Summary of St. Peter v. Pioneer Theatre Corp. (1940) 227 Iowa 1391
? = lottery winner (St. Peter)
? = theatre holding “bank night" (Pioneer)
F: ? registered for a drawing at the theatre. Registration and presentation within three minutes were prize requirements. A theatre ticket was not required for registration. A theatre employee announced the participant as the winner. The participant immediately presented herself to the manager, but he said it was her husband who had won and that the husband was too late to claim the $ 275 prize (lights went out and they could no longer find the manager). The participant filed an action to claim the prize. The trial court entered a directed verdict for the theatre and the manager.
If you sign, win, and claim then you get the money. This is a unilateral contract. Performance is required to fulfill the contract.
I: Is the consideration given adequate, and if there is adequate consideration then is the lottery illegal?
Yes there is adequate nominal consideration but the ct. does not base their decision on this; rather, they decide that this is a bargained-for exchange. If the consideration is honest and real (not fraudulent) the ct. will not examine the adequacy of the consideration as it relates to either party.
R: The ct. does not evaluate the adequacy of consideration; the ct. only requires its presence. The unilateral contract was sufficient consideration (pg. 50) and this type of consideration can be differentiated from the precedent set inHundling which would establish an illegal lottery. There is a difference in the spirit of the lottery in this case that does not cause people to “hazard their substance on mere chance." (pg. 52).
This is the benefit/detriment theory even though that test has fallen out of favor- the bargained-for-exchange theory is the one that really applies to this case when based on the current law.
Consideration has a different definition in this case. While it is similar, the outcome of this case rests on consideration in one (a duty) sense, and not in the sense of money. Thus, consideration can be an act rather than a promise – this is the case in a unilateral contract à promise for act, not promise for promise
A: A unilateral contract was fulfilled by ? and thus ? was obligated to pay the $275.
C: Ct. reversed the directed verdict for ? and entered a judgment for ? for $275.