Messrs. John J. Phelan and Charles F. Thayer for plaintiff in error.
[211 U.S. 489, 490] Mr. Donald G. Perkins for defendant in error.
Mr. Justice White delivered the opinion of the court:
Whether the following provisions of the general laws of Connecticut are repugnant to the 14th Amendment because wanting in due process of law and denying the equal protection of the laws is the question for decision:
The controversy thus arose. Philip E. Hendrick conducted a retail drug store at Taftville, Connecticut. While engaged in such business, in August, 1904, he sold his stock in bulk to Joseph A. Lemieux, his clerk, for a small cash payment and his personal negotiable notes. The sale was made without compliance with the requirements of the statute above quoted. Subsequently Hendricks was adjudicated a bankrupt, and the trustee of his estate commenced this action against Lemieux and replevied the stock of goods. Among other grounds the trustee based his right to recover upon the noncompliance with the statutory requirements in question. In the trial one of the grounds upon which Lemieux relied was the assertion that the statute was void for repugnancy to the 14th Amendment to the Constitution of the United States, because wanting in due process of law and denying the equal protection of the laws. The trial court adjudged in favor of the trustee, and his action in so doing was affirmed by the supreme court of errors of Connecticut, to which the case was taken on appeal. 79 Conn. 434, 65 Atl. 436, 600, 8 A. & E. Ann. Cas. 452. The cause was then brought to this court.
The supreme court of errors, in upholding the validity of the statute, decided that the subject with which it dealt was within the police power of the state, as the statute alone sought to regulate the manner of disposing of a stock in trade outside of the regular course of business, by methods which, if uncontrolled, were often resorted to for the consummation of fraud, to the injury of innocent creditors. In considering whether the requirements of the statute were so onerous and restrictive as to be repugnant to the 14th Amendment, the court said:
That the court below was right in holding that the subject with which the statute dealt was within the lawful scope of the police authority of the state, we think is too clear to require discussion. As pointed out by Vann, J., in a dissenting opinion delivered by him in Wright v. Hart, 182 N. Y. 350, 2 L.R.A. (N.S.) 338, 75 N. E. 404, 3 A. & E. Ann. Cas. 263, the subject has been, with great unanimity, considered not only to be within the police power, but as requiring an exertion of such power. He said:
To the cases thus cited may be added Williams v. Fourth Nat. Bank, 15 Okla. 477, 2 L.R.A.(N.S.) 334, 82 Pac. 496, 6 A. & E. Ann. Cas. 970, where a statute was sustained, which made sales in bulk presumptively fraudulent when the requirements of the statute were not observed.
The argument here, however, does not deny all power to pass a statute regulating the subject in question, but principally insists that the conditions exacted by this particular statute are so arbitrary and onerous as to cause the law to be repugnant to the 14th Amendment. To support this view in many forms of statement it is reiterated that the con- [211 U.S. 489, 495] ditions imposed by the statute so fetter the power to contract for the purchase and sale of property of the character described in the statute as to deprive of property without due process of law; and, moreover, because the conditions apply only to retail dealers, it is urged that the necessary effect of the statute is, as to such dealers, to give rise to a denial of the equal protection of the laws. We think it is unnecessary to follow in detail the elaborate argument by which it is sought to sustain these propositions. Their want of merit is demonstrated by the reasoning by which the court below sustained the statute, as partially shown by the excerpt which we have previously quoted from the opinion announced below. Indeed, the court below, in its opinion, pointed out that the statute did not cause sales which were made without compliance with its requirements to be absolutely void, but made them simply voidable, at the instance of those who were creditors at the time the sales were made. Moreover, the unsoundness of the contentions is additionally shown by the number of cases in state courts of last resort, sustaining statutes of a similar nature, which we need not here cite, as they are referred to in the excerpt heretofore made from the opinion of Vann, J., in Wright v. Hart, supra.
Much support in argument was sought to be deduced from the opinion in Wright v. Hart; Miller v. Crawford; and Block v. Schwartz,-supra. It is true that in those cases statutes dealing with the subject with which the one before us is concerned were decided to be unconstitutional. But we thing it is unnecessary to analyze the cases or to intimate any opinion as to the persuasiveness of the reasoning by which the conclusion expressed in them was sustained. This is said because it is apparent from the most casual inspection of the opinions in the cases in question that the statutes there considered contained conditions of a much more onerous and restrictive character than those which are found in the statute before us.
As the subject to which the statute relates was clearly [211 U.S. 489, 496] within the police powers of the state, the statute cannot be held to be repugnant to the due process clause of the 14th Amendment, because of the nature or character of the regulations which the statute embodies, unless it clearly appears that those regulations are so beyond all reasonable relation to the subject to which they are applied as to amount to mere arbitrary usurpation of power. Booth v. Illinois, 184 U.S. 425 , 46 L. ed. 623, 22 Sup. Ct. Rep. 425. This, we think, is clearly not the case. So, also, as the statute makes a classification based upon a reasonable distinction, and one which, as we have seen, has been generally applied in the exertion of the police power over the subject, there is no foundation for the proposition that the result of the enforcement of the statute will be to deny the equal protection of the laws.