Commonwealth v. Payne Medicine Co.

• Decision Date: 04 May 1910
• Citation: 138 Ky. 164,127 S.W. 760
• Parties: COMMONWEALTH v. PAYNE MEDICINE CO.
• Court: Kentucky Court of Appeals

127 S.W. 760

138 Ky. 164

COMMONWEALTH v. PAYNE MEDICINE CO.

Court of Appeals of Kentucky.

May 4, 1910

Appeal from Circuit Court, Fayette County.

"To be officially reported."

Action by the Commonwealth against the Payne Medicine Company. Judgment for defendant, and plaintiff appeals. Affirmed.

R. J O'Mahoney, for the Commonwealth.

G Allison Holland and George C. Webb, for appellee.

CARROLL J.

The statement filed by a revenue agent in the name of the commonwealth of Kentucky against the Payne Medicine Company set out that its business consisted in "owning, dealing in, buying, and selling, on commission or otherwise, at wholesale or retail, any and all kinds of drugs, nostrums and patent proprietary medicines; and that from the date of the incorporation of the company in 1906 to the present time, the defendant, not being a merchant or druggist selling from his place of business, has, in Fayette county, been continuously engaged in the occupation of selling patent medicines, and conducted such business during the years 1906 to 1909, inclusive, without having obtained the license required by law for persons engaged in such occupation." And it was sought to subject the company to a license tax of $100 for each of the years mentioned, together with the penalty allowed by law. To this statement, a general demurrer was filed and sustained. The question presented is whether or not the company should be required to pay the license tax.

The first paragraph of section 4224 of the Kentucky Statutes (Russell's St.§ 6157) provides that: "Before engaging in any occupation or selling any article named in this subdivision of article 12 of this act, the person desiring to do so shall procure license and pay the tax theron as follows." And another paragraph reads: "On each person, firm or corporation selling patent medicine, except a merchant or druggist selling from his place of business, one hundred dollars. On each transient vendor or trader of patent, secret or proprietary medicines or nostrums, by whatever name called, whether traded or sold by another or otherwise, one hundred dollars." The proceeding was instituted under this statute. It will be noticed that the statement does not charge that the company is a "transient vendor or trader," but that it was engaged in the business of selling patent medicines at its place of business.

The demurrer was sustained upon the ground that so much of the statute as required persons engaged in selling patent medicines at an established place of business to pay a license fee of $100, and exempting merchants or druggists who sold such medicines at their place of business from the payment of the tax, was an unconstitutional discrimination against persons engaged in the sale of patent medicines at their place of business. In opposition to this view, it is the contention of the commonwealth that the statute is a police measure, and therefore, although there is a discrimination between persons engaged in the sale of patent medicines, the discrimination is justifiable under the police power of the state. It is further insisted that the act was intended to tax those engaged exclusively in the sale of patent medicines, and that as the Legislature, for revenue or police purposes, has the power to classify persons engaged in various occupations, trades, and businesses and to impose on persons engaged in each class a reasonable license tax, it was competent to select and tax as a class those engaged exclusively in the sale of patent medicines and exempt those who only sold them in connection with other goods. The police power of the state is far reaching and in a large measure undefined. Generally speaking, it may be invoked to control and regulate, or even prohibit, the doing of anything that concerns the health, lives, morals, good order, and general welfare of the community. As said in a quotation in Cooley's Constitutional Limitations, page 705: "It is much easier to perceive and realize the existence and sources of this power than to mark its boundaries, or prescribe limits to its exercise."

We have no doubt that the Legislature under the police power of the state has the authority to control and regulate the sale of patent and all other kinds of medicines that may and do affect the health of the people, and the right to set apart as special objects of taxation, regulation, and control persons engaged in whole or in part in the sale of medicines. Kentucky Board of Pharmacy v. Cassidy, 115 Ky. 690 74 S.W. 730, 25 Ky. Law Rep. 102. But we think it is clear that the statute under consideration was not enacted under the police power of the state, and that the Legislature did not have in mind either the regulation or control of persons engaged in the sale of medicines. If control or regulation was the purpose of the legislation, then it would have provided for the control and regulation of all persons who sold patent medicines in any quantity. There would be little accomplished in the way of regulation or control if only one class of persons was controlled and other classes engaged in the same business left free to do as they pleased. But, in the view we have of the matter, it does not make any difference whether the statute be treated as a police or a revenue measure, or whether its purpose was regulation or taxation. Extensive as is the police power, especially when exercised to regulate, control, or prohibit a business, trade, or occupation hurtful to the morals, health, lives, or peace and good order of the community, we do not understand that under this power the Legislature can discriminate between persons engaged in the same business, trade, or occupation similarly situated. Especially is this true as to the imposition of license fees. In other words, if under this power the Legislature deems it wise to impose a tax upon a specified trade, business, or occupation, such tax must be equal and uniform on all like businesses, trades, and occupations when the circumstances and conditions of each are substantially alike. It would not, to illustrate, be competent to provide that a...