Summary
In Strager, 10 Mich App at 168, the plaintiff sought a declaratory judgment in regard to the validity of certain provisions of the Home Improvement Finance Act, MCL 455.1101 et seq., after the county prosecutor informed the plaintiff that an informal complaint had been received that charged him with violating the statute.
Summary of this case from Waterford Redemption Ctr. v. Gaming Control Bd. Exec. Dir.Opinion
Docket No. 2,453.
Decided March 25, 1968.
Appeal from Wayne; Burdick (Benjamin D.), J. Submitted Division 1 June 7, 1967, at Detroit. (Docket No. 2,453.) Decided March 25, 1968.
Complaint by Nathan Strager doing business as Best Home Modernization Company, against Wayne Prosecuting Attorney, for declaratory judgment that certain provisions of PA 1965, No 332 are unconstitutional. Defendant's motion for summary judgment granted. Plaintiff appeals. Reversed and remanded.
Franklin Harris ( Michael M. Grand, of counsel), for plaintiff.
Samuel H. Olsen, Prosecuting Attorney, and Aloysius J. Suchy, David E. Flayer, Avery Weiswasser, and David R. Kaplan, Assistant Prosecuting Attorneys, for defendant.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Stanley D. Steinborn, Edwin M. Bladen, and Stewart H. Freeman, Assistant Attorneys General, for intervening defendant.
The plaintiff, Nathan Strager, doing business as Best Home Modernization Company, appeals the trial judge's order dismissing his complaint. The complaint sought a judgment declaring that certain provisions of the home improvement finance act exceed "the purpose and entitlement of the act" and being "arbitrary, capricious and unreasonable" are contrary to provisions of both the Federal and State Constitutions. The complaint also sought injunctive relief.
"In a case of actual controversy within its jurisdiction, any circuit court of this State may declare the rights and other legal relations of any interested party seeking a declaratory judgment, whether or not other relief is or could be sought or granted." GCR 1963, 521.1.
PA 1967, No 332, effective January 1, 1966 (MCLA § 445.1101 [Stat Ann 1968 Cum Supp § 19.417 (101)]).
On February 2, 1966, the Wayne county prosecutor's office wrote to the plaintiff, advising that an informal complaint had been received charging him with violation of the statute. This letter requested plaintiff to call at the prosecutor's office on February 16, 1966, and to bring with him certain records.
The complaint was filed by Nathan Strager, doing business as Best Home Modernization Company. After the defendant filed the motion for judgment hereinafter referred to, Detroit Garage Builders' and Modernization Contractors' Association was permitted to intervene and file a complaint as party plaintiff. The complaint filed by Mr. Strager is referred to in this opinion as the "complaint," and Mr. Strager as the plaintiff."
The plaintiff's complaint was filed in the circuit court on February 7, 1966. The plaintiff admitted in his complaint that he had operated his business in violation of provisions of the statute since its effective date, January 1, 1966. The statute declares that willful violation of any of its provisions is a misdemeanor for which punishment may be by fine or imprisonment or both, MCLA § 445.1421 (Stat Ann 1968 Cum Supp § 19.417 [421]).
The statute defines and regulates home improvement installment contracts and, among other things, requires rescission clauses in an installment contract, reference to the home improvement in promissory notes given in connection therewith, and prohibits gifts exceeding $2.50 for the procurement of the contract and cash loans by the contractor to the buyer. The complaint admits violation of each of these provisions of the statute.
The defendant moved for accelerated judgment under GCR 1963, 116, and summary judgment under GCR 1963, 117, claiming that the court was without jurisdiction and that plaintiff failed to state a claim upon which relief could be granted. The trial judge granted the motion for summary judgment and dismissed the complaint. In granting the motion, he expressed the views that the declaratory judgment procedure is not available to one attacking the constitutionality of a statute providing criminal penalties for its violation and, even if the procedure could properly be utilized for such a purpose, plaintiff's action was premature because no prosecution against him had yet been commenced.
Initially, we note that GCR 1963, 521 was intended to provide the "broadest type of declaratory judgment procedure." It has been observed that under the former declaratory judgment act our Supreme Court at one time indicated that where an alternative remedy was available, a declaratory judgment could not be obtained. GCR 1963, expressly provides that the existence of another adequate remedy does not necessarily preclude declaratory relief. Thus, simply because plaintiff could raise the defense of unconstitutionality in any criminal proceeding that might be brought against him, does not foreclose declaratory relief.
GCR 1963, 521, official committee comment, reprinted as annotation to Michigan Statutes Annotated, Rules, Rule 521.
2 Honigman Hawkins, Michigan Court Rules Annotated, p 684, commenting on Miller v. Siden (1932), 259 Mich. 19, which was decided under PA 1929, No 36 (CL 1948, §§ 691.501, 691.507 [Stat Ann §§ 27.501, 27.507]).
"Other Adequate Remedy. The existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate". GCR 1963, 521.3.
In Michigan, legislation regulating business practices and providing criminal penalties for violation has been successfully challenged in actions seeking declaratory relief. See Grocers Dairy Company v. Department of Agriculture Director (1966), 377 Mich. 71 (prohibiting sale of milk in gallon containers); Arlan's Department Stores, Inc., v. Attorney General (1964), 374 Mich. 70 (Sunday closing law); Levy v. City of Pontiac (1951), 331 Mich. 100 (size of signs advertising gasoline prices); Carolene Products Co. v. Thomson (1936), 276 Mich. 172 (quality of milk); National Amusement Co. v. Johnson (1935), 270 Mich. 613 (ordinance prohibiting endurance contests). In other cases, the Supreme Court reached the merits of actions seeking declaratory relief concerning such legislation and declared the legislation valid. See Thayer v. Department of Agriculture (1949), 323 Mich. 403 (sale of dairy products); Fitzpatrick v. Liquor Control Commission (1946), 316 Mich. 83 (licensing of female bartenders; that declaratory relief was sought appears from the record on appeal); see, also, the following Sunday closing law cases: Mark's Furs, Inc., v. City of Detroit (1961), 365 Mich. 108; People's Appliance, Inc., v. City of Flint (1959), 358 Mich. 34; The Irishman's Lot, Inc., v. Secretary of State (1954), 338 Mich. 662.
While the question of the court's power to grant declaratory relief was neither argued nor discussed in any of the cases cited in the preceding paragraph, we conclude that in Michigan, as in other jurisdictions, a plaintiff may obtain declaratory relief concerning a statute regulating his business practices even though the statute provides a criminal sanction for its violation.
In this connection, we observe that a question affecting the court's jurisdiction of the subject matter should be raised on the court's own motion. Bolton v. Cummings (1918), 200 Mich. 234; Warner v. Noble (1938), 286 Mich. 654, 659; Ideal Furnace Co. v. International Molder's Union of North America (1918), 204 Mich. 311, 313; Bradley v. Board of State Canvassers (1908), 154 Mich. 274, 282; In re Estate of Fraser (1939), 288 Mich. 392, 394.
See Sunshine Mining Co. v. Carver (ND Idaho, 1940), 34 F. Supp. 274, 280; Acme Finance Company v. Huse (1937), 192 Wn. 96, 108 ( 73 P.2d 341, 346, 114 ALR 1345, 1353). See, generally, Note, Declaratory Relief in the Criminal Law, 80 Harv L Rev 1490 (1967); Annotation, Validity, Construction, and Application of Criminal Statutes or Ordinances as Proper Subject For Declaratory Judgment, 10 ALR3d 727 (1966).
"A declaratory action is a proper remedy to test the validity of a criminal statute where it affects one in his trade, business or occupation." 2 Anderson, Actions For Declaratory Judgments (2d ed, 1951), § 624, p 1436. To afford a businessman relief in such a situation without having first to be arrested is one of the functions of the declaratory judgment procedure. Acme Finance Co. v. Huse (1937), 192 Wn. 96, 108 ( 73 P.2d 341, 346, 114 ALR 1345, 1353).
It has been argued that to award declaratory relief in such a case would expose the courts to petitions from potential criminals seeking judicial approval before they go forth into the night. We do not believe this will happen. If it does, the courts will be found fully able to articulate an appropriate response. It has been suggested by some that a distinction may properly be drawn in this regard between crimes malum in se and those malum prohibitum.
"The substitution of the civil for the criminal forum in the adjudication of the validity of administrative controls and the legitimacy of business practices requires the making of a distinction between (a) an offense involving moral turpitude, malum in se, where there is little or no question of what the criminal law prohibits, and (b) business conducted by responsible men, subject to the continuing regulations and prohibitions, statutory and administrative, of a public control sanctioned by criminal penalty, at most malum prohibitum, where there is grave uncertainty as to what practices the general terms of a law prohibit." Borchard, Declaratory Judgments (2d ed, 1941), p 1021.
See, also, Pacific Meat Company v. Otagaki (1964), 47 Haw. 652, 653 ( 394 P.2d 618, 621); Herald Publishing Company v. Bill (1955), 142 Conn. 53, 56 ( 111 A.2d 4, 6); Bryarly v. State (1953), 232 Ind. 47, 51 ( 111 N.E.2d 277, 279).
The attorney general asserts that the threat of criminal prosecution was not here sufficiently imminent to justify plaintiff's commencement of this action. The attorney general, however, acknowledges that the letter of February 2, 1966, from the prosecuting attorney to the plaintiff states: "A warrant will be asked for your arrest if you fail to answer [this] notice." The plaintiff need not defer action until arrested. Indeed, if he delays, he may be unable once criminal prosecution has been commenced to seek declaratory relief; in a case decided under the former declaratory judgment act, the Supreme Court held that one may not maintain an action for declaratory relief after criminal proceedings had been commenced against him. Updegraff v. Attorney General (1941), 298 Mich. 48. See records in Arlan's Department Stores, Inc., v. Attorney General, supra; People's Appliance, Inc., v. City of Flint, supra; Thayer v. Department of Agriculture, supra, where it appears the complaints were filed before the effective date of the legislation. The plaintiff may justifiably assume public officials will do their duty. Plaintiff's complaint was not premature.
"The danger of a criminal penalty attached by law to the performance of an act affords those affected the necessary legal interest in a judgment raising the issue of validity, immunity, or status. The threat to enforce the statute seems hardly necessary for public officials are presumed to do their duty. The plaintiff need only show that his position is jeopardized by the statute." Borchard, Declaratory Judgments (2d ed, 1941), p 66.
It is not disputed that plaintiff's business is directly and substantially affected by the home improvement finance act. An "actual controversy" is presented. See 22 Am Jur 2d, Declaratory Judgments § 11.
The trial judge's determination that the complaint should be dismissed was based on his views that the validity of a statute imposing a criminal penalty for its violation may not be challenged by an action for declaratory judgment, and that the plaintiff's action was premature in that prosecution had not been commenced against him. The trial judge did not dismiss the complaint in the exercise of discretion. See United States Fidelity Guaranty Company v. Kenosha Investment Company (1963), 369 Mich. 481, and Molinaro v. Driver (1961), 364 Mich. 341, 354. We, therefore, have not reviewed his order as if he had. We intimate no opinion as to the extent of the trial judge's discretion in that regard or on the merits of plaintiff's complaint.
Reversed and remanded for a determination on the merits. No costs, a public question.
FITZGERALD, P.J., and McGREGOR, J., concurred.