Court Opinion

ID: 3232754
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:08:00.048624+00
Date Added: 2024-06-11T13:57:25.002260
License: Public Domain

It will be observed that the act makes "profiteering" a crime, the penalty for which is a maximum fine of $5,000, and imprisonment at hard labor for the county for not exceeding two years, and also subjects the "profiteer" to a civil suit, to be instituted by the Attorney General in the name of the state, wherein may be recovered such damages "as the jury see fit to assess."
Section 2 of the act defines the offense of "profiteering" as "the selling or offering for sale of any article or commodity of food. clothing, fuel or other necessity of life with the intent of obtaining fraudulent or grossly excessive price over its true or intrinsic worth."
Section 2 further provides that — "in the ascertainment of whether such price is fraudulent or grossly excessive regard may be had to the cost price of said article or commodity to the person selling or offering the same; or evidence may be given of the cost price on the market of articles, commodities or necessities of life kind or character."
Section 7 provides that "in all cases, the question of whether the party sued violated any provision of this act, shall be a question for the jury."
The conclusion of this court upon the constitutionality of the quoted provisions of this act will be, in the opinion of the writer, the most momentous decision it has rendered in the last half of a century.
Intended to correct an economic evil — the exaction of unreasonable profits in trade — which followed in the wake of the World War, and which prevailed in every part of America, as it did in almost every part of the civilized world, the act is nevertheless, in its essential nature and effect, a direct challenge to those theories of personal liberty and freedom of action which underlie and permeate constitutional government in America. It is, in short, a radical and epochal departure from the trodden paths of governmental action under hitherto recognized constitutional restraints, and a bold excursion into the field of purely paternalistic control of the private business of citizens.
The offense which is defined and denounced is the selling or offering for sale of any article or commodity of the classes named with the intent of obtaining a fraudulent or grossly excessive price. The word "fraudulent," in its legal sense, is used to stigmatize an act or transaction by which the actor deceives or overreaches another, wrongfully and to his hurt. See 26 Corpus Juris, 1059, 1060; 3 Words and Phrases, 2955. Dissociated from and deception in the act of selling, the term "fraudulent," as applied to the price asked by the seller, is merely an opprobrious epithet, without any legal or logical significance. As a form of denunciation it is, of course, intelligible, but the price in question might just as aptly be denounced as larcenous or murderous. In neither case would the epithet alter the nature and quality of the thing. Nor is it apparent to our understanding how the substitution of "and" for "or," and the reading "fraudulent and grossly excessive price," as suggested by the minority opinion, is of any constructional value, except, perhaps, as indicative of the legislative view that a grossly excessive price is, within the meaning and intent of the act, a fraudulent price.
Stripped of all specious and meaningless phraseology, the manifest purpose of the act is to punish with heavy penalty any dealer or other person who sells or offers to sell any article or commodity of the classes named, at a price which, in the estimation of a jury, would yield a grossly excessive profit to the seller.
The act assumes that every article of food and of clothing is a necessity, and lays its hand upon the daintiest and most luxurious confections of food and textures and fabrications of clothing without discrimination. It extends also to any article
which a jury may regard as "a necessity of life," without other definition, although, as a multitude of judicial decisions show, that phrase is without any certainty or meaning, and varies according to the financial and social status of the individual, as well as according to time and place. See 5 Words and Phrases, "Necessity" and "Necessary."
It must be noted, also, that it is operative without regard to any conditions of scarcity or monopoly, or trade restrictions, whether the result of unlawful combinations or agreements, or otherwise, and although other dealers than the offender may be offering the article in plentiful supply at much lower prices.
The question then is, in its last analysis, a very simple one: Does the guaranty of "liberty" as declared in section 1 of the Bill of Rights, and as preserved by the Fourteenth Amendment to the federal Constitution, protect the citizen in his right to conduct his business an sell his goods according to his own judgment and discretion, and at such prices as he may obtain, so long as the business is inherently lawful, and is honestly conducted, and is in no way devoted to a public use or affected by a public interest? *Page 591 
Or, may the police power of the state be constitutionally extended by legislative flat to the conduct of private business, so as to control the prices of goods, and regulate the profits of traders, or of individuals who may wish to dispose of any article they may happen to own?
It has never been contended, so far as we are aware, that the business of selling useful and harmless commodities, to say nothing of merely casual selling, is or can be affected with a public interest, so long as trade is free and unaffected by monopolistic combinations, or artificial restraints, or emergency conditions which involve temporarily the health or safety of the public. As already noted, the operation of this act is founded upon no such conditions or considerations.
During the century of Alabama's political existence, no Legislature has ever attempted to exercise the power in question — a persuasive argument that the power has never existed. We do not overlook the case of Mayor, etc., of Mobile v. Yuille, 3 Ala. 137, 36 Am. Dec. 441, decided in 1841, wherein it was held that a charter power, granted to the city of Mobile "to license bakers, and regulate the weight and price of bread," was founded upon a valid exercise of the police power, and therefore not in violation of the constitutional right of the citizen "to pursue his trade or calling in the mode his judgment might dictate." The concrete question before the court was upon the condemnation of a lot of bread because the loaves were of less weight than that prescribed by the proclamation of the mayor, pursuant to section 2 of an ordinance requiring "all bread to be made of good and wholesome flour; and of such weight as shall be from time to time prescribed; the loaves to be of the value of 12 1/2 and 6 1/4 cents."
An examination of the charter power and ordinance as a whole shows very plainly that there was no intention to regulate the price of bread in its relation to trade profits, but merely to require the loaves to be of such weight as to sell at the prices named, the weight to be greater or less, on a graduated scale, according to the price of flour.
There was no question of price fixing or profit making before the court, but only the question of the general regulation of the business of baking bread, as related to the health, necessities, and convenience of the public. It was observed, in substances, that the practice of the assize of bread in municipalities had long and generally existed at common law under public and governmental sanction, and its necessity and propriety had been demonstrated by experience, from which it was concluded that such a regulation was a legitimate exercise of the police power, and that immunity against such governmental interference, never having existed, was not within the personal rights impliedly reserved to citizens under the Constitution. The Constitution then in force did not contain the specific guaranty of the right to "life, liberty, and the pursuit of happiness," to be found in section 1 of the Bill of Rights in our later Constitutions, nor had the Fourteenth Amendment then been adopted.
The Yuille Case is reviewed in both the prevailing and he dissenting opinion in Munn v. Illinois, 94 U.S. 113,24 L. Ed. 77. In the same case the state Supreme Court (Munn v. People,69 Ill. 89, 91) it was observed by Breese, C. J., in discussing the police power over the use and enjoyment of property, that the state's right to delegate to municipalities the power "to regulate charges of hackmen and draymen, and the weight and price of bread," among other things, had never been questioned, upon which Judge Cooley remarks:
"Regulating the weight of bread is common, and necessary to prevent imposition; but regulating the price of bread we should suppose would now meet with such resistance anywhere as would require a distinct determination upon its constitutional rightfulness. How the baker can have the price of that which he sells prescribed for him, and not the merchant or day-laborer, is not apparent. Indeed, to admit the power seems to render necessary the recognition of the principle that there is and can be no limit to legislative interference but such as legislative discretion from time to time may prescribe." Cooley's Const. Law (7th Ed.) 871, note 3.
Without pursuing that particular phase of the subject further, and without affirming or denying the power of fix the price of bread under emergency conditions so grave as to present a menace to the public health and safety, it is sufficient to say that the Yuille Case lends no support to the exercise of any that power as that with which we are here concerned.
On the general subject of price regulation, Judge Cooley says:
"In the early days of the common law it was sometimes thought necessary, in order to prevent extortion, to interfere, by royal proclamation or otherwise, and establish the charges that might be exacted for certain commodities or services. The price of wages was oftener regulated than that of anything else; the local magistrates being generally allowed to exercise authority over the subject. The practice was followed in this country, and prevailed to a certain extent up to the time of independence. Since then it has been commonly supposed that ageneral power in the state to regulate prices was inconsistentwith personal liberty. The author then proceeds to a discussion of the exceptional cases in which the power may be exercised on the theory that the service, or the business, or the property, upon which the restraint is imposed is devoted to a public use or affected with a public interest, as exemplified particularly in Munn v. Illinois, 94 U.S. 113, 24 L. Ed. 77.] What circumstances shall affect property with a public interest is not very clear. The mere fact that the public have an interest in *Page 592 
the existence of the business, and are accommodated by it, cannot be sufficient, for that would subject the stock of themerchant, and his charges, to public regulation. The public have an interest in every business in which an individual offers his wares, his merchandise, his services, or his accommodations to the public; but his offer does not place him at the mercy of the public in respect to charges and prices." (Italics supplied.)
In the leading case of People v. Budd, 117 N.Y. 1,22 N.E. 670, 682, 5 L.R.A. 559, 15 Am. St. Rep. 460, the court held as valid a statute regulating the price for elevating and storing grain in elevators, on the principle, as expounded in Munn v. Illinois, supra, that special conditions had arisen in that business affecting the commerce of the state and country, and amounting to a virtual monopoly, by which the business itself became "affected with a public interest," and therefore on common-law principles subject to reasonable public control. In People v. Budd, as in Munn v. Illinois, there was eloquent and forceful dissent; but we thing that that extension of the police power, on the principle stated, must now be regarded as an established principle of American jurisprudence.
But the New York court was careful to draw the line, and it explicitly marked the boundaries beyond which the police power could not constitutionally control the citizen in the conduct of his business or vocation. Said the court:
"In determining whether the Legislature can lawfully regulate and fix the charge for elevating grain by private elevators, it must be conceded that the uses to which a man may devote his property, the price which he may charge for such use, how much he shall demand or receive for his labor, and the methods of conducting his business, are, as a general rule, not the subject of legislative regulation. These are a part of our liberty, of which, under the constitutional guaranty, we cannot be deprived. We have no hesitation in declaring that unless there are special conditions and circumstances which bring the business of elevating grain within principles which, by the common law and the practice of free governments, justify legislative control and regulation in the particular case, the statute of 1888 cannot be sustained. That no general power resides in the Legislature to regulate private business, prescribe the conditions under which it shall be conducted, fix the price of commodities or services, or interfere with the freedom of contract, we cannot doubt. The merchant and manufacturer, the artisan and laborer, under our system of government, are left to pursue and provide for their own interests in their own way, untrammeled by burdensome and restrictive regulations which, however common in crude and irregular times, are inconsistent with constitutional liberty." People v. Budd, supra, 117 N.Y. 15, 22 N.E. 675, 5 L.R.A. 566, 15 Am. St. Rep. 470, 471.
The same distinctions and limitations are noted in State v. Edwards, 86 Me. 102, 105, 29 A. 947, 948, 25 L.R.A. 504, 505, 41 Am. St. Rep. 528, 530, where the court said:
"The public is interested to be well and reasonably served at the store of the tradesman, the shop of the mechanic and the office of the professional man, an yet, all these vocations are private. The goods on sale in the store, material furnished by the mechanic, and the skill employed by the professional man are the individual property of each one respectively. Their vocations are exercised for their own gain, and they have a right to the fruits of their own industry without legislative control. it must not be understood that each one may not be properly subjected to suitable police regulations as to the manner of his business (2 Kent's Commentaries, 340); but the business cannot be thereby controlled and the profits to be gained therefrom destroyed, taken away or limited by the establishment of prices; otherwise we should have a paternal government that might crush out all individual liberty, and the declaration of our Constitution would become as valueless as stubble."
In the case of People v. Steele, 231 Ill. 340, 83 N.E. 236, 121 Am. St. Rep. 321, 14 L.R.A. (N.S.) 361, the court held as unconstitutional an act prohibiting the sale of a ticket by the manager of a theater without carrying on its face an inhibition against its resale at an advance, and prohibiting such a resale, or keeping a place for carrying on such a business. Said the court:
"The broker's business is prohibited because it has been made unlawful to make a profit. The public is no better nor worse off in health, morals, security or welfare. These are arbitrary and unreasonable interferences with the rights of the individuals concerned. The business of the broker in theater tickets is no more immoral or injurious to the public welfare than that of the broker in grain or provisions. If he does not make the price satisfactory to intending purchasers, they are under no compulsion to buy. They have no right to buy at any price except that fixed by the holder of the ticket. The manager may fix the price arbitrarily and may raise or lower it at his will."
Our own court has never had occasion until now to deal with a legislative attempt to extend the police power of the state into the field of private business by the regulation of the prices to be charged and the profits to be taken by the manufacturer of or dealer in articles of trade, or by a casual owner who may wish to sell. We have no fault to find with the authorities cited in the dissenting opinion of Mr. Justice Thomas, illustrative of the nature and extent of the police power. It will be found, however, that without a single exception they are cases involving the control of property or business which is devoted to a public use, or affected with apublic interest, as those terms have been broadly defined by the courts. An excellent and comprehensive classification of those cases will be found in People v. Steele, 231 Ill. 340,83 N.E. 236, 121 Am. St. Rep. 321, 14 L.R.A. (N.S.) 361. None of them are applicable to *Page 593 
a case like this, and we have searched the authorities in vain to find a single expression from any American court which tends in any way to support the contention that such a regulation is a valid exercise of the police power. Nor, indeed, are we able to perceive how such a contention, apart from the merely colorable imputation of fraud, can be seriously made.
It is certain that, if the police power can regulate prices and profits in private business, or in casual transactions, whether directly by arbitrary schedules, or indirectly by the discretion of juries, by the simple expedient of branding as fraudulent any price that may be deemed grossly excessive by a jury, then the same power can, by the same expedient, control the selling price of every commodity, and the compensation to be paid for every kind of labor and professional service. This would be practical socialism and it would be the end of the American ideal of personal liberty as understood and enjoyed for more than a century under constitutional guaranties designed to protect the citizen against arbitrary and unnecessary governmental interference.
This court has more than once had occasion to vindicate those guaranties against legislation which sought to restrict the liberty of contracting, and the right to conduct a private business in the manner deemed best by its owner, notably in Joseph v. Randolph, 71 Ala. 499, 46 Am. Rep. 347, and Toney v. State, 141 Ala. 120, 37 So. 332, 67 L.R.A. 286, 109 Am. St. Rep. 23, 3 Ann. Cas. 319 (labor contract cases); and in City Council of Montgomery v. Kelly, 142 Ala. 559, 38 So. 67, 70 L.R.A. 209 (the trading stamp case).
In Joseph v. Randolph, supra, the court said:
"This act has none of the characteristics of a law designed to regulate these or kindred subjects, which properly fall within the purview of domestic price. There can be nothing soinjurious or offensive in the act of hiring a single unemployedlaborer, for one's service, as to require police regulation bythe state."
In Toney v. State, supra, the court quoted with approval from the case of State v. Goodwill, 33 W. Va. 179, 10 S.E. 285, 6 L.R.A. 621, 25 Am. St. Rep. 863, this significant language:
" 'A person living under the protection of this government has the right to adopt and follow any lawful industrial pursuit not injurious to the community which he may see fit. And as incident to this is the right to labor or employ labor, make contracts in respect thereto upon such terms as may be agreed upon by the parties,' etc. * * * 'The right to buy and sell property, and contract in respect thereto, including contracts for labor * * * is protected by the Constitution. If the Legislature without any public necessity has the power to prohibit or restrict the right of contract between private persons in respect of one lawful trade or business, then it may prevent the prosection of all trades, and regulate all contracts."
"In the same case this court approved also this passage from the opinion of Bradley, J., in Butcher's Union Co. v. Crescent City Co., 111 U.S. 746, 4 Sup. Ct. 652, 28 L. Ed. 585:
" 'The right to follow any of the common occupations is an inalienable right.' It was formulated as such under the phrase 'pursuit of happiness' in the declaration of independence which [as does our own Bill of Rights] commenced with the fundamental proposition that all men are created equal, that they are endowed by their Creator with certain inalienable rights; that among these are 'life, liberty and the pursuit of happiness.' * * * I hold that the liberty of pursuit — the right to follow any of the ordinary callings of life — is one of the privileges of a citizen of the United States."
In Allgeyer v. Louisiana, 165 U.S. 578, 579,17 Sup. Ct. 427, 41 L. Ed. 832, it was declared that that right is one of the privileges protected by the Fourteenth Amendment, and that —
"In the privilege of pursuing an ordinary calling or trade and of acquiring, holding and selling property, must be embraced the right to make all proper contracts in relation thereto." (Italics supplied.)
In Toney v. State, supra, it was also declared that notwithstanding the right of the state to enact all needful legislation in conservation of public order, morals, health and safety, "a constitutional right cannot be impaired or destroyed under the guise or device of being regulated."
In City Council of Montgomery v. Kelly, supra, the court quoted with approval the following language:
"The pursuit of the ordinary callings of life can only be so far restrained and regulated as such restraint and regulation may be required to prevent the doing of damage to the public, or to their persons: Tiedeman's Limitation of Police Power, p. 273," and "the Legislature may not, under the guise of protecting the public interest, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations." Lawton v. Steele,152 U.S. 137, 14 Sup. Ct. 499, 38 L. Ed. 385.
It is, of course, to be conceded that the courts have never undertaken to lay down any general rule by which the boundaries of the police power may be determined in all cases. Nevertheless, the courts are all agreed that there are fields of business and private conduct which are clearly and unmistakably beyond those boundaries, and to which the power cannot be constitutionally extended. Lochner v. New York,198 U.S. 45, 25 Sup. Ct. 539, 49 L. Ed. 937, 3 Ann. Cas. 1133, presenting a particularly clear and comprehensive discussion of the subject.
The Lever Act reviewed in the dissenting *Page 594 
opinion, was strictly a war measure, designed to aid the government in its prosecution of the World War. Whether its attempt to regulate commodity prices, even in such an emergency, would have been sustained by the federal Supreme Court is a matter of conjecture, for it was stricken down on a narrower constitutional ground, and the major question was not considered. In any aspect, its enactment and annulment are of no value in the consideration of the instant case.
In our judgment this Act, in so far as it relates to the prevention and punishment of profiteering, as defined in section 2, is a clear abuse of the police power, and is offensive to the declarations and guaranties of our Bill of Rights, and also to the Fourteenth Amendment to the federal Constitution; and we hold it, to that extent, unconstitutional and void.
In this view of the act it is not necessary to deal with other phases of its constitutionality, as discussed at length in the dissenting opinion, and we therefore pretermit any discussion of them here.
Let this opinion be duly certified to the Court of Appeals.
To the above opinion of the Supreme Court Justices McCLELLAN and THOMAS dissent. The latter in an exhaustive dissenting opinion gives expression of his views on the questions involved, but as this court is bound by the majority opinion we feel that no good purpose can be obtained by incorporating herein this dissenting opinion. It has well been said that the views of the individual judges are of no concern unless such views are adopted at least by a majority of the court.
As a result of the opinion of the Supreme Court herein rendered, supra, and upon authority of same, the judgment of the lower court appealed from is affirmed.
Affirmed.
Justices McCLELLAN and THOMAS dissented to the response of the Supreme Court above set forth. The following is the dissenting opinion written by THOMAS, J.: