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UNITED STATES v. ONE HUNDRED THIRTY-NINE GAMBLING D.

December 12, 1952

UNITED STATES
v.
ONE HUNDRED THIRTY-NINE GAMBLING DEVICES ALIAS SLOT MACHINES, MORE OR LESS ET AL. UNITED STATES V. FOUR HUNDRED NINETY-SIX GAMBLING DEVICES ALIAS SLOT MACHINES, MORE OR LESS ET AL.



The opinion of the court was delivered by: Platt, District Judge.

The government and the claimants entered into a stipulation as to certain facts in each case, viz., (1) That the court has jurisdiction of the subject matter of the cause and the parties hereto; (2) That prior to and on January 2, 1951 and until March 5, 1952 the claimants were operating and conducting their businesses in East St. Louis, St. Clair County, Illinois; (3) That prior to January 2, 1951 claimants had acquired practically all of the gambling devices, commonly known as slot machines; (4) That subsequent to January 1, 1951, the claimants had not purchased, sold, or transported in interstate commerce or caused to be purchased, sold, or transported in interstate commerce any coin operated gambling devices, commonly known as slot machines, and particularly did not purchase, sell, or transport in interstate commerce any of the said gambling devices or any sub-assembly or material part or parts of said slot machines; (5) That the operations and transactions of the claimants as carried out or performed by them in the course of their businesses, both prior or subsequent to January 1, 1951 were as follows: That some of said devices were kept in storage and the remainder of them were placed in business houses of certain persons, but the claimants retained keys thereto so that no one other than claimants had access to the mechanism of said machines or the money contained therein. The claimants received 50 percent of the coins in each machine and the proprietor of the establishment in which the machines were located received the other 50 percent. The claimants maintained the gambling devices in good operating condition and repaired or replaced any gambling devices which failed to function properly for the purposes intended from machines kept in storage and from the sub-assembly and material parts kept at their places of business; that it was the usual and customary policy when said machines were opened by the claimants or their agents or employees where they were located, for the purpose of either removing the money from the said machines or to repair them, for the owner of the establishment to be present; (6) That on March 5, 1952 in the Eastern District of Illinois the devices herein involved were seized by the special agents of the Federal Bureau of Investigation, Department of Justice, pursuant to search warrants issued, by the United States Commissioners, and that the devices are now in the custody and possession of Carl J. Werner, United States Marshal for the Eastern District of Illinois; (7) That neither claimant has ever registered as a "dealer" under the terms and provisions of the Johnson Act, nor have any of the persons in whose establishments the devices were placed registered in accordance with said Act.

After the claimants had filed their brief the government attorneys filed reply brief and a motion to strike the claimants' answers and to dismiss them as parties to the suit. The theory of the government is that the claimants admit the nature of the gambling devices to be slot machines by the stipulation; that slot machines are per se pernicious and dangerous to the public welfare; and they are subject to confiscation and destruction by the Illinois authorities wherever they are found, by virtue of the Illinois Criminal Code, Ch. 38, Sec. 342, Ill.Rev.Stat. 1951;*fn1 that this statute has been held constitutional in the State of Illinois.*fn2 Libelant contends further that the Illinois courts have held that there can be no property in slot machines.*fn3 The government therefore maintains since the claimants have no interest in the subject matter of this suit their answers should be stricken and they should be dismissed by the court.

The fallacy of the government's position is quite clear. Claimants may have no property rights in the slot machines under the Illinois law. They may have violated the Illinois statute in possessing the machines.*fn4 But the question here is whether claimants have violated the Johnson Act. The claimants have a locus standi in this court and have a right to defend the suit. McVeigh v. United States, 11 Wall. 259-268, 20 L.Ed. 80. Even the Supreme Court of Illinois transferred a cause to the Appellate Court to determine if the device was a slot machine and subject to confiscation.*fn5 Similarly, here claimants may defend to determine whether there has been a violation of the statute. Furthermore, libelant should not be permitted to stipulate proof with the claimants and then ask that the court strike the answer and dismiss claimants from the suit. There can be but one conclusion that this court can reach. The motion to strike claimants' answer and dismiss them from the suit should be denied.

The court is faced with a determination as to whether these gambling devices come within the purview of the Johnson Act and are subject to seizure and forfeiture as provided therein. Section 7 of the Johnson Act provides in part as follows:

    "Any gambling device * * * possessed, or used
  in violation of the provisions of this chapter
  shall be seized and forfeited to the United
  States. All provisions of law relating to the
  seizure, * * * and judicial forfeiture, and
  condemnation of * * * merchandise * * * for
  violation of the customs laws; the disposition of
  * * merchandise * * * shall apply to seizures and
  forfeitures incurred, or alleged to have been
  incurred, under the provisions of this chapter,
  insofar as applicable and not inconsistent with

  the provisions hereof: Provided, That such duties
  as are imposed upon the collector of
  customs * * * under the customs laws shall be
  performed * * by such officers, agents, or other
  persons as may be authorized or designated for that
  purpose by the Attorney General."

The instant suits have proceeded in accordance with 19 U.S.C.A. §§ 1602-1615, Customs Duties. Said Section 1615 provides in part as follows:

    "In all suits or actions brought for the
  forfeiture of any * * * merchandise * * * where
  the property is claimed by any person, the burden
  of proof shall lie upon such claimant; * * *
  Provided, That probable cause shall be first
  shown for the institution of such suit or action,
  to be judged of by the court, * * *."

In view of this section, the government must first show probable cause for the seizures, or prima facie proof of the allegations of the libels "to be judged of by the court" before the burden of proof shifts to the claimants.*fn6 Since it is admitted that the gambling devices are slot machines they come within the definition of gambling devices as set forth in Section 1 of the Johnson Act. The decision must then be made whether they were possessed, or used in violation of the Act. This requires proof that the claimants were dealers in gambling devices and thereby violated Section 3*fn7 when they possessed, or used the gambling devices without registering as dealers.

Inasmuch as "dealer" is not defined in the statute the court should examine the purpose for which the statute was enacted. The Act is entitled "An Act to prohibit transportation of gambling devices in interstate and foreign commerce." Public Law 906, U.S.Code Cong.Ser., 1950, Vol. 1, page 1234. This is made even more explicit in the legislative history, U.S.Code Cong.Ser., 1950, Vol. 2, page 4240:

    "The primary purpose * * * is to support the
  policy of those States which outlaw slot machines
  and similar gambling devices, by prohibiting use
  of the channels of interstate or foreign commerce
  for the shipment of such machines or devices into
  such States."

The Congress was evidently intending to prohibit the shipment of gambling devices as defined by Section 1 of the Act into states such as Illinois where slot machines are illegal. According to the stipulation, none of the seized devices were actually in interstate commerce or intended for interstate commerce but were being used and operated intrastate in the City of East St. Louis. The claimants do not come within the term "dealer in gambling devices" within the scope of the Act.

"Dealer" in the common usage does not include the claimants or anyone else possessing or using the machines in this case. It must be observed that the Johnson Act is a penal statute and provides for forfeiture. Forfeitures are not favored and they should be enforced only when within both the letter and spirit of the law. United States v. One 1936 Model Ford Coach, 307 U.S. 219, 226, 59 S.Ct. 861, 83 L.Ed. 1249. Forfeiture statutes should be strictly construed. C.C. Co. v. United States, 5 Cir., 147 F.2d 820; The Leme, 77 F. Supp. 773, 777. These devices were being used and operated, or in storage to be used and operated, all in the same way. The owners of the establishments where the machines were placed for operation certainly are not dealers in gambling devices. Newgent, who had machines in his place of business, is not a dealer. The claimants are not dealers in slot machines. They neither held themselves out as ready and willing to sell the machines to purchasers nor were they attempting to find purchasers. They purchased the machines as an investment and elected to operate them at a profit instead of selling them. Claimants were dealing in chance to obtain coins from the slot machines. It is not a different situation than where an individual distributes gum or peanut vending machines, dividing the income from the machines with the owners of the businesses where the vending machines are located. Such a person is clearly a dealer in gum or peanuts but not a dealer in vending machines. Two district courts have been presented with similar uses of slot machines and have held that those who operated ...


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