State ex rel. Loser v. National Optical Stores Co.

• Decision Date: 17 December 1949
• Parties: , 189 Tenn. 433 STATE ex rel. LOSER, Attorney General, v. NATIONAL OPTICAL STORES CO.
• Court: Tennessee Supreme Court

Page 263

225 S.W.2d 263

25 Beeler 433, 189 Tenn. 433

STATE ex rel. LOSER, Attorney General, v. NATIONAL OPTICAL STORES CO.

Supreme Court of Tennessee.

Dec. 17, 1949.

B. B. Gullett, Nashville, for complainant.

Denney, Leftwich & Glasgow and Robert C. Murphy, Nashville, for defendant.

GAILOR, Justice.

The bill in this cause, as it was finally amended, and heard by the Chancellor, is a proceeding in the nature of quo warranto, Code, secs. 9336-9358, brought in the name of the State on relation of the Attorney General for the 10th Judicial District, against the National Optical Stores Company, a Tennessee corporation. The prayer of the bill was that because the Defendant corporation, without license or other authority, was practicing optometry in Tennessee, that the Defendant be permanently enjoined from the practice of optometry, and that its charter be forfeited and revoked, and that the officers, agents and employees of the Defendant be perpetually enjoined from the practice of optometry until or unless they had been duly licensed as such optometrists.

After overruling dilatory pleas of Defendant, and after the Defendant had filed an answer, the Chancellor, on motion of the Complainant, heard the case on oral testimony and granted the prayer of the bill as amended, by revoking the charter of the corporation and perpetually enjoining the officers, servants, agents and employees of the Defendant from practicing optometry until or unless they were duly licensed. The Defendant has appealed.

The briefs and arguments have gone far beyond any issue raised by the bill and its amendment, and we think it necessary to state our conclusion of the essential issue presented.

It is admitted that, as charged by the State, the Defendant corporation has no license to practice 'optometry as a profession,' that a license is a legal prerequisite of such practice, Code, sec. 7026 et seq.; that optometry is a branch of the 'healing arts,' and that Defendant corporation has no license to practice a 'healing art' as required by Chapter 9, Public Acts of 1947. But Defendant denies that as it was operating its business when the bill was filed, it was practicing optometry or a 'healing art.' Therefore, if the evidence of Defendant's operation shows that the Defendant was practicing optometry and a 'healing art,' its operation was ultra vires and unlawful, and the decree was proper under Code, secs. 9316 and 9336 et seq. State ex rel. v. Retail Credit Ass'n, infra.

According to Defendant's brief, the essential facts are not disputed, and the Chancellor, in an excellent opinion, found them as follows:

'The proof in this record shows that the defendant is in the business of making lenses and fitting and selling eye glasses. It is a Tennessee corporation, but is a part of a National Chain Store operation. Prescriptions written in local stores are filled in Chicago, and the glasses sold in Tennessee are made up in Chicago or the factory of the parent corporation, and shipped to Nashville, Knoxville, and Chattanooga for delivery to the purchaser.

'The defendant corporation employs, or has an arrangement with a medical doctor in each of its three stores, by which arrangement each doctor occupies a small space or office inside the store building of the defendant. The doctors' names generally do not appear on the front of the store, and are not listed in the telephone directory. These doctors, by arrangement with the defendant, are present during the time the store is open except for perhaps a short lunch period or possibly an afternoon off each week in some cases. The doctors devote their full time, while present at the store, to examining the eyes of customers who are directed to them by the employees of the corporation, and these doctors are guaranteed a fixed minimum weekly income by the corporation.

'The doctors charge a fixed examination fee of $2.00 per customer or patient, and after examining the patient's eyes, and writing the prescription, the patient is then ushered back into the sales room of the store where the manager, or an employee of the store proceeds to sell the patient glasses by showing samples of frames, etc., and, after agreeing with the customer on the type of frame, glasses, etc., and the price, the order for the glasses is sent to Chicago and shipped from there back to the store for the customer.

'If in any week the doctors examination fees from the patients so directed to him by the corporate employees, fails to amount to the agreed stipulated weekly income, a voucher is sent in and a check from the corporation for the difference is paid him.

'While, in some instances, the doctors have an ostensible agreement to pay some small amount as rent for the office space occupied, the record shows that they, in fact, do not pay rent.

'It seems to the Court that the determinative question in this case is whether or not the doctors, above described, are employees of the corporation. If they are, the Court is of opinion that this plan or device by which the defendant corporation operates in Tennessee, constitutes the practice of optometry and is a violation of the Optometry Act, and of the statutes regulating the practice of medicine.

'A careful examination of this entire record, including the advertisements and pictures which have been made exhibits, the depositions of witnesses and the testimony heard in open Court, leads the Court to the inescapable conclusion that the plan or device by which defendant uses the services of the medical doctors in question, amounts to an evasion of the law and is not a bona fide arrangement. * * *'

From these facts, the Chancellor found that no narrow technical definition of the employer-employee relationship should be applied and that in the sense necessary to make the doctors employees of the corporation, practicing their profession for it and in its name, the undisputed evidence forced the conclusion that the doctors were such employees and that, therefore, the corporation was practicing optometry.

The pertinent parts of the 'Optometry Law' as it was last amended by Chapter 90, Public Act of 1939, are as follows:

'(1) The term 'practice of optometry as a profession' is defined to be (a) the employment of objective or subjective methods (either one or both), for the purpose of ascertaining defects of vision or muscular anomalies or other abnormal conditions of the eye; etc.

'(2) The term 'optometrist' means a person who is engaged in the practice of optometry as defined.' (Emphasis supplied.) Code, sec. 7027.

Code sec. 7028 makes it unlawful to practice optometry without a certificate of registration and license or permit from the State Board of Optometry; for any optometrist to advertise prices or terms or extravagant claims of satisfactory services or guaranties; and finally the section provides:

'And it shall be unlawful for any person to practice or offer to practice optometry as an employee of any person not engaged primarily in the practice of optometry as a licensee under this chapter, or of any firm or corporation not engaged primarily in the practice of optometry under the actual and personal supervision of partners or sole stockholders or lessees who possess valid unrevoked certificates of registration as optometrists in and for the State of Tennessee and who have actual legal residences within the state.' Code, sec. 7028.

It is admitted that the Defendant National Optical Stores Company is not a corporation falling within the definition above, so the question of the validity of this part of the Act is not before us.

Since the argument, the Defendant has filed a supplemental brief in which the scope of the appeal is limited to the following propositions:

(1) That Defendant, as an 'optician' (merchant of optical goods) and the employed physicians as 'oculists' are expressly exempted from the provisions of the Optometry and Medical Practice Acts;

(2) That the amendment of the Optometry Act passed in 1935, was unconstitutional;

(3) That some unspecified provisions of 1935 and 1939 amendments 'have no real and substantial relation to the promotion of public health and safety,' therefore, these Acts are unconstitutional;

(4) That by the Optometry Act as amended, the Legislature has declared the public policy of the State and the Courts have no authority to add to the legislation;

(5) That the State is estopped to prosecute this suit by the decree of the Chancery Court of Davidson County in 1937, in the case of State Board of Optometry v. National Optical Stores; and, finally

(6) That the physicians, under contract with Defendant, are not employees, but independent contractors.

We will undertake to answer these propositions in the course of the opinion.

It is not debatable that if they were duly registered and licensed, the three doctors involved, acting independently, had a right to examine eyes and write prescriptions for eye glasses, and it is also clear that as a merchant, the Defendant, as a merchant-optician, had a right to sell eye-glasses in accord with the prescription. If the evidence supported a conclusion that the profession of the doctors was distinct from and independent of the business of Defendant, the State would have no case, but we find that the evidence is to the contrary, and shows that the activity of the doctors and the sales of the Defendant were so merged and combined that from the advertisement by which the customer was attracted to the Defendant's store until the delivery of the glasses prescribed, the profession of the optometrist and the sale of merchandise by the optician was a single operation and enterprise.

'A customer who desires eyeglasses is taken to the physician, who examines the eyes and prescribes eyeglasses if needed. Other employees of the defendants assist the customer in selecting the shape and style of frames desired, grind and fit the lenses in accordance with the prescription of the physician, and...