Windsor Madison Corp. v. O'Connell

• Citation: 172 N.Y.S.2d 198,9 Misc.2d 1087
• Parties: Application of WINDSOR MADISON CORP., Petitioner, For an Order v. Bernard J. O'CONNELL, as Commissioner of Licenses of the City of New York, Respondent.
• Decision Date: 06 February 1958
• Court: United States State Supreme Court (New York)

Page 198

172 N.Y.S.2d 198

9 Misc.2d 1087

Application of WINDSOR MADISON CORP., Petitioner, For an Order v. Bernard J. O'CONNELL, as Commissioner of Licenses of the

City of New York, Respondent.

Supreme Court, Special Term, New York County, Part I.

Feb. 6, 1958.

Leon London, New York City, for petitioner.

Peter Campbell Brown, Corp. Counsel, New York City, (Joseph M. Callahan, Jr., Daniel Mandel, New York City, of counsel), for respondent.

ARON STEUER, Justice.

This is a proceeding pursuant to article 78, Civil Practice Act, to review a determination of respondent license commissioner in denying petitioner a license to conduct a 'going out of business' sale. Petitioner conducts a haberdashery store and applied to respondent for a license to advertise by means of signs on the premises that it was being forced to go out of business and was selling its stock of merchandise at reduced prices because of this. Respondent refused to issue the license.

Petitioner asserts two grounds for overruling respondent's decision. The first is that the statute is unconstitutional; the second that the commissioner's action was arbitrary.

It is said that the provisions of the Administrative Code (Title B, art. 28, § B32-205.0 et seq.) contravene the constitution in that they deprive the plaintiff of property without due process and interfere with its right of free speech. Plaintiff is not deprived of any property, nor is any property right interfered with. It is not being restricted in the sale of its goods nor is it being limited in respect to the prices it may charge. The only restriction is on calling its sales a closing out sale or giving it some similar designation. No property right is involved. Nor is free speech, except in a fanciful sense, concerned in the problem. It is well recognized that the police power extends to the regulation of advertising that may mislead the public. The conditions which gave rise to the code article are well known. The public was being induced by unscrupulous merchants to make purchases under the belief that stocks of goods were being sold at sacrifice prices. A favored device was by distress advertising displayed on the store that the proprietor was going out of business for one cause or another. To prevent fraud by limiting such sales to instances where the representations were bona fide is not an interference with free speech.

On the issue of whether the action was arbitrary the argument is again two-fold. It is sufficient to defect the first to...