Campbell v. McIntyre

• Decision Date: 23 July 1932
• Parties: CAMPBELL v. McINTYRE et al.
• Court: Tennessee Supreme Court

52 S.W.2d 162

165 Tenn. 47

CAMPBELL v. McINTYRE et al.

Supreme Court of Tennessee.

July 23, 1932

Appeal from Chancery Court, Davidson County; James B. Newman Chancellor.

Suit by E. McD. Campbell against Thomas M. McIntyre and others. From decree dismissing complainant's bill on demurrer complainant appeals.

Reversed and rendered.

Thomas G. Hinson and Allison Humphreys, Jr., both of Lebanon, and James A. Newman, Jr., of Nashville, for complainant.

J. W Cooper, E. F. Hunt, and L. D. Smith, all of Nashville, for defendants.

SWIGGART J.

Complainant describing himself as having been a trained accountant since 1919, filed his bill in this cause against the members of the state board of accountancy, created by Public Acts 1925, c. 33, carried into the Code of 1932 at sections 7083-7097, asserting that the enforcement of said statute operates to deprive him of rights guaranteed by article 1, section 8, and article 11, section 8, of the Constitution of Tennessee. By demurrer to the bill, the defendants pleaded the constitutionality of the statute. The chancellor sustained the demurrer and dismissed the bill, from which decree complainant has appealed.

The bill seeks no relief other than a decree that the statute is unconstitutional, preserving complainant's rights in futuro, as in a suit under the Declaratory Judgments Law. The statute of 1925 having been replaced by the sections of the legislative code above cited, enacted after the bill was filed, we will consider the questions made by the appeal as concerned with the statute as it is brought into the Code.

The legislation under attack creates a state board of accountancy, charged with the duty of certifying the qualifications of persons to follow the business of a public accountant, such certificates to be issued after examination. Annual registration of certificate holders is required, upon which registration a license is issued.

Section 7095 of the Code provides that the license "shall be issued only to certified public accountants and public accountants qualifying under this or prior statutes;" and makes it unlawful, punishable as a misdemeanor, for any person "to practice public accounting, without first having registered with the board and received a license to practice."

The same section of the Code defines the practice of public accounting: "For the purposes of this section a person engages in the practice of public accounting when he performs accounting work as distinguished from bookkeeping on a fee basis, per diem, or otherwise, for more than one employer. In passing upon this question the board will consider specific acts as well as general business conduct."

The statute thus makes it unlawful for an accountant to render his services in accounting work to more than one employer, without first satisfying the board of accountancy of his qualifications for performing such service, and receiving its certificate. The prohibition of the statute is not restricted to accountants who hold themselves out to the general public as open to employment, but is applicable to all who serve more than one employer.

This legislation superseded and replaced Pub. Acts 1913, c. 17, which provided for the examination and certification of accountants, and made it unlawful for a person to represent himself as a certified or chartered accountant without first qualifying as such; but that statute contained no prohibition of the practice of accounting by one who did not so represent himself to the public or his employers. Such regulation of the business has been generally sustained as reasonable and valid. State v. De Verges, 153 La. 349, 95 So. 805, 27 A. L. R. 1526, and note.

Complainant contends that the restriction of the right to practice accounting to certified accountants is arbitrary and unreasonable class legislation, making of certified accountants a favored class with monopolistic privileges conferred upon them, citing the Constitution, art. 11, § 8; and that the statute "denies private business the right to contract with whomsoever they wish to contract in purely personal matters," in violation of the "Bill of Rights" contained in the Constitution.

Legislative prohibition of the right to practice accounting, except after qualifying in the manner required by this statute, has been declared void as an arbitrary and unreasonable exercise of the police power of the state, by the courts of two states, Oklahoma and Illinois, with no cases ruling the contrary to be found. State ex rel. Short v. Riedell, 109 Okl. 35, 233 P. 684, 42 A. L. R. 765; Frazer v. Shelton, 320 Ill. 253, 150 N.E. 696, 43 A. L. R. 1086.

Current legislative history, both state and national, indicates that it is now more important to the preservation of constitutional government that emphasis be placed, in statement, upon the constitutional restraints on the police power of the legislature, rather than upon the extent to which that broad power may be exercised.

Complainant is invoking individual rights as a citizen to engage in a private business or vocation, without unreasonable or arbitrary restraint. In New State Ice Co. v. Liebmann, 285 U.S. 262, 52 S.Ct. 371, 374, 76 L.Ed. 747, decided by the Supreme Court of the United States March 21, 1932, that court recognized the principle invoked by complainant:

"Plainly, a regulation which has the effect of denying or unreasonably curtailing the common right to engage in a lawful private business, such as that under review, cannot be upheld consistent with the Fourteenth Amendment. Under that amendment, nothing is more clearly settled than that it is beyond the power of a state, 'under the guise of protecting the public, arbitrarily (to) interfere with private business or prohibit lawful occupations or impose unreasonable and unnecessary restrictions upon them.' Jay Burns Baking Co. v. Bryan, 264 U.S. 504, 513, 68 L.Ed. 813, 826, 32 A. L. R. 661, 44 S.Ct. 412, 413, and authorities cited; Louis K. Liggett Co. v. Baldridge, 278 U.S. 105, 113, 73 L.Ed. 204,

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