State v. Nuss

• Decision Date: 11 April 1962
• Docket Number: No. 9941,9941
• Parties: STATE of South Dakota, Plaintiff and Respondent, v. W. P. NUSS, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 633

114 N.W.2d 633

79 S.D. 522

STATE of South Dakota, Plaintiff and Respondent, v. W. P. NUSS, Defendant and Appellant.

No. 9941.

Supreme Court of South Dakota.

April 11, 1962.

Acie W. Matthews, Sioux Falls, for defendant and appellant.

A. C. Miller, Atty. Gen., Robert D. Hofer, Asst. Atty. Gen., Pierre, William F. Clayton, State's Atty., Roger A. Schiager, Asst. State's Atty., Sioux Falls, for plaintiff and respondent.

Thomas J. Simmons, Sioux Falls, Stephens, Riter & Mayer, Pierre, George Gisler, Kansas City, Mo., amicus curiae.

HANSON, Judge.

This is a criminal action prosecuted by the State against W. P. Nuss, who is a solicitor of students for Gale Institute, Inc., a privately owned vocational training school located in Minneapolis, Minnesota. On October 12, 1960 defendant Nuss collected from Geraldine Helm of Sioux Falls, South Dakota, the sum of $150 as advance tuition for a course of instruction in automation (operation of IBM machines). Defendant was thereafter charged with and convicted in the Municipal Court of Sioux Falls of the offense of collecting tuition in excess of $25 in advance of a pupil's actual attendance at school in violation of SDC 1960 Supp. 13.1114, which provides as follows:

'No person, firm or corporation or any college or school, which is not supported by a church or religious organization, or a fraternal organization, or by the state or any of its political subdivisions, shall collect tuition or other charges in excess of twenty-five dollars in advance of actual attendance of pupils in such school. Charges for correspondence courses shall not exceed twenty-five dollars in advance of the receipt and approval by the pupil of the first assignment of such courses. No action shall lie to recover on a contract for tuition or other charges from a prospective student in advance of such attendance, or receipt and approval by the pupil of the first assignment of correspondence courses. Any violation of this provision shall be a misdemeanor and upon conviction thereof such violator shall be subject to a fine of not to exceed two hundred dollars or by imprisonment in the county jail for not to exceed thirty days.' (originally enacted as Chapter 89, Laws of 1959)

The complainant, Geraldine Helm, is a resident of Sioux Falls. In September 1960 she saw an ad in the local newspaper concerning a course in automation offered by the Gale Institute. She wrote a letter of inquiry to the Institute which was forwarded by it to the defendant, W. P. Nuss, who was the school's examiner and solicitor of students in North and South Dakota. Thereafter defendant called on complainant. He interviewed her in the presence of her father. She filled out a questionnaire and defendant determined she was qualified to attend Gale Institute subject to the approval of the school. Geraldine and her father were advised about the course in automation, the amount of tuition required, where the school was located, and other pertinent facts. Geraldine agreed to attend. A written contract was signed on October 12, 1960 by both Geraldine and her father, and they paid defendant the sum of $150 as advance tuition. Defendant read the contract in its entirety before it was signed by Geraldine and her father. Thereafter, for some reason not shown in the record, Geraldine failed, or refused, to attend the school and this prosecution followed.

The Gale Institute is a privately owned vocational training school located in Minneapolis. It was organized over twenty years ago and in the course of its history has trained and placed thousands of students in various occupations. It has never refused to admit complainant as a student. There is no issue regarding the reasonableness of the total tuition charged complainant, the worth of the course, or the ability of the school to furnish the training contracted for. Likewise, there is no issue concerning defendant's conduct or integrity. There is no allegation or claim he misrepresented, misled, or deceived complainant in any manner. The sole substance of the crime against defendant is that he collected tuition in excess of twenty-five dollars from a prospective student in advance of actual school attendance.

Defendant assails the constitutionality of the statute under which he was convicted on numerous grounds. In view of our conclusion, it is only necessary to consider his contentions that it is an unreasonable and arbitrary exercise of the police power and deprives him of his freedom to contract in violation of Section 2, Art. VI of the South Dakota Constitution.

In considering these issues we are aware of the presumption of validity which attaches to all legislative acts and 'no statute should be held unconstitutional by any court unless its infringement of constitutional restrictions is so plain and palpable as to admit of no reasonable doubt.' State ex rel. Botkin v. Welsh, 61 S.D. 593, 251 N.W. 189; Mundell v. Graph, 62 S.D. 631, 256 N.W. 121. We are also aware that a court does not sit 'as a super-legislature to weigh the wisdom of legislation'. Day-Brite Lighting, Inc. v. Missouri, 342 U.S. 421, 72 S.Ct. 405, 96 L.Ed. 469.

Economic freedom is one of the inherent rights guaranteed to all men by Sec. 1, Art. VI of the South Dakota Constitution and protected by the due process clause. Sec. 2, Art. VI. The term 'liberty' used in the Constitution means more than freedom from arrest or restraint. It includes freedom of action; freedom to own, control, and use property, and freedom to pursue any lawful trade, business, or calling. This freedom to pursue a lawful business and to own and control property also includes freedom to make all proper contracts in relation thereto. 11 Am.Jur., Constitutional Law, Sec. 339.

On the other hand freedom of contract is not an absolute right or superior to the general welfare of the public. It is subject to reasonable restraint and regulation by the state, under the police power, to protect the safety, health, morals, and general welfare of the people. As explained by the United States Supreme Court in Chicago, B. & Quincy R. R. Co. v. McGuire, 219, U.S. 549, 31 S.Ct. 259, 55 L.Ed. 328, 'freedom of contract is a qualified, and not an absolute, right. There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards. Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community.'

Although freedom of contract has traditionally been considered to be the general rule and economic restraint the exception, which could be justified only under exceptional circumstances, there is no longer much question concerning the broad discretion possessed by the legislature to regulate any and all business for the protection of the health, safety, morals, and general welfare of the people. This trend toward economic regulation is particularly evident in the area of price control. See 'Our Constitutional Heritage' 45 ABAJ 1027. Formerly the legislature was considered to be without power to fix prices at which commodities could be sold, services rendered, or property used, unless the business or property was 'affected with a public interest' such as a public utility operating under a franchise or a business monopolistic in nature. Now the term affected with a public interest means 'no more than that an industry, for adequate reason, is subject to control for the public good.' Nebbia v. New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940; Olsen v. Nebraska, 313 U.S. 236, 61 S.Ct. 862, 85 L.Ed. 1305. Consequently, the authority of the legislature, under the police power, to reasonably regulate private schools and their agents and solicitors must be conceded. State v. Williams, 253 N.C. 337, 117 S.E.2d 444. Nevertheless, due process still requires that any exercise of the police power be reasonable, City of Sioux Falls v. Kadinger, 74 S.D. 217, 50 N.W.2d 797, and the regulatory means adopted by the legislature must bear a real and substantial relation to some actual or manifest evil, Defiance Milk Products Company v. Du Mond, 309 N.Y. 537, 132 N.E.2d 829, and cannot be unreasonable, arbitrary, or capricious. The determination of such issues is a judicial function and when a measure is found to be in violation of our fundamental law it is void. Consequently, it not only is the right, but the duty of this Court to so declare it. Ex parte Hawley, 22 S.D. 23, 115 N.W. 93, 15 L.R.A.,N.S., 138; Hertz Drivurself Stations v. Siggins, 359 Pa. 25, 58 A.2d 464, 7 A.L.R.2d 438.

The statute does not contain a declaration of its purpose or the evils it seeks to curb. Its object, we are told, is to safeguard youthful high school graduates against the fraud and deception of high pressure solicitors employed by privately owned vocational schools. The shotpattern of the act is not so limited. The mantle of its protection extends to adults as well as minors. The only educational institutions clearly exempt from the restrictions and penal provisions of the act are schools supported by (1) a church, (2) a religious or fraternal organization, and (3) the State of South Dakota, and its political subdivisions. All other schools and educational institutions, public and private, apparently fall within its ambit. This includes (1) all privately owned trade, vocational, and correspondence schools operated for profit wherever located, (2) all privately endowed educational institutions not operated for private gain and not having any church or fraternal affiliations which include some of the oldest and most honored and respected institutions of higher learning in America, and (3) all schools, colleges, and universities supported and maintained by states other than South...