(1973) ( 1973 )

LILLIAN M. QUINN, Deputy Secretary, Department of Regulation andLicensing

You have requested my opinion as to which employes of a particular company engaged in the Church Directory photography business in Wisconsin are required to be licensed as "Transient Merchants" pursuant to sec. 440.85, Wis. Stats.

You indicate that the company has taken out Transient Merchant licenses in the name of one of its officers as an "Absentee Licensee" and in the name of its State Manager as a "Resident Manager Licensee." This State Manager has provided me with further information regarding the company's method of operation. It is he who makes the initial contact with churches to interest them in the company's program and if a church desires a directory, he trains volunteer workers who then schedule appointments for church members to appear for photography. He also does the layout for the directory and provides general supervision of the entire operation, including the handling of problems with production or unsatisfied customers. After the schedule for photography is set, a company photographer visits the church and photographs the church members. The photographer does not attempt to sell anything or to collect any money. Some time after the photographs are taken, other company employes visit the church to show the church members their pictures which are generally not yet color-corrected. Church members are asked to select a picture of their family to appear in the directory and every family whose picture does appear receives a free directory. These previewer employes also show a price list for family portraits to the church members and solicit orders for the same. It is through these family portrait purchases that the company receives its revenue. If the member wishes to purchase portraits, he may pay the employe in full at that time or can pay the employe a deposit and send the balance to the company in seven days or pay the balance COD.

"Transient Merchant" is defined as follows in sec. 440.85 (1), Stats.:

"(1) A transient merchant is one who engages in the sale of merchandise at any place in this state temporarily, and who does not intend to become and does not become a permanent merchant of such place. No person shall engage in the business of transient merchant without a license authorizing him to do so. For purposes of this section, sale of merchandise includes a sale in which the personal services rendered upon or in connection with such merchandise constitutes the greatest part of value for the price received, but does not include a farm auction sale conducted by or for a resident farmer of her personal properly used on the farm or the sale of produce or other perishable products at retail or wholesale by a resident of this state."

Section 440.86, Stats., states as follows:

"But one person shall carry on business under the terms of any license provided for in this subchapter and no person shall conduct business under the same license as copartners, agents or otherwise. . . ."

The question for consideration is whether the company employes who work as photographers and previewers are required to be licensed as "Transient Merchants," under sec. 440.85, Stats. In an opinion issued to the Commissioner of the Motor Vehicle Department in 1952, this office discussed whether employes of a Transient Merchant Licensee were required to be licensed under secs. 129.05 and 129.06 of the statutes. 41 OAG 4. The language of these two provisions, upon which the present secs. 440.85 and440.86 are based, was virtually identical to that of the present provisions. In discussing this question, the opinion stated:

"Sec. 129.06 . . . suggests that under some circumstances an employe of a transient merchant licensee might be required to obtain a license himself. Certainly the phrase ``as copartners, agents or otherwise' is broad enough to include an employe. I am of the opinion that the controlling factor here is whether or not the employe ``carries on' or ``conducts' the business. If the employe is in fact the resident manager for an absentee licensee, he is then conducting the business and is required to be licensed. If, however, he is a sales clerk working under the supervision and at least part time in the presence of the licensee, he is not carrying on or conducting the business. Thus it would be possible for a transient merchant to have a number of stands or outlets on one ground or in one municipality and operate them through employes under his direct supervision without being required to secure a transient merchant's license for each of his employes." 41 OAG 4, 6.

It is an elementary rule of statutory construction that statutes must be construed with reference to the objects sought to be accomplished. Undoubtedly, one of the primary objects behind the transient merchant licensing requirement was to prevent fraud and false representation in the sale of merchandise by individuals who are not as directly amenable to those legal and social restraints which must necessarily influence the business conduct of a merchant having a fixed place of business and depending for his patronage on a single community. This object is evidenced by sec. 440.88, Stats., which allows for revocation of a license upon conviction of the licensee for fraud or false representation or imposition in the sale of merchandise.

From the description of the company's operations provided me, it appears that the sole function of the photographer employes is to take photographs. They neither solicit orders nor collect money. Nor would licensing these photographers as "Transient Merchants" further the licensing requirement's object of providing protection against fraud and false representation. It is therefore my opinion that the company's photographer employes are not engaged in the sale of merchandise so as to require licensing as "Transient Merchants" under sec. 440.85, Stats.

The previewer employes, on the other hand, apparently both solicit orders and collect money from church members. Their sales activity is not always directly supervised by the Resident Manager or other licensee present at the location of that sales activity. Licensing such employes would provide protection against fraud and false representation consistent with the object of the licensing requirements. It is therefore my opinion that these previewer employes are "carrying on" or "conducting" the business of a "Transient Merchant" so as to require licensing under sec. 440.85, Stats.

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