Opinion
1917
A statute in effect prohibiting the use of trading stamps, no matter by whom they were to be redeemed, would be unconstitutional, and a statute, which should declare trading stamps redeemable by the vendor alone to be legal and those redeemable by any one other than the vendor to be illegal, likewise would be unconstitutional.
The justices of the Supreme Judicial Court in answering questions under c. 3, art. 2 of the Constitution are bound to follow a decision of this court made in a case between party and party in a matter where this court had final jurisdiction, and such a decision can be overruled only by another decision made between party and party after argument and where the rights of all can be guarded fully.
THE following order was passed by the Senate on April 2, 1917, and on April 6, 1917, was transmitted to the Justices of the Supreme Judicial Court. On April 23, 1917, the Justices returned the answer which is subjoined.
WHEREAS, There is pending in the General Court a certain measure, accompanied by bill printed as House, No. 665, a copy whereof is submitted herewith, wherein the sale or distribution of trading stamps, coupons or similar devices is prohibited under certain conditions; and
WHEREAS, At the session of the General Court in the year nineteen hundred and sixteen a certain bill entitled an Act to prohibit the sale or distribution of trading stamps, coupons or similar devices, a copy of which is herewith submitted, was passed to be enacted by both branches of the General Court but was returned to the House of Representatives by His Excellency the Governor, with his objections thereto in writing, on June 2, 1916, and there failed to pass; and
WHEREAS, In his objections to the bill, His Excellency the Governor stated that in his opinion the proper proceeding would have been to require the opinion of the justices as to the constitutionality of the proposed legislation; and
WHEREAS, The latter bill contained provisions similar to those contained in the bill accompanying the petition now before the General Court; therefore be it
ORDERED, That the Senate require the opinion of the Justices of the Supreme Judicial Court upon the following important questions of law:
First. Is it within the constitutional power of the General Court to enact legislation limiting the giving of or dealing in stamps or other similar devices in which any person other than the vendor or vendee of the merchandise sold has an interest by contract arrangement or otherwise, or is subjected to a liability by the delivery thereof?
Second. Are the provisions of House Bill No. 665 constitutional?
Third. Would an act containing the provisions of the bill returned to the House by His Excellency the Governor in 1916, and referred to above, be constitutional if enacted?
Fourth. Would the provisions of said House Bill No. 665 or those of the other bill referred to above be constitutional if these bills were changed so as to make the provisions thereof apply to stamps or other devices issued directly by the vendor to the vendee and redeemable by the vendor in cash or as a credit or rebate upon the price of articles purchased or to be purchased from the same vendor?
House Bill No. 665, referred to above, was as follows:
An Act to Prohibit the Sale or Distribution of Trading Stamps, Coupons, or Similar Devices.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. No person, firm or corporation shall, in connection with the sale of any article or any merchandise whatsoever, sell, give or deliver any trading stamps, coupons or similar devices, whether such trading stamps, coupons or similar devices are or are not attached to or form a part of the article or package of merchandise sold. This section shall apply to a device which entitles the holder thereof when such device is presented alone or in connection with others, to a cash premium or property premium furnished directly or indirectly by any one other than the vendor of the article or merchandise sold, but shall not apply to stamps, coupons or similar devices issued by the vendor directly to the purchaser in which no one other than the vendor and purchaser has any interest and which are redeemable directly by the vendor in this Commonwealth either in cash or as a credit or rebate upon the price of articles or merchandise purchased or to be purchased by the same vendee from the same vendor within this Commonwealth.
SECTION 2. A violation of this act shall be a misdemeanor, and shall be punished by a fine of not less than ten nor more than one hundred dollars.
SECTION 3. This act shall take effect on the first day of January, nineteen hundred and seventeen.
The following is a copy of a bill in the files of the House of Representatives, referred to above, which was returned by His Excellency the Governor to the House, in which branch it originated, in 1916, with his objections thereto in writing, and which failed to pass in that branch.
An Act to Prohibit the Sale or Distribution of Trading Stamps, Coupons, or Similar Devices.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. No person, firm or corporation shall, in connection with the sale of any article or any merchandise whatsoever, sell, give or deliver any trading stamps, coupons or similar devices, whether such trading stamps, coupons or similar devices are or are not attached to or form a part of the article or package of merchandise sold, which will entitle the holder thereof when presented alone or in connection with others, to a cash or property premium. This act shall not apply to stamps, coupons or similar devices issued by the vendor directly to the vendee in which no one other than the vendor and vendee has any interest and which are redeemable directly by the vendor in this Commonwealth either in cash or as a credit or rebate upon the price of articles or merchandise purchased or to be purchased from the same vendor within this Commonwealth.
SECTION 2. Any violation of this act shall be punished by a fine of not less than ten or more than one hundred dollars.
SECTION 3. This act shall take effect on the first day of January, nineteen hundred and seventeen.
To the Honorable Senate of the Commonwealth of Massachusetts:
We, the Justices of the Supreme Judicial Court, answer the questions submitted by your order adopted on the second day of April, 1917, copy of which is hereto annexed, as follows:
In 1911 the Justices were asked their opinion on the question whether a bill in effect forbidding the use of trading stamps, no matter by whom they were to be redeemed, would be constitutional. The answer was in the negative. Opinion of the Justices, 208 Mass. 607. That opinion was in accord with the almost uniform current of authority as shown by decisions in numerous States where the question had arisen. We see no reason to change the opinion there expressed. The two proposed acts, upon which our opinion now is asked, declare trading stamps redeemable by the vendor alone, to be legal, and those redeemable by any one other than the vendor, to be illegal. The question now asked of us in view of Opinion of the Justices, 208 Mass. 607, in substance is whether such a distinction can be made. We are of opinion that no such distinction can be made under the Constitution. That question is concluded in the negative by the plain implications of Commonwealth v. Sisson, 178 Mass. 578.
By St. 1884, c. 277, the vendor of any property was prohibited from representing that anything other than the specific subject of sale was to be in any way connected with the transaction. By St. 1898, c. 576, the provisions of the earlier act were made applicable specifically to the giving by the vendor of any trading stamp or other device to the purchaser which should entitle him to receive from any person other than the vendor any other property than that actually the subject of the sale and to the honoring of any such trading stamp or other device by any person other than the vendor. The fair inference from the decision in Commonwealth v. Sisson, 178 Mass. 578, read in connection with Commonwealth v. Emerson, 165 Mass. 146, where the earlier statute was construed, is that no such distinction can be made and that such a prohibition of the use of trading stamps is not within the power of the General Court. The same inference is to be drawn from O'Keeffe v. Somerville, 190 Mass. 110. These decisions were constructions of the Constitution of Massachusetts although reference was made in one or more also to the Federal Constitution.
Since these decisions, the Supreme Court of the United States has determined in Rast v. Van Deman Lewis Co. 240 U.S. 342, Tanner v. Little, 240 U.S. 369, Pitney v. Washington, 240 U.S. 387, that statutes in essence like those referred to in the questions do not conflict with the provisions of the Fourteenth Amendment of the Constitution of the United States. But the question whether a statute is in conflict with the provisions of the Constitution of this Commonwealth is a question upon which the decision of the Supreme Judicial Court of this Commonwealth is final. It is established also that in answering questions submitted to them under c. 3, art. 2 of the Constitution, the Justices of this court are bound by the decisions of the court upon matters respecting which that court is the final authority. It is not open to the Justices in answering questions submitted to them under the Constitution to attempt to overrule a decision made by the court in a cause between party and party or to speculate upon the correctness of such a decision. If such a decision is to be overruled, it can be only after argument in another cause between party and party, where the rights of all can be fully guarded. It cannot be overturned by an advisory opinion of the Justices given without the benefit of argument. Without intimating that there is ground to question our decisions, it is enough to say that we are bound by them.
We construe all of the questions as applying to the two bills presented therewith and answer them all in the negative.
ARTHUR P. RUGG. WILLIAM CALEB LORING. HENRY K. BRALEY. CHARLES A. De COURCY. JOHN C. CROSBY. EDWARD P. PIERCE. JAMES B. CARROLL.
THE FOLLOWING REPORT of the case of Derby v. Blake, decided by the Supreme Judicial Court in 1799, is taken from the first page of the Columbian Centinel of October 9, 1799, a copy of which is preserved in the State Library. That newspaper was published on Wednesdays and Saturdays by Benjamin Russell, "Printer of the Laws of the Union — South-side State Street, next to the New Branch Bank, Boston, (Massachusetts.)"
This appears to be the earliest recorded decision of any court by which a statute of a State was held to be void as in violation of the Constitution of the United States. The same statute of Georgia, which in Derby v. Blake in August, 1799, was held by the Supreme Judicial Court of this Commonwealth to be unconstitutional and void as impairing the obligation of contracts, was held by the Supreme Court of the United States on March 16, 1810, in Fletcher v. Peck, 6 Cranch, 87, to be void for the same reason. See that case and Warren's History of the American Bar, 270 note.
The following is a copy of the publication in the Columbian Centinel without any change in the punctuation or spelling:
LAW INTELLIGENCE. GEORGIA LANDS.
[A subject which has excited much public speculation, is developed in the subsequent Law Case; which we, therefore, insert with pleasure.]
Mr. Russell,
The following hasty sketch, of a Case decided at the last Supreme Judicial Court, was originally drawn up as a mere memorandum, for the private use of one of the parties concerned in the issue; but at the request of several gentlemen, is nevertheless handed you for publication. It could not be conveniently abbreviated, though we presume that part alone of the report can be interesting, which contains the decided opinion of the highest Judiciary of Massachusetts, relative to the memorable repealing Law of the Georgia Legislature; an Act which, however void and nugatory in itself, has nevertheless been attended with almost irreparable injury to very many worthy and respectable citizens of this and other States in the Union.
SUFFOLK, SS.
SUPREME JUDICIAL COURT, August Term, 1799. DERBY vs. BLAKE.
This was an action by the indorsee, against the indorser of a promissory note of hand, for payment of five thousand dollars — the indorsement was in common form, and dated 6th February, 1796 — at which time also the defendant had received from the plaintiff a special agreement relative to said note, specifying the consideration for which the same was indorsed, and declaring it to be void, and to be returned to defendant, on the happening of a certain contingence. — This special agreement, without any objection on the part of plaintiff's counsel, was suffered to be shown against the note, and was relied on in the defence: — Whereupon the following facts were established, viz. —
That on the 26th day of January, 1796, Messrs. Jackson and Williamson, as Agents for a certain company in Georgia, called the Georgia Mississippi Company, entered into a contract, bearing date on said 26th January, with said Derby, and sundry persons in Boston, and elsewhere, for the sale of a large tract of land, supposed to contain between eleven and twelve millions acres, lying between the Mississippi and Tom Bigby rivers, within the reputed boundaries of the said State of Georgia. By this contract, the said Jackson and Williamson were expressly holden to convey to the purchasers, by filling up, completing and delivering to them, at Boston, on the 12th day of February, then next, a certain deed which had been previously signed and sealed by the said Georgia Mississippi Company, in Georgia, in which deed, blank spaces had been left for the insertion of date, consideration, and the names of any persons who should become purchasers of the land; and for the purpose of completing these omissions, the said J. and Williamson were vested with a special letter of attorney from the said Trustees of the Georgia Mississippi Company. The present plaintiff, Mr. Derby, was one of the persons contracting with J. and Williamson, and had subscribed for (two shares, so called) or 500,000 acres, at ten cents per acre, to be secured by notes of hand, as particularly set forth in the contract. — That after the said 26th January, and before the 12th February, the present defendant purchased of the plaintiff, his right of subscription, so termed, agreed to take his place in the contract, and was to receive all the benefits and incur all the hazards that might result from the same, for which the defendant agreed to give him certain notes of hand to the amount of ten thousand dollars. Immediately upon execution of this agreement with Derby, the defendant sold to Messrs. Judd and Wells, the same right to the said two shares, so purchased of said Derby, and received from them in payment, their joint and several notes of hand for a much larger sum than was to be given to the said Derby; and at the same time the defendant made and delivered to the said Judd and Wells, his written obligation, whereby he promised, that in case the contract of the 26th January, with J. and Williamson should be dissolved, or not carried into execution, then the notes aforesaid should be considered as void, and be re-delivered to the makers of them. Of these notes, ten thousand dollars were thereupon transferred to Derby, by the defendant's blank indorsement, and at the same time Derby made to him a written agreement, reciting the substance of defendant's agreement with Judd and Wells, and stipulating, that in case J. and Williamson's contract, as aforesaid, should be dissolved, so that the said Judd and Wells should not be holden to pay their notes to defendant, then the notes indorsed to Derby, should also become void, and be delivered back to the indorser.
It furthermore appeared in evidence, that on the 12th of February, aforesaid, the said J. and Williamson, and the contracting parties, among whom were Judd and Wells (whose names were now inserted in the contract in place of Derby's) met together for the purpose of completing the business, but for some reason, which did not particularly appear at trial, the business was postponed by consent of Jackson and Williamson, and by vote of the purchasers, from the said 12th to 13th of same month, each party agreeing, verbally, to take no exception to the delay. On the 13th, the parties reassembled, the blank spaces of the deed were filled up; but a doubt arising as to the efficacy of a deed thus interpolated, it was agreed that the same, together with all the securities to be given for the land, should be sealed up and deposited with a third person, as escrows to take effect on certain conditions, and that in the mean time said J. and Williamson should procure a new, or confirmation deed, so called, which was accordingly procured some months afterwards, and that together with the former or interpolated deed was subsequently delivered to, and accepted by the purchasers; and at the same time the securities were given up to J. and Williamson, as had been stipulated. — It also appeared at the trial, that on the said 13th February, 1796, the Legislature of Georgia passed an Act declaring their former grant of the land in question, to the Georgia Mississippi Company, and others, to be unconstitutional and void, suggesting that said grant had been obtained by gross fraud and collusion. _____ By this Act the lands aforesaid are declared to be still the property of that State, and the money that had been paid for the same, viz. 500,000 dollars, ordered to be returned to the persons from whom it was received. — The Repealing Act furthermore directed all the records of the grant in question, to be publicly burnt, prohibited the registry of any deed or document relative to the premises, and declares all power and future grants, contracts, and agreements founded on the original grant of the former Legislature, to be illegal and "ipso facto" void. In conformity to the directions in this Act, all the records and documents of the original grant aforesaid, were burnt, and that from that time to the present, it has been impossible to procure the registry in Georgia, of any deed or document founded on the same. — It however appeared in evidence, that the said Judd and Wells have uniformly recognized the purchase, under the contract of 26th Jan. no other or different contract ever having existed on the subject; that subsequent to the said 12th February, they paid J. and Williamson, for the two shares of Derby, and have subscribed all the papers and agreements, down to Feb. 1798, that have been executed among the purchasers, in order to organize and form themselves into a Company of Associates.
On the foregoing facts, a defence was strenuously urged by Mr. G. Blake, on the following grounds, viz. — First. — That the contract of J. and Williamson, of the 26th January, was in contemplation of law dissolved, and that therefore the contingence had happened, upon which, by Derby's argument, the notes in question were to become void, and delivered up to defendant.
Secondly. — That the consideration for which the notes were indorsed, had wholly failed.
Thirdly. — That the plaintiff ought to have tried the validity of the notes, by a suit against Judd and Wells, before he could resort to the defendant for payment.
With respect to the first point, it was insisted for defendant, that the failure to deliver a good and sufficient deed on the 12th February, whereby the purchasers were released from the necessity of taking it afterwards, amounted to a dissolution of the contract of 26th January, within the spirit and meaning of Derby's agreement — But it was furthermore contended, that although that contract might not have been dissolved by any act or omission of the parties, still it was rendered void and nugatory by operation of law — The interpolated deed of the 13th February, being considered of no validity, should, as was said, be wholly laid out of the cause, however the nature and effect of it might have been originally misapprehended by the parties; and therefore that the subsequent deed of confirmation, as it was called, must be considered the only foundation of the purchaser's title — Here it was argued, that this latter deed, being executed in Georgia, by citizens of that state, long after the enaction of the repealing act before referred to, was against law and consequently ipso facto void — That admitting the original grant of the Georgia Mississippi Company, to have been good and fair, and therefore that the state of Georgia could by no act of their Legislature revoke or destroy it, still they had the power of rendering illegal and void, any contracts or conveyances which their own citizens might afterwards be disposed to make relative to lands lying within their own jurisdiction. On this ground it was urged that Jackson and Williamson had not procured a legal conveyance, in conformity to their contract, and therefore it was dissolved, and the notes consequently become void.
As to the second point, want of consideration, the effect and operation of the repealing act were more particularly considered — Here it was strenuously insisted for the defendant, that if on the foregoing principles, the deed, eventually procured by J. and Williamson, be considered a nullity, then every promise or contract predicated thereon, however distant from the original negotiation, must be taken for a mere nudum pactum and therefore not maintainable by law — But as to the particular bargain between the present plaintiff and defendant, it was furthermore contended, that whatever might be the legal consequences of the repealing act, either in respect to the original grant of Georgia, or the subsequent deed procured by Jackson and Williamson, still that the only object ever contemplated by the parties in this suit had been thereby totally defeated — Derby sold his chance of profit only, in consideration of which the note in question was endorsed, now this chance of profit it was said, had been annihilated, long before the execution of Jackson and Williamson's contract, if that contract, in fact, ever was executed at all — Here the counsel for defendant attempted to illustrate the principal contended for, by putting among others, the following example, viz. — The Legislature of Massachusetts, pass an Act for the institution of a Lottery, and appoint Trustees to sell the tickets. — A. purchases a ticket, promises to pay the established price, say, five dollars. B. purchases the same ticket of A. and assumes to pay to the Trustees the price originally agreed to be given by A. for the same, and also to pay A. five dollars for the bargain. It afterwards appears, that at the time the bargain between A. and B. happened, and without their knowledge, the same Legislature had repealed the Act on which the Lottery was founded declaring the same to have been fraudulently attained — prevent the Trustees from proceeding to draw the Lottery, and order a return of the purchase money to the holders of tickets — By these means the chance of a prize, which was the only consideration for the five dollars agreed to be paid by B. having been defeated; it was said assumsit would not lie against him for the recovery. — So on this ground it was urged that though the real title of the original grantees of the land in question, might not be affected by the repealing law, still that the sovereign power of a State, within whose jurisdiction the lands lie, had by a solemn uncontrolable act, effectually destroyed the chance of profits contemplated by the present parties, by foreclosing the purchasers from any possible use of their property.
But on the other hand, Mr. Lowell, for the plaintiff contended, and was supported by the clear and decided opinion of the Court — First — That the contract of the 26th January, though not carried into complete execution on the 12th February, as stipulated, still was not dissolved, according to the spirit and intention of Derby's agreement — That however the case might be considered with respect to third persons, it could not be competent for Judd and Wells, who were parties to the contract, and had virtually assented to the delays and modifications attending its execution, afterwards to avail themselves of a non-performance on the part of J. and Williamson of the original stipulation: — Whatever objections might have been within the power of Judd and Wells, on the 12th February, they had effectually waved the privilege of recurring to them, by their acceptance of the last deed, and by various other acts, which clearly demonstrate their constant acquiescence in the bargain — It was also decidedly the opinion of the Court, that the bargain with J. and Williamson, had not been legally affected by the Repealing Act of Georgia — That Act they considered a mere nullity — as a flagrant, outrageous violation of the first and fundamental principles of social compacts. The idea of a Legislature reclaiming property they had once sold, and been paid for, was said by the Court to be not less preposterous, than for an individual to repeal his own note of hand, or to render void by his own act and determination, any contract, however sacred or solemn. The vociferations of the Georgia Legislature, who were the very granters of the property in question, about fraud and circumvention, could not be admitted in a Judiciary of Massachusetts, as evidence of the real existence of such facts — Whether the original grant of the Georgia Legislature were valid or not, was considered by the Court a cause of judicial, and not of legislative cognizance. The Repealing Act of Georgia was moreover declared void, because it was considered directly repugnant to Article 1st. Sec. 10, of the United States Constitution, which provides that "no State shall pass any ex post facto Law, or Law impairing the obligation of contracts." — On this ground, the Court expressed a clear and decided opinion, that the title of the State of Georgia, at the time of their grant, held to the territory in dispute, had been fairly and legally conveyed to the purchasers, under J. and Williamson — That the note in litigation was therefore endorsed for a good and valuable consideration, which had not failed. The Jury were of the same opinion, and pronounced a verdict against the defendant.