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

• Decision Date: 24 December 1913
• Docket Number: 18,058
• Citation: 144 N.W. 795,94 Neb. 785
• Parties: STATE, EX REL. MICHEL A. HARTIGAN, APPELLEE, v. SPERRY & HUTCHINSON COMPANY, APPELLANT
• Court: Nebraska Supreme Court

144 N.W. 795

94 Neb. 785

STATE, EX REL. MICHEL A. HARTIGAN, APPELLEE, v. SPERRY & HUTCHINSON COMPANY, APPELLANT

No. 18,058

Supreme Court of Nebraska

December 24, 1913

APPEAL from the district court for Adams county: HARRY S. DUNGAN JUDGE. Reversed and dismissed.

REVERSED AND action DISMISSED.

Frank P. Wolcott, Talbot & Allen and Tibbets, Morey & Fuller, for appellant.

J. W James, M. A. Hartigan and Don C. Fouts, contra.

FAWCETT J. ROSE, J., dissents.

OPINION

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.

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.

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.

"Section 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, Nebraska; 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 Brothers, with the intent of building up and maintaining a monopoly and obstructing open competition; that Stein Brothers conduct clothing, grocery, millinery and furniture departments; that respondent and Stein Brothers have been and are now engaged in the violation of this act. The method of issuing trading stamps by merchants to their customers and of their redemption by the trading stamp company is a matter of common knowledge and need not be detailed here. The business has grown to enormous proportions and is now being carried on in practically every state in the Union. As a result of present-day agitation along the line of what some of the courts have characterized as governmental paternalism, the legislatures of many states have been induced to pass laws substantially similar to the one under consideration here. While they differ somewhat in phraseology, they are, as we have said, substantially the same. A reading of them will show that, while their real purpose is attempted to be concealed in the language used, it is apparent that such real purpose is to abolish the trading stamp system as a method of advertising...