State v. Lothrops-Farnham Co., Inc.

Decision Date06 May 1930
Citation150 A. 551
PartiesSTATE v. LOTHROPS-FARNHAM CO., Inc.
CourtNew Hampshire Supreme Court

Transferred from Superior Court, Strafford County; Scammon, Judge.

The Lothrops-Farnham Company, Incorporated, was charged by information with offering and delivering trading stamps in connection with sale of merchandise without being licensed. Transferred without a ruling on question reserved whether unlicensed use violated law and whether act requiring license is unconstitutional.

Information quashed.

Information, alleging that the defendant, not being licensed under the provisions of P. L. c. 173, on September 1, 1928, and on various other dates subsequent thereto, offered and delivered trading stamps, known as Sperry & Hutchinson discount stamps, in connection with the sale of merchandise at its store in Rochester.

The trial court found that the defendant had never applied for, nor secured, a license to use these stamps, and that it did in fact use them on the dates alleged. The question whether such unlicensed use "is a violation of the law and whether or not said act is unconstitutional" was reserved and transferred by Scammon, J., without a ruling.

Burt R. Cooper and Guy Smart, both of Rochester and Jennie Blanche Newhall, of Concord, for the State.

Frank T. Wolcott, Stuart McNamara, Thomas E. Dewey and Warren, Howe & Wilson, all of New York City, and Robert P. Bingham, of Manchester, for defendant.

MARBLE, J.

The defendant is a corporation organized under the laws of this state. It is not engaged in the business of selling trading stamps to merchants, and therefore need not obtain a license. P. L. c. 173, §§ 1, 12. Moreover, it is not charged with a violation of any provision applicable to tradesmen who deliver such stamps in connection with sales of merchandise. Consequently its motion to quash the information as it now stands should be granted. Since, however, the information is subject to amendment in the superior court (P. L. c. 367, § 12; State v. Weare, 38 N. H. 314, 316), the question of the constitutionality of the statute has been considered.

The stamps used by the defendant were procured from the Sperry & Hutchinson Company, a foreign corporation, under a contract with that company. By the terms of the contract the defendant delivers stamps to its customers at the rate of one stamp for every ten-cent cash payment. These stamps are collected by the customers in books, and the books are redeemed by the Sperry & Hutchinson Company either in cash or in merchandise selected from a catalogue.

The method employed does not differ in essential particulars from that described in State v. Ramseyer, 73 N. H. 31, 32, 58 A. 958, 6 Ann. Cas. 445, and in that case a statute designed to prohibit the use of trading stamps by merchants (Laws 1899, c. 60) was held to be void as an unwarrantable interference with the constitutional right of acquiring and possessing property.

While the present statute purports to be regulatory, the provisions requiring a deposit of $10,000, the payment of a license fee of from $250 to $1,000, and the levying of excise taxes amounting to 10 per cent. of the licensee's sales of stamps and 3 per cent. of the merchant's gross receipts are virtually prohibitive.

The state seeks to distinguish this case on the ground that the statute in State v. Ramseyer was not intended as a police measure, while P. L. c. 173, § 4, expressly recognizes the fact that the trading stamp business may be attended with fraud and imposition. This, however, is equally true of all business. And, although the reasonableness of a statute relating to public welfare is not ordinarily a question on which the court can properly pass (State v. Jackson, 71 N. H. 552, 554, 53 A. 1021, 60 L. R. A. 739; Sundeen v. Rogers, 83 N. H. 253, 256, 257, 141 A. 142, 57 A. L. R. 950, and cases cited), the right of acquiring and possessing property is guaranteed to all persons by the Constitution (Bill of Rights, art. 2), and the mere statement in a legislative enactment that a particular business may be fraudulently conducted does not give the Legislature power to prohibit that business either in terms or in effect. See 12 C. J. 929-934, and cases cited.

Certainly there is no more evidence now than existed at the time the earlier decision was rendered to indicate that trading stamp transactions as such involve any element of chance or deceit. Indeed, the court in Rast v. Van Deman & Lewis Co., 240 U. S. 342, 36 S. Ct. 370, 60 L. Ed. 679, L. R. A. 1917A, 421, Ann. Cas. 1917B, 455, on which the state chiefly relies, concedes that the business is neither a lottery nor gaming.

It is further suggested that the views of legislators and economists have changed in the years which have intervened since the passage of the original statute, and that there is now a widespread and definite conviction that the use of stamps, coupons, or similar devices, as a stimulus to trade, is subversive of public morals. This view finds support in the Rast Case.

That case was considered by the Supreme Court of the United States together with Tanner v. Little, 240 U. S. 369, 36 S. Ct. 379, 60 L. Ed. 691, and Pitney v. Washington, 240 U. S. 387, 36 S. Ct. 385, 60 L. Ed. 703. The question raised in each of these cases was the validity of state laws imposing prohibitive restrictions on the use of trading stamps or premium tokens. All three decisions were rendered the same day, and each sustained the constitutionality of the particular statute in controversy, holding that neither the due process nor the equal protection clause of the Fourteenth Amendment had been violated.

It is well recognized that courts are reluctant to declare any avowed exercise of the police power in contravention of the Fourteenth Amendment. Nevertheless, the police power "has its limits and must stop when it encounters the prohibitions of the Constitution." Eubank v. Richmond, 226 U. S. 137, 143, 33 S. Ct. 76, 77, 57 L. Ed. 156, 42 L. R. A. (N. S.) 1123. A necessary inquiry is whether there has been a "wanton or arbitrary interference with private rights." Atlantic Coast Line R. R. v. Goldsboro, 232 U. S. 548, 559, 34 S. Ct. 364, 368, 58 L. Ed. 721. And "where legislative action is within the scope of the police power, fairly debatable questions as to its reasonableness, wisdom, and propriety are not for the determination of courts, but for that of the legislative body on which rests the duty and responsibility of decision." Standard Oil Co. v. Marysville, 279 U. S. 582, 584, 49 S. Ct. 430, 73 L. Ed. 856.

In the Rast Case the court says at page 357 of 210 U. S., 36 S. Ct. 370, 374: "It is established that a distinction in legislation is not arbitrary, if any state of facts reasonably can be conceived that would sustain it, and the existence of that state of facts at the time the law was enacted must be assumed."

Applying this rule to the problem, the court holds that a classification based on differences between a business using and one not using trading stamps is not so...

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5 cases
  • Garden Spot Market, Inc. v. Byrne
    • United States
    • Montana Supreme Court
    • 24 Enero 1963
    ...Colo. 546, 190 P. 1117 (1920); Lawton v. Stewart Dry Goods Co., 197 Ky. 394, 247 S.W. 14, 26 A.L.R. 686 (1923); State v. Lothrops-Farnham Co., 84 N.H. 322, 150 A. 551 (1930); Sperry & Hutchinson Co. v. Kent Prosecuting Attorney, 287 Mich. 555, 283 N.W. 686 (1939); People v. Victor, 287 Mich......
  • Sperry & Hutchinson Co. v. Hoegh
    • United States
    • Iowa Supreme Court
    • 26 Julio 1954
    ...McBride, 307 Mass. 408, 30 N.E.2d 269, 131 A.L.R. 1254; Winston v. Beeson, 135 N.C. 271, 47 S.E. 457, 65 L.R.A. 167; State v. Lothrops-Farnham Co., 84 N.H. 322, 150 A. 551; State v. Holtgreve, 58 Utah 563, 200 P. 894, 26 A.L.R. In Sperry & Hutchinson Co. v. Hudson, 190 Or. 458, 226 P.2d 501......
  • Sperry & Hutchinson Co. v. McBride
    • United States
    • United States State Supreme Judicial Court of Massachusetts Supreme Court
    • 27 Noviembre 1940
    ...unconstitutional. The decision in the Rast case was rendered in 1916. Other courts have declined to follow it. See State v. Lothrops-Farnham Co., Inc., 84 N.H. 322, 150 A. 551;Denver v. United Cigar Stores Co., 68 Colo. 363, 189 P. 848; Ware v. Sperry & Hutchinson Co., 197 Ky. 394, 247 S.W.......
  • State v. Green
    • United States
    • New Hampshire Supreme Court
    • 31 Enero 1964
    ...778. A criminal information is subject to amendment under RSA 601:8 in the same manner as a criminal complaint. State v. Lothrops-Farnham Company, 84 N.H. 322, 150 A. 551. The informations filed in the present case were defective in their failure to allege the time and place of the offense,......
  • Request a trial to view additional results

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