Case Name: STATE v. MASON
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1938-04-27
Citations: 94 Utah 501
Docket Number: No. 5887
Parties: STATE v. MASON.
Judges: FOLLAND, C. J., and HANSON, J., concur.
Reporter: Utah Reports
Volume: 94
Pages: 501–532

Head Matter:
STATE v. MASON.
No. 5887.
Decided April 27, 1938.
(78 P. 2d 920.)
Thatcher & Young and J. A. Howell, all of Ogden, for appellant.
Joseph Chez, Atty. Gen., and Grover A. Giles, Deputy Atty. Gen., for the State.

Opinion:
WOLFE, Justice.
The primary purpose of this appeal is to test the constitutionality of chapter 4, Laws of Utah 1935, in so far as it requires a license to be obtained by persons other than commission merchants, who for the purpose of resale obtain from farmers possession or control of farm products without paying cash for the same at the time of obtaining such control or possession. Section 5 of the act provides in part as follows:
"No person shall act as a commission merchant, dealer, broker, or agent without having obtained a license as provided in this act."
Section 2 defines a "dealer" as follows:
"The term 'dealer' means any person other than a commission merchant who for the purpose of reSale obtains from the producer thereof possession or control of any farm products, except by payment to the producer at the time of obtaining such possession or control, of the full agreed purchase price of such commodity in lawful money of the United States; provided, however, that the term 'dealer' as herein defined shall not be construed to include those who are regularly licensed under the laws of this state to sell tangible personal property exclusively at retail."
With this law in effect the defendant on September 5, 1935, purchased and obtained from R. S. Rice, a producer of farm products as defined by the act, for the purpose of resale a thousand bushels of barley and paid for the same by his check drawn on the Commercial Security Bank of Ogden, Utah, for the agreed full purchase price. The check was duly presented for payment and paid. At the time of the transaction defendant did not have a dealer's license. The defendant at the time of the transaction was engaged in the business of buying farm produce and giving in payment therefor his check in the same manner as he had done in this case. All the above facts were stipulated at the trial of the case. It was further stipulated "that the defendant does not come within any of the exemptions provided in said Act. That the defendant desires a decision squarely on the question of the constitutionality of the statute."
The trial was founded on the following complaint filed before a justice of the peace:
" that W. B. Mason on or about September 5th, 1935, at the County of Box Elder, State of Utah, did commit the crime of acting as a dealer without a license, a misdemeanor, as follows:
"That said defendant did then and there wilfully and unlawfully, for the purpose of resale, obtain from R. S. Rice, a producer, possession and control of 1000 bushels of barley without at the time of such delivery paying the full agreed purchase price of such commodity in lawful money of the United States."
The defendant demurred. It was overruled. On the facts stipulated substantially as above set out, he was found guilty. He appealed to the district court and was again adjudged guilty. He appeals to this court to test the constitutionality of the act. Defendant assigns as error the overruling of his demurrer to the complaint, his conviction of a violation of law, and the judgment sentencing him to pay a fine of $5.
The defendant relies entirely for a reversal on establishing the proposition that chapter 4, Laws of Utah 1935, is unconstitutional so far as it applies to so-called dealers because, he contends, it violates section 7, article 1, of the State Constitution, and section 1 of the Fourteenth Amend ment to the Constitution of the United States. The specifica-ions are that the act, in requiring a person to take out a license in order to buy farm products on credit or by payment with a check, exempting those who buy for lawful money of the United States or those who are regularly licensed under the laws of the State to sell tangible property exclusively at retail, denies the equal protection of law and is taking property without due process of law.
A denial of the law's equal protection presupposes an unreasonable discrimination between those included and those excluded from the act whether the act confers a privilege or a right or imposes a duty or an obligation. In this case it imposes a duty and obligation to make an application and obtain a license before farm products may be purchased by any other payment than United States money. It requires the payment of $35 for a license and implies the right of certain investigation of the applicant by the Department of Agriculture before license and certain investigation in case of complaint.
Of course, every legislative act is in one sense discriminatory. The Legislature cannot in one act legislate as to all persons or all subject matters. It is inclusive as to some class or group and as to some human relationships, transactions, or functions and exclusive as to the remainder. For that reason, to be unconstitutional the discrimination must be unreasonable or arbitrary. A classification is never unreasonable or arbitrary in its inclusion or exclusion features so long as there is some basis for the differentiation between classes or subject matters included as compared to those excluded from its operation, provided the differentiation bears a reasonable relation to the purposes to be accomplished by the act.
Defendant claims an unreasonable discrimination in three respects: (1) Including in the operation of the act those who obtained possession or control of farm products by other than contemporaneous payment of cash and excluding those who paid contemporaneously with cash; (2) exclud ing those regularly licensed under the laws of the State, to sell tangible personal property "exclusively at retail"; (3) a discrimination in the class or group enjoying the intended protection in that it pertained only to farmers and excluded manufacturers and other businessmen. No question was raised as to the constitutionality on the ground that it constituted an unlawful interference with interstate commerce, so we shall not treat it in its interstate commerce aspect.
We conclude that none of the above classifications are arbitrary or unreasonable. In order to see whether the excluded classes or transactions are on a different basis than those included, we must look at the purpose of the act. The objects and purposes of a law present the touchstone for determining proper and improper classifications. The purpose of this law was to protect the farmers. From whom? From those whose credit was not good and who might, therefore, deprive him of his season's labor by hauling away the products of it and never paying. It was unnecessary to protect him against those purchasing with lawful money of the United States, hence their exemption. That was not only a reasonable distinction measured in the light of the object to be accomplished, but including cash buyers would have been useless and wholly unnecessary.
Exempting those who are regularly licensed under the laws of this State to sell tangible personal property exclusively at retail is likewise based on a difference in situation which makes it relatively unnecessary to license them as dealers. They have places of business in the State, are established, and in all likelihood have a credit rating fairly well known. They are not transients with trucks picking up farm merchandise or fly-by-nights. Viewed in the light of the purposes of the act, the exclusion of such licensed retail merchants was not unreasonable or arbitrary but rather natural and appropriate.
As to the third classification — farmers protected but not manufacturers or other businessmen. Passing over the doubt as to whether it lies in the power of one not suffering from such discrimination to raise the constitutionality on this ground (the defendant is not a person extending credit who is claiming that the law discriminates in not protecting him), it is quite clear again that there is a reasonable basis for such classification. There are very definite reasons for including one and excluding the other class which may have seemed adequate to the Legislature. We as the judiciary cannot supplant their judgment with ours. The farmer is on an entirely different basis than the manufacturer or the merchant in his ability to protect himself from itinerant purchasers. The manufacturer knows generally to whom he can extend credit. The merchant sells for cash or knows the standing of his credit customers. That here and there some shrewd and businesslike farmer may have more business acumen and be more cautious than some manufacturers or merchants does not affect the general statement. If classification of such large groups so differently situated were not possible, practical and realistic legislation would be impossible In the case of State v. Packer Corporation, 78 Utah 177, 2 P. 2d 114, Packer Corporation v. Utah, 285 U. S. 105, 52 S. Ct. 273, 76 L. Ed. 643, 79 A. L. R. 546, it was held that advertisers of cigarettes in newspapers, magazines, and periodicals form a class for exclusion from an act making it unlawful for such cigarette manufacturers to advertise by billboard. It should not require much strain of the imagination when the classifications can be that refined to justify a classification between farmers on one side and manufacturers and merchants or others on the other side. See, also, Breedlove v. Suttles, 1937, 302 U. S. 277, 58 S. Ct. 205, 82 L. Ed. _, a recent case where it was held it was not an unlawful discrimination to exact from all persons between 21 and 60' a poll tax of one dollar, exempting blind persons or females who do not register for voting. The court found a reasonable basis on which such females were excluded from the burden of the tax. The case of State v. Latham, 115 Me. 176, 98 A. 578, L. R. A. 1917A, 480, if correctly decided, may be easily distinguished from this ease. There is a substantial difference, on the one hand, between singling out for protection solely producers of milk by requiring semimonthly settlements for milk and omitting producers of eggs or other dairy products and, on the other hand, differentiating between farmers as a class and manufacturers as a class in choosing to protect one class and not the other. The same court would undoubtedly have held that, if a semimonthly payment for all dairy products had been required, it would not be invalid because it did not by the same act require semimonthly payment of all workers in factories. Certainly, two such groups so widely separated as to situation would not have to be included in one act so as to prevent denial of equal protection.
It is only where some persons or transactions excluded from the operation of the law are as to the subject matter of the law in no differentiable class from those included in its operation that the law is discriminatory in the sense of being arbitrary and unconstitutional. If a reasonable basis to differentiate those included from those excluded from its operation can be found, it must be held constitutional. This law as to all the classifications above set out meets these necessary tests and in such regard is constitutional. The point need not further be labored. We think that not only is the classification related to the object of the legislation, but necessary to accomplish it.
How fares it regarding due process? No complaint is made that there is lack of procedural due process, but only that substantially it lacks due process. It is somewhat difficult to determine from appellant's briefs in what respect he thinks the law offends against the due process clause. He does not divide his argument by specifying what provisions or situations arising out of the law work a denial of equal protection and what work a denial of due process. As we understand his argument, he contends that the purposes of the law are not related to the "health or morals of the community" and are therefore not a proper subject for legislation; that consequently the act denies to defendant the right to enter into the transaction of business unless he obtains a license and that such transaction cannot constitutionally be conditioned on obtaining a license; that it is one of the fundamental rights which cannot be taken away or made conditional on administrative or legislative permission; that to attempt to do so by law is denial of due process. There might be some merit to defendant's contention if the act required a license for a single act of buying at wholesale, regardless of what purpose the buying was for.
It is true that section 5 of the act reads as follows: "Every person, acting as a commission merchant, dealer, broker, or agent as herein defined, shall file an application with the state board of agriculture for a license to transact the business of commission merchant, dealer, broker," etc. Further down in the same section, it specifies; "Such applicant shall further satisfy the state board of agriculture of his or its character, responsibility, and good faith in seeking to carry on the business stated in the application." Section 2, dealing with definitions, defines a commission merchant as one "who shall solicit from the producer thereof any farm product for sale on commission on behalf of such producer, or who shall accept any farm product in trust from the producer thereof for the purpose of resale, or who shall sell or offer for sale on commission any farm product," etc. It defines a dealer as above set out in this opinion. Apparently section 2 intended to make a single transaction of the types defined the badge of a commission merchant or dealer, as the case may be. The same section defines a "producer" as one "engaged in the business of growing or producing any farm product" and a "broker" as one "engaged in the business of soliciting or negotiating the sale of farm products." As later pointed out in this opinion, the purpose of protecting the farmer against those who bought outright and took title on credit was but an extension of the purpose to protect the farmer against those who acquired possession but not title for purposes of selling on commission. The protection in relation to the transaction which makes one a dealer supplements the transaction which makes one a commission merchant. The two are of a piece. And we think it was intended to protect the farmer against what might be contended was a single transaction. If a person purchased at one time a number of truckfuls of farm produce with a check or on credit, for resale, he might maintain he was not in the business of dealing in farm products, but we think an integrated interpretation of the act makes such transaction a business. By this interpretation is reconciled the language of section 2 with that of section 5. Thus, we conclude that while the license is for carrying on the business of commission merchant or dealer, a single transaction involving the acquisition of farm products obtained for the purpose of selling for the farmer or for resale by the purchaser on his own account constitutes such person either a commission merchant or dealer, as the case may be. This interpretation does not affect any situation where one buys for his own use whether to feed to livestock which he later intends to sell or for personal consumption, or where he buys for his own use and later, finding no need for what he has bought, sells the produce. The constitutionality of an act might well be questioned which required one to obtain a license to buy any commodity for his own use where it was purchased by check or on credit. But in the cases affected by the Produce Dealers Act the transactions of purchase must be for the purpose of resale which may be denominated as a business, whether it is to be done once and not repeated or done repeatedly.
The act, therefore, seems to require little more than a license to carry on the business of selling pushed ahead to a point where it must be obtained before the preliminary transaction of buying is accomplished. In Maycock v. White, 83 Utah 446, 29 P. 2d 934, we held the business of buying, selling, and handling carload lots could be constitutionally required to be licensed. Mercantile business, which requires licensing, consists of the sum of transactions of buying and selling. In that sense, a merchant can neither buy nor sell until he is licensed. Moreover, there seems to be nothing in the way constitutionally of requiring those in the business of buying — those on the buying end of the transaction — to be licensed and regulated. It is quite common to compel dealers in their capacity as sellers to be licensed and regulated. We see no reason why dealers in their capacity as buyers may not be required to be licensed and regulated.
It is urged that the act bears no relation to public health, morals, or the general welfare of the State, the implication from the argument being that the power of the Legislature in an act of this sort must fall under such classification. We think it does bear a distinct relationship to the general welfare even though it does not cover every person in the State. Protective legislation rarely does that. But we think the defendant labors under a fundamental misapprehension regarding the powers of the Legislature. The Legislature has every power which has not been fully granted to the Federal Government or which is not prohibited by the State Constitution. Salt Lake City v. Christensen Co., 34 Utah 38, 95 P. 523, 17 L. R. A., N. S., 898. By article 6, section 1, of the Constitution, the legislative power is vested in the Legislature and the people of the State of Utah. Certain limitations on this legislative power are specific in the State and Federal Constitutions. Certain other limitations not so specific reside in the due process clause of section 7, article 1, of our Constitution, and section 1 of the Fourteenth Amendment to the Federal Constitution. The whole field of powers exercisable by the Legislature is divided for convenience into police, revenue, and powers of eminent domain. And what does not fall within the realm of revenue and eminent domain is us ually classified as police power. But the real test is regardless of classification. Has the power been granted to the federal government exclusively and, if not, is it prohibited or limited by the State or Federal Constitutions, especially by the due process clauses? What defendant apparently has in mind is that, in determining what is or what is not due process as it affects the ordinary rights which citizens of all orderly governments enjoy, we generally look to see whether the legislation which affects or trammels those rights is reasonably related to and designed to protect the health, safety, morals, or public welfare of the people or any portion of them. This balance between police powers and due process is, therefore, more or less in a state of unstable equilibrium, changing with sociological and economic developments. As the protection of the due process clause recedes, the police power advances. There is always articulation between the two. In this case the legislation was for the protection of a large class of producers and sellers. It is a particular measure affecting a great group of persons. The right of buyers to buy in such case without interference or administrative regulation, ordinarily protected by this due process clause, must give way to the advancing exercise of police powers.
The defendant has much to say about the ineffectiveness of the act to accomplish its purpose; that it is a snare and a delusion. This goes to the wisdom and not the constitutionality of the act. Certainly, it is true that the license does not guarantee credit or assure payment and that a licensed swindler may have more liberty in regard to buying than an unlicensed purchaser with a bank full of money. Of course, the same argument might be made against licensing doctors, morticians, plumbers, and the whole line of businesses or professions which are licensed for the purpose of regulation. An unskillful surgeon might still operate. None of it is perfect or guarantees in its protection. Regulatory legislation is not meant to absolve all persons from personal appraisal of the man at the other end of the transaction. But, even from a standpoint of its wisdom, licensing and regulating businesses in most cases has proved highly beneficial to the public.
In the case of Maycock v. White, 83 Utah 446, 29 P. 2d 934, the questions raised in this case were expressly reserved, but the constitutionality of the act then in force, section 3-9-1, E. S. Utah 1933, requiring a license to buy, sell, or handle carload lots on commission, was sustained. The next development was an amendment of section 3-9-1, E. S. 1933, by chapter 3, Laws of Utah 1933, which required the licensing of those buying and selling farm products on commission in any quantities. Those laws were repealed and the present act substituted. Undoubtedly one of the reasons for substitution was to include another class called "dealers" who took title outright for resale rather than possession for sale as a commission merchant. It apparently appeared to the Legislature that there was little difference as far as the farmer was concerned between the case where his products were assigned to a commission merchant and he never received his money, and a case where a "dealer" took title, went off with the goods, and the farmer never received his money. The previous acts were designed to protect the farmer against commission merchants and consignees where the farmer retained title until sale. It was found just as necessary to protect him against those who bought outright, took both title and possession, and gave a "rubber" check in payment.
Acts somewhat similar involving like principles were upheld in the cases of People v. Jarvis, 135 Cal. App. 288, 27 P. 2d 77, in regard to which decision a writ of certiorari was denied by the Supreme Court of the United States in Jarvis v. People of California, 291 U. S. 648, 54 S. Ct. 527, 78 L. Ed. 1044, and People v. Perry, 212 Cal. 186, 298 P. 19, 76 A. L. R. 1331.
Although the point has not been argued, the demurrer to the complaint not only raises the question of the constitutionality of the act, but also the question of whether the allegations are sufficient under the law, granted the same is constitutional.
Mr. Justice LARSON calls our attention to the fact that neither the new Code of Criminal Procedure, being chapters 116, 117, and 118 of Laws of Utah 1935, nor chapter 143, Laws of Utah 1937, in any way changes the required contents of a complaint in the case of a misdemeanor. Such complaint must state, among other things, the acts or omissions complained of as constituting the public crime or offense named. The act or omission, as far as this case is concerned, which constitutes the public offense under section 5 of chapter 4, Laws of Utah 1935, is that of assuming or attempting to act as a dealer without a license. As we have hitherto noted, the assuming to act as a dealer may be constituted by the single act of buying otherwise than by payment of lawful money of the United States for purposes of resale.
The complaint sets out definitely the act which constituted the assumption under the law of acting as a dealer and which was without license. The act or omission which constituted the crime was set out as required in the case of a complaint for a misdemeanor.
In consequence of what has been above said, the conviction judgment and sentence are affirmed.
FOLLAND, C. J., and HANSON, J., concur.