Jewell Tobacco Warehouse Co. v. Kemper

• Decision Date: 20 January 1925
• Citation: 206 Ky. 667
• Parties: Jewell Tobacco Warehouse Company and Others v. Kemper, Commonwealth's Attorney, et al.
• Court: Kentucky Court of Appeals

206 Ky. 667

Jewell Tobacco Warehouse Company and Others v.Kemper, Commonwealth'sAttorney, et al.

Court of Appeals of Kentucky.

Decided January 20, 1925.

Appeal from Fayette Circuit Court.

HUNT, NORTHCUTT & BUSH for appellants.

ALLEN, BOTTS & DUNCAN, STANLEY REED and AARON SAPIRO for appellees.

OPINION OF THE COURT BY JUDGE SAMPSON — Affirming

The constitutionality of an act of the General Assembly entitled "An act regulating the sale of loose leaf tobacco at public auction in this Commonwealth," passed in 1924, being chapter 10 of the Acts of that session, is called in question by this litigation.The partiesplaintiffs are Jewell Tobacco Warehouse Company, New Independent Tobacco Warehouse Company, Virginia Avenue Tobacco Warehouse Company and T. C. Geary, trading and doing business as the Geary Tobacco Company.All are corporations except the Geary Tobacco Company.

Among other things it is alleged in the petition that the plaintiffs are each now and have been for many years past engaged in the business of operating and conducting a loose leaf tobacco warehouse in the city of Lexington, Kentucky, and that in the conduct of the warehouse the plaintiffs sold tobacco at public auction over their floors; that a large part of the tobacco grown in Kentucky is so sold and that a large amount of tobacco from other states is and was shipped into Kentucky and handled in the same manner.It is then alleged "that each of them has a large investment in the warehouse operated by them respectively, and each of them employs a large number of men each year in the conduct of their respective places of business and in the conduct of their business.Said plaintiffs state that a large part of the value of their business consists of a list of satisfied customers and patrons, and that the business conducted by each of them has a good will value in that their customers and patrons have been selling tobacco with them respectively for a number of years, and that the disclosures of the names of their customers and patrons, who produce and own tobacco and who sell same at said warehouses, and the disclosure of the post office addresses of such customers and patrons would cause to them and each of them a serious loss, in that their said customers and patrons do not desire to disclose to the public generally, or to competitors in business, the amount of tobacco marketed by them respectively, or the prices received by them respectively for the crops so grown and sold."

After charging that the act of 1924 materially and seriously affects their rights, it is further alleged "that in the conduct of their respective warehouses, and in conducting sales of leaf tobacco at public auction it is necessary for them to know whether said act of 1924 is valid or invalid, and whether these plaintiffs are liable for the crimes therein denounced, and subject to the penalties described in said act of 1924, and whether under said act crimes can be innocently committed by them and the penalties therein prescribed imposed upon them even though diligent efforts are made on their part to comply with said law."

A copy of the contract between the Burley Tobacco Co-operative Marketing Association and its members is set out in full and made a part of the petition.It is then averred "they are advised, believe and charge that the Burley Tobacco Co-operative Marketing Association caused to be prepared and to be introduced in the General Assembly of Kentucky what is known as chapter 10 of the Acts of 1924, and that said association was largely instrumental in securing the passage of said act.Said plaintiffs state that said act of 1924 was intended for the sole use of the Burley Tobacco Co-operative Marketing Association and was passed for the sole purpose of enabling said Burley Tobacco Co-operative Marketing Association to control more effectively its members and to secure a performance on the part of its members of contracts made with it."

Following this is the allegation that "under the Bill of Rights, they have the right of seeking and pursuing their safety and happiness and of acquiring and protecting property; that it is further provided in the Constitution that absolute and arbitrary power over the lives, liberty and property of freeman exists nowhere in a republic, not even in the largest majority, and that private property cannot be taken and applied to public use without just compensation being previously made.Said plaintiffs state that said act of 1924 is invalid and in violation of the Bill of Rights and sections 2and13 of the Constitution; that said act is invalid, because it violates section 59, subsection 4, andsection 59, subsection 29 of the Constitution."

Plaintiffs also charged that "said act of 1924 is a special or local act, passed for the sole benefit of said marketing association; that it involves an invasion of the rights of property of these plaintiffs and was intended to be and is practical inhibition of the business of selling leaf tobacco at public auction in Kentucky so long as the said marketing association continues to operate under the Bingham Co-operative Act."

It is further averred in the petition that "the legislature of Kentucky, under the guise of protecting the interests of the public, has arbitrarily attempted to interfere with private business and to impose unusual and unnecessary restrictions upon the business conducted by these plaintiffs, and that the provisions of the act of 1924 are arbitrary and oppressive."And further that "said act of 1924 is invalid, because it violates the provisions of the Fourteenth Amendment to the Constitution of the United States, and that under said law the state of Kentucky has denied to these plaintiffs, within its jurisdiction, the equal protection of the laws, and has attempted to abridge their privileges and immunities as citizens of the United States and has deprived these plaintiffs of property without due process of law. . . .That said act of 1924 is an unreasonable restriction upon their right to acquire and dispose of property; that it is an unreasonable restriction to prohibit them from conducting a business which is not detrimental to the public. . . .That the attempt on the part of the General Assembly of Kentucky to prohibit these plaintiffs from conducting a business is a taking of their property without due process of law; that a requirement that the names of all of their customers and patrons shall be disclosed is a taking of their property without due process of law and an arbitrary and oppressive restriction upon their right to do business."

To the petition is attached a prayer that the court declare the rights and duties of the plaintiffs under the act of 1924, and that the representatives of the Commonwealth be enjoined from the enforcement of that act.

An amended petition was filed in which it was alleged "that more tobacco is grown in Kentucky than in any other state in the union; that between 75 and 80 per cent of the growers of tobacco in Kentucky belong to the two co-operative associations in Kentucky; that one of said associations operates in the burley belt, which includes Fayette county, Kentucky, and the other association operates in western Kentucky in what is known as the dark belt; that the growers of tobacco, who are members of the two associations referred to raise between 75 and 80 per cent of the tobacco grown in Kentucky each year. . . .Said plaintiffs state that said associations operate warehouses in Kentucky, at which tobacco produced by certain growers is delivered to them respectively, and after the same is delivered, said tobacco is commingled with the tobacco grown by other persons, and is graded according to the demands of the market, and each grade is kept separate, but that no attempt is made to keep the tobacco grown by each producer separate and distinct from that grown by other producers, but the same, when commingled with the tobacco of others, losses its identity and each producer who delivers tobacco to either one of said associations receives a certificate to the effect that he has delivered a certain number of pounds of a certain grade."

A general demurrer was filed to the petition as amended and sustained by the trial court, judgment being entered holding the act of 1924 constitutional, and dismissing the plaintiff's petition.

For half a century Kentucky has by statutes regulated the business of warehousemen.In 1914, an act entitled "An act requiring tobacco warehouses handling loose leaf tobacco to post on their premises the number of pounds and the average price thereof of each day's sales, and prescribing penalties," became a law.The first section of the present act repealed the act of 1914, and re-enacted it in the following words:

"That it shall be the duty of any tobacco warehouseman, corporation, firm or individual, who shall receive, or who shall undertake to receive or take care of leaf tobacco, for sale at public auction, whether with or without compensation or reward, to post or cause to be posted a notice, in a conspicuous place upon the premises of said warehouseman, corporation, firm or individual, stating the number of pounds in the aggregate, actually sold, and the average price per pound received on account of each day's sale.It shall further be the duty of said warehousemen, prior to any such sale, to post at a point in the office of said warehouse, convenient and accessible for public inspection, a typewritten or...