottery
and substituted the purchaser in their place.
In its origin, the lottery was a city lottery. It was to be
managed by persons appointed by the city, drawn under their
superintendence, and, so far as the public was informed for the
benefit and on the responsibility of the city. Tickets were
prepared under the authority of the corporation, bearing on their
face the city improvements for which the lottery was to be drawn,
the names of the managers appointed by the city, and the words
"national lottery," and "by authority of Congress." Before these
tickets were disposed of in the usual way, the managers entered
into an agreement with David Gillespie to sell him a lottery
denominated the fifth class of the Grand National Lottery, to be
drawn according to the scheme annexed, at the costs of the said
Gillespie, except the expense of drawing the same.
The stipulations of this contract show that it was not
intended
Page 25 U. S. 60
to dissolve the connection between the city and the lottery, and
to give the absolute property in it, and control over it, to
Gillespie; nor to exhibit him to the world as its owner, with whom
alone the purchasers of tickets were to contract, and to whom the
fortunate adventurers were to look for the payment of their prizes.
He engages to draw the lottery in the City of Washington in the
presence of the managers; to finish the drawing within two years
from the date of the contract; to pay all the prizes within sixty
days from its completion; to provide two clerks to assist at the
drawing; and to execute, within thirty days, and before the drawing
should commence, a bond to the managers, with such security as they
should approve, in the penal sum of $35,00, conditioned for the
faithful drawing of the lottery, according to the scheme, for the
punctual payment of the prizes, and for conducting the lottery
fairly and honestly, according to the scheme and according to the
true intent and meaning of the acts of the aldermen and board of
common council.
A bond was executed in pursuance of this agreement.
These provisions are in the spirit of a contract made to secure
the city from the hazard of a continuing responsibility -- a
responsibility which they were induced to continue by the
consideration of the $10,000 paid by Gillespie. Why else stipulate
that the lottery should be drawn in the city? Why that it should be
completed within a limited time, and drawn in the presence of the
managers appointed by the corporation? Why that the prizes should
be paid other things, for their payment conditioned, among other
things, for their payment? Had the corporation felt no further
interest in the lottery, the purchaser might have been permitted to
exercise his own discretion with the article he had purchased, and
to appear to the world as its owner. But the nature of the case
justifies the opinion that such a sale could not have been made. No
purchaser could have been found who would have given $10,000 for
the privilege of drawing a lottery on his own account and
responsibility, having no connection with the city. The probability
is strong, that the aspect which the lottery still continued to
bear was a necessary part of the contract,
Page 25 U. S. 61
without which it would never have been made, and that these
precautions were used to diminish the hazard of a responsibility
which was unavoidably continued. We find the appearance of this
responsibility carefully preserved by the corporation itself, and
by its managers. In the ordinance of 22 May, 1821, it is enacted
that the tickets shall be signed by the president of their board of
managers, and that their managers shall receive a daily allowance
for attending the drawing of the lottery. The tickets were signed
in conformity with this ordinance.
The manner in which the lottery was advertised confirms the
opinion that the contract of sale was made with a view to the
continuing the responsibility of the city. Exception is taken to
the admission of these advertisements, and we will not affirm that
their appearance in the city papers, one of which was published by
a member of the corporate body, is evidence that the publication
was made by authority of the managers; but the advertisements prove
the fact that the lottery was ushered to the world in the form and
character which those advertisements represent. It is proved that
they were published in two papers in the city, in the National
Intelligencer from 18 May, 1821, and in the Washington City Gazette
from 17 July, 1821, until the completion of the lottery. These
advertisements exhibited the scheme which was agreed on between the
managers and Gillespie, which was annexed to their contract; gives
notice of the time when the drawing would take place; of the number
of days to be employed in the drawings, and that they would be
completed as soon as possible, under the superintendence of the
managers. To this advertisement the names of the managers are
annexed. The lottery is drawn in pursuance of it, and the managers
superintend the drawing. In its progress, a postponement takes
place. An advertisement purporting to be signed by three of the
managers appears, giving notice of this postponement, and of its
cause. Another advertisement soon follows, purporting to be signed
by the president by order of the board, giving notice when the
drawing would recommence. It does recommence under the
superintendence of the managers.
Page 25 U. S. 62
It is not, we think, within the compass of human credulity to
believe that the managers did not see these advertisements, or did
not believe that they would be received by the public as being
accredited by their names. Not to contradict them was to sanction
them. To appear in pursuance of them and superintend the drawings
of which they had given notice was to adopt them. It is not to be
believed that this concurrence of circumstances, all tending to
assure the public that these advertisements were published by
authority of the managers, could have been produced by accident. To
sit daily superintending the drawing of a lottery in pursuance of
notice published every day under their names verifies that
publication, and must be considered as a ratification of it.
The proceedings which took place between the managers and
Gillespie after the contract still further corroborates the opinion
that this continuing responsibility of the corporation which was
held out to the public was not a fraudulent representation for the
purpose of enabling Gillespie to sell the tickets, but a
representation of the fact as then understood.
It appears, from the deposition of Mr. Webb, that all the
tickets, amounting to 50,000, were put into the possession of
Gillespie; but these tickets were not vendible until signed by the
president of the board of managers. Those unsigned could no more be
used by him than if they had not been in his possession. As soon as
the scheme was agreed on, three or four thousand tickets were
signed, and afterwards tickets were occasionally signed, so as to
make the additional number of 17,203. Why were these tickets thus
withheld from him if he had became the absolute and unconditional
proprietor of them? The conduct of the managers, as disclosed in
the subsequent part of Webb's deposition, will inform us. He says
that sometime after the drawing of the lottery commenced, the
president of the managers refused to sign tickets, unless an
equivalent in prize tickets, either paid and taken in by Gillespie
or drawn on hand, or the notes of individuals which Gillespie had
taken, payable to himself, for tickets sold, were deposited with
them, and accordingly, when the witness, as the
Page 25 U. S. 63
clerk and agent of Gillespie, presented tickets to be signed, he
was obliged, at the same time, to deposit such prize tickets or
promissory notes, and, on some occasions, when tickets were called
for, and wanted, the managers have refused to sign the same for
want of such equivalent; that the amount of such prize tickets so
deposited with the managers was about the sum of $141,779; that the
managers on such occasions objected to trusting Gillespie with the
disposal of tickets much beyond the penalty of his bond, and the
witness understood, from the conversations and transactions between
the parties at the time, that this precaution arose from doubts
which had been circulated respecting Gillespie's solvency. The
whole number of tickets actually signed was 30,960. This conduct of
the managers is explained by the supposition that they considered
the city as still responsible for prizes, but is irreconcilable
with the idea of an entire transfer of responsibility to Gillespie.
Such entire transfer would have entitled him to the free use of all
the tickets. That the parties who made the contract so understood
it would go far in its construction, were it even in the power of
the corporation to transfer its responsibility.
We, think then, that the contract of May, 1821, can be
considered only as a sale of the profits of the lottery, and could
not, under all the circumstances of the case, affect the
responsibility of the corporation. The ticket was in fact what it
purports on its face to be, a ticket in the National Lottery, by
authority of Congress, sold under the direction of the corporation
and signed by the person who was authorized by an act of the
corporate body to sign it. It asserts that it shall entitle the
possessor to such prize as may be drawn to its number, and this is,
we think, in such a case the promise of the corporation, made by
its authorized agent, to pay such prize.
The judgment of the circuit court, then, on the verdict found in
the cause and on the case agreed, to which that verdict refers,
ought to have been for the plaintiff.
The judgment is to be reversed and the cause remanded to the
circuit court with directions to enter judgment for the
plaintiff.
