State v. Mohler

• Decision Date: 29 June 1916
• Docket Number: 20,234
• Citation: 158 P. 408,98 Kan. 465
• Parties: THE STATE OF KANSAS, ex rel. S. M. BREWSTER, as Attorney-general, etc., Plaintiff, v. J. C. MOHLER, as Secretary of the State Board of Agriculture, etc., and W. S. PAYNE, Defendants; L. H. POWELL et al., Intervenors
• Court: Kansas Supreme Court

158 P. 408

98 Kan. 465

THE STATE OF KANSAS, ex rel. S. M. BREWSTER, as Attorney-general, etc., Plaintiff, v. J. C. MOHLER, as Secretary of the State Board of Agriculture, etc., and W. S. PAYNE, Defendants;

L. H. POWELL et al., Intervenors

No. 20,234

Supreme Court of Kansas

June 29, 1916

Decided July, 1916.

Original proceeding in mandamus.

Writ allowed.

SYLLABUS

SYLLABUS BY THE COURT.

1. FACTORS--Regulation--Constitutionality of Statute. Chapter 371 of the Laws of 1915, which requires all commission merchants who sell farm produce for resale to hold a license issued by the secretary of the state board of agriculture and to give bond to insure fair dealing with their consignors, is not unconstitutional as discriminatory or class legislation.

2. SAME--Must Account to Consignors--Police Power. An act which requires commission merchants to make and furnish to the consignors of goods entrusted to them for sale on commission an accurate and detailed account of all the pertinent facts relating to such sales on commission is a valid exercise of the state's police power, and the expense of making such a record and account is a proper charge upon the business and not confiscatory.

3. SAME--Supervision of--Administrative Function. The powers of granting and withholding or revoking licenses to commission merchants, of supervising their dealings with their consignors, of examining their solvency, and of exacting from them bonds to insure their faithful accounting and payment for goods consigned to them are administrative and not judicial.

4. CONSTITUTIONAL LAW--Statute Confers No Corporate Power. Chapter 371 of the Laws of 1915 confers no corporate powers on the state board of agriculture.

5. SAME -- Statute Valid -- Interstate Commerce. Chapter 371 of the Laws of 1915 is not invalid as an undue interference with interstate commerce.

6. SAME -- Intrastate Commerce Regulated -- Interstate Not -- Statute Valid. An act of the legislature regulating intrastate commerce is not invalid because competitive interstate commerce in the same territory is not similarly regulated by the federal government.

7. SAME -- Title of Statute Sufficient -- Act General. Chapter 371 of the Laws of 1915, entitled "An act in relation to the sale of farm produce on commission," contains only one subject. That subject is clearly expressed in its title, and the act is subject to no infirmity as special legislation.

8. SAME -- Penalties -- Not Excessive or Unusual. The penalties prescribed for violations of the act, (a) revocation of license for various relevant delinquencies, and (b) fines of from $ 10 to $ 500 for misdemeanors defined therein are not excessive or unusual.

9. SAME--Acts of Administrative Officer--Judicial Review--Certiorari. The legislature has full power to provide for a judicial review of the acts of an administrative officer, and to prescribe the procedure for such review. The writ of certiorari and its statutory adaptation to a review of the official acts of the secretary of the state board of agriculture, under chapter 371 of the Laws of 1915, violates no constitutional principle.

S. M. Brewster, attorney-general, S. N. Hawkes, and John L. Hunt, assistants attorney-general, for the plaintiff.

J. C. Mohler, of Topeka, pro se.

Edwin D. McKeever, of Topeka, Earl Blake, W. A. Ayres, and C. A. McCorkle, all of Wichita, for defendant W. S. Payne.

J. Graham Campbell, and Ray Campbell, both of Wichita, for the intervenors.

Dawson J. Marshall, J. dissenting.

OPINION OPINION ON REHEARING.

DAWSON, J.:

This action is brought to test the validity of chapter 371 of the Laws of 1915, entitled "An act in relation to the sale of farm produce on commission." The state asks for a writ of mandamus to compel the secretary of the state board of agriculture to pay into the state treasury certain license fees which he has received from certain commission merchants, paid by them under protest and under coercion of the act.

The secretary answers that he is ready and willing to execute this law and to pay over the fees when assured that he will incur no personal liability in so doing, and he asks that the parties interested in the fees paid under protest be brought into court that the whole controversy be fully adjudicated.

W. S. Payne, a commission merchant of Wichita, who has paid his license fee under protest, was impleaded and answered setting up many constitutional objections to the act. Some thirty grain dealers of Wichita who receive consignments of grain from country elevators and sell the same on commission intervene and likewise challenge the constitutionality of the act.

The act under consideration provides that all persons who sell farm products on commission, except sales to the ultimate consumer, must have a license issued by the secretary of the state board of agriculture. The license costs ten dollars and is effective for one year, subject to revocation by the secretary, after investigation, for unfair or improper business dealings. A judicial review of the acts of the secretary is provided. The licensee must give a bond to insure his fair dealing with his consignors. The secretary may maintain an action on this bond in a proper case. Every commission merchant must keep a complete record of all consignments received and sold by him, with the name of the consignor, date of receipt, kind and quality of the consignment, the price received, name and address of person to whom the goods are sold, and the items of expense, and this record must be forwarded to the consignor within forty-eight hours after the transaction unless otherwise agreed. Such a record shall also be kept by the commission merchant for one year, and shall be open to the inspection of the consignor and the secretary of the state board of agriculture or their agents.

Certain relevant offenses are defined by the act, all designed to standardize the business of commission merchants in consonance with honesty and fair dealing.

The chief objections to the act may be thus summarized:

(a) The act is meddlesome, discriminatory and class legislation, and so burdensome that it will confiscate and destroy an honorable, useful and legitimate private business; (b) it confers judicial power on an administrative functionary; (c) it confers corporate power on the state board of agriculture; (d) it interferes with interstate commerce or unjustly burdens domestic commerce; (e) the title is defective and the act contains two subjects; (f) the act is special; (g) the judicial review is anomalous; and (h) the penalties are excessive.

Examining these points in order, the act is to be justified, if at all, as an exercise of the state's police power. It is sometimes contended that the state can not regulate private business, and that unless the business is one of public concern it is exempt from legislative interference. Probably this notion is due to the fact that the modern American state has hitherto left private business largely to its own devices, and because the state in recent years has largely concerned itself with the regulation of business as to which the public's interest was undeniable. Hence the elaborate statutes regulating public-service corporations. But there can be no doubt that the state's police power may extend to private business. Our statutes relating to registration of deeds and mortgages, the statute of frauds, the mechanic's lien law, and the like are illustrations of the exercise of the state's police power over private business. It is also true that business which has heretofore been considered to be private may by changes and progress in the methods of its conduct be transformed into a public or quasi-public business, and this may make it desirable and even imperative that the state concern itself in its regulation and control. Of course such regulations must be reasonable, but if they are reasonable they must be obeyed.

The business of commission merchants dealing in farm produce has grown to be one of great volume and much importance. In its development its tendency seems to be to centralize in the larger cities, far removed from the points of origin, and where by no practical possibility can the originators of the traffic, the consignors, keep personal check on the doings of the commission merchants, who are merely the agents of the consignors. Such a situation would seem to warrant a reasonable extension of the state's governmental power over the business.

The act does classify commission merchants, but the classification is reasonable. It relates to all who sell farm produce on commission for resale, and this includes "agricultural, horticultural, vegetable and fruit products of the soil, and meats, poultry, eggs, dairy products, nuts and honey," but not timber, floricultural products, tea or coffee. It practically reaches all the important and useful products of farm and truck garden. It specifically exempts matters of little consequence to the Kansas producer. If, as argued, it also exempts live stock, that too, is a reasonable exemption, since live stock is almost invariably shipped in carloads and is so valuable as to justify the producer or shipper in the expense of accompanying his shipment to market and personally supervising the fidelity of the commission merchant who makes the sale for him or in making the sale himself. As modern business is now conducted, it is practically impossible for the ordinary farmer or fruit producer or truck gardener to market his own products without the agency of the commission merchant.

Nor do the exactions of the statute seem unduly burdensome. It exacts a license of $ 10 per annum. That fee is not onerous. It requires a bond to insure the commission merchant's fidelity and the payment...