G. F. Redmond & Co. v. Mich. Sec. Comm'n

• Citation: 222 Mich. 1,192 N.W. 688
• Decision Date: 22 March 1923
• Docket Number: No. 13.,13.
• Court: Supreme Court of Michigan
• Parties: G. F. REDMOND & CO. v. MICHIGAN SECURITIES COMMISSION.

222 Mich. 1

192 N.W. 688

G. F. REDMOND & CO.

v.MICHIGAN SECURITIES COMMISSION.

No. 13.

Supreme Court of Michigan.

March 22, 1923.

Certiorari to Michigan Securities Commission.

Certiorari by G. F. Redmond & Co., a corporation, against the Michigan Securities Commission to review an order revoking plaintiff's license. Affirmed.

Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ. E. W. Mulford and Hedley V. Richardson, both of Detroit (James O. Murfin, of Detroit, of counsel), for plaintiff.

Andrew B. Dougherty, Atty. Gen., and Ernest G. Smith, Asst. Atty. Gen., for defendant.

WIEST, C. J.

Plaintiff is a Massachusetts corporation, and, upon its application, was duly licensed under the so-called Blue Sky Law of this state (Comp. Laws, §§ 11945-11969) to carry on the business of buying and selling stocks for customers on commission.

In this proceeding plaintiff reviews, by certiorari, an order of the Michigan Securities Commission revoking its license to do business in this state.

March 8, 1922, the Commission suspended plaintiff's license, designating reasons therefor, in substance as hereinafter stated, and cited it to appear before the commission on March 16, and show cause why such suspension should not be made permanent. Hearings were had before the Commission and testimony of many witnesses taken. April 20, 1922, the Commission found the following charges sustained by the proofs so taken and revoked plaintiff's license:

‘(1) For failure to deliver stocks in accordance with contract.

‘(2) For unreasonably delayed deliveries of stocks and securities.

‘(3) For failure to furnish statements to customers showing the time, place, price, and name of person to whom stocks were sold or from whom bought, as required by law.

‘(4) For misrepresentation of stocks offered to customers.

‘(5) For fraud practiced upon the public and upon its customers by reason of the basis of compensation between the company and its salesmen.’

And:

‘In addition to the foregoing facts so established, the Commission finds from the testimony of the defendant, submitted by it in its own behalf, that it has been guilty of negotiations and trading in stock unapproved for negotiation and trading in the state of Michigan.’

We are asked to determine under what circumstances a dealer's license may be revoked. As usual, we will confine determination to the case before us.

It is contended that:

‘Under the law, as it now stands, there appears to be no statutory right to revoke a dealer's license.’

The attack here made is against the provision in section 11955, Compiled Laws 1915, authorizing the Commission to revoke a license for ‘good cause’ upon notice to the dealer and a hearing duly had, and the particular point urged is the indefiniteness of the term ‘good cause,’ in its relation to the business authorized by law and in which one may engage under license duly obtained.

It insisted that:

‘The Michigan Securities Commission is an administrative body and only on the ground of fraud can it revoke this license.’

The questions so presented will be considered together. The law requiring license and providing for revocation thereof is an exercise of the police power inherent in the state.

We do not accept the broad contention of the attorney general that:

‘Wherever the police power of the state seeks to regulate a trade, occupation, or profession, it confers upon the regulatory board or commission wide discretionary powers, sometimes directing the lines along which this discretion shall be exercised, but always leaving open a wide field for the exclusive exercise of the discretion of the board of commission administering the act.’

Nor do we have to approve of such a doctrine in affirming the action of the commission. The ambit of the power of the commission is in a field, meted and bound by the express provisions of the law. The law under which the commission acted designates with as much particularity as is consistent with public policy and the rights of all concerned the power vested in the Commission and the reasons for exercising the same.

While the police power, inherent in the state, is incapable of being defined and subjected to limitations in the abstract, its exercise in any given direction, such as the regulation of trades, occupations, and professions, is capable of definite expression, and must, if delegated to a commission or administrative board, define its purpose and the means of attainment thereof, and do this in language leaving no wide administrative discretion, and no discretion at all of a legislative nature.

The power to carry out a legislative policy enacted into law under the police power may be delegated to an administrative board under quite general language, so long as the exact policy is clearly made apparent, and the administrative board may carry out in its action the policy declared and delegated, but it cannot assume it has been vested with power beyond expressed legislative delegation, and must ever seek its way in the light shed by the legislative mandate. This marks the line between arbitrary officiousness and the exercise of delegated power to carry...