Page images
PDF
EPUB

Argument for Appellant.

268 U.S.

burden on interstate commerce, but because it is unreasonable, arbitrary and unnecessarily burdensome. Adams Express Co. v. New York, 232 U. S. 14, 31. The direct and effective way to attack and suppress such frauds as the ordinance professes to be aimed at, is by criminal prosecutions. This Court is not bound by the recitals in the ordinance or its declared purpose. Mugler v. Kansas, 123 U. S. 623; Dobbins v. City of Los Angeles, 195 U. S. 223; La Coste v. Dept. of Conservation, 263 U. S. 545. If there be any real necessity for the regulation of solicitors selling the goods of a non-resident principal it is for Congress, and not for the various States or municipalities, to pass appropriate laws for such regulation. Robbins v. Shelby Taxing Dist., supra; Stoutenburgh v. Hennick, supra; Lemke v. Farmers Grain Co., supra; Bowman v. Chicago & North Western Railway Co., 125 U. S. 465; American Express Co. v. Iowa, 196 U.S. 133; Railroad Co. v. Husen, 95 U. S. 465.

The theory of the opinion of the Circuit Court of Appeals as to the local character of the service of the appellant's solicitors is untenable. This is a clear misconception of the real transaction. The solicitors are employed by the appellant. Their function is to solicit orders on behalf of the appellant, and when obtained to reduce them to writing, sign them and receive the deposit on behalf of the appellant. The orders are transmitted to the appellant through a district sales manager's office located in the City of Portland. This is the indispensable initial step in the transaction. The total purchase price is stated in the formal order. It is the sum which the purchaser is obligated to pay to the appellant for the goods. A payment of a part of the purchase price is required in advance and is paid to the solicitor, not as money due from the purchaser to the solicitor, but as part of the purchase price of the goods. The payment required is retained by the solicitor under his arrange

325

Argument for Appellant.

[ocr errors]

ment with the appellant as compensation for his service rendered to the appellant. That he retains it instead of remitting it to his principal does not affect the purchaser. The solicitor's part in the sale is concluded when he receives the order and advance payment and sends the order to the district sales manager just as any travelling salesman's function in connection with a sale is performed when he has obtained an order and forwarded it to his principal. There is obviously no basis in the actual facts for the statements in the opinion of the court below that the solicitor "receives nothing from the plaintiff ”, and “that the plaintiff has no interest in the advance payment made by the purchaser to the solicitor", or for the description of the solicitor as “independent”, and his business as “independent and self sustaining "; or for severing the solicitor's service from each transaction of sale as an entirety and treating it as a separate and independent transaction between the purchaser and the solicitor.

The advance payment is necessary as an inducement to the purchaser to take the goods when delivered and pay the balance of the purchase price; and, in case of their rejection by the purchaser owing to a change of mind or any similar cause, to recoup the appellant for the selection and packing of the goods and the expense of forwarding them and having them returned. Experience has shown that it materially tends to hold the purchaser to his order. For this reason the advance payment is indispensable.

Facing the problem of the payment of the compensation of thousands of solicitors all over the country and an advance payment being indispensable, the natural solution of it was to fix the payment at a sum equivalent to a workable compensation to the solicitor in connection with each order and allow him to retain it, thereby saving an open account with each solicitor and remittances from

Argument for Appellees.

268 U.S.

him and to him. It is a natural and legitimate method of business and its operation in no way converts the purely interstate sales of the business into a combination of an interstate element, consisting of the receipt of the order, the transmission of the goods by mail C. O. D. as to the balance of the purchase price, and their delivery to the purchaser on payment of such balance, and of an intrastate element consisting of the obtaining of the order by the solicitor, the forwarding of it to the district manager's office for transmission to the mills, and his retention of the advance payment on the purchase price of the goods collected by him. Pennsylvania R. R. Co. v. Knight, 192 U. S. 21; Coe v. Erroll, 116 U. S. 517; Hall v. GeigerJones Company, 242 U. S. 539; Plumley v. Massachusetts, 155 U. S. 461, distinguished. To single out solicitors who collect any portion of the purchase price in advance of final delivery and subject them to discriminating and hostile legislation is a violation of the equality clause of the Fourteenth Amendment.

Mr. Frank S. Grant, with whom Mr. Robert A. Imlay was on the brief, for appellees.

The police power, from its very nature, is incapable of exact definition or limitation. It reaches out generally to control everything which affects the health, peace, safety and morals of the people, and as new conditions arise, and as public opinion creates new standards of valuation, it will reach out in a never ending procession of legislative enactments to cope with the situation. It is inevitable that contention will arise as to the power of the States and the power of the national Government. Hence, each individual case must, to a large extent, be decided upon its own merits. Welton v. Missouri, 91 U. S. 275. The State may by appropriate legislation protect local interests. Such legislation is valid under the Commerce Clause notwithstanding that interstate

325

Argument for Appellees.

commerce may to some extent be affected. Gibbons v. Ogden, 9 Wheat. 1; Gilman v. Philadelphia, 3 Wall. 713; Sherlock v. Alling, 93 U. S. 99; Escanaba Co. v. Chicago, 107 U. S. 678; Barbier v. Connolly, 113 U. S. 27; Walling v. Michigan, 116 U. S. 446; Philadelphia etc., S. S. Co. v. Penna., 122 U. S. 326; In Re Rahrer, 140 U. S. 545; Leloup v. Mobile, 127 U. S. 640; Hebe Co. v. Calvert, 246 Fed. 711; Missouri ex rel. Barrett v. Kansas National Gas Co., 265 U. S. 298; State v. Leary, 125 Atl. (R. I.) 353.

On various phases of legislation which have been declared within the reserved powers of States, and not a regulation of interstate commerce, see especially International Textbook Co. v. District of Columbia, 35 App. D. C. 307; Chicago R. I. & P. R. Co. v. Arkansas, 219 U. S. 453; Hennington v. Georgia, 163 U. S. 299; Nashville C. & St. L. R. Co. v. Alabama, 128 U. S. 96; United States v. Hart, Pet. C. C. 390; New Mex. ex rel. v. Denver & R. G. R. Co., 203 U. S. 38; Compagnie Francaise, Etc. v. Louisiana State Board, 186 U. S. 380; Hebe Co. v. Calvert, supra; Hendrick v. Maryland, 235 U. S. 610; Kane v. New Jersey, 242 U. S. 160; N. Y., N. H. & H. R. Co. v. New York, 165 U. S. 628; Sherlock v. Alling, 93 U. S. 99; Erie R. Co. v. Williams, 233 U. S. 685; Lakeshore & M. S. R. Co. v. Ohio, 173 U. S. 285; Texas Transport & T. Co. v. New Orleans, 264 U. S. 150; New York ex rel. Pa. Ry. Co. v. Knight, 192 U. S. 21.

The situation presented by the case at bar is not dissimilar in principle to those cases where persons engaged in interstate transportation are required by the provisions of state statutes to be examined and licensed. Smith v. Alabama, 124 U. S. 465. A presumption should be indulged in that a statute was enacted in good faith. The declared purpose of the act is to be accepted as true unless incompatible with its meaning and effect. Flint v. StoneTracey Co., 220 U. S. 107. It will be contended, that

Argument for Appellees.

268 U.S.

the real purpose of the ordinance is to discriminate against non-resident manufacturers in favor of local business. There is nothing in the language to justify such a contention, nor is there any allegation in the bill upon which to base such a claim. It is not alleged or claimed that the ordinance is administered with an unequal hand, so as practically to make discriminations against non-resident manufacturers. See Yick Wo v. Hopkins, 118 U. S. 356. The declared purpose is to prevent the perpetration of fraud upon the citizens of Portland by fraudulent or irresponsible solicitors. It does not discriminate against goods, nor interfere in any way with the free intercourse in goods of a sister state, nor, except in an indirect and incidental manner, with the contract for the sale of such goods. It is aimed solely, at fraudulent practices of such a nature that they are necessarily of a local and not of a national character.

It would seem not only within the power of the State, but its positive duty, to devise some method for reaching the evils of a system so freighted with opportunities for fraudulent practices. The system is enlarging in its scope from year to year. The tendency, today, is to eliminate the middle man entirely. This may be well enough, but the system has built up an immense business in soliciting which is practically the only business of that character which is unregulated and unrestricted. For years individuals, engaged in soliciting for non-resident principals, have successfully hidden behind the provisions of the federal Constitution, and it has prevented legislation designed to reach solicitors of local concerns because of the inequality of such a measure. It is said in Plumley v. Massachusetts, 155 U. S. 461: “ The Constitu

: tion of the United States does not secure to anyone the privilege of defrauding the public.” Preventive measures are of infinitely greater benefit to society than an uncertain criminal or civil process, after the damage is done.

« PreviousContinue »