This is a suit to enjoin the collection of an authorized license tax. On final hearing the circuit court perpetually enjoined the defendants, Grant P. Hall, State tax commissioner, and R. C. Lilly, deputy State tax commissioner, and all other deputies, agents, employees, and representatives of said State tax commissioner "from collecting by any proceeding whatsoever any tax, assessment, license or other charge from the plaintiff, upon and for the sale of any goods, wares, chattels, or merchandise by means of certain donation cards or 'punch boards' owned, furnished and delivered to the said plaintiff by Bluefield Lodge No. 269, Benevolent and Protective Order of Elks, of Bluefield, West Virginia". The defendants appeal.
The bill shows that the plaintiff is a member of a voluntary fraternal and charitable organization, known as the Bluefield Lodge No. 269, Benevolent and Protective Order of Elks, composed of 1,800 members with headquarters at Bluefield, Mercer County, West Virginia; that with the view of securing funds for its charitable purposes, by the operation of "punch boards", whereby articles of merchandise of different *Page 78 values are awarded to those buying chances on the boards, the lodge obtained from the tax commissioner, through his deputy, R. C. Lilly, a license in words and figures following, to-wit:
No. 23210 (Form S. T. C. 42A) $16.67
STATE OF WEST VIRGINIA June 20, 1863 State of West Virginia (Seal) Montani Semper Liberi
Office of State Tax Commissioner, ss:
"This is to certify that the undersigned, in pursuance of the authority vested in him, by Section 42a of Chapter 32 of the Code, as enacted by the regular session of the Legislature of 1909, has this day granted to Elks Club (No. 269) of Bluefield, Mercer County, West Virginia, a license to operate Punch Board on second floor of Elks Bldg. Beginning 15th day of November, 1925, and ending 15th day of February, 1926, and has assessed and collected the license tax of $16.67 Dollars, and a penalty of __________ Dollars.
Given under my hand this 30th day of November, 1925.
GRANT P. HALL, State Tax Commissioner, By R. C. Lilly, Deputy.
NOTE: It is distinctly understood that the issuance of this certificate and the payment of the license tax assessed does not legalize any act which otherwise may be in violation of law or exempt any person or firm from any penalty for such violation.
That the plaintiff, as an agent of the Lodge, operated a punch board in Mercer County (outside the Lodge building) within the period covered by said license; and that the defendant, R. C. Lilly, deputy tax commissioner, has demanded of the plaintiff and other members of the organization operating punch boards for its benefit, a license tax of $5.00 each, by virtue of Section 1, Chapter 32, Code, providing that: *Page 79
"No person without a State license therefor, shall * * * (e) run or operate, for profit, a merry-go-round, or roller coaster, or scenic railway, or like device, or keep for public use or resort, a shooting gallery, skating rink; or run, or operate a cane rack, doll-baby rack, knife rack, striking machine, jingle board, punch board, artful dodger, candy wheel, or other scheme or device by which merchandise or other things of value are disposed of by game of chance, or like device, * * *
"Provided, that nothing in this chapter contained, and no license or payment under the provision hereof, shall be taken to legalize any act which otherwise may be in violation of law, or exempt any person from any penalty prescribed for such violation."
To support the decree of the circuit court the plaintiff relies mainly upon the ground that punch boards are gaming devices, the operation of which constitutes a crime. It is not denied that the operation of punch boards, with or without license, is unlawful, but the defendants say that the plaintiff may not rely upon his own violation of the law as ground for relief in equity.
There is considerable authority holding that the State may levy a license tax on an unlawful business. This is permitted upon the theory that the tax is intended as a penalty in addition to that prescribed by the criminal law and will, therefore, tend to discourage the business. We do not concur in this view but, on the contrary, are of opinion that the statute requiring a license tax for the operation of gaming devices in this State has increased rather than lessened the pernicious practice, because in many instances, if not as a general rule, the criminal law is not enforced against the operators of gaming devices holding licenses. For this reason, the statute is against public policy, as tending to encourage crime and create disrespect for the criminal laws; and is, therefore, invalid and unenforceable.
There is, however, no exception whereby the plaintiff may evade application of the legal maxim that "he who comes *Page 80 into equity must come with clean hands". He is left to his remedy at law.
The decree of the circuit court is reversed and the bill dismissed.
Reversed.