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NATIONAL RECOVERY SYSTEMS v. WARREN BRYER (03/24/86)

filed: March 24, 1986.

NATIONAL RECOVERY SYSTEMS, APPELLANT
v.
WARREN BRYER



Appeal from the Order of the Court of Common Pleas, Civil Division, of Philadelphia County at No. 4372 February 1980.

COUNSEL

Melvin Rubin, Ardmore, for appellant.

Jerome Gamburg, Philadelphia, for appellee.

Wickersham, Beck and Hoffman, JJ.

Author: Wickersham

[ 352 Pa. Super. Page 275]

National Recovery Systems (NRS) appeals from the order of the court below in which its claim, as assignee,*fn1 for money lent to appellee Warren Bryer by a Nevada casino was found to be unenforceable.

The pertinent facts are as follows: In July, 1975 appellee applied for credit from the Frontier Hotel, Las Vegas in order to make a "gambling junket"*fn2 to that casino at a later date. A credit line of $5,000.00 was duly extended to appellee. Appellant subsequently travelled to Nevada in November 1977, and as a guest at the Frontier Hotel, used his $5,000.00 line of credit for gambling there. Upon appellee's refusal to repay the "loan" made by the casino, appellant sought recovery of the debt.

[ 352 Pa. Super. Page 276]

Following a non-jury trial, the lower court made findings of fact, conclusions of law, and entered a verdict for appellant in the amount of $5,000.00. Appellee filed exceptions to the court's findings of facts, which were sustained and the previous verdict was reversed, with judgment entered for appellee on March 11, 1985.

The instant appeal followed, in which appellant raises two issues for our review.*fn3 One of these issues is whether Nevada law applies under the Pennsylvania conflict of law rules. This "issue" being previously resolved correctly by the trial court in the affirmative, we do not find it deserving of our further attention.

We turn to appellant's remaining issue, regarding the recoverability of the "loan" as money not lent solely for gambling purposes. We begin by noting that "[a]lthough the state of Nevada has legalized gambling, the Nevada Supreme Court has consistently held that debts incurred, and checks drawn for gambling purposes, are unenforceable." National Recovery Systems v. Ornstein, 541 F.Supp. 1131, 1133 (E.D.Pa.1982). While the burden of proving a gambling purpose is on the party seeking to avoid liability, there is a presumption of gambling purpose where the transaction occurs in proximity to the gambling itself in terms of both time and space. Flamingo Resort, Inc. v. United States, 485 F.Supp. 926, 931 (D.Nev.1980), aff'd, 664 F.2d 1387 (9th Cir.1982). The test to be used in determining whether this presumption arises was set out by the Supreme Court of Nevada in Craig v. Harrah, 66 Nev. 1, 201 P.2d 1081 (1949) as follows:

[ 352 Pa. Super. Page 277]

In determining the purpose [behind the indebtedness], the significance and relevancy of the surrounding circumstances and environment are readily apparent. If the advancement was made in a gambling establishment in full operation, by the proprietor or his agent, to one then, or immediately prior thereto, engaged in gambling and who ran short of money, the game still being in progress, or if his conversation or the circumstances indicated he intended to resume playing, the purpose of the advancement become clear. On the other hand, if the advancement was at a different place than a gambling establishment, or if same was not made at a time when the recipient had been recently playing, and some ...


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