Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-01-12
QUASH STAMP CHARGES
JUDGE MULLOWNY'S DECISION
FAvORS COMPANY.
Notice of Appeal by the District Is
Filed by Assistant Corporation
Counsel Pugh.

In the case of the Sperry & Hutchinson
Company and the Economy Cooperative
Society. trading stamp concerns, Judge
Mullowny, in the Police Court, today
rendered a decision granting the motion
of the companies to quash the charges
filed against them by the District OF Co.
lumbia under the gift enterprise law.
The District, represented by Assistant
Corporation Counsel Pugh. gave notice
of an appeal to the Court OF Appeals or
the District of Columbia
Referring to the Lansburgh trading
stamp case, in which the D'strict several
years ago secured a decision in its favor
from the Court of Appeals. Judge Mu-
lowry said:
Chief Justice Shepard, in passing
upon the act of the legislative assembly
defining gift enterprises, used this Ian
guage:
time to undertake a spec fication OF the
particular conditions i'm which the act
under consideration might or might not
apply to actual merchants i'm the ord-
nary course and practice of competitive
business. or to determine just what char
acter of inducements by way OF gift or
premium may, and may not. be held out
TO purchasers at the time, and as a part
of their purchases. That il was not In
tended to apply to ordinary discounts fer
cash, or in proportion to amounts of pul-
chaSes when made by the merchant him
self to his customers may be regarded as
certain: and the exercise of such power.
would doubtless be denied if expressly
attempted. Nor can il with reason b.
said TO apply to bona fide cooperative
associations and the like. II is possible
also that it might not be operative in
case where the sale OF a lawful article is
cific and certain. not attended with any,
element of chance, and where the gift 1.
not the real object of the sale.
1T would not follow necessarily that
the statute should be stricken down in
Its entirety, because il may be sur
ceptible Of an unconstitutional applica-
ton in certain cases that may possibly
arise
The conclusion. therefore, is that ths
scope of this act defining gift enter
prises is SO broad that il not only for
bids matters of common right, beyond
the power OF Congress 10 prevent under
the guarantees of the Constitution. but
also those matters which. under tlel
police power. Congress clearly has the
right to define, prohibit and punish
The question is, does the statement al
facts disclose such scheme Of business
where the sale of q lawful article is ac-
companied by d gift OF something si,s-
cific and certain. not attended with any
element of chance. and where the git
is not the real object of the sale. be-
yond the power Of Congress To prohibit
under the limitations of the Constitu-
ton. and therefore not within the pro-
visions Of the statute.
The business OF the defendant is dif-
terent in several very essential particG-
lars from the Litnsburgh case. I'D Il lie
Sta mpS issued by the defendant are r.
deemablc in amy number from one UP
ward, while those in the Lansburen
case were redeemable only IN lots e
nine hundred and ninety: ca the stamp,
issued by the defendant are redeem
able one stamp for a Falcon pcn or il
cash at the rate OF one cent for ton
stamps, ten cents for one hundred
stamps and one dollar for nine nun
dred and ninety stamps. Willie those IN
the Lansburgh case were not redeem
abIe in any cash payment; and t:j) the
stamps of the defendant are by the
terms of the contract under which -hnv
are issued discounted 10y the merchau4
to his customers on small payments m
cash, while the contract in the Lan5-
burgh case did not So provide.
I'm the defenda nt's scheme or plan o.
business. therefore there is no elemer;
of chance, no appeal to the gambling
instinct or anything by which the
of the community may be af-
fected.'