Merchants' Legal Stamp Co. v. Murphy
| Decision Date | 01 March 1915 |
| Citation | 220 Mass. 281,107 N.E. 968 |
| Parties | MERCHANTS' LEGAL STAMP CO. v. MURPHY et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Whipple, Sears & Ogden, of Boston (Sherman L Whipple, Charles Connor, Lothrop Withington, all of Boston of counsel), for plaintiffs.
Walter B. Grant, of Boston, for defendant Murphy.
W. M Richardson and John R. Lazenby, both of Boston, for defendant People's Cash Stamp Co.
The principal if not the sole business of the plaintiff is the issuing of trading stamps to merchants at a fixed price who give them to their customers for cash purchases usually on the basis of one stamp for every ten cents of the price of the article bought, and after a number of stamps have been thus collected the merchant or collector presents them to the plaintiff for redemption at a fixed rate. By this arrangement the stamp or coupon operates as a discount in cash for every purchase made. Com. v. Sisson, 178 Mass. 578, 60 N.E. 385. The books containing the contract are described by the master as ruled off into spaces similar to stamp albums into which the collectors, who are also the purchasers, paste the stamps, and the plaintiff redeems them at a lower price the difference measures the company's profits. It is plain that the plaintiff is a trading stamp company giving premiums or a valuable consideration for stamps furnished to purchasers of goods as an inducement for payment in cash. The master's report shows, that under the operation of this system the plaintiff controls nearly ninety per cent. of the actual business conducted in this form by the merchants of Boston and vicinity. By the provisions of the contract designed for this territory the company retains title to the book and stamps with an agreement by the authorized merchant or customer not to part with them except in the specified course of trade, and to return the book with the stamps attached which may have been presented to him by purchasers. If this is not done all rights under the contract cease or are forfeited. We said in O'Keeffe v. Somerville, 190 Mass. 110, 76 N.E. 457, 112 Am. St. Rep. 316, 5 Am. Cas. 684, that trading stamps not being a commodity within the meaning of our Constitution they were not subject to an excise tax although no attempt was made to classify them. Nor is it necessary now to determine whether the contract is strictly a bailment. Hunt v. Wyman, 100 Mass. 198; Springfield Engine Stop Co. v. Sharp, 184 Mass. 266, 68 N.E. 224; Isaacs v. MacDonald, 214 Mass. 487, 102 N.E. 81. Or whether the stamps are choses in action. Sperry & Hutchinson Co. v. Hertzberg, 69 N. J. Eq. 264, 60 A. 368. The transaction is to be determined from its inherent character or purpose. If not goods, wares or merchandise as those terms ordinarily are used, or the title did not vest in the purchaser, but he had only a limited use, they do represent and were intended to represent a mode of doing business which under modern mercantile conditions is in itself a business potentially affecting and largely controlling certain well recognized lines of trade. The books and stamps when viewed in the light of their manufacture and use by the plaintiff, coupled with its contract treating them not as symbols but as chattels of value which are the subject of sale or of bailment are to be deemed articles within the meaning of St. of 1908, c. 454, § 1. It is expressly found that the plaintiff declines to supply stamps to merchants unless they stipulate not to use trading stamps issued by other companies or individuals, and that the insertion of this provision in the contract is to suppress all competition. The direct tendency of the plaintiff's system of...
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