Hoyt Bros., Inc. v. City of Grand Rapids

• Decision Date: 06 December 1932
• Docket Number: No. 130.,130.
• Citation: 260 Mich. 447,245 N.W. 509
• Parties: HOYT BROS., Inc., v. CITY OF GRAND RAPIDS.
• Court: Michigan Supreme Court

260 Mich. 447

245 N.W. 509

HOYT BROS., Inc.,

v.CITY OF GRAND RAPIDS.

No. 130.

Supreme Court of Michigan.

Dec. 6, 1932.

Appeal from Superior Court of Grand Rapids; Arthur F. Shaw, Judge.

Suit by Hoyt Brothers, Inc., against the City of Grand Rapids. From a decree of dismissal, plaintiff appeals.

Reversed, and decree entered for plaintiff.

Argued before the Entire Bench.Grant Sims and William K. Clute, both of Grand Rapids, for appellant.

Dale Souter and Robert S. Tubbs, both of Grand Rapids, for appellee.

NORTH, J.

Plaintiff, a New Jersey corporation, is engaged in Grand Rapids and other cities in selling its merchandise through employees who solicit orders by a house-to-house canvass. The sales agents are each provided with a so-called certificate of identification, which, among other things, recites: ‘The Passaic Home & Orphanage receive 10% of the net profits made by the Hoyt Brothers, Inc., on the merchandise as shown on their regular price list. * * * Hoyt's representatives are not authorized to solicit or receive contributions.'

Plaintiff alleges in its bill of complaint that it and its employees are threatened by the city of Grand Rapids with prosecution under a city ordinance which prohibits solicitation for charitable purposes without first obtaining from the city manager a permit so to do. An injunction is sought to restrain the city from enforcing the ordinance against plaintiff and its employees, for the reason that it is not applicable to its business of selling merchandise, and also because the ordinance is unconstitutional and void. On defendant's motion the bill of complaint was dismissed in the superior court, it being there held that the ordinance was valid, and that plaintiff's bill of complaint did not state a cause of action. Plaintiff has appealed, and the primary question for review is the validity of the ordinance. We quote it in part:

‘An ordinance to license and regulate within the City of Grand Rapids, the soliciting of funds, the securing of subscriptions, or the selling of goods, wares and merchandise, the proceeds from which or any part thereof, are to be used for charitable purposes, and to prohibit false representations in connection therewith.'

‘Section 1. No person, firm, corporation or society of any kind, nature or description, including charitable, fraternal or eleemosynary, his, its or their agents, representatives or employees, within the limits of the city of Grand Rapids shall sell or solicit funds the proceeds from which, or any part thereof, are to be used for any so-called charitable purposes, without first having secured from the city manager a written permit so to do.'

Sections 3, 4, and 5 provide for a written application giving information concerning the solicitor, the articles sold, the charitable purpose, the portion of sales proceeds used for charity, indorsement of at least six reputable citizens, investigation by a police officer and report to the city manager, and that no fee shall be charged.

‘Section 6. Whenever it shall appear to the city manager from such investigation and report that the charity is a worthy one and that the person or persons making application are fit and responsible parties, he shall issue a permit to such person, firm, corporation or society. * * *'

The ordinance further provides for subsequent applications and renewals, and a penalty for violation.

Appellant urges invalidity of the ordinance in that it violates sections 1 and 16 of article II of the Michigan Constitution. These sections provide:

‘Section 1. All political power is inherent in the people. Government is instituted for their equal benefit, security and protection.'

‘Section 16. No person shall be * * * deprived of life, liberty or property, without due process of law.'

If, as claimed by appellant, the ordinance attempts to vest the city manager with arbitrary power in the exercise of which he may either grant or withhold the permit, the quoted constitutional provisions are violated, and the ordinance is wholly void. Numerous cases of this character have been before this court, and the law is well settled.

‘Reasonable regulations and a uniform rule of action in its determination are essential to the validity of a municipal ordinance and it may not be left to the arbitrary decision of an administrative officer or board.’ (Syll...