Stone v. Mississippi
101 U.S. 814

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U.S. Supreme Court

Stone v. Mississippi, 101 U.S. 814 (1879)

Stone v. Mississippi

101 U.S. 814

Syllabus

1. In 1867, the Legislature of Mississippi granted a charter to a lottery company for twenty-five years in consideration of a stipulated sum in cash, an annual payment of a further sum, and a percentage of receipts from the sale of tickets. A provision of the constitution adopted in 1868 declares that

"The legislature shall never authorize any lottery, nor shall the sale of lottery tickets be allowed, nor shall any lottery heretofore authorized be permitted to be drawn, or tickets therein to be sold."

Held:

1. That this provision is not in conflict with sec. 10, art. 1, of the Constitution of the United States, which prohibits a State from "passing a law impairing the obligation of contracts."

2. That such a charter is in legal effect nothing more than a license to enjoy the privilege conferred for the time, and on the terms specified, subject to future legislative or constitutional control or withdrawal.

2. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, commented upon and explained.

3. The legislature cannot, by chartering a lottery company, defeat the will of the people of the state authoritatively expressed, in relation to the continuance of such business in their midst.

The Legislature of Mississippi passed an Act, approved Feb. 16, 1867, entitled "An Act incorporating the Mississippi Agricultural and Manufacturing Aid Society." Its provisions, so far as they bear upon the questions involved, are as follows:

"The corporation shall have power to receive subscriptions, and sell and dispose of certificates of subscriptions which shall entitle the holders thereof to any articles that may be awarded to them, and the distribution of the awards shall be fairly made in public, after advertising, by the casting of lots, or by lot, chance, or otherwise, in such manner as shall be directed by the bylaws of said corporation; . . . and the said corporation shall have power to offer premiums or prizes in money, for the best essays on agriculture, manufactures, and education, written by a citizen of Mississippi, or to the most deserving works of art executed by citizens of Mississippi, or the most useful inventions in mechanics, science, or art, mane by citizens of Mississippi."

Sec. 7 provides that the articles to be distributed or awarded may consist of lands, books, paintings, statues, antiques, scientific

Page 101 U. S. 815

instruments or apparatus, or any other property or thing that may be ornamental, valuable, or useful.

Sect. 8 requires the corporation to pay, before the commencement of business, to the treasurer of the state for the use of the university the sum of $5,000, and to give bond and security for the annual payment of $1,000, together with one-half percent on the amount of receipts derived from the sale of certificates.

Sect. 9 declares that any neglect or refusal to comply with the provisions of the act shall work a forfeiture of all the privileges granted, and subject any officer or agent failing to carry out its provisions or committing any fraud in selling tickets at drawing of lottery to indictment, the penalty being a "fine not less than $1,000, and imprisonment not less than six months."

Sect. 11 enacts that as soon as the sum of $100,000 is subscribed and the sum of $25,000 paid into the capital stock, the company shall go into operation under their charter and not before, and the act of incorporation shall continue and be in force for the space of twenty-five years from its passage, and that all laws and parts of laws in conflict with its provisions be repealed, and that the act shall take effect from and after its passage.

The constitution of the state, adopted in convention May 15, 1868, and ratified by the people Dec. 1, 1869, declares that

"The legislature shall never authorize any lottery, nor shall the sale of lottery tickets be allowed, nor shall any lottery heretofore authorized be permitted to be drawn, or tickets therein to be sold."

The legislature passed an act, approved July 16, 1870, entitled

"An Act enforcing the provisions of the Constitution of the State of Mississippi, prohibiting all kinds of lotteries within said State, and making it unlawful to conduct one in this state."

The Attorney-General of Mississippi filed, March 17, 1874, in the Circuit Court of Warren County in that state, an information in the nature of a quo warranto, against John B. Stone and others, alleging that, without authority or warrant of law, they were then, and for the preceding twelve months had been, carrying on a lottery or gift enterprise within said county and state under the name of "The Mississippi Agricultural, Educational,

Page 101 U. S. 816

and Manufacturing Aid Society." The information alleges that said society obtained from the legislature a charter, but sets up the aforesaid constitutional provision and the act of July 16, 1870, and avers that the charter was thereby virtually and in effect repealed.

By their answer the respondents admit that they were carrying on a lottery enterprise under the name mentioned. They aver that in so doing they were exercising the rights, privileges, and franchises conferred by their charter, and that they have in all things complied with its provisions. They further aver that their rights and franchises were not impaired by the constitutional provision and legislative enactment aforesaid.

The state replied to the answer by admitting that the respondents had in every particular conformed to the provisions of their charter.

The court, holding that the act of incorporation had been abrogated and annulled by the constitution of 1868 and the legislation of July 16, 1870, adjudged that the respondents be ousted of and from all the liberties and privileges, franchises and emoluments, exercised by them under and by virtue of the said act.

The judgment was, on error, affirmed by the supreme court, and Stone and others sued out this writ.

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