might be found relating to this subject: Meyer v. State, 112 Ga. 20, 37 S. E. 96, 51 L. R. A. 496, 81 Am. St. Rep. 17; McLaughlin v. Investment Co. (C. C.) 64 Fed. 908; Horner v. U. S., 147 U. S. 449, 13 Sup. Ct. 409, 37 L. Ed. 237; State v. Clarke, 33 N. H. 329, 66 Am. Dec. 723; Thomas v. People, 59 Ill. 160; In re National Indemnity Co. (Pa.) 21 Atl. 879; United States v. Politzer (D. C.) 59 Fed. 273; Dunn v. People, 40 Ill. 465; Sykes v. Beadon, 40 L. R. Ch. Div. 170; MacDonald v. United States, 12 C. C. A. 339, 63 Fed. 427; United States v. Fulkerson (D. C.) 74 Fed. 619; Hudelson v. State (Ind.) 48 Am. Rep. 171; State v. Moren (Minn.) 51 N. W. 618; Ballock v. State (Md.) 20 Atl. 184, 8 L. R. A. 671, 25 Am. St. Rep. 559; State v. Mercantile Ass'n (Kan.) 25 Pac. 984, 11 L. R. A. 430, 23 Am. St. Rep. 721; State v. Boneil (La.) 8 South. 298, 10 L. R. A. 60, 21 Am. St. Rep. 413; Reg. v. Harris, 10 Cox, C. C. 352; United States v. Zeisler (C.

C.) 30 Fed. 499; United States v. Wallis (D. C.) 58 Fed. 942; State v. Shorts, 32 N. J. Law, 398, 90 Am. Dec. 668; Com. v. Thacher, 97 Mass. 583, 93 Am. Dec. 125. We do not think it would be desirable or profitable to discuss in detail the facts of these numerous cases that have been called to our attention. Many of them are merely cases relating to general principles in reference to the law of lottery, about which there is no dispute. Some of them relate to investment companies, but none of these are, in our judgment, either in their facts or in their reasoning, close enough to the present case to be followed by us, even if they were decisions which were binding upon us as authority. In those cases where the facts were at all similar to those of the present case, there were some facts which, in our opinion, materially distinguished the cases from that which we now have under consideration. There was a union in each case of chance, prize, and consideration, or the contract was of such a character that it was so largely dependent upon lapses as to make it fraudulent and void. If in the foregoing discussion we have been so fortunate as to have clearly set forth what we understand to be the scheme of the contract involved in the present case, we feel perfectly safe in saying that a mere casual examination of the cases cited will be all that is necessary to differentiate every one of them from the one now under review, though it is not at all incumbent upon us to show that any distinction between the cases exists. The courts have in many cases made rulings which were intended to protect the public from being imposed upon by fraudulent devices in the form of investment companies, and it is proper that the strong arm of the courts should be used in cases where the scheme is fraudulent and calculated to deceive and defraud. But no case has been called to our attention where any court of last resort has ever held a contract like the one under consideration, understood as we

think it should be understood, and as the entire scheme requires it to be understood, to be unlawful or incapable of enforcement.

It was not insisted, as we understand it, that there was any infirmity in that clause of the certificate which provides that the legal representatives of a deceased certificate holder, who was not more than 50 years of age when the certificate was issued, should be settled with by the payment of all amounts which had been paid in, with 8 per cent. interest thereon, and its share of earnings in excess of that amount; and if the deceased holder was more than 50 years of age when the certificate was issued, and his legal representatives did not desire to continue the certificate as though death had not occurred, they should be settled with by the delivery of a paid-up certificate for the amounts paid in, bearing 4 per cent. interest per annum. Nor was it claimed that there was any infirmity in that part of the contract which provided that one who had paid for 84 months should be entitled to a paid-up certificate for such amounts, bearing 4 per cent. interest per annum. It might be that under the contract the legal representatives of a holder who was not more than 50 years old when the certificate was issued would receive the full amount paid in, with 8 per cent. interest thereon, at a time when this amount had not earned 8 per cent.; but as this payment would be due to him by the happening of the death of the certificate holder, which is an event coming in due course of nature, this would not make the scheme any more illegal than it would make every contract of life insurance fraudulent and void. Taking the contract as a whole, and viewing the same as it has been construed by the officers of the company, and in the light of the manner in which the affairs of the company have been administered, we find nothing in the contract that would justify us in condemning the same as illegal. It is said, though, that the company issued literature which was calculated to impress the public and those who invested in the company with the idea that the business carried on was the business of a lottery, and that this literature was misleading, and did not set forth the character of the enterprise as now contended for by the company. We will set forth some of these extracts from the literature of the company. Certain circulars of the company sent to prospective investors contained the following statements: "The Equitable Loan and Security Co. is an established financial institution, whose governing principles are security, profit earnings, and speedy returns to the investor." "All certificates pay their holders their equitable ratio of profits, whether called for redemption the 12th, 24th, 36th, or any month after their issuance." "Insurance companies kill the man and pay the policy; the Equitable Loan and Security Co. kills the policy and pays the man, thereby insuring a speedy re

turn to living members." "A thorough knowledge of our plan will also show that it is absolutely perfect in point of security, profit earnings, equity and speedy returns to the investor." "To guarantee our certificate holders the largest profits and quickest possible returns, no officer or director of this company, or any member of his or their families can ever own or purchase certificates, thus preventing those who are familiar with the inside workings of the company from speculating on delinquent investors and realizing any profits at the expense of prompt and persistent holders." "Twenty certificates purchased in the Equitable Loan and Security Company, if carried to maturity, will pay you Ten Thousand Dollars, yielding a clear profit of $5,720.00." "The chief element and most prominent feature in our plan is to call and pay certificates as rapidly as our business will permit at their value, which value shall always be the full amount of first payment and all installments paid on them, with 8 per cent. interest, and their proportionate share of all dividends, accumulations from fines, lapses (forfeitures), and interest earned in excess of 8 per cent, per annum. For the express purpose of calling certificates for payment as rapidly and as early as possible, a redemption fund has been created," etc.

These extracts from the literature of the company contain a few of the many alluring attractions which are held out to prospective certificate holders. They embrace, we believe, those which are principally relied on in the present case to show misrepresentation and fraud in reference to the character of the company's business. It must be admitted that these declarations in the litera. ture of the company evince a hopeful and sanguine spirit on the part of the officers of the company, and it is evidently their desire to impress the public and possible investors with this same spirit. Is what is said in this literature anything more than an effort to call attention to the character and business of the company in an attractive, enticing, and fascinating way? Are not such methods usual in the commercial world with those who have something to sell? Are they not permissible when not false or fraudulent? When these statements are read and understood, there is really nothing inconsistent with the plan of the company as we have held it to be. But suppose we are wrong in this, and that what is said amounts to misrepresentation and fraudulent misrepresentation. So far as the present case is concerned, it will avail the defendants in error nothing, for the reason that the court has not placed its order appointing a receiver on any such ground. On the contrary, it has distinctly held that if the individual holders of certificates were induced to purchase them by the fraudulent representations of the selling agent, or of the officers of the company, it might be ground for a rescission

of the contract, so far as they were concerned, but it would not necessitate the appointment of a receiver to take charge of the entire assets of the company, unless it was shown that a receiver for the entire assets was necessary for the protection of the rights of such persons; and that, if the scheme of the company is legal and its contracts valid, if any deception was practiced upon the certificate holders, it would not require the appointment of a receiver. So far as these misrepresentations may have been made by the agents of the company, it was not bound by them, if they were at all in conflict with what was stated in the cer tificate, because in the face of each certificate is a distinct stipulation that no statement made by any one, except as therein set forth, shall be binding upon the company. This language is broad enough to apply even to statements made by the officials of the company. The contract relations between the certificate holder and the company are absolutely controlled by the certificate, as long as it stands as evidence of the contract. Let it be conceded that the literature of the company which was sent out and authorized by it was calculated to impress upon those who read it that contracts of a nature not provided for in the certificate were intended, and that the applicants for certificates made their applications expecting to obtain certificates of a character indicated by the literature and different from those indicated by the certificates. When they received the certificates with the statement in them above referred to, and could see by a simple reading of the same that it was different from what was contained in the literature, they would be bound by the terms of the certificates after they became acquainted with what was contained therein, or a reasonable and sufficient time elapsed for them to acquaint themselves with its contents after the certificate had come into their possession. The certificate was the evidence of the contract. When it was delivered to the certificate holder, it was his duty to read it, and ascertain what was the contract relation that existed between himself and the company, and, if the literature of the company proposed a different contract, he could have, within a reasonable time, claimed a rescission and recovered back what he had paid, if the contract contained in the certificate was substantially and materially different from that proposed in the literature of the company. Certainly, he cannot come into court as a certificate holder, and claim rights under a contract not only not contained in the certificate, but directly antagonistic to the statements made therein, after having received and treated the certificate as evidence of the contract between himself and the company. The plaintiffs do not ask either a rescission or a reformation of the contract. They claim that they are holders of the certificates as issued, and as such only

do they pray for relief, and the relief asked for is not of a nature which the contract contained in the certificate would authorize. It may be that they have been deceived and defrauded and wronged by the misrepresentations of agents, or even of the officers, contained in authorized literature of the company. If so, they should not come into a court of equity endeavoring to use their position as certificate holders to enforce a contract not contained in their certificates, but their appropriate remedy was in due time to have applied for a rescission of the contract, and ask that the company be required to pay to them the sums which it and its agents had received from them as a result of the fraud which had been perpetrated upon them. Fraud on the part of the agents and officers of the company would be a sufficient ground upon which to base an application for a rescission of the contract; but fraud of the worst type would not authorize a court of equity, in the absence of a prayer for a reformation of the contract, to decree that the certificates issued providing a contract of one character should, on account of the misrepresentations made at the time they were issued or applied for, be declared a contract of an entirely different character.

It appears from the evidence that a large part of certificates of "Class B" are outstanding, and that the company has ceased to issue certificates of this class. At the time this suit was filed the company was issuing certificates known as "Class C." A copy of one of such certificates is as follows:

"In Consideration of the written application for this Certificate (a copy of which is on the back of this Certificate) and the statements and agreements therein contained, which are hereby made a part of this contract, the Equitable Loan and Security Company, hereby promises to pay to the order of

of

at the Home Office of the Company, Five Hundred Dollars, subject to the following express terms and conditions:

"1st. That the holder hereof agrees to and shall surrender this Certificate for payment and cancellation whenever the same shall be called before maturity upon the payment to him of its then redemption value, which value shall be the full amount of all installments paid hereon, with a guarantied profit of Eight per cent. per annum (which profit must be earned before this certificate shall be eligible for redemption) together with its proportionate share of all profits or accumulations arising from interest, fines and lapses in excess of Eight per cent. per annum.

"2nd. That of each and every installment paid hereon the maker hereof shall place Fifty per cent, and all net receipts from fines to a redemption fund, which may be used: (1st.) For paying off Certificates prior to their full maturity according to the terms herein set forth; (2nd.) For paying Certificates in the order and manner that they shall mature at the end of the full term; (3rd.) For pay

ing to the legal representatives of the deceased holder hereof the full amount of all installments paid hereon with a guaranteed profit of Eight per cent. per annum together with its proportionate share of all profits or accumulations arising from interest, fines and lapses in excess of Eight per cent. per annum, Provided, this Certificate is in good standing and legal and sufficient notice of such death is furnished and this Certificate satisfactorily released and surrendered to the maker hereof within ninety days after death occurs; otherwise this Certificate can not be so surrendered, and all conditions will be enforced as provided for in section fifth hereof; (4th.) For paying all licenses and taxes: Thirty per cent. to a reserve fund which shall be used and held for the protection of all live outstanding Certificates; and the remaining twenty per cent. and all transfer fees shall be used for the expenses of the Company and such other purposes as the Directors may approve.

"3rd. That the holder has paid One Dollar and Fifty cents herefor and agrees to pay to the maker hereof at its Home Office, without any other or further notice, an installment of One Dollar and fifty cents on the fifth day of each and every succeeding month hereafter, until One Hundred and Sixty-eight installments shall have been thus paid, time being of the essence of this contract; then this Certificate shall become due and payable within thirty days from the date of said last payment for its full face value of Five Hundred Dollars.

"4th. That in order to prevent favoritism or partiality being shown by the Company, Certificates paid before maturity shall be paid by numbers, and only according to the multiple table which is printed on the back hereof, which table is hereby referred to and made a part of this contract.

"5th. That a failure to pay said installments when due subjects the holder hereof to a fine of 15 cents per month for each month on every installment in arrears, and if any installment shall remain unpaid for six months, then this Certificate shall become null and void, and of no value, and the holder hereof shall and does forfeit all payments (including fines) made hereon; Provided, that at any time after eighty-four monthly installments have been paid hereon, the holder hereof may surrender this Certificate, if it is in good standing, and receive for it a new, non-assessable and non-forfeitable Certificate for the full amount of installments that have been paid hereon, with interest at the rate of 4 per cent. per annum, which new Certificate shall bear the next unsold number and shall bear interest at the rate of 4 per cent. per annum and be payable on or before the expiration of the tontine period, from the time it is then issued.

"6th. That no transfer hereof shall be valid or binding on the maker hereof until it has been approved hereon by the Secretary and

recorded on the books of the Company at its Home Office, and a fee of One Dollar and Fifty cents paid for making such record. Each and every transferee hereof accepts this Certificate subject to all the stipulations herein. This Company shall have a prior lien upon this Certificate for any indebtedness due said Company by the owner hereof as shown by the books of this Company.

"7th. That no statement made by any one except as herein set forth shall be binding on this Company.

"8th..That no part of the reserve or redemption funds can ever be loaned to any officer or director of this Company.

"9th. That the funds of this Company may be loaned to the holders of Certificates, and otherwise invested, upon terms and security to be approved and accepted by the Board of Directors.

"10th. That no officer or director of this Company, or any member of his or their families, can purchase or own this Certificate.

"In Witness Whereof, this Company has caused this Certificate to be executed in its name and behalf, under its corporate seal, by its President and Secretary, this day of —, 190-.

"Equitable Loan and Security Company, "By President. Secretary."

66

The multiple table referred to in this certificate is the same as that set out above, except that at the bottom of the table appears the following: "If at any time any multiple number next in the regular order of redemption should not have to its credit a sufficient per cent. profit to permit of its redemption according to the terms of this certificate, payment may revert back to the lowest numeral and multiple numbers coming next in order, and on which the profit is sufficient to justify their redemption, and this process continued until the suspended multiple numbers shall have enough earned profit apportioned to their credit to render them eligible for redemption, according to their terms, when they may be called."

If the contracts contained in certificates of Class B are lawful, it follows necessarily that the contracts contained in certificates of Class C would be lawful. In fact, it was practically conceded that the issue in this case depended upon the validity of certificates of Class B. Upon the invalidity of these certificates the court based its order appointing a receiver, and we think it is evident that the judgment appointing a receiver of the entire assets of the company was not based upon the certificates of either Class A or Class C. The court based its decision appointing a receiver solely upon the ground that the scheme of the company was unlawful, and not upon the ground that the company was not carrying out in good faith the scheme authorized by the charter, and indicated by the contracts made with the certificate holders. We are constrained, for the

reasons above given, to disagree with our learned Brother in reference to the legality of this scheme. We have set forth what we believe to be the true intrepretation of the contract. If the company is not keeping within the limits of its charter powers, or if it is not managing the assets in the manner provided in its contracts with the certificate holders, of course they have their appropriate remedy to bring the company within the limits of its charter and the scheme as set forth in the certificates. Whether the company has exceeded its charter powers, or whether it has managed the assets of the company in any improper way, it is not incumbent upon us to determine at the present time. The finding of the judge to the contrary precludes any inquiry into the subject, so far as the present case is concerned. In our opinion, the judgment must be reversed on the ground that the court erred in its interpretation of the contract, and, as upon this ground alone a receiver was appointed, the order appointing the receiver should be vacated, and the assets of the company restored to the possession of the officers of the company, to be administered by them in accordance with the charter, the contracts, and the law of the land.

From the view we have taken of the case, it is unnecessary for us to investigate the question whether a court of equity would under any circumstances take charge of the assets of a lottery company at the instance of one who knowingly went into the unlawful scheme. On first impression, it would seem to us that the purchaser of a lottery ticket was in pari delicto with the seller, and, if the scheme of the company was as the learned judge of the court below held, the holders of certificates would be in no better position than the purchasers of lottery tickets. Upon this question, however, we refrain from expressing any matured opinion. Certain it is, however, that if the scheme of the company was in the nature of a lottery, and a court would, at the instance of one who went into the scheme, take charge of the assets of the company, then every person who ever paid one cent into the company would be entitled to participate in the distribution of these assets, even though by reason of his default his certificate had been forfeited. The assets should not be administered for the benefit alone of certificate holders who are in. They obtain no rights under their certificates, because the contracts would be illegal. If. they have any rights, they arise from the fact that they paid money into an unlawful enterprise, and the holders of certificates who have paid in and lapsed are just as much entitled to participate as those who have paid in and have not lapsed. If a court of equity will take charge of these assets, in order to prevent them from being used for this unlawful business, these assets should be returned to the true own.

ers of the fund-that is, the holders of certificates at the present time, and all persons who have contributed to the fund at any time. One reason why it appears to us that it is not the province of a court of equity to soil its hands in distributing a fund of this character is that after all persons who have ever contributed to the fund have been repaid the amount contributed, with lawful interest thereon, and even the costs of suit and of the receivership have been paid, there will probably be remaining a surplus in the hands of the court, and it would be necessary to determine to whom this surplus belonged. A court of equity would certainly not give this fund to the holders of the lottery tickets, as it were. If it did, it would encourage people to buy lottery tickets, and would be giving to those who bought the tickets a part of the profits of the illegal enterprise. If the fund remaining in the hands of the court was not given to the purchasers of the tickets, it would have to be divided among the operators of the illegal scheme; and it would certainly be an unusual spectacle for men who had been promoters of a lottery scheme, and who had had a fund raised by them taken from them by a court of equity, to wait around the doors of the court until the fund had been administered, to see how much a court of equity would return to them as the promoters of the scheme. At no time in the history of the court of chancery have persons in possession of a fund procured by unlawful means been known to wait around the doors of the court for the time to arrive when a portion of such a fund should be returned to them by the court, for the reason that the owner could not be found, and the court must make some disposition of it. The doors of a court of equity are closed against such persons, and should never open to admit a fund which would have to be so administered that a time would arrive when the lawbreaker loitering at the doors of the court in anxious solicitude as to the time and terms of the final decree must be sent for in order that the court might deliver to him a part of the fund remaining unadministered in its hands. The unadministered part of the fund in such cases cannot, consistently with any rule of law or equity, be paid to those who were enticed into the illegal scheme, and a court of equity has no right to confiscate even the property of a lawbreaker; and, at the end of litigation of the character indicated by the above reflections, the only course open to the court would be to call in the transgressor of the law, and deliver to him a fund which, according to the rules of law and equity, could not with propriety be delivered to any one else. However, as said above, we do not decide this question. These are simply some reflections growing out of the possibilities that might result from an attempt by a court of equity to administer

a fund which in its inception and growth is tainted and impure. It does now seem to us that the only court that should ever open its doors to him who would improve his fortune by methods not authorized by law is that court which has jurisdiction to punish offenders against the law. Of all courts, a court of equity should not be opened to the lawless, to settle controversies concerning their spoils. The lawless should neither be allowed to pass the threshold of such a court, nor permitted to linger around its portals in anticipation of a benefit to be derived from its decrees.

Having reached the conclusion that the individuals engaged in this enterprise are not subject to the criticism that they are the managers of a lottery, or promoters of a scheme which is unlawful, we are saved the necessity at the present time of deciding what would have been the rights of these certificate holders if their contentions had been sound.

Judgment reversed. All the Justices concurring, except LUMPKIN, P. J., absent on account of sickness, and SIMMONS, C. J., and LAMAR, J., dissenting.

LAMAR, J. (dissenting). I cannot assent to the majority opinion, and have attempted in the headnotes to indicate as briefly as possible what I conceive to be the law applicable to this case, in which I am authorized to say that Chief Justice SIMMONS concurs. The reporter has been requested to incorporate in the official report the learned and able opinion of his honor, Judge J. H. LUMPKIN, of the Atlanta circuit, and this makes it unnecessary to go into any elaborate discussion of the authorities, or to set out at greater length the facts appearing in the record.

On Rehearing.

COBB, J. The application for a rehearing in this case is based upon numerous grounds. A rehearing is asked upon the ground that the case was heard by only five justices, and the judgment rendered was concurred in by only three. It is now asked that the case be reheard before a full bench of six justices. These facts alone furnish no sufficient reason for a rehearing. Under the Constitution and Laws, three justices may render a judgment in any case heard before less than six justices. Even if, under any circumstances, a litigant has a right to ask that his case be heard before a full court of six justices, the application must be made before the case is heard. The fact that one or more of the justices is absent, and the judgment is rendered by three justices only, constitutes no ground for a rehearing at the instance of a party. While it does not appear in the official report of the case, still the records of this court disclose that in the case of Gilbert v. State (Ga.) 43 S. E. 47, which was heard by four justices,