Olson v. Ross

| N.D. | Apr 11, 1918

Lead Opinion

Christianson, J.

This is an original application for a writ of habeas corpus presented to this court after a denial of an application for such.writ by Judge Cole of the third judicial district. It appears from the petition that the petitioner has been arrested and is held in the custody of the sheriff of Cass county by virtue of .a commitment duly-issued by a justice of the peace, in Cass county, in a criminal action properly instituted before him, wherein the petitioner is charged with violating the provisions of the so-called Trading Stamp Act, viz., chapter 238, Laws 1917.

Section 1 of the act provides: — “Every person, firm or corporation who shall use, and every person, firm or corporation who shall furnish to any other person, firm or corporation to use in, with or for the sale-of any goods, wares, or merchandise, any stamps, coupons, tickets, certificates, cards, or other similar schemes or devices which shall entitle-the purchaser receiving the same with such sale of goods, wares or merchandise to procure from any person, firm or corporation any goods, wares or merchandise, free of charge or for less than the retail market price thereof, upon the production of any number of said stamps, coupons, tickets, certificates, cards, or other similar devices, shall before so furnishing, selling or using the same obtain a separate license from the auditor of each county wherein such furnishing or selling or using shall take place for each and every store or place of business in that county,, owned or conducted by such person, firm, or corporation from which such furnishing or selling, or in which such using, shall take place. Provided that this act shall not apply to using or furnishing coupons, tickets, certificates, cards or similar devices contained in or attached to> the original package of said goods, wares or merchandise, by the manufacturer, jobber, distributer, or packer thereof, and directly redeemable’ by the manufacturer, jobber, distributer, packer or retailer of such goods, wares .or merchandise.”

The other sections prescribe the procedure for obtaining the license, fix the license fee, and declare that “any person, firm, or corporation violating any of the provisions of this act shall be guilty of a misdemeanor.”

The criminal complaint charges that the petitioner is an employee and manager of the Sperry & Hutchinson Company, a foreign corporation, and not a manufacturer, packer, jobber, or distributer, and that without first having obtained a license under the statute above quoted, he did wilfully and unlawfully furnish to one Victor J. Baldwin, a merchant, for use by him as evidence of and discount to customers making cash payments for merchandise, certain green trading stamps, redeemable in cash by the Sperry & Hutchinson Company, and that such trading stamps were furnished to the said Baldwin with the intent that he should give said stamps to customers as evidence of and discount for cash payments for merchandise in accordance with the conditions and provisions of a certain written contract.

The contract which is set out in the complaint recites that Baldwin “desires to adopt and use a co-operative system of giving a cash discount on small as well as large cash purchases, for the purpose of encouraging cash trade,” and that “the Sperry & Hutchinson Company .. . . is fully equipped to furnish said system and services relating thereto.” By the contract Baldwin agreed “to order and receive such S. & H. Green Trading Stamps, redeemable in cash, in lots of not less than five pads per lot, and a minimum of not less than five pads every six months, each pad containing 5,000 stamps, and to pay upon delivery for the use and redemption thereof in cash and its services in connection therewith $15 per pad.” Baldwin further agreed “to offer said -stamps to customers upon making cash purchases, and when accepted -give as evidence of and discount for cash payment, and only for redemption in cash hy said agent (Sperry & Hutchinson), one of said stamps to be given with each 10-cent purchase and multiple thereof.” The Sperry & Hutchinson Company agreed to deliver to Baldwin “its S. & R. Green Trading Stamps redeemable in cash” when ordered by him, -as provided in the contract, and to furnish him with its trading stamps books in reasonable quantities, the books to be given to the customers, in which to preserve the stamps until presented to the Sperry & Hutchinson Company for redemption in cash. The Sperry & Hutchinson Company further agreed to redeem the stamps in cash at their face value (1 mill each), but when the stamps are presented in its trading •stamps books each containing 1,00.0 stamps, then it agreed to pay $2 in cash for such redemption, or 2 mills each for said stamps. On the back of each stamp is the following printed statement:

Subject to the notice in our green stamp book this stamp will be redeemed by us in cash. It is our property and not transferable except as stated in such notice.

[Signed] Sperry & Hutchinson Company.

It will be noted that the contract and the stamps expressly stipulate-that the stamps are redeemable in cash only. There is no provision for a redemption in goods, wares, or merchandise.

The petitioner claims that he is unlawfully in custody, and that the-commitment under which he is held is void for two reasons: (1) That-the Trading Stamp Law is unconstitutional and void; (a) because it violates the right of liberty guaranteed by both the Federal and state-Constitution; (b) because the act discriminates in favor of persons and corporations who give trading stamps in original packages which are-redeemable by themselves or their retailers in goods, wares, and merchandise; (2) that the facts set forth in the complaint do not constitute a violation of the statute for the reason that the trading stamps-furnished by petitioner are redeemable in cash only.

It is requested that we first determine the constitutionality of the-statute. A constitutional question does not arise merely because it is-raised and a decision thereon sought. A party who assails the validity of a statute on constitutional grounds must show that- he is prejudiced by the alleged unconstitutional provision, and that a decision on the-constitutional question is necessary in order to protect him in the enjoyment of the rights guaranteed to him by the Constitution. “Courts-will not assume to pass upon constitutional questions unless properly before them, and the constitutionality of a statute will not be considered and determined by the courts as a hypothetical question. It is only when a decision on its validity is necessary to the determination of the-cause that the same will be made, and not then at the instance of a stranger, but only on the complaint of those with the requisite interest. These principles have been ’-ecognized by the Supreme Court of the United States. That tribunal has announced that it rigidly adheres to the rule never to anticipate a question of constitutional law in advance-of the necessity of deciding it, never to formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied, and never to consider the constitutionality of state legislation unless it is imperatively required.” 6 R. C. L. § 71, pp. 76, 77. And where a “case may be decided on either one of two grounds, and one of these does not involve the constitutionality of a statute, the court will decide it on that ground.” 6 R. C. L. § 76, p. 77.

It is well settled that a person who is seeking to raise the question as to the validity of a discriminatory statute has no standing for that purpose, unless he belongs to the class which is prejudiced by the statute. And where the class which includes' the party complaining is in no wise prejudiced by the general rule, or the particular objectionable feature-of the statute does not happen to prejudice the plaintiff, he cannot be-heard to complain of the statute on the ground that it is unconstitutional. For “one who is not prejudiced by the enforcement of an act of the legislature cannot question its constitutionality, or obtain a decision as to its invalidity on the ground that it impairs the rights of others. It has been said that courts cannot pass on the question of the-constitutionality of a statute abstractly, but only as it applies and is-sought to be enforced in the government of a particular case before-the court; for the power to revoke or repeal a statute is not judicial in-its character.” 6 R. C. L. pp. 89, 91.

The legislative annals of recent years abound with enactments seeking to regulate the trading stamp business, and to prohibit some forms-thereof. Not only has this subject been deemed one appropriate for legislative action, but some of the trading stamp schemes have been-severely condemned by the courts. See Rast v. Van Deman & L. Co. 240 U.S. 342" court="SCOTUS" date_filed="1916-03-06" href="https://app.midpage.ai/document/rast-v-van-deman--lewis-co-98668?utm_source=webapp" opinion_id="98668">240 U. S. 342, 60 L. ed. 679, L.R.A.1917A, 421, 36 Sup. Ct. Rep. 370, Ann. Cas. 1917B, 455. Delator’s counsel contends, however, that, the scheme denounced by the United States Supreme Court in Rast v. Van Deman & L. Co. supra, was one wherein the coupons were redeemable in premiums. And it is asserted that the purpose of this system is to promote the sale of quantities of certain kinds of goods, and that inasmuch as the purchaser must acquire a sufficient number of tokens- or stamps to enable him to procure the desired premium, this scheme may lead to improvident buying. It is pointed out that this objection does not apply to trading stamps such as those furnished by the relator; that these trading stamps are merely evidence of a cash discount, and utilized as a convenient medium for the allowance thereof; and that by means of the trading stamp a cash discount is allowed to every cash-purchaser regardless of the amount of the purchase, and that the practice tends to encourage cash purchases, and is an incentive to thrift and economy rather than to improvidence.

That there is some distinction between the two systems is apparent. This seems to have been recognized by the Supreme Court of the United. States in Rast v. Van Deman & L. Co. supra. Whether the form of .trading stamp business pursued by the relator is free from objection is not a question properly involved in this proceeding, and one upon which we express no opinion. It is sufficient to say that the legislature, .as a matter of -legislative policy, has recognized the distinction contended for by relator’s counsel. For the statute which it enacted does not purport to regulate or prohibit the sale or furnishing of trading stamps redeemable in cash, but relates only to, and does in effect tend to prohibit the sale of, trading stamps redeemable in goods, wares, or merchandise by a third party. The criminal complaint in this case shows that the petitioner furnished stamps redeemable in cash only. He furnished no stamps redeemable in goods, wares, or merchandise. Hence, he has committed no act violative of the statute.

The writ will issue as prayed for.

Grace, J. I concur in the result.

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Concurrence Opinion

Robinson, J.

(concurring). This is a habeas corpus case. The defendant has been arrested and held for a violation of the recent Trading Stamp Act (Laws 1917, chap. 238). It is a petty kindergarten case which should have been heard and decided in two hours, and yet by the unwise indulgence of the court, six distinguished counselors wore permitted to talk the case for two whole days.

The act declared it a misdemeanor for any person or corporation (without a license) to use or furnish any person for use in the sale of .any merchandise, any stamps, coupons, certificates, or cards which shall •entitle the purchaser to procure from any person any merchandise free of charge or for less than the retail market price.

The complaint charges that contrary to the statute defendant did wilfully and unlawfully furnish to one Victor J. Baldwin, a merchant, for use by him and as evidence of a cash discount to customers making cash payments for merchandise, certain green stamps, coupons, or vouchors commonly known as “trading stamps” redeemable in cash by Sperry, Hutchinson, & Company at a purported face value of 1 mill each. The stamps are redeemable in cash, and not otherwise by Sperry, Hutchinson, & Company.

From the complaint it appears the face value of a trading stamp is 1 mill, and the stamps are sold to the dealer in lots of not less than five pads. Each pad contains 5,000 stamps and the dealer pays for the same $15, which is 3 mills for each stamp. The stamps are given out by the local dealer as a discount to cash purchasers, and are redeemed in cash only at the face value of 1 mill for each stamp or 1 cent for ten stamps. But when stamps are presented in trading stamp books and in lots of 1,000, there is paid for the lot $2 in cash, or 2 mills for each stamp. Eor a book of stamps containing five pads the dealer pays $75, and at the very most the cash redemption is $50. Of course many of the stamps are lost and never presented for redemption, so we allow the stamp dealer a clear profit of 50 per cent.

What fools we mortals be! Of course the business is deceptive and pernicious, but it is not within the prohibition of our statute because the redemption is in cash, and not in merchandise. In Wisconsin a similar act has recently been well considered and the act was sustained by good reason and authority. Trading Stamp Cases, 166 Wis. 613" court="Wis." date_filed="1917-12-20" href="https://app.midpage.ai/document/state-ex-rel-sperry--hutchinson-co-v-weigle-dairy--food-commissioner-8192539?utm_source=webapp" opinion_id="8192539">166 Wis. 613, 166 N. W. 55, Ann. Cas. 1918D, 707. There the act prohibited the use of trading stamps redeemable in any goods, wares, merchandise, or anything of value, but our statute is different. It does not prohibit the use of trading stamps redeemable in cash or “in anything of value.”

In Wisconsin there was printed on the back of each stamp the following:

Subject to the notice in our green trading stamp book this stamp will be redeemed by us in merchandise or cash. It is our property, and not transferable except as stated in such notice.

[Signed] Sperry & Hutchinson Company.

On the trading stamps in question there is printed in microscopic letters, the following:

Subject to the notice in our green stamp book this stamp will be redeemed by us in cash. It is our property and not transferable except as stated in such notice.

[Signed] Sperry & Hutchinson Company.

You will note the word “merchandise” is omitted from our stamps, and it is not made an offense to use trading stamps redeemable in cash. Manifestly the statute forbids only the sale of trading stamps which are redeemable in merchandise, and hence, the complaint does not state a cause of action, and for that reason the defendant must be discharged. The whole argument has turned on the constitutional validity of the act, but that becomes only a moot question, as the complaint does not charge a sale of stamps redeemable in merchandise. Defendant must be discharged.