Contracts: Craps on Credit

While visiting Puerto Rico, a New Yorker named Jack Golden lost $12,000 shooting craps in a San Juan hotel casino. Golden signed lOUs for $9,000 and wrote a check for $3,000. Then, when he got home, he ordered his bank to stop payment. Golden assumed that it was a lovely legal welsh; gambling debts are not collectible in New York.

Unhappily for Golden, the San Juan hotel not only sued him for $12,000, but last week won its case in the New York Court of Appeals. Gambling debts are legally collectible in Puerto Rico, noted the court's 5-to-2 majority, and New York is bound to honor a "foreign right" unless it violates "some prevalent conception of good morals." New York does permit pari-mutuel betting, and "public sentiment in New York is only against unlicensed gambling." Given this quasi approval, ruled the majority, "injustice would result" if New Yorkers could renege on losses in any state where gambling "contracts" are binding.

Chief Judge Charles Desmond winced at the decision. Said he in sharp dissent: The majority "is holding that there is no public policy against the use of a New York court as a collection agency by a gambling-house proprietor who is guilty of the social wrong of letting his customers gamble on a charge-account basis."