State v. Wilson

• Decision Date: 10 November 1917
• Docket Number: 21,526
• Citation: 101 Kan. 789,168 P. 679
• Parties: THE STATE OF KANSAS, Appellee, v. L. F. WILSON, Appellant
• Court: Kansas Supreme Court

168 P. 679

101 Kan. 789

THE STATE OF KANSAS, Appellee, v. L. F. WILSON, Appellant

No. 21,526

Supreme Court of Kansas

November 10, 1917

Decided July, 1917.

Appeal from Shawnee district court, division No. 1; ALSTON W. DANA judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. TRADING STAMPS -- Construction of Statute -- License Tax. Trading stamps supplied by a stamp company to a retail merchant, under an agreement on his part that he is "to offer them to all cash customers when making purchases and when accepted give to his said cash customers one of said stamps for each ten cents represented in such payment, as a discount for cash," are to be regarded as used "in, with, or for" the sale of goods, within the meaning of a statute requiring the payment of a license tax by any one furnishing stamps to be used in that manner.

2. SAME. In a provision of such a statute, exempting from its operation the furnishing of stamps "redeemable at their face value, in cash or merchandise from the general stock of said merchant at regular retail prices at the option of the holder thereof," the phrase "said merchant" refers to the dealer to whom the stamps are furnished, and not to the concern furnishing them, the stamps being redeemable by that concern in cash or out of a special stock of goods kept and used by it only for that purpose.

3. SAME--Prohibitory License Tax--Power of Legislature. In the case of a business which the state under its police power has a right to prohibit on the ground that it is injurious to the public, the legislature may exact as a requirement to its continuance the payment of a license tax so large as to be practically prohibitory.

4. SAME--Objections to Use of Stamps. Objections to trading stamps on public grounds are not so obviously unreasonable as to warrant a court in holding void a statute prohibiting their use.

5. SAME--Issued to Cash Customers Only--Power of Legislature. A trading-stamp device is not placed beyond legislative prohibition by the fact that the stamps are issued only to cash customers, and not to those purchasing on credit.

6. SAME--Method of Redemption--Not Discriminative. A statute imposing a license tax upon the use of trading stamps is not rendered void, as involving an unreasonable discrimination, by the fact that it does not apply where the stamps are redeemable in goods from the general stock of the merchant using them.

7. SAME--Stamps Sold for Use in Another County. The validity of a section of the anti-trading-stamp act relating to stamps sold for use in another county held not to be involved.

8. SAME -- "Uniformity of Assessment" -- No Application to Trading-stamp Act. The provisions of the state constitution regarding uniformity of assessment and the statutory statement of the object of a tax do not apply to license taxes.

J. S. Dean, and A. M. Harvey, both of Topeka, for the appellant; Frank T. Wolcott, of New York, N. Y., of counsel.

S. M. Brewster, attorney-general, and Robert D. Garver, county attorney, for the appellee; James A. Troutman, of Topeka, of counsel.

C. W. Burch, B. I. Litowich, and LaRue Royce, all of Salina, as amici curiae.

Mason J. Burch, J., not sitting.

OPINION

MASON, J.:

L. F. Wilson appeals from a conviction upon a charge of violating the provisions of the act relating to the use of trading stamps. (Laws 1917, ch. 331.) The case was determined by the trial court upon an agreed statement of facts supplemented by a few affidavits. The appellant is an agent of the Sperry & Hutchinson Company, and his contention is that the operations of that company are not within the prohibition of the statute as properly construed; and that if the statute is given such construction as to impose a penalty upon him, it is invalid.

The statute (§ 1) forbids any one who has not obtained a license, by the payment of a fee graded according to the population of the county (in this instance $ 6,000) to--

"furnish to any other person, firm or corporation to use in, with or for the sale of any goods, wares or merchandise, any stamps, coupons, tickets, certificates, cards, or other similar devices, which shall entitle the purchaser receiving the same with such sale of goods, wares or merchandise to procure from any person, firm or corporation any goods, wares or merchandise, free of charge, or for less than the retail market price thereof, upon the production of any number of said stamps, coupons, tickets, certificates, cards or other similar devices."

An exception is made, however, by the terms of which the act does not apply to--

"the furnishing or issuance of any stamps, coupons, tickets, certificates, cards or other similar devices redeemable at their face value, in cash or merchandise from the general stock of said merchant at regular retail prices at the option of the holder thereof."

The appellant maintains that the stamps of his company are not furnished for use "in, with, or for the sale of any goods," and that the transactions of the company are within the terms of the exception.

1. As shown by the agreed statement, the Sperry & Hutchinson Company furnished to a firm of retail merchants in Topeka "trading stamps" which were redeemable in cash or merchandise, at the election of the holder, but only at the "premium parlor" maintained by the stamp company, where goods were kept for that purpose, and not for sale for cash or other disposition. The merchants receiving them agreed:

"To offer said stamps to all cash customers when making purchases and when accepted give to . . . said cash customers one of said stamps for each ten cents represented in such payment, as a discount for cash."

In behalf of the appellant it is argued that inasmuch as the stamps are given to a customer only as a discount for a cash payment they are not used "in, with, or for" the sale of the goods. We regard the argument as unsound. While the stamps are allowed only to customers who pay cash, and an important purpose in their use is to promote prompt payment, it is clear that they also serve as an inducement to buy--they are a part of what the buyer gets for his money, and as they must be offered to all cash customers when making purchases, they are used "in, with, or for" cash sales within the letter as well as within the spirit of the act. If they were given only for the payment within a fixed time of indebtedness which had already been incurred, an entirely different question would be presented. The circumstance that they are not used in connection with all sales does not affect the application of the statute.

2. It is also argued in behalf of the appellant that the statute being penal is required to be strictly construed in his favor, and that by virtue of that rule it is permissible to interpret as referring to his company the words "said merchant" in the provision allowing stamps to be furnished without the payment of the license tax, if they are redeemable "from the general stock of said merchant." We do not think the statute fairly susceptible of that interpretation. The word "merchant" had not previously been used in the act, but the language already quoted shows that the subject of the legislation is the furnishing of stamps by one person to be used by another in connection with sales of merchandise made by the latter, who is the one to whom the term "merchant" naturally applies. Moreover, the goods in a "premium parlor" can hardly be regarded as the general stock of a merchant, since they are kept merely for delivery in exchange for stamps, and not for ordinary sale.

3. The conviction must therefore be sustained unless the statute as we have construed it is open to some constitutional objection which the defendant is in a position to urge. He asserts that the tax which his company would be required to pay under this construction in order to continue in business is absolutely prohibitory. It may be doubted whether the evidence clearly shows this to be the case, but that matter need not be gone into. The tax is so large as to indicate that at least a repressive effect was intended, and as the legal question would be substantially the same in one case as in the other, it will be assumed for the purpose of the appeal that the necessary effect of its enforcement would be to bar the stamp company from operating in the state under its present system.

An ordinance enacted merely under statutory authority to impose license taxes, supplemented by a general grant of power to legislate for the welfare of the city, will be held unreasonable and void if it is manifestly in excess of the needs of the municipality and out of proportion to other taxes. (Scriven v. City of Lebanon, 99 Kan. 602, 162 P. 307.) But a city ordinance except where it conforms strictly to an express and specific legislative grant, is far more amenable to judicial supervision than a statute. (6 R. C. L. 244; 28 Cyc. 370; 2 Cooley on Taxation, 3d ed., 1140.) The amount of tax which may be imposed upon the right to engage in an ordinary, useful, harmless business is limited, and the power of the legislature itself in that regard is sometimes said to be confined within very narrow bounds. (25 Cyc. 611.) But in the case of an occupation which is injurious or offensive to the public, these limitations do not apply. As such an occupation may be prohibited altogether, it may be allowed upon such terms as the law-making body sees fit to impose. It may be suffered to exist, on condition of the payment of a burdensome tax, designed to have a repressive effect (2 Cooley on Taxation, 3d ed., 1125; Gray on Limitations of Taxing Power, § 1452; Tiedeman's Limitations of Police Power, pp. 277, 278), or practical prohibition may be accomplished indirectly by imposing a tax so large as...