State v. Caspare

Pattison, J., delivered the opinion to the Court. Pattison, J., delivered the opinion of the Court. ' The appellees in this case, the defendants below, were indicted in the Criminal Court for Baltimore City under an indictment containing three counts. The first count charges in substance, that the defendants did unlawfully use a scheme and deviee in the nature of a gift enterprise for the sale of merchandise, in that they did sell and deliver to one Benjamin B. Barber, Jr., eighteen bars of soap, and in connection with such sale and delivery, did then and there give and issue to the said Barber, as an inducement to said purchase, ten stamps,' commonly called “trading stamps,” that had been furnished to the defendants by certain other persons engaged in the trading stamp business, to'wit: the Sperry and Hutchinson Company,' a body corporate, to be used by the defendants in connection with the sale of merchandise by them, which said stamps the said company, being then and there the agent of the said defend ¹⁰ ants, had agreed to redeem, upon presentation to it, and in exchange therefor to give to the holder thereof something uncertain, undetermined and unknown to the said Barber at the time of said purchase; and, as allegedj in violation of section 263 a of Chapter 207 of the Acts of 1898, and codified in the Code of 1904 as Article 27, section 404. In the second count they were charged with the violation of section 412 of Chapter 381 of the Acts of 1910, in that “none of which said trading stamps (so issued by them) did then and there have a monetary redeemable value of at least one cent current money.” The third count charges, in substance, that the defendants unlawfully failed, at the time of the issue of said stamps, to deliver to said Barber, the receiver of said stamps, a printed or written statement clearly setting forth the date and place of issue of said stamps, and every right given to the receiver thereof, also the names of the defendants issuing and the name of said Barber, the receiver of, said stamps, also, a full and itemized list of each and every article for which said stamps either singly or in connection with other similar stamps might thereafter be exchanged or redeemed by the holder thereof, and also the exact number of such stamps required for the redemption of each of said specific articles or things enumerated in such statement; and, as alleged, in violation of section 412 a of Chapter 381 of the Acts of 1910.

The defendants filed a special plea to all three counts of the indictment, alleging, in substance, that they, the defendants, were on the 11th day of May, 1910, engaged in the l’etail grocery business in the city of Baltimore, and that on said last named day they, at their place of business, sold unto one Benjamin. B. Barber, Jr., certain merchandise, at and for the sum of one dollar which was paid to them in cash, and that at such time the defendants delivered to the purchaser ten coupons, tickets or vouchers known as the Sperry and Hutchinson green trading stamps, being at the rate of one stamp for each ten cents of merchandise so purchased, pursuant to the terms of a written contract or agreement ¹¹ existing between tbe defendants and the Sperry and Hutchinson Company, a foreign corporation dnly authorized to transact business in the State of Maryland, whereby the said company furnished said trading stamps to the defendants, who agreed to deliver said stamps to their customers as an inducement for cash trade. By the contract it was agreed by the company that it would redeem said stamps with goods and merchandise when presented by the customers of defendants in its trading stamp books in lots of 990 stamps, and according to law, “collected in the manner prescribed and subject to the conditions” in the trading stamp books of the company hereinafter referred to. One of which conditions is as follows: “ Notice “ To the Public and to the Customers of our Subscribers : “This book and the trading stamps which are issued by the undersigned are so issued, and are received by you, pursuant to certain restrictions and limitations concerning their use contained in this written contract made for your benefit between the undersigned and the merchants authorized to re-issue them to their customers.

Neither, the books nor the stamps are sold to you or the merchant, the title thereto being expressly reserved in the undersigned. They are furnished for you as evidence of payments to our subscribers, the only righ which you acquire in said stamps is to paste them in books like this and present them to us for redemption.” That said company is engaged in the business of advertising defendants and other merchants in the city of Baltimore for the purpose of increasing the trade, and especially the cash trade of such merchants as contract for its services. That the company maintains a three-story and basement store on N. Howard street, in the city of Baltimore, and also a store in the large department store of Stewart & Company, in said city. These stores are stocked with good's, wares and merchandise, consisting of sideboards, chairs' china closets, tables, lamps, desks, bookcases, rugs, bedspreads, silver ware, plated ware, china, cut glass, pictures, statuary, musical instruments, and various other classes of articles for house ¹² hold use, and are .open to the public during the business hours of each day, and the company by various methods of advertising, invites the public to enter and1 inspect said merchandise, which is. of the value of many thousand dollars.

Each of said articles bears a printed tag correctly showing the number of stamps, in exchange for which said company offers to give such articles free of charge to the person presenting such stamps. That the company employs numerous persons in said stores and as canvassers, who go from house to house in Baltimore City, and especially in the neighborhood of defendants’ store, all of whom explain to the general public that the company will deliver said articles of merchandise in exchange for Sperry and Hutchinson green trading stamps in certain numbers. That the canvassers carry with them catalogues containing many hundred illustrations of the mer’chandise carried by said company in said stox'es, which catalogxxes describe said ardides and state the nulnber of stamps accepted in exchange for each article. Said catalogues and directories containing the names of the merchants, of the city dealing ixx such stamps, and trading stamp books are • left at the houses by the canvasser's.

That the offer of the company was, until the passage of the Act of 1910, known, as the Trading Stamp Act, also brought to the attention of the public by means of large and frequent advertisements thereof in "the newspaper’s of Baltimore City, at which time the newspapers refused to accept advertisements offered by the company; since then, as well as before, they have advertised in various other ways. The agents of the company inform the public that said stamps may be procured from those merchants with whom the company has advertising contracts, and the said merchants will deliver said stamps to the customers as an inducement for cash trade. That by experience the company has found that the stock which is usually carried in its stores is sufficient to redeem all of the stamps presented for redemption in the usual course of business, which stock is about two-thirds of that ¹³ required to redeem, all of its outstanding stamps if all were presented for redemption at the same time. That it is fully able and willing, however, 'at all times to purchase and provide sufficient articles equal in value to the articles kept, in its stores for the redemption of all of its outstanding stamps.

That it replenishes its stock from time to time with articles of identically the same make and nature, while other articles are not replaced, but for them are substituted other articles of attractive character and of the same relative value, particular regard being had to the seasons of the year and the requirments of the public based upon its experience. The company also, when requested, agrees for a reasonable time to set aside any particular article in its stores selected by a collector of stamps, although such collector may not have, at the time of such request, the number of stamps required for such article. Such change as the company makes in the kind and character of its merchandise is made for the purpose of accommodating the varying tastes and meeting the requirements of the public. The plea alleges that there is no time limit placed by said company within which the stamps received by Barber, or any of the stamps issued by said company, must be presented for redemption.

That different collectors of stamps take different periods of time to fill a trading stamp book for redemption,' depending upon the amount of purchases with which they receive stamps; and that the company maintains throughout the United States more than four hundred and fifty stations or stores in any one of which said trading stamps received by Barber would be redeemed. That the stamps are without intrinsic value and are delivered to their customers only as evidence of payment in cash and as an inducement for such payment because of their value in enabling defendant’s customers to obtain the articles of merchandisé offered by the company in exchange therefor. That by the contract the defendants agreed to pay to the company for the use of said stamps and for the publication of defendants’ names in the directories, and for the adver ¹⁴ tising signs -which are displayed in the windows and other prominent places in and about defendants’ store, and for said trading stamp books, and for such other advertising as said company might do for defendants during the term, of the contract, at the rate of $3.50 for each one thousand of said stamps ordered by them from the company. That the company also offers to the public, in addition to said contract obligations with the defendants, to exchange its merchandise for said trading stamps when presented in any number from one upwards and whether or not contained, in said trading stamp books, and carries in said store articles of different kinds for the redemption of said stamps in numbers less than 990, which is the number required by the company to fill one of its trading stamp books.

The redemption of stamps in numbers less than 990 constitutes a relatively insignificant part of the business. The plea further alleges, in response to the charges contained in the second count of the indictment, that the rate now paid by the defendants for the trading stamps of said company, including as it does the expense of advertising done by said company for the defendants, as aforesaid, is as high as defendants can afford to pay for such service. That the defendants would be compelled to pay at the rate of at least ten dollars per thousand for the redemption of trading stamps of the value of one cent each, which is about 300 per cent, more than defendants now pay for the trading stamps of said company, including the advertising as aforesaid. That the greater number of their sales are in amounts so small that if defendants were compelled to give with such sales trading stamps of the value of at least one cent each; defendants would be giving to their customers a discount far in excess of what defendants can afford with any profit or advantage to themselves; that, therefore, the defendants would be denied the benefits of the use of trading stamps in connection with a very large proportion of their business.

The plea further alleges, in response to the charges contained in the third count of the indictment, that the said ¹⁵ Barber at the time he purchased the merchandise and received said trading stamps from defendants could easily have ascertained that the company has two stores in the city of Baltimore and that in said stores were publicly displayed articles of merchandise to be given in exchange for said stamps, and could have easily ascertained the terms and conditions of the offer made by said company for the redemption of the stamps. That at the time and place of the sale of such merchandise he, Barber, knew the date and place of the sale-of such merchandise and the date and place of the issue of such stamps, and also the names of the defendants so issuing and giving the trading stamps, and also his own name, the receiver thereof; and at such time and place he, the receiver of the stamps, could readily have ascertained the general conditions under which said business is carried on as described in the plea. The plea further alleges that the costs to the defendants in time, labor and material in preparing such a statement as referred to in the third count of the indictment, would be so large as to impose a great and unnecessary burden upon the defendants without any corresponding profit or advantage either to the defendants or their customers; that defendants’ customers could readily have ascertained' the general conditions under which said business is carried on as described in the plea, and that the presentation of such a statement would be nothing but an annoyance to defendants and to their customers and would tend to drive away trade from defendants and would prevent the use of said trading stamps and destroy the value of the defendants’ contract with the trading stamp company. To this special plea the State demurred.

The learned Court below, consisting of Judges Dobles, ILeuisleb and Duffy, in passing upon the demurrer, held “that the plea as to the first count of the indictment is a good and sufficient answer thereto, and that sections 412 and 412 a of Article 27 of the Code of Public General Laws of Maryland, as enacted by Chapter 381 of the Acts of the General Assembly of Maryland of 1910, upon which the ¹⁶ second'and third counts of said indictment are respectively based, are unconstitutional, and that therefore the State’s demurrer to the plea to the second and third counts should be treated as a demurrer of the defendant to the second and third counts of said indictment,” and accordingly overruled the demurrer to the plea to the first count of the indictment and sustained the demurrer to the second and third counts. Upon this ruling of the Court, judgment was entered upon each count of the indictment, and from this judgment the appeal is taken. The first of this class of cases to reach this Court'was the case of State v. Long, 73 Md. 527 . The defendant was indicted in the Criminal Court of Baltimore City charged with violating Chapter 480 of the Acts of 1886, codified as section 185 of Article 27 of the Code of Public General Laws, which provided that “no person or body corporate shall be permitted, either directly or indirectly, by agent or otherwise, to barter, sell or trade, or offer for barter, sale or trade, by any publication or in any way, any wares, goods or merchandise of any description in package or bulk, holding out as an inducement for any such barter," sale or trade, or the offer of the same, any scheme or device by way of gift enterprise of any kind or character whatever.” The defendant demurred to the indictment upon the ground that' the Act of Assembly under which he was charged was unconstitutional: The demurrer was overruled, evidence was taken and a verdict of guilty rendered, but, as stated in the opinion, •no final judgment was entered, in consequence of which the ruling upon the demurrer was not before the Cour£ for its review and therefore the Court did not determine the point raised by the demurrer as to the validity of the statute.

The only question there presented and determined by the Court was to the admissibility of certain testimony, which when stated by the Court was as follows: That the defendant long kept a general grocery store in the city" of Baltimore, known as the Northern Central Supply Company; that the defendant sold to the prosecuting witness, for the sum of ¹⁷ twenty-five cents, three one pound packages of ground coffee, called the “Big Bonanza Coffee.” That on each of said packages was pasted a blue slip of paper about three-fourths of an inch wide and extending nearly around the package; that the outside of the slip was blank, but .on -the inside of each slip was printed respectively the following: One plate, one plate, one saucer; and that said slips were placed on either end of the package in such manner as to be easily torn off. That the witness Riley tore the slips from the packages and presented them to the witness Clark (clerk of the defendant) who then presented him with three pieces of crockery ware, consisting of two plates and one saucer which were produced; at the trial. That these pieces of crockery- were obtained by the witness Clark from a selection of crockery ware on exhibition in said store in view of customers, and that there was-also displayed in the store a number of packages of said coffee and a number of pieces of said crockery ware, and a: notice or a card to this effect “A piece of this crockery ware given with each pound.” As to these facts the Court, speaking through Judge Eowleb, said: “If the scheme which is thus shown by the evidence to have been adopted by the appellant, and which certainly is not characterised by any originality, is not a gift enterprise, it would be difficult to find words to describe it,” and the Court accordingly affirmed the rulings of the lower Court and the cause was remanded; whereupon a final judgment was entered in the lower Court and from that judgment the second appeal was taken. Upon this appeal the only question presented was upon the ruling of the Court below in oyerruling the defendant’s demurrer to the indictment.

This Court, again speaking through Judge Eowxer, said: “It is apparent that the giving away of property without consideration, whether by lot or otherwise, is not in itself an evil and certainly not an evil that requires prohibition by law at the present day.” And the Court in referring to the statute further said': “This broad and sweeping language would seem to include not only ¹⁸ a lottery in which a valuable consideration is given for the chance to win a prize, but also a gratuitous distribution not involving the eletents of chance.” “In so far as the object of an Act is to protect the morals and advance the welfare of the public by prohibiting every scheme and device bearing any semblance to lottery or gambling, it undoubtedly would be a valid exercise of power. But the Act in question goes further and in effect, as we construe it, declares as did the New York Statute, which was held invalid in the case referred to (People v. Gillscn, 109 N. Y), that no person shall give away anything to a purchaser of goods, wares or merchandise as an inducement to make the purchase.” “Such a regulation of trade is, in our opinion, not only unwise but unlawful, because it is necessary neither for the health, safety nor welfare of the people and which in its operation would be oppressive and burdensome.” “It follows that the Act, by reason of its general terms, including as it does all gift enterprizes, those involving the elements of chance as well as those that do not, is invalid so far as it applies to gift enterprizes not involving chance.” Following the case of Long v. State, supra, is the case of State v. Hawkins, 95 Md. 141 . The defendant in that case, under the first count of the indictment, was charged with violation of the Acts of 1898, Chapter 207, the same statute under which the defendant in' this case is charged' in the first count of the indictment. In that case the defendant contended that the Act was unconsttiutional and demurred to each count of the indictment, including the first.

The Court sustained the demurrer and quashed the indictment. It was from that judgment that the State appealed, and the only question presented by the appeal was as to the validity of the statute. In that case, as stated in the opinion of this Court: “The first (count of the indictment) charges that the defendant '‘unlawfully did use, hold for use and sell to one Walter T. Gregory a certain stamp-, commonly called a “trading stamp.” ¹⁹ and a certain ticket and check’ which was a scheme and device for the sale, etc., of certain goods, wares and merchandise, holding ont as an inducement for such sale, etc., the giving and issuing of such stamp, ticket and check which was to be and might have been presented to and redeemed by some person and association of persons other than the traverser, the holder getting and receiving in exchange therefor a certain gift, prize, gratuity and divers other things uncertain, undetermined and unknown to him, the said Walter J. Gregory, the purchaser of said goods, wares and merchandise, at the time of the purchase thereof.” There was no evidence taken nor was any agreed statement of facts filed, the only facts were those found in the indictment and it was upon