Budget Marketing, Inc. v. Commonwealth ex rel. Stephens

587 S.W.2d 245, 1979 Ky. LEXIS 290
CourtKentucky Supreme Court
DecidedSeptember 11, 1979
StatusPublished
Cited by2 cases

This text of 587 S.W.2d 245 (Budget Marketing, Inc. v. Commonwealth ex rel. Stephens) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Budget Marketing, Inc. v. Commonwealth ex rel. Stephens, 587 S.W.2d 245, 1979 Ky. LEXIS 290 (Ky. 1979).

Opinion

LUKOWSKY, Justice.

The question presented is whether the legislature can constitutionally require nonresidents engaged in the business of soliciting orders, via interstate telephone, for magazines on a subscription basis, the delivery of which is contingent on a future event, to register in each county in the Commonwealth in which they solicit. The trial court and the Court of Appeals answered the question yes. We affirm.

Budget Marketing, Inc. is an Iowa corporation which has no certificate of authority to transact business in this Commonwealth.1 Watson is the sole proprietor of Budget Marketing of Dixie, located in Memphis, Tennessee, and a franchise of Budget. Prochnow is the sole proprietor of Budget Marketing of the South, located in Atlanta, Georgia, and a franchisee of Budget. Mov-ants are engaged in the business of soliciting magazine subscription sales through the use of interstate telephone lines. Movants use telephone operators to call into Kentucky communities over some twenty-one wide area telephone service [WATS] lines to solicit orders for magazine subscriptions. When telephone calls result in an order, subscription sales contracts and payments are transmitted back and forth by mail. Thereafter magazines are delivered by mail.

Budget has maintained strict control over its franchisees. It designates territories, manages the subscription service, accepts or rejects each subscription sale contract solicited, and receives a thirty-two per cent commission on sales. We do not find it difficult, therefore, to conclude that the franchisees represent Budget as they engage in the business of subscription sales solicitation in the Commonwealth.

Analysis of the case requires the construction of KRS 367.510-367.515.2 [247]*247Movants argue that the statutory provisions are susceptible to such distortion as to allow an arbitrary application. It is the duty of this court to “draw all inferences and implications from the act as a whole and thereby, if possible, sustain the validity of the act and expound it.” Folks v. Barren County, 313 Ky. 515, 519-20, 232 S.W.2d 1010, 1013 (1950).

By its terms KRS 367.513 only applies to “solicitors,” a word which the legislature has narrowly defined as “any person engaged in the business of soliciting orders ... in any county in this state.” The word “person” may of course include a corporation as well as an individual. KRS 446.010(26) (Supp.1978); See Kentucky State Bar Assoc. v. Tussey, Ky., 476 S.W.2d 177 (1972); KRS 367.110(1). Further, the language does not apply to the physical activity of soliciting orders for printed materials. Instead, the statute is couched in terms which apply it to those persons engaged in the business of soliciting orders, such as the movants, but not to each telephone operator of the solicitor. The statute would not apply to publishers seeking to sell their own product because they are in the business of publishing not soliciting. On the other hand, a person engaged in the business of solicitation cannot escape the reach of KRS 367.510-367.515 merely because of a collateral business venture.

The statutory definition is further narrowed to apply to such persons soliciting orders for the subject materials “on a subscription basis. . . .” KRS 367.510. The statute looks to a continuing relationship brought about by the solicitation. Individual sales of books, magazines, and the like are not included. This continuing relationship through a subscription is restricted by the language that “the delivery of which magazines ... is contingent upon a future event, such as a down payment or one or more instalment payments . . .” KRS 367.510. Therefore, even where a continuing relationship has arisen the “solicitor” appellation will not apply if the printed material is delivered before payment is required or C.O.D.

It is also evident that KRS 367.510 must be read with KRS 367.513 and 367.515. Indeed, both the registration provisions and the definition section were originally parts of the same act of the legislature. 1972 Kentucky Acts, ch. 55. Read together it is clear that the registration plan also extends only to solicitations conducted in person or by telephone. The statute is directed at face to face or tongue to ear confrontations. The statute does not apply to solicitations through the use of the mails or the advertising media. The statute, by requiring identification of solicitors, is designed to hopefully prevent, or at least insure a meaningful local remedy for, the fraud which may result from the pressure inherent in a conversation with a hard selling and well-rehearsed salesman.

[248]*248The statute provides the consumer with a means to determine at the outset whether the solicitor actually is who he claims to be by checking the registration receipt number of the solicitor with the local county clerk. The consumer has available this means of readily checking the credentials of personal solicitors because of the minimal registration requirements of KRS 367.513 and the accompanying requirements of KRS 367.515 that the solicitor identify himself before the solicitation begins by displaying the registration receipt or by reciting over the telephone its number to the target consumer.

The itinerant salesman was with us prior to the Reformation. Ever since there have been continual governmental attempts to protect citizens from the unscrupulous members of this trade.3 In Breard v. City of Alexandria, 341 U.S. 622, 71 S.Ct. 920, 95 L.Ed.

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Cite This Page — Counsel Stack

Bluebook (online)
587 S.W.2d 245, 1979 Ky. LEXIS 290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/budget-marketing-inc-v-commonwealth-ex-rel-stephens-ky-1979.