Court Opinion

ID: 3837230
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:06:10.662409+00
Date Added: 2024-06-11T08:27:05.739467
License: Public Domain

ON THE MERITS                              (16 P.2d 651)
Department 2.
Calvin B. Terwilliger was convicted of violating the Blue Sky Law, and he appeals.
AFFIRMED. REHEARING DENIED.
This is a prosecution for the alleged violation of the Blue Sky law of Oregon. The indictment reads, in part, as follows:
"Calvin B. Terwilliger is accused by the grand jury of the county of Multnomah and state of Oregon, *Page 376 
by this indictment, of the crime of unlawfully selling securities, committed as follows:
"The said Calvin B. Terwilliger, on the 23d day of September, A.D. 1930, in the county of Multnomah and state of Oregon, then and there being, did then and there unlawfully and feloniously offer for sale and sell to one Truman J. Glover, and make sale of to the said Truman J. Glover, for the sum of $500.00, at the same time and place in the county of Multnomah and State of Oregon, certain securities, to wit, a certain preorganization subscription to and for certain of the common stock and certain of the preferred stock of a certain organization, to wit, The American Coal Products Corporation, which said organization was then and there being formed, and was then and there in the process of formation as a private corporation under the laws of the state of Oregon, a more particular description of any of which said common stock or said preferred stock, or of which said organization, is to this grand jury unknown, without any permit authorizing the selling or offering for sale of said common stock, or said preferred stock, or of any thereof, or of any of the common, or the preferred or other stock, or any securities or security whatever of said organization ever having been theretofore, or at all, issued by the corporation commissioner of the state of Oregon, and none of said stock being then and there either:
"1. A security issued by the United States, or any territory or insular possession thereof, or by the District of Columbia, or by any state or political subdivision or agency thereof, or guaranteed as to either principal or interest by any of said governmental bodies;
"2. A security issued or guaranteed by any foreign government whatever, or by any state, province, or political subdivision of any foreign government whatever; or
"3. A mortgage; or
"4. Commercial paper or acceptances or an acceptance; or *Page 377 
"5. Stocks or bonds or bond of any bank or trust company whatever; or
"6. A security listed on the New York stock exchange or the Chicago stock exchange, or the San Francisco stock exchange, or the Los Angeles stock exchange, or the New York curb market, or a security listed in any standard or other manual or supplement thereto.
"There being then and there, and having been theretofore continuously preceding and inclusive of the said 23d day of September, 1930, by and on the part of the said Calvin B. Terwilliger, an invitation to and solicitation of the public to make such subscriptions to and for said common stock and said preferred stock of the said organization, and the said offering for sale and sale of said common stock and said preferred stock to the said Truman J. Glover then and there being and occurring in the course of continuing and repeated transactions of a similar nature by and on the part of the said Calvin B. Terwilliger in marketing said common stock of said organization; and none of said common stock or preferred stock, and none of the securities whatever of said organization having been theretofore, or at all, qualified by any written application, or by any application whatever, and no permit having been theretofore, or at all, ever issued by the said corporation commissioner of the state of Oregon, to sell or offer for sale in the state of Oregon said common stock or said preferred stock, or any thereof, or any of the securities whatever of said organization, contrary," etc.
The defendant was convicted and sentenced to imprisonment in the county jail of Multnomah county for a term not to exceed one year and to pay a fine of $500. From the judgment of conviction, he appeals.
As counsel stated in their argument herein, there is but one issue in this case, and that is the constitutionality of our Blue Sky law, codified *Page 378 
as sections 25-1301 to 25-1328, Oregon Code 1930. The particular provision thereof that the defendant assails as unconstitutional is designated subdivision 10 of section 25-1302, Oregon Code 1930, relating to application for permit to sell securities, which section provides that, before any permit shall issue for such purpose, the applicant shall file with the corporation commissioner certain data specifically set out therein, together with "such other information as the corporation commissioner may require." This quoted subdivision the defendant insists is violative of our fundamental law for the reason that, he argues, it is unreasonable and arbitrary.
The law involved in this case is well settled in our own jurisdiction, and it is entirely unnecessary to go abroad in search of precedent for the holding of the court herein.
The early case of State v. Briggs, 45 Or. 366 (77 P. 750, 78 P. 361, 2 Ann. Cas. 424), is a valuable case dealing at considerable length with the question at issue, and it is directly in point here. In that case it was contended that the Barber Act of 1903 was unconstitutional in that the legislature had not therein fixed the qualifications of a barber, but had delegated to a board the power to determine them. The act defined what should constitute the occupation of a barber (Laws 1903, p. 31, § 9), provided for the appointment of a board of examiners, defined its powers and duties, among others, "to make such bylaws as it may deem necessary not inconsistent with the constitution of this state, or with the provisions of this act, and shall prescribe the qualifications of a barber of this state" (p. 27, § 2). The act declared that it should be unlawful for any person not registered to practice the occupation of a barber or conduct *Page 379 
a barber shop or barber school without the sanction of the board, and provided a penalty for the violation of its provisions. The defendant in that case was convicted for conducting a barber school in violation of the act. However, the trial court held the act to be unconstitutional and void on the ground that it delegated to the board of barber examiners legislative authority, and vested in them power to issue and withhold licenses arbitrarily and at pleasure.
On appeal this court, speaking through Mr. Justice R.S. BEAN in an able and exhaustive opinion, held that if the law was open to either objection the judgment must be affirmed, for the reason, first, that the power conferred upon a legislature to make laws could not be delegated by that department to any other authority, and, second, that "any statute attempting to vest in a board, officer, or tribunal arbitrary power to issue or withhold permission or license to practice any trade, profession or calling without regard to discretion, in the legal sense of that term, or without regard to the qualifications of the applicant, is void: White v. Holman, 44 Or. 180 (74 P. 933, 1 Ann. Cas. 843); Yick Wo v. Hopkins, 118 U.S. 356 (6 S. Ct. 1064,30 L. Ed. 220); Noel v. People, 187 Ill. 587 (58 N.E. 616, 52 L.R.A. 287, 79 Am. St. Rep. 238)." In his valuable and instructive treatise, the learned judge said:
"While the law defines what shall constitute a barber, it does not prescribe the standard or degree of knowledge, learning, experience, or qualification which shall be required before applicants shall be licensed or authorized to practice or follow the trade or calling, but leaves that matter to be determined by the board of examiners. This, it is argued, renders the act void, because it is a delegation of legislative authority, and vests in the board arbitrary and unregulated powers. The position of the defendant is that, while the legislature *Page 380 
may lawfully regulate the trade or calling of a barber, and require all persons following it to register, or obtain certificates from the board of examiners, it must provide in the act the standard of qualification required, leaving to the board the mere duty of ascertaining whether the appellant possesses such qualification."
In answer to this contention, the court said:
"The constitutional inhibition (against conferring upon any other authority the right to determine what the law shall be), however, cannot be extended so as to prevent the legislature from conferring authority upon an administrative board to adopt suitable rules, by-laws, regulations, and requirements to aid in the successful carrying out and execution of a law it has passed. The doctrine on this subject is admirably stated by Mr. Justice Agnew, in Locke's Appeal, 72 Pa. 491, 13 Am. Rep. 716, as follows:
"`Then the true distinction, I conceive, is this: The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend, which cannot be known to the lawmaking power, and must, therefore, be a subject of inquiry and determination outside of the halls of legislation.'
"It is well settled by a long line of authorities in harmony with this doctrine that the power given to an administrative board like the one now under consideration to prescribe rules and regulations reasonably adapted to carry out the purposes and object for which the board is created does not constitute an improper delegation of legislative authority."
Many authorities are cited and reviewed in support of the opinion in the Briggs case, some of which we shall mention here. Among others is the case of Port *Page 381 Royal Min. Co. v. Hagood, 30 S.C. 519 (9 S.E. 686, 3 L.R.A. 841). In that opinion, which, in the view of the writer, was a practical one and based on sound reasoning, the court said:
"It is undoubtedly true that legislative power cannot be delegated, but it is not always easy to say what is and what is not legislative power, in the sense of the principle. The legislature is only in session for a short period of each year, and during the recess cannot attend to what might be called the business affairs of the state. From the necessity of the case, as well as the character of the business itself, that must be performed by agents appointed for that purpose — such as the railroad commission, regents of the lunatic asylum, the state board of canvassers of elections, sinking fund commission, etc. The numerous authorities cited in the argument show conclusively that, while it is necessary that the law itself should be full and complete as it comes from the proper lawmaking body, it may be — indeed, must be — left to agents in one form or another to perform acts of executive administration which are in no sense legislative."
Continuing its discussion in the Briggs case, the court announced that the legislature might properly delegate to a board the authority to determine what is a college in good standing, or a reputable college, within the intention of a law authorizing graduates of such a college to practice their profession, and cited in support thereof Barmore v. State Board of MedicalExaminers, 21 Or. 301 (28 P. 8); People ex rel. v. State Boardof Dental Examiners, 110 Ill. 180. It again announced, in substance, that the legislature must enact the law necessary to accomplish the purpose in view, "but it may be carried into execution by some officer or board appointed for that purpose, and such officer or board may be authorized to prescribe the qualifications of those desiring to follow such callings or professions." *Page 382 
Another case pointed out in the opinion is West Virginia v.Dent, 25 W. Va. 1, and Dent v. West Virginia, 129 U.S. 114
(9 S. Ct. 231, 32 L. Ed. 623), which involved the right to practice medicine. In the state of West Virginia every practitioner of medicine was required to obtain a certificate from the state board of health that he was a graduate of a reputable medical college, or that he had practiced medicine in the state continuously for 10 years prior to the passage of the act, or that he had been found upon examination by the medical board qualified to practice medicine in all its branches. The statute did not prescribe the standard of qualification which the board should exact or enforce in its examination of applicants, but left that entirely to the judgment of the board; and the law was held valid by both the Supreme Court of the state of West Virginia and of the United States.
The learned judge also directed attention to the case of Smithv. Alabama, 124 U.S. 465 (8 S. Ct. 564, 31 L. Ed. 508), wherein an Alabama act which empowered the board of examiners for locomotive engineers to determine the qualifications of engineers was held valid by both the Supreme Court of the State of Alabama and of the United States.
In conclusion, the court said:
"If it [board of examiners] should act arbitrarily or oppressively, its conduct might call for a remedy against the members of the board, but it would not furnish a ground for declaring the act invalid. People v. Hasbrouck, 11 Utah 291, 306,39 P. 918; People ex rel. v. Warden, 144 N.Y. 529, 39 N.E. 686, 27 L.R.A. 718; People ex rel. v. Dental Examiners, 110 Ill. 180. * * * The law here in question provides for the appointment of a board, made up of persons skilled in the calling, to which the duties imposed are intrusted for performance, and to which is committed the power *Page 383 
of prescribing such qualifications for applicants applying for licenses desiring to practice the trade or calling of a barber as may be just and reasonable, and it must be presumed that the board will exercise fairly and impartially the powers conferred."
In the more recent case of State v. Gerritson, 124 Or. 525
(265 P. 422), this court, in reviewing the provisions of the Blue Sky law denouncing the sale of securities without a permit, used the following language:
"It may be very plausibly argued that the provisions of the statute give to the corporation commissioner arbitrary powers, but it must be remembered that the statute provides for a review of the power exercised by the commissioner in the courts. This, we believe, amply protects legitimate business and enterprises in this state: Or. L., § 6841" (§ 25-1310, Oregon Code 1930).
The case of Livesay v. DeArmond, 131 Or. 563 (284 P. 166, 68 A.L.R. 422), was prosecuted to test the validity and application of chapter 182, 1929 Session Laws, in involving the right of the board of county commissioners of any county, at its discretion, to waive or reduce the penalty or interest, or both, imposed for failure to pay taxes within the time prescribed by law, if, in the opinion of the board, such action would facilitate the collection of such taxes. This law was attacked as being unconstitutional, and the court, in passing upon the question, said, among other things:
"Any power, other than a legislative one, which the legislature may exercise, it may delegate: Wayman v. Southard, 10 Wheat 1,6 L. Ed. 253. From this fact it necessarily follows that before a statute can be condemned as conferring legislative power upon an administrative body, it must be evident that the power conferred is legislative. Hence, at this point it is desirable to recognize the distinction between the delegation *Page 384 
of power to make law or complete an incomplete act, and the conferring of authority upon a commission or official to administer a law in a manner that involves the exercise of administrative discretion. Since the power to make a law includes discretion as to what it shall be this power can never be delegated, but the decisions display an increasing tendency, due to the complexity of our social and industrial activities, to hold as nonlegislative authority conferred upon commission and boards to determine the facts or state of things upon which the law intends to make its action depend. We quote from Minneapolis, etc., R. Co. v. Wisconsin R. Com., 136 Wis. 146, 116 N.W. 905, 17 L.R.A. (N.S.) 821, as follows:
"`In the process of enacting a law, there is frequently necessary the preliminary determination of a fact or group of facts by the legislature; and it is well settled that the legislature may declare the general rule of law to be in force and take effect upon the subsequent establishment of the facts necessary to make it operative or to call for its application.'"
The court then cited Stettler v. O'Hara, 69 Or. 519
(139 P. 743, L.R.A. 1917C, 944, Ann. Cas. 1916A, 217), State v. Briggs, supra, Portland Fish Co. v. Benson, 56 Or. 147 (108 P. 122), and State v. Gates, 104 Or. 112 (206 P. 863).
Were we to assume that subdivision 10 under consideration in this case is unconstitutional, it could afford the defendant no saving grace.
Section 25-1328, Oregon Code 1930, provides:
"Should the court declare any section or clause of this act unconstitutional, then such decision shall affect only the section or clause so declared to be unconstitutional, and shall not affect any other section or clause of this act."
The meaning of this section of our Code is clear and plain. It follows that, if section 10 were eradicated *Page 385 
from the statute, the remainder of the act would stand, a subsisting and operative law.
Many are the cases in which the courts have been called upon to decide whether the unconstitutional portion or portions of a general statute were of sufficient importance to render the entire act unconstitutional.
In the case of State ex rel. Pierce v. Slusher, 119 Or. 141
(248 P. 358), we wrote:
"Recurring to the criminal provisions of the act [Income Tax Act], it is a well-established principle of statutory construction that, when an unconstitutional portion of an enactment is stricken out, that which remains, if complete in itself and capable of being executed in accordance with the apparent legislative intent, must be sustained: 26 Am.  Eng. Ency. of Law (2d Ed.), 570."
The case of United States Automobile Service Club v. VanWinkle, 128 Or. 274 (274 P. 308), was a suit instituted to test the validity of chapter 419, General Laws of Oregon, 1927, defining motor clubs for service and providing for licensing companies engaged in that service. In that case it was held that the classification provided for by section 4 of the act was not founded upon any substantial difference between the two classes mentioned, and was therefore violative of the Fourteenth Amendment of the Federal Constitution and also offended against Article I, section 20, of the Oregon Constitution. The court held that section 4 was unconstitutional and void, but at the same time declared that "this does not have the effect of making the other provisions of the act invalid, for the reason that section 4 may be separated from the remainder of the act without destroying or rendering nugatory the remainder of the act."
The case of Standard Lbr. Co. v. Pierce, 112 Or. 314
(228 P. 812), is additional authority for the holding *Page 386 
that if a statute is partly constitutional and partly unconstitutional and the unconstitutional part thereof is severable, the portion that is constitutional will stand, while that which is unconstitutional will be stricken out and rejected. See, also, the cases therein cited.
An examination of the statute under consideration shows beyond peradventure that subdivision 10, which reads, "such other information as the corporation commissioner may require," is severable, and that, if this provision were held to be unconstitutional and therefore eliminated from the provisions of the Blue Sky law, it would in no material way affect the result of this case.
The defendant invokes the doctrine announced in Yick Wo. v.Hopkins, 118 U.S. 356, which case he asserts is of great value. In this we fully agree. Much learning is embodied in the opinion rendered in that case; but there is nothing therein that in any way conflicts with, or tends to invalidate, our Blue Sky law. Yick Wo, a native of China and a subject of the Emperor of China, came to America in 1861, and for many years conducted a laundry in San Francisco, California. In 1880 a municipal ordinance was adopted making it necessary that any person, before operating, maintaining or carrying on a laundry within the corporate limits of the city and county of San Francisco, first secure a license therefor. At the time this ordinance became effective there were about 320 laundries in San Francisco, about 240 of which were owned and operated by subjects of China. Yick Wo was charged with the violation of the municipal ordinance involved, and was fined $10 and held to the custody of Sheriff Hopkins until released by a habeas corpus proceeding. It appears that, in the administration of the ordinance, *Page 387 
the board of supervisors grossly discriminated against the citizens of China and refused them licenses to conduct their laundries. The record clearly shows that all Chinese applications were, in fact, denied, and those of Caucasians granted, thus, in fact, making the discriminations, in the administration of the ordinance, which its terms permitted.
Clearly, the setting of facts in that case is far removed from the facts surrounding the case under consideration. The statutory provision assailed by the defendant in the case at bar does not attempt to clothe the corporation commissioner with arbitrary power. The statute creates the law, but leaves the lawmaking power where the sovereign people placed it. The only information that the corporation commissioner can lawfully require an applicant for a license to give is information pertinent to the inquiry; and in the event that such applicant is aggrieved he may have his day in court by an appeal. An excellent case sustaining this view is Ex Parte Tindall, 102 Okla. 192 (229 P. 125).
In conclusion, we direct attention to the following pronouncement emanating from the pen of Mr. Justice Holmes inSpringer v. Government of the Philippine Islands, 277 U.S. 189
(48 S. Ct. 480, 485, 72 L. Ed. 845):
"It does not seem to need argument to show that however we may disguise it by veiling words, we do not and cannot carry out the distinction between legislative and executive action with mathematical precision and divide the branches into watertight compartments, were it ever so desirable to do so, which I am far from believing that it is, or that the Constitution requires."
See the many instructive cases cited by the eminent jurist.
This case is affirmed.
BEAN, C.J., BELT and CAMPBELL, JJ., concur. *Page 388