Blauvelt v. Beck

• Decision Date: 04 May 1956
• Docket Number: No. 33954,33954
• Citation: 76 N.W.2d 738,162 Neb. 576
• Parties: Leslie L. BLAUVELT, Mac Wondra, Clifford E. Anderson, Charles C. Gannett, C. C. Gannett & Co., Inc., a corporation, and Prima Sales Co., an association of persons, Appellees, v. Clarence S. BECK, Attorney General of the State of Nebraska, et al., Appellants.
• Court: Nebraska Supreme Court

Page 738

76 N.W.2d 738

162 Neb. 576

Leslie L. BLAUVELT, Mac Wondra, Clifford E. Anderson, Charles C. Gannett, C. C. Gannett & Co., Inc., a corporation, and Prima Sales Co., an association of persons, Appellees, v. Clarence S. BECK, Attorney General of the State of Nebraska, et al., Appellants.

No. 33954.

Supreme Court of Nebraska.

May 4, 1956.

Syllabus by the Court.

1. A general demurrer tests the substantive legal rights of the parties upon admitted facts including reasonable inferences of law and fact deduced from the facts which are alleged. It does not admit conclusions alleged in the pleading to which the demurrer is directed.

2. If it is claimed that a statute is invalid because it is in its substance violative of the fundamental law, the inference of invalidity being one following from the fundamental law as compared with the act in question, it is sufficient to generally allege that it is invalid.

3. The business of auctioneering and the sale of merchandise at auction are legitimate, lawful, and useful activities.

4. The business of conducting public auction sales of merchandise is lawful and useful but it is affected with a public interest and is subject to reasonable legislative restrictions.

5. The source of the authority to regulate auctions is the police power and a regulatory statute enacted by virtue thereof must have relation to the public health, safety, and welfare.

6. If the regulations imposed by such a statute do not have relation to the public health, safety, or welfare they are invalid as an invasion of property rights of persons affected.

7. Liberty in the constitutional meaning includes absence of arbitrary and unreasonable restraint upon an individual in the conduct of his business and the use and enjoyment of property.

8. If a condition of affairs exists concerning which the Legislature, exercising its conceded right to enact laws for protection of health, safety, and welfare of the people, might pass the law in question it must be sustained.

9. If such legislative action is arbitrary and an unreasonable interference with the right to engage in and carry on business and has no relation to the protection of the public within the legislative power, the act must fail.

10. The reasonableness of restrictions imposed by the Legislature by the exercise of the police power is a judicial matter.

11. A regulatory provision of a statute having some relation to public health, safety, or welfare but which arbitrarily and unreasonably interferes with private business and imposes unreasonable and unnecessary restrictions may not be upheld.

12. The question if legislation is in the public interest is ordinarily one for legislative determination, but the Legislature may not, under the guise of regulation in the public interest, impose conditions which are on their face unreasonable, arbitrary, discriminatory, or confiscatory.

13. The constitutional validity of a law may be tested by what may by its authority be done.

14. The fundamental requisite of due process of law is opportunity to be heard and this right has small reality or value unless one is informed that the matter is pending and he can choose for himself what action he will take in reference to it.

15. The method of transmitting notice to a person of a pending matter to constitute due process must be one that is reasonably calculated to give him notice thereof and an opportunity to be heard.

16. The Legislature may make a reasonable classification of persons, corporations, and property for purposes of legislation concerning them, but the classification must rest upon real differences of situation and circumstances surrounding the members of the class, relative to the subject of legislation, which render appropriate its enactment.

17. The Nebraska Public Auction Law makes arbitrary and unreasonable classification because it limits the right to conduct auction sales of new merchandise as therein defined to less than all who are similarly situated without distinctive circumstances which reasonably justify such limitation.

Clarence S. Beck, Atty. Gen., Homer G. Hamilton, Asst. Atty. Gen., Elmer M. Scheele, County Atty., Edward F. Carter, Jr., Deputy County Atty., Lincoln, for appellants.

Albert S. Johnston, Thomas H. Adams, Lincoln, for appellees.

Heard before SIMMONS, C. J., and MESSMORE, YEAGER, CHAPPELL, WENKE and BOSLAUGH, JJ.

BOSLAUGH, Justice.

The objective of this litigation is to secure an adjudication that the Nebraska Public Auction Law is constitutionally invalid and to enjoin appellants from taking any action intended to enforce the provisions of the law.

The substance of the petition is as follows:

Appellees Leslie L. Blauvelt, Mac Wondra, and Clifford E. Anderson, duly qualified and experienced auctioneers, are and each have been for many years engaged in conducting retail sales of personal property at public auction in a lawful manner in the State of Nebraska. The property sold by them at auction includes personal property of other persons consigned to appellees for sale and they are paid compensation for making a sale of it at auction. A part of the property sold consists of new merchandise not previously sold at retail and it is impossible to ascertain and know in many instances if the articles offered for sale and sold have or have not been previously sold at retail. Appellee C. C. Gannett & Co., Inc., is a domestic corporation and appellee Charles C. Gannett is one of its officers and stockholders. Appellee Prima Sales Co. is an association of persons engaged in business in Nebraska. C. C. Gannett & Co., Inc., and Prima Sales Co. are each engaged in buying and selling at retail personal property including merchandise not previously sold at retail. Their method consists of the sale of a part of the merchandise at public auction. Their method of selling merchandise has been and is lawful and legitimate. Appellant Clarence S. Beck, the Attorney General of Nebraska, is authorized to act for the state in the enforcement of its laws and to prosecute violations of any of them. Appellant Elmer M. Scheele, county attorney for Lancaster County, is charged with the duty of enforcing the laws of the state and prosecuting violation of any of them that occur within the county.

The Legislature of Nebraska at its 1955 session enacted Legislative Bill 498 as the Nebraska Public Auction Law. It by its terms became in force and operative May 6, 1955. It contains conditions and restrictions that are discriminatory and unreasonable. It does not accord to appellees equal protection of the law in the conduct of their lawful business and it abridges the privileges and immunities of appellees and other persons similarly situated, contrary to the Constitution of the United States and the Constitution of Nebraska. The classifications of business made therein and thereby are discriminatory, the fees required to be paid thereby are confiscatory, and the fines imposed by it are excessive. The law in each of said respects is contrary to the Constitution of the United States and the Constitution of Nebraska.

The county attorney of Lancaster County, one of the appellants, filed a complaint in the county court of that county charging plaintiffs with the violation of the Nebraska Public Auction Law. Appellees Leslie L. Blauvelt and Charles C. Gannett were each arrested at the Lincoln Sale Barn, owned and operated by the former, while each of said persons was engaged in the lawful sale of merchandise consigned to them for auction sale by C. C. Gannett & Co., Inc. The action of the county attorney in that regard was the occasion of the commencement of this litigation. Appellants each threaten to continue to attempt to enforce the invalid law and to harass appellees in the conduct of their business.

Appellants challenged the sufficiency of the petition by general demurrer. It was overruled and appellants elected not to plead further in the case. The district court found that the Nebraska Public Auction Law conflicts with the Constitution of Nebraska and the Constitution of the United States in the particulars alleged in the petition of appellees; that it was invalid; and that appellees were entitled to an injunction preventing appellants from attempting to enforce the provisions of the law. A judgment was rendered in harmony with the findings. This appeal contests the correctness of the judgment.

A general demurrer tests the substantive legal rights of the parties upon admitted facts including reasonable inferences of law and fact which may be deduced from the facts which are alleged. It does not admit conclusions alleged in the pleading to which the demurrer is directed. Central Nebraska Public Power & Irr. Dist. v. Walston, 140 Neb. 190, 299 N.W. 609; Kinney Loan & Finance Co. v. Sumner, 159 Neb. 57, 65 N.W.2d 240; Montgomery v. Blazek, 161 Neb. 349, 73 N.W.2d 402.

The petition is quite general in its averments of the basis for the claims of appellees that the statute is in conflict with the Constitution. The ability of appellees to contest the validity of the statute by virtue of their business status is not assailed by appellants. Appellees allege that they are threatened with its attempted and intended enforcement; that the legislation violates the fundamental law because it is discriminatory, unreasonable, and confiscatory; that the classification made by it is arbitrary and illegal; and that it denies appellees in the prosecution of their business equal protection of the law and denies them the privileges and immunities to which they are entitled. The petition is sufficient to the extent and in instances that appellees assert that the statute is invalid because it is in its substance, as shown by its language and effect, violative of the fundamental law. This doctrine was announced in this jurisdiction many years ago and has not since been departed from. The statement of it in City of York v. Chicago, B. & Q. R. R....