Wright v. Hart

Before proceeding to a critical view of the challenged statute it may be profitable to make a few pertinent though trite observations on the nature, construction and effect of written constitutions. A written constitution is the fundamental expression of the sovereign will. Under our form of government that sovereign will resides in the people.' A written constitution is not only the direct and basic expression of the sovereign will, but is the absolute rule of action and decision for all departments and offices of government in respect to all matters covered by it and must control as it is written until it shall be changed by the authority that established it. It is true, as was said by Judge Cooley, that “ the weaknesses of a written constitution are that it establishes iron rules which, when found inconvenient, are difficult of change; that it is often construed on technical principles of verbal- criticism rather than in the light of great principles, and that it is likely to invade the domain of ordinary legislation instead of being restricted to fundamental rules.” The logical corollary of the proposition that the Constitution is the supreme law of the land' is that the power to legislate is a a purely delegated one, derived from the Constitution and controlled by it. In the case at bar we are concerned with no quibbles of verbiage or technicalities of construction, but with the broad question whether an act of our legislature is repugnant to the “ iron rule ” of our Federal and State Constitutions that no citizen shall be deprived of “ life, liberty or property,” or be denied the “ equal protection of the laws.” •

In the course of judicial interpretation, the words “ liberty ” and “ property ” as used in the Constitutions, have naturally and properly been given their most comprehensive signification, so that they embrace every form and phase of individual

Let us now analyze the statute under scrutiny. Every sale (A) “ of any portion of a stock of merchandise, other than in the ordinary course of trade in the regular and usual prosecution of the seller’s business, or (B) the sale of an entire stock of merchandise in bulk, shall be fraudulent and void as against the creditors of the seller, unless (1) the seller and purchaser shall at least five days before the sale, (2) make a full and detailed inventory, (3) showing the quantity, and, so far as possible with the exercise of reasonable diligence, (4)

Ho one will have the temerity to suggest that this drastic and cumbersome statute is not in restraint of the rights of “ liberty ” and “ property,” as those terms have been judicially declared to have been used in the Federal and State Constitutions. It is contended, however, that the restraint which it imposes upon these rights is justifiable under that shibboleth of legislatures and courts known as the police power. Far be it from us to deny the existence of that power or to attempt to define its extent. It will be our effort, rather, to show that the statute under consideration is, in some particulars, so thoroughly unrelated to the probable object of its enactment, and in others so cumbersome, burdensome, unreasonable and unworkable, as to violate every one of the constitutional provisions under which it is challenged. The rights of “ liberty ” and “ property,” as we have seen, are sacred and substantial rights guaranteed by the Federal and State Constitutions. Any law that interferes with the right to make and enforce contracts affects both the liberty and property of the citizen. The right to sell and purchase merchandise in bulk is no less under the protection of the Constitution than the right to sell and buy in the smallest possible quantities. Any legislative interference with either of these rights, that

Beginning with the title of the statute, we observe that its object is “ to regulate the sale of merchandise in bulk.” If we give- to the term “ merchandise ” its ordinary business signification, there is no escape from the conclusion that the statute applies to merchants alone as distinguished from

The statute, as we have seen, discriminates between sales of entire stocks in bulk, and sales of portions of such stocks. But it does not differentiate between sales that are honestly ¡•nade and sides that are made with intent to defraud. The sale of an entire stock is declared to be fraudulent and void as against the seller’s creditors, no matter how solvent he may be, unless all the petty and harassing details of the statute are observed. The sale of a lesser quantity, however, is interdicted by no such sweeping fiat so long as it is made in the ordinary course of trade in the regular and usual conduct of the seller’s business, although made with a fraudulent intent. But this is not all. Both seller and purchaser shall, at least five days before the sale, make a full and detailed inventory. One inventory is not enough. There must be two, or at least one joined in by both. And they must 'be made, not when the sale has been consummated, but five days before. Gould anything be devised that would more effectually paralyze sales of merchandise in bulk? Some simple illustrations will

And what must such an inventory contain? First, the quantity. That is usually and of itself entirely sufficient in the case of a sale in bulk. Second, the cost price to the seller of each article to be included in the sale, although the purchaser, one of the parties who must file an inventory, may have no means of knowing anything about the cost price to the seller. It is true that the latter feature of the inventory is only made necessary in so far as it is possible with the exercise of reasonable diligence. But the seller may have full knowledge on the subject, which he may decide not to disclose. The purchaser may know nothing about it, but his bargain can be annihilated by the seller’s refusal to exercise the “ due diligence ” by which the information could be disclosed. Then again, a purchaser may have a market for goods which - he is willing to purchase at a specified price. This market he would lose if compelled to file a long and

The next requirement of the statute has to do with the purchaser alone. At least five days before the sale he must make full, explicit inquiry of the seller as to the name and place of residence or business of each of the seller’s creditors, and of the amount owing to him, and, having done this, he must then notify or cause to be notified each of such creditors, personally or by registered letter, of the proposed sale and the stated cost price of the merchandise, as well as the price to be paid by the purchaser. In other words, the purchaser, who is under no legal or moral obligation to the seller’s creditors, is not only required to obtain from the seller all these details concerning his creditors, but he must send to each one, no matter how great their number or how remote their places of residence or business, all the detailed information that is to be included in the inventory. Thus the inventory may have to be duplicated by the hundreds or thousands and sent to creditors scattered over all portions of the globe. It is true that this obligation rests upon the purchaser only to the extent that it can be fulfilled in the exercise of reasonable diligence, but this

Let us again emphasize the assertion that we do not question the power of the legislature to enact 2-easonable laws for the prevention of fraud and the protection o f creditors. That this right falls within the general scope of the police power-no one will deny. But the police power only begins wher-e the Constitution ends. Broad and comprehensive as the police power, concededly is, and incapable of precise definition or exact demarlcation as we know it to be, it is never difficult to determine that its limits have been transcended when it is clear that the sacred domain of the Constitution has been trespassed upon. And when the exercise of the police power clearly infr-inges uporr vested constitutional rights, courts should not concern themselves with the pr-obable purposes for which it is exercised, or the evils which it was designed to correct. Fir-st the Constitution and then the police power. The statute under consideration sweeps away the constitutional rights of liberty and property of a. limited class of our citizens who are entitled to the equal protection of the laws with all other citizens. It invades the right of liberty because it arbiti-ar-ily and unnecessar-ily denies the right of a .specified class of citizens' to coutr-aCt for, bargain and sell a particular kind of property. It violates the Constitution in prohibiting all sales of merchandise in bulk, whether honest or dishonest, except upon conditions that are har-slr, drastic, unreasonable and imnecessary in so far as they do not tend to effectuate the objects for which such a statute may properly be enacted. It ignores the constitutional

It is urged, however, that the impositions of this statute are more nominal than real, since a seller has only to pay his debts in order to make his sale valid. The argument, so far from supporting the statute, really serves to disclose one of its most sweeping and unreasonable features. If the statute affected none'but insolvent sellers, or related merely to debts due, or gave to purchase-price creditors ah equitable lien for their respective shares of the proceeds of a proposed sale, or if, instead of interdicting in advance a sale in bulk, it had made some reasonable provision for impounding the proceeds of sale until the seller’s legal obligations could be judicially ascertained, there might be some force in the suggestion. But what is the fact?- The act'embraces all sales of entire stocks of merchandise in bulk. It covers every sale of any part of a stock not made in the ordinary course of trade in the regular and usual prosecution of the seller’s business. It requires notice to be given to all the seller’s creditors, whether their debts are due or not, that a sale is contemplated. It requires this notice to be given five days in advance of a sale. It requires observance of every one of its details or payment of every creditor. What is the practical effect ? A seller who is abundantly able to pay his debts is compelled by law to do so before he can dispose of a part of his possessions. He must pay his debts whether they are due or not. He must pay them whether they are in dispute or not. He must pay creditors who have no legal, equitable or moral claim upon the particular property or its proceeds. And if he depends upon the proceeds of the particular sale to pay his debts, he must pay them at least five. days before he gets the money. Thus an intending seller is under the necessity of practically obtaining the consent of his creditors before he can make a sale. He must pay a c rim that may be in dispute, right or wrong, and he must take what equitably belongs to the creditor for purchase price and pay it to general creditors, or he

It is said also that similar statutes, some of them much more drastic, have been adopted in twbnty different states or jurisdictions. Twenty wrongs can never make one right. There is, moreover, a singular, not to say suspicious, coincidence in the time and substance of. all this legislation. We are indebted to our brother Bartlett for the suggestion that more than half of these statutes were enacted in 1903 and 1904, and nearly all of them since 1900. Statutes that are passed pro bono publico rarely sweep the country with such irresistible momentum, while much fantastic legislation has resulted from organized crusades upon legislatures by the advocates and supporters of special classes. This statute “ is evidently of that kind which has been so frequent of late, a kind which is meant to protect some class in the community against the fair, free and full competition of some other class, the members of the former class thinking it impossible to hold their own against such competition and, therefore, flying to the legislature to secure some enactment which shall operate favorably to them or unfavorably to their competitors.” (Peckham, J., in People v. Gillson, 109 N. Y. 389 .)

If we have succeeded in making our position plain, it will be unnecessary to answer in detail that portion of Judge Vann’s very learned and able opinion in which he illustrates the manifold purposes for which the police power has been exercised by legislatures and upheld by courts. The existence of the power is not denied. Its limits cannot be accurately demarked. The well-beaten paths which it has pursued time out of mind contain no guide board to the new and untrodden field sought to be explored by this particular phase of paternal legislation. Therefore, old cases and old laws are of little help except as they expound general principles appli

Owing to the length of this opinion we refrain from discussing the cases decided in other states upon similar statutes, except to say that those which have been upheld in Massachusetts, Connecticut, Tennessee and Washington are far less drastic than our own, in that they either except from their operation all sales by executors, administrators, receivers, etc., or provide that sales of merchandise in bulk shall only be presumptively void if the statutory requirements are not observed; or, as in Connecticut, that one day after the sale there shall be filed a descriptive writing duly signed and acknowledged. In Ohio and Utah, where such legislation was condemned by the courts, it was in some respects even more far reaching and burdensome than here.

The judgment of the Special Term and Appellate Division should be reversed and judgment ordered sustaining defendant’s demurrer, with costs in all the courts.

Question certified answered in the negative,

1 concur in the opinion of Webneb, J. He has called attention to the defects in the statute in not specifying the place where the inquiries shall be filed. But in addition thereto the notice to creditors provided for means nonresident as well as resident creditors. The notice to creditors must be served either personally or by registered mail at least five days before the sale. The notice would be of no benefit unless it was received before the sale was completed and in time for the creditor to take action in reference thereto. The statute has, therefore, fixed the period of five days. If the notice is served personally it must be five days before sale. If by registered mail, the statute doubtless means the same thing; that is, the notice should be received at least five days before the sale. In other words, if the service is by registered mail, the posting must take place a sufficient time in advance so that the creditor may receive it at least five days before the sale is completed. (Steinhardt v. Bingham, 182 N. Y. 326 .) In case of creditors so far removed as to be beyond the reach of the registered mail, personal service only would answer the requirements of the statute. Such a notice in many cases might be impossible, or if it could be given, it might involve not only so much time but so much expense as to render the purchase profitless and operate to defeat the sale. In case the sale is very large, as for instance that of a large department store, weeks must elapse after the parties have made their agreement before they can complete the same. An inventory of every article must be made and the cost price of each article must be stated. This necessarily would consume considerable time. The inventory, no matter how extensive or bulky, must be duplicated for each creditor, for the statute could only be complied with by the serving of a copy of such inventory upon each creditor, containing the cost price of each article and the amount to be paid under the proposed agreement of purchase. This must be served personally or by registered mail five days before the sale. Again, what is the necessity of such a notice ? It can have but one purpose. It.gives to every creditor an inventory of

(dissenting). The only question presented by this appeal is whether the statute regulating the sale of merchandise in bulk (L. 1902, ch. 528) violates any provision of the State or Federal Constitution. The object of the act was to suppress a widespread evil, well known to current history and condemned by repeated adjudications in this court and in all the loading courts of the state from time out of mind. That evil is the tendency and practice of merchants who are heavily in debt to make secret sales of their merchandise in bulk for the purpose oftdefraudiug creditors. Common observation shows that when a dealer has reached a point in his business career where he cannot go on owing to the claims of creditors, the temptation is strong and the practice common of making a fraudulent sale. Fraud works m secret, and the bargain is closed and the purchaser in possession before the creditors know anything about it. The evil is difficult for the courts to handle, because the evidence to uncover the fur

When a merchant owes more than he can pay he has no substantial equity in his stock of goods and the claims of his creditors are superior to his own. The courts may not only prevent him from parting with his property but may seize and sell it and apply the proceeds upon his debts. If an execution issued against his property is returned unsatisfied, he may be compelled to disclose under oath all his business transactions, tell what he has done with his estate, both real and personal, and the proceeds thereof, and if he still holds any property in the name of someone else, to divulge all the facts relating thereto. (Code Civ. Pro. §§ 2432, 2463.) He may be imprisoned on civil process and punished criminally for making a fraudulent disposition of his property and any person who is a party or privy to the fraud may be punished in the same way. (Code Civ. Pro. § 549; Penal Code, § 586.) Interference with his liberty and property by such methods has never been successfully questioned as a violation of fundamental rights. Many restraints upon freedom of contract,some of which reach back to our colonial history, have passed

The statute now before us was passed for the same general purpose as the most of those mentioned. It is aimed at the same evil which is admitted to be both serious and common. It does not prohibit a sale of any kind, but it provides safeguards against secrecy, which is the bulwark of fraud. It simply requires that notice of what is to be done should be given in advance, personally or by mail, to those directly interested who are frequently made the victims of fraudulent sales.

It regulates two kinds of sales: 1. A sale of any portion of a stock of merchandise other than in the ordinary course of trade in the regular and usual prosecution of the seller’s business. 2. The sale of an entire stock of merchandise in bulk. We now have to deal with the latter only. Such a use is declared fraudulent and void, not absolutely but as

A recent amendment provides that a sale “ will be presumed to be fraudulent and void as against the creditors of the seller ” unless the statute is complied with, while the act governing the case now before us makes such a sale absolutely void as to creditors. (L. 1904, ch. 569.)

The statute is confined to merchants and dealers, as is apparent from the use of the expressions “ a stock of merchandise ” and “ the cost price to the seller.” Ho sale is forbidden, but certain sales are ■ regulated in order to prevent fraud. Ho restraint is placed upon sales made in the ordinary course of business, whether at wholesale or retail, for the statute applies only to unusual and extraordinary sales. There is no attempt to regulate sales generally, but merely those which experience shows are so frequently made a cover for fraud. There is no interference with the ordinary business of merchants, but when they sell tlicir entire stock and go out of business, or sell any substantial portion thereof in an irregular and unusual way, notice to creditors is required so that they can protect

While the statute in question disturbs freedom of contract, so does fixing the price of elevating grain (People v. Budd, 117 N. Y. 1 ; Munn v. Illinois, 94 U. S. 113 ); the prohibition of options to buy or sell grain at a future time (Booth v. Illinois, 184 U. S. 425 ), and the annulment of all contracts for the sale of corporate stocks for future delivery, or on margin O tis v. Parker, 187 U. S. 606 ). It interferes with the use of property, but so does a limitation upon the height of buildings (People ex rel. Kemp v. D'Oench, 111 N. Y. 359 ); the requirement that tenement houses shall be furnished with water (Health Dept. of New York v. Rector, etc., Trinity Church, 145 N. Y. 32 ); forbidding the sale of stamped bottles (P eople v. Cannon, 139 N. Y. 32 ); or of lottery tickets issued in 'a state where lotteries are lawful (People v. Noelke, 94 N. Y. 137 ); or of game purchased in another state as lawful merchandise and brought into this state (People v. Bootman, 180 N. Y. 1 ). It interferes with liberty, but so does the act “ to regulate barbering on Sunday ” (People v. Havnor, 149 N. Y. 195 ; Petit v. Minnesota, 177 U. S. 164 ); the statute making it a misdemeanor to exhibit a child as a dancer in order to earn a living (People v. Ewer, 141 N. Y. 129 ); the exclusion of children not vaccinated from school (Matter of Viemeister, 179 N. Y. 235 ), and the compulsory vaccination of all the inhabitants of a community (Jacobson v. Mass., 197 U. S. 11 ).

Twenty states as well as the Federal government in the District of Columbia .have similar statutes, some with provi

A statute with the same object attained by a similar remedy has been held valid by the highest courts in Massachusetts, Connecticut, Tennessee and Washington. (J. P. Squire & Co. v. Tellier, 185 Mass. 18 ; Walp v. Mooar, 76 Conn. 515 ; Neas v. Borches, 109 Tenn. 398 ; McDaniels v. J. J. Connelly Shoe Co., 30 Wash. 549 .) An act declaring such sales presumptively fraudulent was assumed to be valid by the courts of last resort in Wisconsin and Maryland. (Fisher v. Herrmann, 118 Wis. 424 ; Hart v. Roney, 93 Md. 432 .)

On the other hand, a statute with more exacting conditions was held unconstitutional in Ohio (Miller v. Crawford, 70 Ohio St. 207 ), and a similar act met the same fate in Utah, where a violation of the statute was made a crime (Block v. Schwartz, 27 Utah, 387 ). The weight of authority, thus far . announced, is in favor of the validity of such legislation, The general grounds upon which it has been sustained are well illustrated by the following extract from the opinion of the Supreme Court of Massachusetts: “ A purchaser, to be safe, has only to see that the vendor’s creditors are provided for. The vendor may sell freely, without regard to the statute, if he pays his debts. The legislature, when contemplating this

The question before us is one of power, not of policy. Courts may pass upon the power of the legislature, but not upon its policy. Statutes, whether wise or unwise, are equally binding upon us, provided no provision of either Constitution is molested. According to the general rule, unless there is a plain conflict between a statute and the Constitution, the statute stands, for every presumption is in its favor. The respect due to a co-ordinate branch of the government will not permit mere judicial doubt to undermine a statute, for there must be clear judicial conviction that it violates the Constitution before the "courts can set it aside. The legislature with all the power of legislation there is, may jiass any law upon any subject, unless it is expressly or impliedly forbidden by the supreme law of the State or of the United States. There is a power beneath the Constitution but not superior to it, unwritten, not fully defined, necessary, resting oh the sovereignty of the state, which exists because the state cannot exist without it and which must be considered in connection with the Constitution. That power, known as the police

Starting always with the presumption that the statute, although challenged, is valid, we study it in connection with the Constitution to see whether there is such a conflict as to divest the legislature of jurisdiction. If purporting to be passed in the exercise of the police power, we endeavor to see, first, whether there was an evil to be remedied, and, second, whether the remedy prescribed is “ calculated, intended, convenient or appropriate ” to suppress it and not designed to trespass upon personal rights “ under the guise of a police regulation.” If “the act has a fair, just and reasonable relation to the general welfare,” it may so regulate “ the conduct of an individual and the use of property ” as to “interfere to some extent with the freedom of the one and the enjoyment of the other.” If it violates no express command of the Constitution and tends “in a degree that is perceptible and clear towards the preservation of the lives, the health, the morals or the welfare of the community, as those words have been used and construed in many cases heretofore decided,” and is not passed “ostensibly in favor of the promotion of some such object, while really it is an evasion thereof and for a distinct and totally different purpose,” it comes within the jurisdiction of the legislature and the courts are bound to sustain it. The police power cannot be arbitrarily exercised so as to deprive the citizen of his liberty or property, “ but a statute does not work such a deprivation in the constitutional sense, simply because it imposes burdens or abridges freedom of action, or regulates occupations, or subjects indi

Liberty under the Constitution does not mean natural liberty, or the right to act as one pleases subject only to the laws of nature, for society cannot exist on that basis. Constitutional liberty is the right to act without restraint upon person or property, except such as is necessary or expedient for the general advantage of the public. (Matter of Jacobs, 98 N. Y. 98 ; People v. Marx, 99 N. Y. 377 ; People v. Arensberg, 105 N. Y. 123 ; People v. Gillson, 109 N. Y. 389 ; People v. Budd, 117 N. Y. 1 ; Health Dept. of New York v. Rector, etc., Trinity Church, 145 N. Y. 32 ; Slaughter House Cases, 16 Wall. 36 ; Barbier v. Connolly, 113 U. S. 27 ; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650 .)

The legislation under consideration was intended to suppress a deep-seated evil, common in sales of a certain kind. The existence of the. evil is admitted, and the right of the legislature to provide a remedy is also admitted, but it is insisted that the remedy provided is so unreasonable that it violates the primary guaranties of the Constitution. The same claim was made when a maximum price was fixed for doing a certain kind of work, but it was rejected, because the work was done in a business affected with a public interest. (People v. Budd, supra.) The same position was taken when one state absolutely prohibited sales on margin and another options to buy or sell at a future time, contracts which were previously valid, but both provisions were sustained by the Supreme Court of the United States, because they tended to prevent gambling. (Booth v. Illinois, supra, and Otis v. Parker, supra) While many contracts of the kind prohibited were free from wrong, as so many were made for the purpose of gambling, all were swept away, the good and the bad alike. Is gambling a worse evil than fraud ? Does it

The right to pass laws to prevent fraud being conceded, what principle is to guide us in drawing a line to separate the act before us from those considered in the cases cited ? How can we declare this statute void and the others valid ? It has no ulterior purpose. Ho attempt is made to protect some favored interest from injurious competition. Its object is not, as in the Gillson case, to interfere with a lawful business, but to prevent one man from keeping property which equitably belongs to others. It seeks to maintain justice, which is one of the leading features of the public welfare. The protection of creditors has always been a primary function in the administration of justice. Why should the Constitution require courts to be maintained to punish fraud and yet deprive the legislature of power to prevent fraud by requiring notice to a class apt to be defrauded ?

As it is known that dishonest merchants abuse freedom of contract by secretly selling out in such a way. as to defeat the claims of creditors, may not the legislature surround the right with some safeguards, such as an inventory and notice thereof ? When the end sought is within the domain of legislation and the form of the remedy proposed is fairly adapted to that end, the courts have no power to interfere. When jurisdiction exists, the details are within the exclusive control of the legislature. While a merchant, owing debts, has an absolute constitutional right to sell his stock of goods, he may properly be required to do something for the protection of his creditors

It is insisted, and the argument is not without force, that while the provisions of the act, so far as they relate to the vendor, may be valid, the restraint upon the purchaser is so severe as to impinge on the right of liberty and property. What is required of the purchaser % To some extent he must look after the interests of creditors, if there are any. He must either see that they are paid or notify them in advance of what is to be sold, the price paid and to be paid and must ask the seller who his creditors are. If there are no creditors the statute does not apply. If the inquiry, when carefully made, discloses no creditors and the purchaser knows of none, he may buy in safety without the inconvenience of inventory dr notice. If there are creditors, the risk is in proportion to the amount of their claims, and whether it is large or small, they have rights which need protection from a sale made in bad faith and it is at such sales that the statute strikes. The purchaser may be buying property in which the seller has less real interest than his creditors, and it is reasonable to charge both seller and purchaser with the exercise of some care toward them, in the interest of justice ánd the general welfare. The inconvenience to purchasers is an evil, as it hampers commerce to some exfent, but the injury to commerce from fraudulent sales is a much greater evil, so that on the whole commerce is not harmed but helped. The legislature had the right to balance these evils and to promote the common good by trying to do away with the greater. The everyday business of the seller and buyer is not touched, for that is outside of the statute, but when an extraordinary saléis made, such as can occur but few times in the life of a merchant, certain conditions and restraints are imposed, not to hamper business, but to prevent secret sales in bulk of property usually bought on credit and generally unpaid for when the sale is

Purchasers who complain of the act as a violation of their constitutional rights . are themselves protected by legislation equally drastic, for they could, not purchase in safety were it not for the acts in relation to chattel mortgages and conditional sales. They might purchase and pay in good faith and yet have the property taken away from them under a lien they knew nothing about and which they could not discover. As the legislature passed these acts, it can repeal them and in that event purchasers, however careful, might not get a good title, while now, even with the act under consideration in full force, they can get a good title if they only take pains. They cannot, therefore, consistently object to such a statute. They cannot in fairness assert that interference with an unlimited right of contract is constitutional when it operates in their favor, but unconstitutional when it operates in favor of creditors and against themselves.

It is also claimed that an unreasonable burden is imposed upon a limited class of debtors for the benefit of a limited class consisting of their creditors. A statute which is uniform in its effect upon all persons to whom it applies is not invalid because it applies to a limited number. This act applies to all the people of the State who carry on a certain kind of business, which presents special temptations and opportunities for the commission of fraud. The classification is not arbitrary, but is founded on a “reasonable and just difference between the persons affected and all others.” The difference is seen in the nature of a business conducted largely on credit, which, as shown by the records of our courts, furnishes peculiar facilities for the perpetration of a characteristic fraud. As was said by Hr. Justice Brewer in a late case: “ It is

I close my review by repeating as applicable generally to the case before us the words of the Supreme Court of the United States in a decision of great importance : “ The power which the legislature has to promote the general welfare is very, great and the discretion which that department of the government has, in the employment of means to that end, is very large. While both its power and its discretion must be so exercised as not to impair the fundamental rights of life, liberty and property * * * . yet in many cases of mere administration the responsibility is purely political, no appeal lying except to the ultimate tribunal of the public judgment exercised either in the pressure of public opinion or by means of the suffrage.” (Powell v. Penn., 127 U. S, 678 , 685, citing Yick Wo v. Hopkins, 118 U. S. 370 .)

(dissenting). I concur entirely in the opinion of my brother Yann, but as the point has now been raised that the statute before us makes unlawful discrimination between sales of one kind of personal property and sales of other personal property, of sales by persons- engaged in one character of business and those in another, and, therefore, violates the provision of the Federal Constitution guaranteeing equal protection of the laws, Í desire to add a word.

Of course, absolutely arbitrary selection by the legislature in imposing a tax or in creating a crime cannot be justified, and foi’ this reason we refused to uphold the imposition óf a transfer tax in the Pell Case ( 171 N. Y. 48 ). But if there be difference in circumstance which bears some reasonable relation to the classification made by a statute then that statute must be upheld, however greatly we may doubt its wisdom. Ever since we adopted the Law Merchant there has been a difference in the title acquired by a Iona fide purchaser to different kinds of personal property. The purchaser of a watch or of a bond and mortgage must abide the title of his vendor, - though he purchases in the best of faith for a full consideration. But the purchaser of a railroad bond or a promissory note, if he acts in good faith, acquires title to the security even though he buys from a thief. The practical difference between the business of a merchant and that of a farmer is very apparent. A merchant obtains credit on the capital which lie has in his business, that is to say, the excess in value of his stock in trade over his debts. He cannot secure his creditors by a mortgage on his goods, for a chattel mortgage on a fluctuating stock is void as against a purchaser, and to uphold such a mortgage would destroy the very object for which the goods are sold to a merchant, to wit, for sale to his customers. The case of a farmer is radically different. His capital is principally represented by his land, his stock, Ms implements) which are the subject of mortgage ov

G-ray and Bartlett, J J., concur with Werner and Haight, ,TJ.; Cullen, Ch. J. (in memorandum), and O’Brien, J., concur with Vann, J.

Judgment reversed, etc.