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Hershey Mfg. Co. v. Adamowski





APPEAL from the Superior Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding.


Rehearing denied May 17, 1961.

On July 1, 1959, the plaintiff, Hershey Mfg. Co., filed a complaint for a declaratory judgment, seeking to have declared unconstitutional the act of 1919 protecting counties having naval stations and military posts from gambling devices, (Ill. Rev. Stat. 1957, chap. 38, pars. 344-348,) praying for the restoration to interstate commerce certain property seized from an interstate carrier by the defendant, Benjamin S. Adamowski, State's Attorney of Cook County, pursuant to the aforesaid statutory provisions, and seeking a permanent injunction restraining and forbidding further interference with the manufacture by plaintiff of slot machines, subassemblies and essential parts for shipment in interstate commerce in compliance with the Johnson Act (15 U.S.C.A. 1171 et seq.). After a full hearing, the superior court of Cook County entered its decree, on February 2, 1960, granting the relief sought by the plaintiff. The defendant has filed his direct appeal from that decree. Jurisdiction is predicated upon section 75(1) (a) of the Civil Practice Act (Ill. Rev. Stat. 1959, chap. 110, par. 75(1)(a),) inasmuch as the decree declared unconstitutional the statutory provisions challenged by the plaintiff. People ex rel. Ryan v. Sempek, 12 Ill.2d 581, 584; Jenisek v. Riggs, 381 Ill. 290, 293; Shilvock v. Retirement Board, 375 Ill. 68.

The plaintiff, an Illinois corporation, maintains its principal office and factory at 4309 West Lake Street, Chicago. It is engaged principally in the manufacture of slot machines and parts exclusively upon the order of and for delivery to customers in interstate commerce and foreign commerce in accordance with the Johnson Act. In addition to slot machines and parts, the plaintiff manufactures electronic photo-flash equipment, and coin-operated milk vendors, and also engages in a variety of subcontract work not associated with gambling devices. The plaintiff's average annual sales are from $600,000 to $700,000 of which at least 60% is attributable to its slot machine manufacturing operations.

Prior to March, 1958, when certain raids were made by the defendant and certain property was seized from the Ace Manufacturing Company, another slot machine manufacturer, plaintiff manufactured, assembled and completed slot machines for shipment to Nevada and certain foreign countries. The plaintiff and predecessor organizations were in the business of manufacturing slot machines since 1906 and prior to the Ace Manufacturing Company difficulty with defendant's office, five manufacturers operating in Chicago had shipped completed machines for fifty years. After the raid on Ace Manufacturing Company, plaintiff, on the advice of its counsel and as the result of what happened to Ace, ceased assembling slot machines in Cook County and limited its activities in Cook County to the manufacture of parts only.

On June 27, 1958, at 3:30 in the afternoon, plaintiff's factory was searched pursuant to a search warrant authorizing a search for slot machines allegedly being manufactured and assembled in violation of section I of the act of 1919, above cited. The search warrant was based upon an information in which one Raymond Burton swore that 100 slot machines were being shipped from plaintiff's factory to a gambling establishment at Las Vegas, Nevada, and that "said shipment is now being arranged for immediate delivery from aforesaid premises in Chicago to the establishment in Nevada." The return indicates that 37 assembled slot machine mechanisms without outside covering, 20 outside cases of slot machines and 2 boxes containing assorted slot machine parts were seized.

On the same day, June 27, 1958, defendant seized without warrant, 31 parcels of slot machine subassemblies and parts which were the property of the plaintiff. These items were in the possession of Transworld Airlines, Inc., an interstate freight carrier, and were covered by 3 bills of lading, indicating that they were consigned to a purchaser at Las Vegas, Nevada. This shipment was admittedly in compliance with the Johnson Act.

In July, 1958, the plaintiff filed a complaint before a three-judge district court in the northern district of Illinois which dismissed the complaint for lack of jurisdiction; and that order of dismissal was affirmed by the United States Supreme Court in Hershey Mfg. Co. v. Adamowski, 360 U.S. 717, 3 L.ed.2d 1540. During the period that this matter was under advisement in the Federal court, the plaintiff continued operations under the protection of a restraining order issued by the Federal court. On April 15, 1959, the day after the Federal court dissolved the restraining order, the plaintiff's premises were raided again and the president of the plaintiff corporation was arrested. No gambling devices or parts of gambling devices were found or seized by the State's Attorney's police at that time.

After the dissolution of the Federal court temporary injunction order, the plaintiff was put to the expense of assembling machines in Nevada and at a branch in Elgin, Illinois, at considerable additional cost. Completed slot machines were shipped into interstate and foreign commerce from Elgin at the time this proceeding was pending in the trial court.

At the outset, we are confronted by the claim of the defendant that the trial court improperly granted injunctive relief, inasmuch as the plaintiff had an adequate legal remedy pursuant to the provisions of the Replevin Act. (Ill. Rev. Stat. 1957, chap. 119.) Plaintiff's action, however, sought to protect a valuable property right, which is the proper subject matter of equitable action. (See International News Service v. Associated Press, 248 U.S. 215, 236, 63 L.ed. 211.) It is patent that prevailing in a multiplicity of replevin suits instituted by it can not be considered an adequate remedy at law for the plaintiff. The orders pursuant to which the merchandise was manufactured would go unfilled while each replevin case was pending. Plaintiff's right to continue in the business of manufacturing slot machines and parts would not be decided in a replevin action, the gist of which is the right of possession. Finally, it is well established that equity jurisdiction exists to restrain criminal proceedings under statutes or ordinances alleged to be unconstitutional when the prevention of such proceedings is essential to the safeguarding of rights of property. (Jackie Cab Co. v. Chicago Park District, 366 Ill. 474, 478; Western Theological Seminary v. City of Evanston, 325 Ill. 511, 523; Packard v. Banton, 264 U.S. 140, 68 L.ed. 596; Terrace v. Thompson, 263 U.S. 197, 68 L.ed. 255; Dobbins v. City of Los Angeles, 195 U.S. 223, 49 L.ed. 169.) In our view, the form of the action filed by the plaintiff here was proper.

Citing our decisions in Bobel v. People, 173 Ill. 19; Frost v. People, 193 Ill. 635; and People v. One Device, 410 Ill. 318, the defendant maintains that slot machines in Illinois are classified as contraband and, accordingly, are not within the scope of protection afforded by a court of equity. In short, the defendant contends that section 2 of the act of June 21, 1895, as amended, prohibiting gambling devices (Ill. Rev. Stat. 1957, chap. 38, par. 342,) declares the plaintiff's slot machines to be contraband and that therefore plaintiff has no standing in court to attack the validity of the act of June 11, 1919. (Ill. Rev. Stat. 1957, chap. 38, pars. 344 et seq.) The interrelationship of these two statutes commands our attention.

Section 2 of the 1895 act, as amended, provides as follows: "Every clock, tape machine, slot machine or other machine or device for the reception of money on chance or upon the action of which money is staked, hazarded, bet, won or lost is hereby declared a gambling device and shall be subject to seizure, confiscation and destruction by any municipal or other local authority within whose jurisdiction the same may be found. A coin-in-the-slot-operated mechanical device played for amusement which rewards the player with the right to replay such mechanical device, which device is so constructed or devised as to make such result of the operation thereof depend in part upon the skill of the player and which returns to the player thereof no coins, tokens or merchandise shall not be considered to be a gambling device within the meaning of this Act and any right of replay so obtained shall not represent a valuable thing within the meaning of this Act."

Section I of the 1919 act, pursuant to which the search warrant was issued, provides as follows: "That it shall be unlawful for any person, firm or corporation, as owner, agent or otherwise, to manufacture, sell, lease, or hold, or offer for sale, or lease to another any clock, joker, punch board, tape or slot machine, or any other device upon which money is staked or hazarded, or into which money is paid or played upon chance, or upon the result of the action of which money or valuable thing is staked, bet, hazarded, won or lost, in any county in the State of Illinois in which there is a United States military post, or United States naval training station of the first class."

In People v. One Device, 410 Ill. 318, 321-22, we summarized the legal policy of this State proclaimed by the 1895 act and the holdings of the Frost and Bobel cases, as follows: "The statute (Ill. Rev. Stat. 1949, chap. 38, par. 342,) describes gambling devices and provides that such devices shall be subject to seizure, confiscation and destruction by any municipal or other local authority within whose jurisdiction the same may be found. By this statute the legislature has determined that gambling devices are pernicious and dangerous to the public welfare and the keeping of them is prohibited by law. The constitutionality of this act has been sustained by this court in Frost v. People, 193 Ill. 635, and in Bobel v. People, 173 Ill. 19. These cases lay down the principles that devices which are manufactured, made, or kept for gambling purposes and have no potential for lawful use, are gambling devices per se and are not lawful subjects of property which the law ...

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