State ex rel. Hartigan v. Sperry & Hutchinson Co.

• Decision Date: 24 December 1913
• Docket Number: No. 18,058.,18,058.
• Citation: 94 Neb. 785,144 N.W. 795
• Parties: STATE EX REL. HARTIGAN v. SPERRY & HUTCHINSON CO.
• Court: Nebraska Supreme Court

94 Neb. 785

144 N.W. 795

STATE EX REL. HARTIGAN

v.SPERRY & HUTCHINSON CO.

No. 18,058.

Supreme Court of Nebraska.

Dec. 24, 1913.

Syllabus by the Court.

Where a corporation, delinquent in the payment of an occupation fee, as provided in section 4260, Cobbey's Ann. St. 1911, applies to the Secretary of State to be reinstated, as provided in section 4261, and in good faith pays to such Secretary the full amount of fee and penalty demanded by him, the fact that the Secretary may, through oversight or under a misconstruction of the law, have demanded a less sum than is required will not, in the absence of a demand upon the corporation to pay the required balance and a refusal or failure on its part to make the payment, sustain a judgment of ouster against such corporation.

Statutes enacted by the Legislature in the exercise of the police power must not violate rights guaranteed to the people by the Constitution. The Legislature may not, under the guise of protecting public interests, arbitrarily interfere with private business.

And the fact that the Legislature, in an act making it a criminal offense for any person to engage in any gift enterprise, describes a legitimate private business enterprise and provides that any person engaged in such business shall be held to be engaged in a gift enterprise within the provisions of the act will not oust the jurisdiction of the courts to determine the true character of the business so attempted to be prohibited.

Chapter 179, Laws 1911, set out in the opinion, in so far as it might be construed to prohibit the business of giving and redeeming what are commonly known as trading stamps, is an unreasonable interference with a lawful business, not within the police power of the Legislature, and is in conflict with section 1 of the Bill of Rights and the fourteenth amendment to the federal Constitution.

Rose, J., dissenting.

Appeal from District Court, Adams County; Dungan, Judge.

Quo warranto by the State, on the relation of Michel A. Hartigan, against the Sperry & Hutchinson Company. From a judgment of ouster, respondent appeals. Reversed and dismissed.

Frank T. Wolcott, of New York City, T. S. Allen, of Lincoln, and Tibbets, Morey & Fuller, of Hastings, for appellant.

M. A. Hartigan and J. W. James, both of Hastings, and Don C. Fouts, of Lincoln, for appellee.

FAWCETT, J.

The relator, the county attorney for Adams county, instituted proceedings in quo warranto, in the district court for that county, to oust the respondent from the state of Nebraska, and from a judgment of ouster the respondent appeals.

The pleadings, consisting of the amended information, the answer and reply, are voluminous and will not be set out. A reference to the real points in issue will be sufficient. The judgment of ouster was based solely on the following findings: “The court further finds that on August 25, 1911, after the respondent had been doing business in the state of Nebraska for three or more years without having paid an occupation tax, it appeared before the Secretary of the State and filed with him a statement that it was delinquent under the law and that it wished to be reinstated. The court further finds that at the time it complied with the law on this subject in all respects, except that it failed to pay a sufficient amount as an occupation tax, as will be hereinafter more specifically set forth; that it paid $10 for occupation tax, together with $10 penalty, for the year ending June 30, 1910, and was thereupon reinstated; that on the same day the respondent paid to the Secretary of State a $10 occupation fee and $10 penalty for reinstatement to cover the year ending June 30, 1911; that on the same day respondent paid to the Secretary of State $10 to cover the occupation permit for the year ending June 30, 1912; and that subsequently the respondent paid to the Secretary of State $100, being the occupation tax for the year ending June 30, 1913. The court further finds that said respondent at the time of its application for reinstatement, and upon the payment of the sums heretofore set forth, was thereupon duly reinstated by the Secretary of State. The court further finds that, under the law, the respondent should have paid $100 for each of the years for which it paid only $10, and that the respondent, therefore, in this respect failed to comply with section 4260, Cobbey's Statutes of 1911. The court further finds that at the time of reinstatement of the respondent by the Secretary of State, such corporation was in default under section 12031, Cobbey's Statutes of 1911, providing for the filing of a report with the Attorney General of the state of Nebraska. The court, therefore, finds that the respondent, by reason of having neglected to comply with the requirements of the statute relative to foreign corporations, as above set forth, has forfeited its rights to do business in the state of Nebraska and is now wrongfully doing business in this state, and that it should be ousted therefrom.”

In deciding the case upon these findings, the court ignored the main ground upon which relator seeks to oust the respondent, viz., that the business in which respondent is engaged is prohibited by chapter 179, Laws 1911. That relator considers this the main ground, and the only one which would permanently give the full relief he seeks, is shown by the fact that his counsel, in his brief, by not discussing practically abandons all of the other grounds of complaint set out in his amended information and directs his argument wholly to the constitutionality of this act.

[1] The record shows that, at the time respondent was reinstated, it paid to the Secretary of State the full amount of occupation tax and penalty demanded by the Secretary for each of the years named; and by its answer it alleges that it “is willing and desirous and stands ready to comply with all and every lawful provision of the statutes of said state.” The fact, if it be a fact, that the Secretary of State may have erred as to the amount required to entitle respondent to reinstatement is not sufficient to sustain a judgment of ouster, and especially so when respondent was before the court offering to fully comply with every statutory requirement. The record also shows the filing by respondent of its reports with the Attorney General. The court, therefore, erred in its findings upon which it based its judgment.

[3] We might rest here and remand the case for further proceedings; but, as such a course would not end the litigation, we have concluded to consider the main question, which has been so ably argued by counsel on both sides, in their briefs and at the bar. Chapter 179, supra, is as follows:

“An act to prohibit gift enterprises and to provide punishment for a violation of the same.

Section 1. Gift Enterprise. It shall be unlawful for any person or persons to engage in any gift enterprise in this state. Every person who shall sell or offer for sale any real estate or article of merchandise of any description whatever, or any ticket of admission to any exhibition or performance, or other place of amusement, with a promise, expressed or implied, to give or bestow, or in any manner hold out the promise of gift or bestowal, of any article or thing, for and in consideration of the purchase by any person of any other article or thing, whether the object shall be for individual gain or for the benefit of any institution of whatever character, or for any purpose whatever, shall be held to be engaged in a gift enterprise within the provisions of this act.

Sec. 2. Same––Penalty. Any person or persons who shall engage in any gift enterprise in this state shall be deemed guilty of a misdemeanor and, upon conviction thereof, shall be fined in any sum not exceeding five hundred dollars, or imprisoned in the county jail not exceeding six months, or both, at the discretion of the court.”

The amended information alleges substantially that in violation of this act respondent is conducting a gift enterprise at Hastings, Neb.; that the method of conducting its business is to hold out the promise of a gift or bestowal of certain trading stamps to any person who may purchase goods and their redemption at its place of business, for the benefit of a certain institution, to wit, Stein Bros., with the intent of building up and maintaining a...