#### *Phalen v. The Commonwealth.*

June, 1842.

Lotteries—Privilege of Conducting-'Constitutional Law† —Obligation of Contracts.—On the 30th of January 1829. a statute is passed appointing commissioners to superintend the raising by way of lottery the sum of 30,000 dollars, to be paid to the president and directors of a turnpike company for the improvement and repair of their road, and authorizing the commissioners to contract with some proper person lor managing and conducting the lottery. The turnpike company, relying on the benefit of the statute, contract debts for the erection and completion of their road, expecting and intending to raise money for the payment thereof by a lottery; such debts being contracted prior to the 25th of February 1834, on which day a statute is passed enacting that it shall not be lawful to draw any lottery within the commonwealth, or to sell any ticket in a lottery to be drawn therein, after the 1st of January 1837. but providing that nothing in the statute contained shall interfere with contracts already made for the drawing of lotteries to extend beyond the 1st of January 1837, or with contracts to be thereafter made, under existing laws, for the drawing of lotteries not to extend beyond the 1st of January 1840. On the 11th of March 1834, a statute is passed appointing two persons commissioners, in place of two of the commissioners appointed by the act of January 1829 (who had resigned), to carry into effect the last mentioned act. No contract for the drawing of the lottery is made by the commissioners until the 19th of December 1839, when they make a contract for that purpose with J. P. who, after the 1st of January 1840, sells a ticket in the lottery, which is proposed to be drawn within the commonwealth. On present? ment against J. P. for selling the ticket, IlBim, 1. The act of February 1834 did not impair the obligation of any contract, expressly or impliedly made by the commonwealth with the turnpike company, nor contravene any right of private property vested in the company. 2. The act of March 1834 appointing new commissioners, had not the effect of exempting the lottery authorized by the act of January 1829, from the operation of the act of February 1834.

*438A presentment was made in the circuit superior court for the county of Henrico and city of Richmond, at October term 1840, against James Phalen, charging that he, since the 1st of January 1837, to wit, on the 1st of June 1840, at the city aforesaid, unlawfully did sell and *cause to be sold one certain lottery ticket in a certain lottery to be drawn in this commonwealth, to wit, in a lottery called Alexandria and Fauquier turnpike lottery, and then and there advertised to be drawn at----, the said lottery not being a lottery authorized to be drawn by any contract made with this commonwealth prior to the 25th day of February 1834, or by any contract made since in pursuance of any law of this commonwealth passed prior to the said 25th of February 1834, the drawing of which lottery was not to extend by virtue of said last mentioned contract beyond the 1st day of January 1840; contrary to the act of assembly in such case made. The defendant pleaded not guilty, and the jury impaneled for the trial returned special verdict, in which the following facts were found.

In November 1828, the president and directors of the Fauquier and Alexandria turnpike road presented a petition to the legislature, calling their attention to the importance of that road to the public, and to the fact that the state had an interest in it; stating that the directors and a few of the stockholders, upon their own responsibility, had raised money by which the road was then in excellent condition, except about three miles, which required much repair; and for that object, and the repayment of the money borrowed, praying the passage of a law authorizing a lottery to raise the sum of 30,000 dollars.

In consequence of this petition, a law was passed on the 30th of January 1829, (Acts of 1828-9, ch. 101, p. 99,) by the first section whereof it was enacted “that Hugh Smith, Jacob Morgan, John Boyd, William Dean and Jacob Douglass be and they are hereby appointed commissioners, whose duty it shall be to superintend the raising, by way of lottery or lotteries, the sum of thirty thousand dollars, for the purpose of improving the Fauquier and Alexandria turnpike road.” The 2d section enacted “that the said commissioners, or a majority *of them, shall be and they are hereby authorized to contract and agree with some fit and proper person or persons for managing and conducting the said lottery or lotteries.” And the 4th section enacted “that the sum hereby authorized to be raised bj- the said lottery or lotteries, so soon as the whole or any part thereof shall be received by the said commissioners, shall be paid over to the president and directors of the said Fauquier and Alexandria turnpike road company, and by them appropriated in the improvement and repair of the said road.”

By an act 'passed the 25th of February 1834, (Acts of 1833-4, ch. 69, p. 81,) it was enacted, “That it shall not be lawful for any person or persons to draw or cause to be drawn any lottery or lotteries, or any scheme or schemes in any lottery, within this commonwealth, after the first day of January eighteen hundred and thirty-seven, or to sell or cause to be sold any lottery ticket, or part of any lottery ticket, in any lottery to be drawn therein. And if any person or persons shall, after that day, set up or draw, or cause to be set up or drawn, at any place within the limits of this commonwealth, any lottery whatsoever, every person concerned directly or indirectly as a manager or conductor of such lottery shall be liable to a fine, at the discretion of a jury, of not less than one hundred dollars nor more than one thousand dollars for each offence; and every person who shall be concerned directly or indirectly in setting up or drawing any lottery in any other character than as a manager or conductor thereof, shall be liable to a fine of not less than twenty dollars nor more than one hundred dollars for each offence, at the discretion of a jury. And if any person shall, after the period aforesaid, sell any lottery ticket or any part or share thereof, either in person or by proxy, or shall act as agent, attorney or proxy in making sale of any lottery ticket, or any part or share thereof, in any such lottery, he shall forfeit and *pay for every such offence the sum of twenty dollars. And the several penalties in this act provided shall be recovered by action of debt, presentment, indictment or information in any court of record having jurisdiction of the offence, one half to the informer or person who may sue for the same, and the other half to the commonwealth. Provided, that nothing herein contained shall be construed to extend to or interfere with contracts already made for the drawing of any lottery or lotteries, the drawing whereof, by the provisions of such contract, shall extend to a period beyond the said first day of January eighteen hundred and thirty-seven: And provided also, that nothing herein contained shall be construed to extend to or interfere with any contract which may hereafter be made under and by virtue of any existing law authorizing the same, for the drawing of any lottery the drawirg whereof shall not extend beyond the first day of January eighteen hundred and forty.”

By an act passed the 11th of March 1834, (Acts of 1833-4, ch. 137, p. 171,) it was enacted (§1), “that William B. Hodgson and Bernard Hooe be and they are hereby appointed commissioners, instead of Hugh Smith and John Boyd, resigned, to carry into effect the act passed on the thirtieth day of January eighteen hundred and twenty-nine, ‘to authorize the raising by way of lottery a sum of money for improving the Fauquier and Alexandria turnpike road.’ ” And ($ 2), “That whenever any vacancy or vacancies shall hereafter occur in the commissioners appointed for the purpose aforesaid, by death, resignation, or refusal to act, the same shall be filled by the executive of this commonwealth.” The Fauquier and Alexandria turnpike *439company, relying upon the benefit and advantages of the act of January 1829, did, prior to the 25th of February 1834, enter into contracts and incur debts for the erection and completion of their road, expecting and intending to *raise by a lottery, for the *payment*thereof, the money authorized by the said act of 1829. And the commissioners of the said company did, under the acts of 1829 and March 1834, for the purposes specified in the act of 1829, enter into a contract with the said James Phalen and a certain Francis Morris on the 19th of December 1839, whereby, after reciting the provisions of the said act of 1829, it was witnessed that the said commissioners, parties of the first part, in consideration of the sums of money thereinafter agreed to be paid to them by the said Phalen and Morris, parties of the second part, did appoint the said parties of the second part the sole and exclusive managers and conductors of the lotteries aforesaid, and did covenant and agree that such apfjointment should not be revoked by them or any of them, and that the sole and exclusive right of drawing the said lottery or lotteries, so far as the parties of the first part were by the law aforesaid authorized to contract for the same, should be and remain vested in the parties of the second part, until the payments thereinafter stipulated to be made by them should amount to the sum of 30,000 dollars authorized to be made by the said act; to be used and exercised by the parties of the second part, by drawing so many lotteries as they might think proper, under such scheme or schemes as they might devise. And the parties of the second part agreed to take *on*themselves the management of the lottery and lotteries aforesaid, and to pay to the parties of the first part, as the consideration of the said contract or agency, the sum of 1500 dollars per annum, to be computed from the 2d of December 1839, and in that proportion for any part of a year. It was further agreed, That if, during the then session of the general assembly, an act should be procured exempting the lottery and lotteries authorized by the act of 1829 from the operation of the act of February 25, 1834, the parties of the second part would pay to the ^parties of the first part an additional compensation at the rale of 1000 dollars per annum, the payment of the said additional sum to date from the passage of such act. That whereas the constitutionality of the act of February 25, 1834 had been doubted, the parties of the second part, in case po act should be passed during the then session of the general assembly, exempting the lotteries authorized by the act of 1829 from the operation of the act of 1834, would, at their own proper expense, use all ways and means which might be expedient and necessary, to have settled and determined the constitutionality of the last mentioned act, and would, by appeal, or in such other way as should be legal and necessary, obtain on that point the sentence, judgment or decree of the highest legal tribunals of the state of Virginia and of the United Slates, to which the question could be taken. That if, before a final decision of the said question should be obtained, and after the end of the then session of the general assembly, an act of that assembly should be procured suspending the operation of the act of February 1834 in regard to the lottery and lotteries aforesaid, the parties of the second part would, in lieu of the payments before provided, pay to the parties of the first part, during the period of such suspension, the sum of 2000 dollars per annum, and at that rate for any portion of a year, to date from the passage of such act; till which time, the payments before agreed on were to he made. That the payments aforesaid, and all rights and powers of the parties of the second part to continue to act under the contract, or to draw any lottery or lotteries under the same, should cease as soon as, from the payments to be made under the foregoing provisions, the parties of the first part should have received the said sum of 30,000 dollars. That if, by any legal proceedings, the parties of the second part should be prevented from drawing the lottery or lotteries aforesaid, then the payments before ’^stipulated to be made by them should cease and determine during the time they should be so prevented, and their liability to make any such payments should only recommence on the decision of the highest judicial tribunal to which the question could be taken, that the act of February 1834 is unconstitutional, or on the removal of such legal impediments.*

The defendant James Phalen was, at the time of the presentment against him, one of the managers of the said lottery authorized by the aforesaid acts of January 1829 and March 1834; and under the said acts, and by virtue of the said contract, acting for the said James Phalen and Francis Morris, he sold the ticket in the presentment mentioned, at the city of Richmond and within the jurisdiction of this court. The said lottery was to be drawn in the commonwealth of Virginia.

If, upon the foregoing state of facts, the law should be for the commonwealth, then the jury found the defendant guilty; but if the law should be for the defendant, then they found him not guilty.

The matters of law arising upon the special verdict being argued, the circuit court held that the law was for the commonwealth, and rendered judgment that the defendant forfeit and pay to the commonwealth 20 dollars, and that he pay the costs of the prosecution. A writ of error to the judgment was awarded by this court, upon a petition of the defendant alleging that the same was erroneous for the reasons follow*440ing: 1. Because the act of February 1834 does not profess to repeal, and does not repeal, the act of January 1829 which conferred the right to draw the lottery, and therefore the petitioner had lawful authority to sell the lottery ticket in the presentment mentioned. 2. Because the *act of March 1834 is to be regarded as reenacting the law of January 1829, and being posterior in date to the law of February 1834, if there beany inconsistency between the two laws, the posterior must prevail. 3. Because the right to draw the lottery, conferred by the act of January 1829, was a valuable franchise and vested right, which it was not competent to the legislature to revoke; therefore if the act of February 1834 is to be regarded as revoking the right, it is unconstitutional and void, and whether it be so regarded or not, the petitioner ought to have been acquitted.

The cause was argued here by Eyons, Stanard and Robinson for the plaintiff in error, and Scott and Brooke for the cojnmonwealth.

*

For monographic note on Lotteries, see end of case.

†

See monographic *note*on “Constitutional Law” appended to Com. v. Adcock, 8 Gratt. 661.

*

The petition to the legislature, the several acts of assembly, and the contract for drawing the lottery, mentioned in this report, were fully set forth in hasc yerba in the special verdict.—Note in Original lOdition.

SUMMERS, J.,

delivered the opinion of the majority of the court.—This cause has been fully and ably discussed, and under other circumstances the judges would have adverted more.fully to the reasonings and illustrations which have been submitted to them, and to the authorities to which their consideration has been directed. The time necessarily occupied in a careful examination of the leading principles relied on, has, however, left them but a limited space for embodying their decision, with some of the prominent considerations by which they have been governed; and they therefore content themselves with shortly announcing the conclusions at which they have arrived after a very careful examination of the whole case.

The Fauquier and Alexandria turnpike company, even with the aid of the government subscription to their capital, found their road incomplete, and their resources inadequate to the repayment of money borrowed and expended in the construction of the work; and in the winter of 1828-9 applied to the general assembly for permission to raise 30,000 dollars by a lottery. *'This application resulted in the act of the 30th January 1829, authorizing certain commissioners therein named to contract with fit and proper persons for managing and conducting the lottery or lotteries, and for raising thereby the sum of mone3r before mentioned, to 'be applied to the improvement and repair of the road.

The expediency and moral propriety of raising money for public purposes by means of lotteries, at all times questionable, seems to have attracted legislative consideration in 1834, and to have resulted in a change of the course of our public policy in relation to lotteries, giving rise to the act of the 25th of February 1834. By this act, the drawing of lotteries and the selling of lottery tickets within the state, after the 1st of January 1837, are prohibited under heavy penalties; with a proviso in favour of lotteries for the drawing of which contracts had been previously made, leaving all such lotteries and the drawings thereof to be governed by the preexisting laws; and a second proviso, declaring that nothing contained in the act should be construed to extend to or interfere with any contract subsequently made for the drawing of any previously authorized lottery, if the drawing thereof should not extend beyond the first of January 1840. The lottery authorized on behalf of the Fauquier and Alexandria turnpike company, falling within the terms of the latter proviso, might, according to the provisions of the act, be contracted for and drawn in one or more lotteries or classes, until the sum of 30,000 dollars was raised by the commissioners for the improvement and repair of the road; provided these operations did not extend beyond the 1st of January 1840.

From the resignation of two of the commissioners, no measures were taken for the execution of the act of the 30th January 1829, until the 11th of Rfarch 1834, fourteen days after the passage of the prohibitory act; when the same legislature, by an act of that date, appointed *commissioners in place of those who had resigned, and authorized the executive to fill any vacancies that might subsequently occur.

It is earnestly and ingeniously contended that the provisions of the act of March 1834 are repugnant to those contained in the act of the 25th of the previous month, in this, that the appointment of the new commissioners, and the power given to the executive to fill subsequent vacancies in their number, are equivalent to the x'eenactment of the act of 1829 with the new provisions incorporated therein; which, forming a grant of the lotted right without limitation of time as to the exercise of it, are repugnant to and operate a repeal of the provisions in the act of February 1834, limiting the exercise of the right to the first of January 1840.

The constructive repeal of statutes is in all cases to be avoided, where the legislative intendment may be otherwise satisfied, and the supposed repugnancy reconciled by a construction giving effect to both. These two statutes, enacted by the same lawgivers within two weeks of each other, present a case which strikingly imposes this duty upon the court. We think the duty performed by regarding the last statute as reviving, under the limitation as to time prescribed by the former, the original statute of 1829; thus giving to the turnpike company the full benefit of their lottery privilege for nearly six years, and forbidding its exercise beyond that period. This restriction of the right in point of time is, we think, no more than an application of the ordinary legislative power of limiting the exercise of even vested and ascertained rights, where the public weal or the safety of society may require it. If this construction reconciling the provisions of those acts *441were doubtful, we should find a strong motive for its adoption, in the necessity of recognizing in the legislature the power to correct improvident and sometimes injurious enactments, where they' may not have ripened into contracts, 'x'or resulted in the investment of rights which cannot be invaded without perfidy or bad faith.

The contemporaneous and subsequent acts regulating the licensing of the venders of lottery tickets, and imposing taxes upon them, cannot, as contended, operate a repeal of the act of February 1834, as the sale of tickets in lotteries the drawing of which had been contracted for before that date, and of tickets in foreign lotteries, was and yet is authorized by law, and the sale of other descriptions of lottery tickets only became unlawful after the 1st of January 1840 ; leaving to the keepers of lottery offices a field of operation to which the license and tax laws applied. And the increased rates of taxation on such licenses, instead of furnishing any implication of the legislative intent to abandon the policy of the restraining act of February 1834, evince an increased solicitude to repress this immoral and sometimes ruinous pursuit of gain, by the requisition of heavier contributions to the treasury from the lottery offices.

The judgment of the circuit court is, however, impugned on a graver ground. It is contended that the act of the 30th of January 1829 conferred on the turnpike company a franchise under which expenditures of money were made, and formed an implied contract between the government and the company, that the latter should enjoy, unimpaired, all the rights and advantages enuring to them under the act, until they should realize under its provisions the sum of 30,000 dollars: that the act of B’ebrua'ry 1834, limiting and restraining the exercise of the rights of the company to the 1st of January 1840, impairs the obligation of this contract, and is therefore void: and that the franchise with which the company was thus invested, entered into and became a part of the property of the corporation, of which, under the constitution of Virginia, they could not be deprived without just compensation. This argument submits *to this court the solemn duty of comparing the provisions of the act of February 1834 with the paramount law, and of pronouncing whether those provisions are void or valid. This important judicial function, which results from the structure of our government, is, happily for the country, not often called into action; but when demanded by the occasion, it will be exercised with firmness, and the question considered with the care and deliberation called for by its importance.

In deciding this case, it becomes necessary to consider the nature and quality of the franchise, if it be one, which is granted to the turnpike company by the act of January 1829.

A franchise may consist in personal privilege or exemption, or in rights or privileges connected with personal or real estate; and in the latter aspect it is a species of incorporeal hereditament. The one under consideration may be properly characterized as a liberty or license to effect a particular purpose by prescribed means; which may or may not, at particular periods of its existence, and by reason of the rights and immunities which have sprung from its exercise, give rise to an implied contract or obligation for preserving it, and guarding it from injurious modifications, or become an element of private property, beyond the reach of the power of government, without due compensation. In looking into the inception and qualities of this privilege or license, it is found that the company' had borrowed money for the construction and repair of the road, which circumstance formed, among others, an inducement to apply for a lottery; yet the act directs that the funds to be raised thereby shall be appropriated to the improvement and repair of the road. It is stated in the verdict, that the company, relying on the benefit and advantages of the act of January 1829, did, prior to the 25th of February 1834, enter into contracts and incur *‘debts for the erection and completion of their road, expecting and intending to taise money for the payment thereof by the lottery : but whether these are inconsiderable amounts referred to for the purpose of giving colour, or amounts of sufficient magnitude necessarily to couple the lottery privilege with their security and payment, does not appear. Be this as it may, however, about five years elapsed without any successful attempt to render the lottery effective; and then the only measure was the act appointing two new commissioners, by which the company was again placed in a situation to render its privilege available. B’ive years more rolled on, when, within eleven days of the time at which the act of February 1834 went into operation, the contract of the 19th of December 1839, between the commissioners and Phalen and Morris, was entered into. Throughout this whole period, the franchise, liberty', license or privilege remained, as on the day of its enactment, a naked authority to contract for and draw a lottery, and, in the opinion of the court, at no time took the form of a contract, either express or implied, or that of private property, over which the legislative power was restrained. As to the power of the general assembly to limit, change or abolish a lottery privilege whenever the preservation and inculcation of sound morals may require it, we do not' find it necessary to express , any opinion ; being satisfied, without reference to the general power, committed to that body, of guarding the public weal, that the act of the 25th February 1834 was not in contravention of any legal right, vested in the turnpike company', and coming within the constitutional provisions on which the argument of the case has placed this question.

Separating the question from the general powers claimed on behalf of the commonwealth to reside in the legislative depart*442ment of the government, to our minds it is manifest that this dormant right to draw *the lottery, which was revived by the act of March 1834, must be taken as subordinate to and limited by the act of the 25th of the previous month; that those statutes must be taken as in pari materia, and receive the same construction as if embodied in one act; that there is nothing repugnant in the provisions of the one to those of the other, when the first is taken as limiting the time within which the right under the second is to be exercised ; and that the well ascertained principles governing the construction of statutes not only authorize but require the interpretation which we have given to these contemporary acts.

There are provisions in the contract of the 19th December 1839, fully contemplating the questions now discussed, and indicating the submission of them to this courtas an experiment in reference to the before mentioned statutes; but we have examined those questions without regard to the motives which may have brought this cause here, or which may carry it further; leaving our decision to be reviewed, if that power exists elsewhere.

CHRISTIAN, J., dissented.

Judgment affirmed with costs.