OPINION
Morris, C. J.
Suit by
appellants against appellees, under the bulk-sales act of
1909 (Acts 1909 p. 122).
The
circuit court sustained a demurrer to the complaint, and
appellants declined to plead further. From the judgment
rendered, this appeal is prosecuted. The only error assigned
here is the sustaining of the demurrer to the complaint.
The
action of the lower court was based on the theory that the
foregoing act is unconstitutional. Only the one question is
involved in the appeal. If the act is constitutional, the
judgment should be reversed; otherwise it should be affirmed.
The act
in question is a substantial copy of an act passed by the
legislature of the State of Michigan in 1905. Michigan Public
Acts 1905 p. 322.
In
Spurr v. Travis (1906), 145 Mich. 721, 108
N.W. 1090, 116 Am. St. 330, the supreme court of
Michigan held that the act did not violate the constitution
of that state. In Musselman Grocer Co. v. Kidd
Dater & Price Co. (1908), 151 Mich. 478, 115 N.W.
409, the same court held that the act was not in conflict
with any of the provisions of the Michigan constitution, or
of § 1 of the 14th amendment to the Constitution of the
United States. The plaintiffs in error carried that case to
the Supreme Court of the United States, which held that the
Michigan law was based on a proper and reasonable
classification, and did not violate the 14th amendment to the
federal Constitution. Kidd, Dater & Price Co. v.
Musselman Grocer Co. (1910), 217 U.S. 461, 30 S.Ct.
606, 54 L.Ed. 839. In thus holding, the court followed its
previous ruling, made in the case of Lemieux v.
Young (1909), 211 U.S. 489, 29 S.Ct. 174, 53 L.Ed.
295, which involved the same question with reference to a
similar statute of Connecticut. In the latter case it is
said: "That the court below was right in holding that
the subject with which the statute dealt was within the
lawful scope of the police authority of the state, we think
is too clear to require discussion. As pointed out by Vann,
J., in a dissenting opinion delivered by him in
Wright v. Hart [1905], 182 N.Y. 330, 350,
75 N.E. 404, 2 L. R. A. (N. S.) 338, the subject has been,
with great unanimity, considered not only to be within the
police power, but as requiring an exertion of such
power."
In its
opinion in Spurr v. Travis, supra,
the court said: "It is contended that the act is class
legislation for two reasons: (1) Because it limits its
operation to merchants and does not include farmers,
manufacturers, etc.; and (2) that it does not relate to
merchants who owe no debts. A sufficient reason for not
including within its provisions merchants who owe no debts is
found in the apparent purpose of the act, which is to protect
creditors. If there be no creditor, there is no one requiring
protection. It would be a novel application of the doctrine
which forbids class legislation to hold that
creditors of such merchants as have creditors may not be
protected by regulation of transfers by such merchants
because the provisions cannot properly be made applicable to
others having no creditors. Nor is it class legislation
within the meaning of this term as used to express an
unconstitutional exercise of power to limit the application
of the act to a particular calling or relation.
People v. Bellet [1894], 99 Mich. 151, 57
N.W. 1094, 22 L. R. A. 696, 41 Am. St. 589. In Cooley, Const.
Lim. (7th ed.) 554, it is said: 'Laws public in their
objects may, unless express constitutional provision forbids,
be either general or local in their application; they may
embrace many subjects or one, and they may extend to all
citizens, or be confined to particular classes, as minors or
married women, bankers or traders, and the like. * * * If the
laws be otherwise unobjectionable, all that can be required
in these cases is, that they be general in their application
to the class or locality to which they apply; and they are
then public in character, and of their propriety and policy
the legislature must judge.' See, also,
McDaniels v. J. J. Connelly Shoe Co.
[1902], 30 Wash. 549, 71 P. 37, 60 L. R. A. 947, 94 Am. St.
889. It is easy to discover reasons for apprehending and
guarding against fraudulent disposition of stocks of
merchandise by debtor owners which would not relate to other
species of property. As was said in the case cited above:
'It is well known that the business of retailing goods,
wares and merchandise is conducted largely upon credit, and
furnishes an opportunity for the commission of frauds upon
creditors not usual in other classes of business.' The
act is not class legislation. * * * Does the act conflict
with § 32 of article 6 of the constitution? It may be
conceded that an act which should prohibit the sale of
property of any
character, either generally or for a stated time, without any
adequate purpose or object, would constitute such an
interference with the property and liberty of the individual
as is inhibited by this section. The courts have, however,
never treated this or similar provisions as
prohibitive of legislation in the exercise of the police
power which regulates the manner of the use or disposition of
property, even though a temporary inconvenience may be
suffered by the owner. An illustration of this is afforded by
the laws providing liens in favor of mechanics. Many other
illustrations might be given, but it is, we think, safe to
state, as a general rule, that where, in the exercise of the
police power, a beneficent result is sought, and legislation
is enacted in protection of rights which would, but for the
enactment, be subject to defeat, such legislation does not
infringe the liberty of the citizen in a legal sense or
deprive him of property because it involves regulations which
may postpone for a reasonable time the exercise of his right
to sell. It is to be noted that in case of an owner who owes
no debts no delay is required. A sale may be had at once. The
owner of merchandise who is also a debtor may at once qualify
himself to make a sale by discharging his indebtedness, but,
if he does not, this act postpones the sale until notice is
given to the creditors. In our belief this is within the
police power, and does not constitute an unconstitutional
invasion of liberty or property rights. Laws similar to the
one under consideration have been enacted in twenty states of
the Union. This is significant of a general belief that
transfers of the character sought to be regulated afford
peculiar opportunities for the perpetration of fraud upon
creditors. While this general course of legislation in sister
states is in no sense controlling, it may afford evidence of
a consensus of opinion that some legislation is necessary to
meet a manifest, if not a growing, evil."
Article
6, § 32, of the Michigan constitution provides: "No
person shall * * * be deprived of life, liberty or property,
without due process of law."
In
Attorney-General, ex rel., v. Jochim
(1894), 99 Mich. 358, 58 N.W. 611, 23 L. R. A. 699, 41 Am.
St. 606, the supreme court of that state held: "The
words 'due process of law', as used in
the constitution (Article 6, § 32), mean the law of the
land, by which are to be understood laws which are general in
their operation, and not special acts of legislation passed
to affect the rights of particular individuals against their
will, and in a way in which the same rights of other persons
are not affected by existing laws. Sears v.
Cottrell [1858], 5 Mich. 251."
It thus
appears that the Michigan courts have construed article 6,
§ 32, of their constitution as covering practically the
same field as article 1, § 23, of our Constitution.
In
Kidd, Dater & Price Co. v. Musselman Grocer
Co., supra, Mr. Justice White delivered the
opinion of the court. In the course of the opinion it is
said: "The errors assigned embody the proposition that
the sales-in-bulk act in question was not a valid exercise of
the police powers of the state, and is hence repugnant to the
14th Amendment, because wanting in due process of law and
denying the equal protection of the laws. Substantially the
same arguments are urged as were presented in
Lemieux v. Young [1909], 211 U.S. 489, 29
S.Ct. 174, 53 L.Ed. 295, decided after this writ of error was
sued out. In the Lemieux case, the validity of legislation of
the general character of that embodied in the Michigan
statute was passed on. The Connecticut law, the
constitutionality of which was particularly involved, was
held to be a valid exercise of the police power of the state
and not to be repugnant to the due process or equal
protection clauses of the 14th Amendment, although it avoided
as against creditors sales by retail dealers in commodities
of their entire stock at a single transaction, and not in the
regular course of business, unless notice of intention to
make such sale was recorded seven days before its
consummation. The opinion in that case thus concluded:
'As the subject to which the statute relates was clearly
within the police powers of the state, the statute cannot be
held to be repugnant to the due process clause of the 14th
Amendment, because of the nature or character of the
regulations which the statute embodies, unless
it clearly appears that those regulations are so beyond all
reasonable relation to the subject to which they are applied
as to amount to mere arbitrary...
