Texas Underwriters v. Martinal

140 S.W.2d 582, 1940 Tex. App. LEXIS 381
CourtCourt of Appeals of Texas
DecidedApril 18, 1940
DocketNo. 3939
StatusPublished
Cited by6 cases

This text of 140 S.W.2d 582 (Texas Underwriters v. Martinal) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Texas Underwriters v. Martinal, 140 S.W.2d 582, 1940 Tex. App. LEXIS 381 (Tex. Ct. App. 1940).

Opinion

PRICE, Chief Justice.

This is an appeal from the judgment of one of the District Courts exercising jurisdiction in Cameron County. Plaintiff, Alfred Martinal, recovered judgment against defendants R. G. Treon and the Texas Underwriters in the sum of $846.93. The defendant last named perfected an appeal from such judgment. Defendant Treon was sued for the purchase price of certain citrus fruit, and the appealing defendant was joined as a surety upon a bond executed by Treon as principal with National Indemnity Underwriters of America as surety; the Texas Underwriters had, subsequent to the giving of the bond, assumed the liability thereof. The bond was given by Treon as a licensed “maximum dealer” in citrus fruit under House Bill No. 99, c. 236, Acts of the 45th Legislature, as amended by Senate Bill No. 24, Acts of the First Called Session of the 45th Legislature; in Vernon’s Statutes, Article 118b and Article 1287 — 2.

Treon answered by general exception and general denial. A general demurrer and numerous special exceptions were filed by the defendant Texas Underwriters, and likewise an answer to the merits.

The main question involved in the appeal is the constitutionality of the Act of the Legislature in pursuance of which the bond was given. Appellant asserts that the Act violates the Constitution of the State in many particulars, and likewise violates the Constitution of the United States.

On account of the length of the Act we shall not set same out in full, but shall attempt to give the substance thereof as to the matters in question here.

It provides one shall not be a dealer in citrus fruit unless he apply to the Commissioner of Agriculture for a license as such, receive such license, and file and have approved the five thousand dollar bond required by the Act This bond, conditioned as required by law, guarantees the payment by the dealer of fruit purchased on credit. Under the terms of the law and the bond anyone dealing with such licensed dealer may maintain action on same. If the Commissioner refuse the license, the law gives the applicant a right to appeal to the courts, and if, under the authority conferred on the Commissioner, said license be revoked, the right of appeal to the courts is also given. Venue of any criminal acts and civil suits under the Act is to be in the county where the violation of the Act occurred, or where the citrus fruit was delivered. The Commissioner of Agriculture is given broad and general powers for the enforcement of the Act.

Appellant’s principal was a “maximum dealer” as defined by subsection (e) of Section 1 of the Act in question, having made application for and received a license as a dealer as provided for in the Act The bond filed and approved by the Com[584]*584missioner was in the sum of five thousand dollars, payable to the Governor, and conditioned in part, in substance, as follows: That the principal should honestly comply with the provisions of House Bill No. 99 and House Bill No. 557, c. 443, as passed by the Regular Session of the 45th Legislature of Texas, as amended by S.B.No. 24, passed by the First Called Session of the 45th, Legislature, Vernon’s Ann.Civ.St. art. 1287 — 1.

An Act of the Legislature is entitled to the presumption of constitutionality. Unless it clearly is in violation of the Constitution the court must hold same was within the power of the Legislature, and apply and enforce the law. The dominion, of the Act extends over the institutions through which the government functions, as well as over each citizen. 16 C.J.S. Constitutional Law, § 99, p. 250, par. 99, and authorities cited; 11 American Jurisprudence, p. 776, § 92, and § 128, and authorities cited.

The Act in question is regulatory in its nature, even though a license fee is exacted from the dealer. This license fee is by nature of the provisions of the Act not a tax, but strictly what it purports to be. Power of enactment must be considered from the standpoint of the police power of the State. This great and general power has never been entirely delimited and defined. Its source is the sovereignty of the State. Exercise of this power is for the Legislature. In lawful pursuance of same the Legislature may enact any measure which may be reasonably said to promote the health, safety, comfort or welfare of the inhabitants of the State, provided such power is not withheld or limited by the provisions of the Constitution. Sid Westheimer Co. v. Piner, Tex.Civ.App., 240 S.W. 985; Id., Tex.Com.App., 263 S.W. 578.

The basis of the attack made here on the Act is that it is not a valid exercise of the police power, in that it unreasonably and unwarrantably restricts the right to pursue a lawful business and interferes with the primary right of freedom of contract.

We shall first discuss the question from that broad standpoint, later disposing of the more specific questions involved in the attack not comprehended in the general discussion. Throughout it is to be borne in mind, however, only those provisions of the Act requiring the license and the bond are directly involved here. The appellant has not been refused a license, and a license held by it has not been revoked.

The San Antonio Court of Civil Appeals has held the Act in question constitutional. Attack on the law was there made on grounds almost identical with the attack here. In the case of Berry v. McDonald, Commissioner of Agriculture, Tex. Civ.App., 123 S.W.2d 388, the Act was held to be within the police power of the State. It was further held that the Act was not subject to the limitation contained in the Constitution against class and discriminatory legislation. The above holding is sustained by the great weight of authority throughout the United States. In the notes appearing in 3 A.L.R. 1271 ; 48 A.L.R. 453; 84 A.L.R. 640; 101 A.L.R. 827; and 117 A.L.R. 347, there is a collection of authorities on this point. There is also a comprehensive discussion of the power to require a bond to guarantee private contracts in connection with the licensing of a business or occupation. The collection of authorities in the above-cited notes seems to be comprehensive and complete. In the annotation, 3 A.L.R. 1271, supra, the following principle is set forth: “Since the State or a municipality may regulate any business, however lawful in itself, which may be so conducted as to become the medium of fraud and dishon•esty, a requirement of a bond to insure creditors of the business against financial . loss is a valid enactment, and is not class legislation, if the requirement is based on reasonable grounds and is not essentially arbitrary.”

Numerous authorities, both State and Federal, are cited supporting the proposition. In a supplementary note in 84 A.L. R. 640, the proposition is reiterated and additional authorities are cited and discussed sustaining same.

California has an Act relating to the purchase and handling of deciduous fruit adopted in 1929, Statutes 1929, p. 665. There is great similarity between our legislation and that of California. The California legislation seems to be more inclusive and drastic in its provisions than is our Act. In the case of People v. Perry, 212 Cal. 186, 298 P. 19, 76 A.L.R. 1331, there was before the Supreme Court of California a penal provision of the Act relating to the punishment of a “cash buyer” failing to meet his obligations. [585]*585Under an attack, in a great measure paralleling the attack here made on our law, the legislation was upheld.

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140 S.W.2d 582, 1940 Tex. App. LEXIS 381, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texas-underwriters-v-martinal-texapp-1940.