35 App. D.C. 253 | D.C. | 1910
Lead Opinion
delivered the opinion of the Court:
Assuming that the statute does not apply in the case of bona fide co-operative associations, or of merchants making discounts or presenting actual articles directly to their customers, we fail to see that the co-operative association belongs in either class. We will consider, first, the co-operative feature. In a general-sense a co-operative society or corporation is one organized on the principle of a joint-stock company, where the members share in the profits in proportion to their contributions, and may or may not obtain a discount on their individual purchases.
A vigorous attack has been made on the act as unconstitutional, because it is an unreasonable interference with the freedom of trade and contract. While that question was decided in the LansbwrgJi Case, we are asked to reconsider it, on the ground that the soundness of that decision has been denied in many cases in other jurisdictions. We have carefully examined those decisions, and find that very few of them go to the extent claimed for them. They may be separated into the following classes: (1) Those in which the statute involved prohibited
(2) Cases holding that statutes prohibiting merchants from giving premiums, vouchers, gifts, etc., to purchasers of their goods, are in excess of legislative power. State v. Dalton, 22 R. I. 77, 48 L.R.A. 775, 84 Am. St. Rep. 818, 46 Atl. 234; People v. Gillson, 109 N. Y. 389, 4 Am. St. Rep. 465, 17 N. E. 343; State v. Dodge, 76 Vt. 197, 56 Atl. 983, 1 A. & E. Ann. Cas. 47; Ex parte Drexel, 147 Cal. 763, 2 L.R.A. (N.S.) 588, 82 Pac. 429, 3 A. & E. Ann. Cas. 878; State v. Ramseyer, 73 N. H. 31, 58 Atl. 958, 6 A. & E. Ann. Cas. 445; Leonard v. Bassindale, 46 Wash. 301, 89 Pac. 879; Young v. Com. 101 Va. 853, 45 S. E. 327.
In some of those cases the court went beyond the question actually involved, and declared that the trading stamp business of third parties could not be lawfully prohibited. In others, as in State v. Dalton, the court expressly limited its decision to the case of the merchant giving premiums, and declined to say that the legislature might not prohibit the'business of trading stamp companies.
(3) Cases analogous to those in class 1, which hold that the statute did not apply to the giving of premiums, simply because it was limited to those which embraced a gambling feature. Com. v. Emerson, 165 Mass. 146, 42 N. E. 559; Com. v. Sisson, 178 Mass. 578, 60 N. E. 385.
(4) Cases in which the statute or municipal ordinance imposed a license tax; some holding that the power to license had not been conferred on the municipality; some that the exercise of the power in the particular case was unreasonable and oppressive; others, that, as applied to a licensed merchant, the license requirement was inapplicable, because the giving of premiums by such merchants was but an incident of their regular business, and not a separate business as such. Winston v.
In some of these the courts, expressly declined' to pass upon the legality of the trading stamp business, which question was not involved. (121 Ga. 729). The case of O’Keeffe v. Somerville, 190 Mass. 110, 112 Am. St. Rep. 316, 76 N. E. 457, 5 A. & E. Ann. Cas. 684, may be put in this class, but there the license tax was held unconstitutional, because the trading stamps were not “goods, wares, merchandise, or commodities,” to which the special taxing power was limited by the Constitution of Massachusetts. See also State v. Walker, 105 La. 492, 29 So. 973, -in which a statute prohibiting trading stamps, etc., was held unconstitutional, because the object of the act was not expressed in the title, as required by a provision of the State Constitution.
(5) Cases of injunction'by trading stamp companies against others interfering with their business. Sperry & H. Co. v. Brady, 134 Fed. 691; Sperry & H. Co. v. Temple, 137 Fed. 992; Sperry & H. Co. v. Louis Weber & Co. 161 Fed. 219. No prohibitory statute was involved.
(6) Cases in which the validity of legislation prohibiting the trading stamp business was discussed and involved and expressly denied. Ex parte Drexel and Leonard v. Bassindale, supra; Denver v. Frueauff, 39 Colo. 20, 7 L.R.A. (N.S.) 1131, 88 Pac. 389, 12 A. & E. Ann. Cas. 521. The California and Washington cases appear to us to involve nothing more than the particular question stated in class 2, supra, and for that reason are ranged thereunder. The general question of the power to prohibit trading stamp concerns, as such, was not necessarily involved. In the Colorado case, the city ordinance went beyond the power conferred by the Constitution and an act of the legislature, which were limited to “lotteries” and “gift enterprises,” neither of which terms embraced the giving of trading
Of the cases cited on behalf of the District of Columbia, but one directly upholds the doctrine of the Lansburgh Case, which is quoted from and approved. Humes v. Ft. Smith, 93 Fed. 857; State v. Hawkins, 95 Md. 133, 93 Am. St. Rep. 328, 51 Atl. 850, does not involve the direct question presented here.
Before proceeding to consider the question necessarily involved in this case, in the light of some applicable decisions of the Supreme Court of the United States relating to the exercise of the police power limiting the freedom of contract, we will briefly consider a point that has been relied on as showing the legitimate character of the trading stamp business. It has been argued, and in some of the cases cited it has been suggested, that the trading stamp companies are engaged in advertising the merchants contracting with them; and it is contended that this business, in that respect, is similar to that of the ordinary newspaper. Certainly, the right of the advertiser and the newspaper to contract for this purpose has never been questioned. The newspaper is a time-honored institution, indispensable in civilized' society. It gives the current news on all subjects of public interest, and in addition opens its pages to advertisers. The merchant purchases his space and presents the advantages of his business. Undoubtedly the cost of this, advertising is an expense that must be added to the cost of carrying on the business, and borne along with other incidental expenses. No way can be devised by which the cost of transportation and the legitimate handling of produce or goods in the transfer from producer to consumer can be entirely eliminated.
In the case at bar the advertising feature is a mere pretense; it is of the stamp dealer rather than of the merchant. To induce the purchase of stamps, the stamp company circulates
Hence: “It is always easier to determine whether a particular case comes within the general scope of the power, than to give an abstract definition of the power itself, which will be in all respects accurate.” Stone v. Mississippi, 101 U. S. 818, 25 L. ed. 1079. In a later case it was said: “It is undoubtedly true that it is the right of ever^ citizen of the United States to pursue any lawful trade or business, under such restrictions as are imposed upon all persons of the same age,
That there are bounds to forced individual “shrinkage,” in order to prevent its development into sheer arbitrary oppression and tyranny, under our system of government, all must admit. The difficulty lies in the practical ascertainment of those boundaries. The legislature is the judge in the first instance, but when its act is an unmistakable invasion of individual liberty and right, the courts will intervene to arrest its enforcement. In a recent case, a statute of a State was upheld which made, it unlawful to screen coal dug by miners before weighing the same for determining their compensation, and prohibiting them from waiving the benefit of the act by contract with the mining company. McLean v. Arkansas, 211 U. S. 539, 5 L. ed. 315, 29 Sup. Ct. Rep. 206. After referring to All
The whole country is now agitated by the increased cost of ^ living that has grown to alarming proportions, and legislative bodies are inquiring into its causes with a view, if possible, of providing remedies for the mischief. While there is difference of opinion as regards the chief source, all concur in the opinion "that every introduction of superfluous middlemen, and consequent unnecessary charges between producer and consumer, undoubtedly contribute to swell the stream to overflowing. Had the statute under consideration been passed at the present session of Congress, it would be regarded as intended to promote the public welfare in this respect. Ihcugh enacted many years
Now, what are the conditions presented by the facts in this case? An entirely unnecessary middleman, for his own profit solely, has injected himself between the regular merchant on the one hand, and his customers on the other. He receives $3.50 for every thousand stamps issued to the customers, and redeems such as may be presented, in goods or in cash at $2 per thousand. By this means the corporation represented by the defendant in error has in the first year of its intervention received about $12,000, which should have either been retained by the merchant or received by his customers.
Several other concerns being engaged in the same business, their profits are probably as great, if not greater. We have then this large sum of money annually taken from the merchant and his customers,, and added to the gross cost of living of all of the people of the District, without return. Is it not for the public welfare, in the juridical sense of the term, to prohibit such an undertaking ? We think that it is. Must this public welfare be sacrificed to the unlimited freedom of contract invoked in this case, to protect the right to prey upon local commerce? We think not.
With this we will close a discussion that has been carried to an unusual length. Our excuse is the importance of the principle involved, and the great conflict of authority relating to it, which may furnish ground for a writ of certiorari to remove the case to the Supreme Court of the United States, where alone the vexed question may be settled.
It follows that the Police Court erred in sustaining the motion to quash the information, and its judgment must therefore be reversed, with costs, and the cause remanded for further proceedings in conformity with this opinion. Reversed. - -
Dissenting Opinion
dissenting:
I cannot agree with my associates that the business here under investigation is embraced within the terms of the statute.
The system detailed by the record discloses neither a gift enterprise nor a lottery. Every stamp exchanged has a fixed value; and the mere fact that- the transaction is conducted through the medium of a third party does not make it different from a direct payment of the discount by the merchant, or the giving of a stamp redeemable by him on presentation. It is conceded that the merchant himself could legally issue the stamps, redeemable by him in cash or merchandise, as an inducement to secure the patronage of the public. Such a transaction would be perfectly legitimate. Exactly the same result is here accomplished. The same discount is paid, and the customer is accorded the same rights. The advertising is conduct
In my opinion, the question of the constitutionality of the statute is not before us, as the matter here involved cannot be -brought within its provisions. Such statutes are to be strictly construed, and no reasonable construction of this statute can bring the transaction here involved within its provisions. It is unnecessary to discuss in this connection the power of Congress, under the exercise of the police power, to regulate or suppress these stamp enterprises, since that question, in my judgment, is not here presented. The mere fact that the profits f the business have been large, or that a middleman is involved, is not sufficient to bring it by implication within the terms of the statute.
In view of the importance of the question involved, and the wide diversity of opinion among the courts of the country, as to the effect of the statute and the power of the legislature to regulate the business in question, I join with my associates in inviting the allowance of a writ of certiorari by the Supreme Court.
An application by the defendant in error to the Supreme Court of the United States for the allowance of the writ of certiorari, was denied by that court October 24, 1910.