State ex rel. Nilsen v. Whited

• Decision Date: 25 November 1964
• Parties: STATE of Oregon ex rel. Norman O. NILSEN, Commissioner of the Oregon Bureau of Labor, Appellant, v. Tom WHITED, Bus Annable, aka Bus Annabelle, and Andre De Vos, aka Andre De Voss, doing business as Stirrup Room, Respondents.
• Court: Oregon Supreme Court

Page 758

396 P.2d 758

239 Or. 149

STATE of Oregon ex rel. Norman O. NILSEN, Commissioner of the Oregon Bureau of Labor, Appellant, v. Tom WHITED, Bus Annable, aka Bus Annabelle, and Andre De Vos, aka Andre De Voss, doing business as Stirrup Room, Respondents.

Supreme Court of Oregon, In Banc.

Submitted on Briefs Sept. 15, 1964.

Decided Nov. 25, 1964.

Robert Y. Thornton, Atty. Gen., Salem, and H. J. Belton Hamilton, Thomas N. Trotta, and Thomas Y. Higashi, Asst.Attys. Gen., Portland, filed a brief, for appellant.

No appearance for respondents.

Green, Richardson, Green & Griswold, and Donald S. Richardson, and Allen T. Murphy, Jr., Portland, filed a brief amicus curiae.

Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN, O'CONNELL, GOODWIN and DENECKE, JJ.

ROSSMAN, Justice.

This is an appeal by the plaintiff, the Commissioner of the State Bureau of Labor, from a judgment order of the circuit court which sustained the defendants' demurrer and dismissed the complaint. The order sustained subsection 2 of defendants' demurrer:

'* * * on the grounds that ORS 652.335 is unconstitutional and void as a denial of substantive due process in that it is not within the power of the legislature to create a debt from one person to another without the consent of the person charged unless for some breach of contract, express or implied, or for some tort or crime and ORS 652.335 creates such liability without breach of contract, either express or implied, and without the commission of a tort or a crime.'

Plaintiff assigns as error the above order. The sole question presented by this appeal is the validity of ORS 652.335; that is, whether that section of our laws is a valid exercise of the police power of the state or an unconstitutional deprivation of property without due process of law.

The following allegations of the complaint must be taken as true for purposes of this appeal. Plaintiff's assignors were six employees of defendant Tom Whited. The other defendants, Annable and De Vos, were holders of a class 'B' liquor dispensers license for the Stirrup Room of a hotel in Baker. The Stirrup Room is a commercial establishment which the two defendants last named owned and operated under the provisions of the state Distilled Liquor Control Act (ORS 472.010 to 472.990). Whited operated the kitchen and dining facilities in the Stirrup Room. He failed to pay the employees regular wages and apparently absconded. Neither he nor his assets were available for collection of the wages. Plaintiff seeks to recover from the defendants, Annable and De Vos, the licensees, the regular wages due the assignors and the statutory penalty for defendants' wilful refusal to pay such wages when due (ORS 652.140, 652.150).

ORS 652.335 provides:

'(1) A person operating a commercial establishment where food is cooked and served who holds a dispenser's license issued under ORS 472.110 is liable for all valid wage claims of individuals employed in the kitchen facilities and dining space of such establishment who are not employed by such person if the wage claims cannot be enforced against the employer of such individuals. The commissioner may in such a case proceed under ORS 652.310 to 652.410 against the person operating the establishment as if that person had employed the individuals assigning the wage claims.

'(2) This section does not impose any liability not otherwise imposed by law for compensation for the performance of an individual's personal services in excess of a period of 60 days, nor does it subject the person operating an establishment described in this section to criminal penalties for violation of any law providing for payment of wages.'

The section was added to the labor code by Chapter 475 of the Session Laws of 1961 before defendants Annable and De Vos received their liquor dispenser license. The section purports to make the liquor dispenser licensee personally liable for the accrued wages of the food services employees if their employer or his assets are not amenable to enforcement procedures. Any liability asserted is limited to 60 days regular wages plus penalties under ORS 652.140 and 652.150 for the willful refusal to pay wages when due; but may not include criminal penalties. Being treated as employer for the purposes of this provision, the licensee presumably has available the defenses of insolvency and lack of knowledge that wages were due. See State ex rel. Nilsen v. Johnston, 1962, 233 Or. 103, 377 P.2d 331. His liability, if any, will be determined only in a judicial action under the general procedure for the enforcement of wage claims by the commissioner as assignee of the wage claimants. ORS 652.310 to 652.410.

We believe that the purpose of ORS 652.335 is twofold: (1) to provide protection for the wages of employees in kitchens and dining rooms that are parts of commercial establishments conducted by licensed dispensers, and (2) to secure for the entire establishment, conducted by licensees, the better administration that the legislature evidently believed would be manifested when licensees realize that they are responsible for the wages of the kitchen and dining room staff. That postulate is based upon a belief that if a person who operates a business enterprise knows that he is responsible for the debts of the person whom he installs in charge of an integral part of the venture, he will exercise greater caution in the selection of his appointee. He will avoid fly-by-nights and seek stability.

It is plain that ORS 652.335 is a step towards better supervision and control of the sale and consumption of distilled liquor by the glass in restaurants and private clubs. The exercise of the police power is not limited to the enactment of legislation necessary for preserving good order or public health and safety; State v. Hudson House, Inc., 1962, 231 Or. 164, 371 P.2d 675; Semler v. Oregon State Board of Dental Examiners, 1934, 148 Or. 50, 34 P.2d 311, affirmed, 294 U.S. 608, 55 S.Ct. 570, 79 L.Ed. 1086; nor is the exercise of the power restricted to situations of overriding necessity, Baer v. City of Bend, 1956, 206 Or. 221, 292 P.2d 134.

Governmental protection from the evils of traffic in intoxicating liquor has generally been considered an inherently proper subject for the exercise of the police powers, see 48 C.J.S. Intoxicating Liquors § 36, p. 170; Freund, Police Power, Sec. 205. It is important to observe that Art. 1, Sec. 39, of the Oregon Constitution authorizes the legislature to enact legislation implementing the peoples' intent and purpose in adopting that amendment through the initiative procedure. Article 1, Sec. 39, provides:

'* * * The Legislative Assembly shall provide in such detail as it shall deem advisable for carrying out and administering the provisions of this amendment and shall provide adequate safeguards to carry out the original intent and purpose of the Oregon Liquor Control Act, including the promotion of temperance in the use and consumption of alcoholic beverages, * * *.'

The test of a constitutional exercise of iegislative will is the same whether the authority derives from the police power inherent in the sovereign or express constitutional grant by the people. The legislature is not the final arbiter of the constitutionality of its enactments. All legislation, authorized by the police power, must pass the judicial test of reasonableness: Union Fisherman's Co. v. Shoemaker, 1921, 98 Or. 659, 193 P. 476, 194 P. 854; Anthony v. Veatch, 1950, 189 Or. 462, 220 P.2d 493, 221 P.2d 575; Christian v. LaForge, 1952, 194 Or. 450, 242 P.2d 797; Bowden v. Davis, 1955, 205 Or. 421, 289 P.2d 1100; State v. Hudson House, Inc., supra. ¹ When the subject to which the statute relates is within the scope of legislative power, validity is assured if the ends sought to be attained are appropriate and the means chosen reasonable: Savage v. Martin, 1939, 161 Or. 660, 91 P.2d 273; Robertson v. City of Salem, 1961, D.C., 191 F.Supp. 604, and cases cited above. We do not examine the wisdom of the legislative choice; that choice need not be the best, it is required to be only fairly appropriate, Christian v. LaForge, supra; Foeller v. Housing Authority of Protland, 1953, 198 Or. 205, 256 P.2d 752. We defer to the large measure of legislative discretion in determining the needs of the public and the measures necessary to satisfy them: State ex rel. Overhulse v. Appling, 1961, 226 Or. 575, 361 P.2d 86. Precedents already cited show that there is a strong presumption in favor of the reasonableness and validity of police power regulations. The party asserting unconstitutionality labors under a heavy burden of proof: Semler v. Oregon State Board of Dental Examiners, supra; Schmidt v. City of Cornelius, 1957, 211 Or. 505, 316 P.2d 511; Port of Umatilla v. Richmond, 1958, 212 Or. 596, 321 P.2d 338; Milwaukie Co. of Jehovah's Witnesses v. Muller, 1958, 214 Or. 281, 330 P.2d 5, 74 A.L.R.2d 347; Croft v. Lambert, 1961, 228 Or. 76, 357 P.2d 513, 88 A.L.R.2d 1227. Our construction of ORS 652.335 is a reasonable foundation for its validity: State v. Harmon, 1961, 225 Or. 571, 358 P.2d 1048; Priester v. Thrall, 1961, 229 Or. 184, 349 P.2d 866, 365 P.2d 1050; Simons v. Smith, 1961, 229 Or. 277, 366 P.2d 875.

Due Process does not foreclose legislation reasonably desigened to meet the exigencies of public necessity. Constitutional liberties are not absolute; the use of property is subject to reasonable restraints imposed for the protection of the general welfare: Foeller v. Housing Authority of Portland, supra; Baer v. City of Bend, supra. The sale of intoxicating liquors by the glass is not a common right of citizenship protected by the Fourteenth Amendment: State ex rel. v. Richardson, 1906, 48 Or. 309, 85 P. 225, 8 L.R.A.N.S., 362 and may be entirely prohibited: Brown and Bennett v. Powers, 1910, 146 Iowa 729, 125 N.W. 833: Twentyfirst Amendment. A license to sell merely grants a temporary provilege;...