Pennsylvania Act 1963-217 — LICENSING AND REGULATING "FIRE SALES"

Act text

LICENSING AND REGULATING "FIRE SALES"
                 Act of Jul. 31, 1963, P.L. 410, No. 217              Cl. 53
                                  AN ACT

     Regulating and licensing all sales at retail when such sales are
        advertised as "Closing Out Sale," "Fire, Smoke or Water
        Damage Sale," or "Defunct Business Sale," with exceptions;
        requiring filing of inventory and bond; and providing for
        appeals and penalties.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Factual Background.--That sales to be licensed
     and regulated pursuant to the provisions of this act have often
     been conducted and advertised in such a manner as to mislead and
     defraud the public and otherwise to result in harm to the public
     interest.
        That such fraud and imposition on the public has included, by
     way of partial enumeration only: the misrepresentation of the
     condition or necessity which is the occasion of such sale; the
     misrepresentation of the identity of the person conducting such
     sale, and/or the name and style in which such sale is to be
     conducted; the misrepresentation that the goods offered at such
     sale are selling at sacrifice prices; the misrepresentation that
     the operator of the sale is selling merchandise on hand at the
     time when the necessity, which is the occasion of such sale,
     arose, when in fact he is replenishing his stock with additional
     merchandise both prior to the commencement and during the
     conduct of such sale so as to keep foisting upon the public such
     added merchandise as though it were part of the original stock;
     and the excessive valuation and misrepresentation of the
     quality, former price and ownership of the goods to be sold at
     such sale;
        In order to prevent such fraud and imposition, the public
     interest requires the regulation of such sales and the duration
     and conduct thereof;
        That the public interest therefor requires that no such sale
     should be conducted without a license or otherwise than in
     accordance with this act.
        Section 2.  Unlawful Advertisement.--It shall be unlawful for
     any person in municipalities or townships of this Commonwealth
     to advertise or hold out by any means that the sale of any
     goods, wares or merchandise is a "closing-out sale," "a sale of
     goods damaged by fire, smoke or water," or a "defunct business
     sale," unless a license is first obtained to conduct such a sale
     from the treasurer of the city, or the secretary of the borough,
     or the secretary of the board of commissioners or board of
     supervisors of the township in which such sale is to be held.
        Section 3.  Definitions.--For the purpose of this act, the
     following terms, phrases, words and their derivations shall have
     the meaning given herein. When not inconsistent with the
     context, words used in the present tense include the future,
     words in the plural number include the singular number, and
     words in the singular number include the plural number. The word
     "shall" is always mandatory and not merely directory;
        (1)  The term "closing-out sale" shall include, but not be
     limited to, all sales advertised, represented, or held forth
     under the designation of "quitting business," "going out of
     business," "discontinuance of business," "selling out,"
     "liquidation," "lost our lease," "must vacate," "forced out,"
     "removal," "branch store-discontinuance sale," "building coming
     down," "end," "final days," "last days," "lease expires," "we
     give up sale," "we quit sale," "warehouse closing sale,"
     "warehouse removal sale," "reorganization sale," and any other
     advertising or designation by any other expression or
     characterization similar to any of the foregoing, and giving
     notice to the public that the sale will precede the abandonment
     of a business location.
        (2)  The term "sale of goods damaged by fire, smoke or water"
     shall include, but not be limited to, all sales advertised,
     represented or held forth under the designation of "fire sale,"
     "smoke damage sale," "water damage sale," "flood damage sale,"
     "insurance sale," and any other advertising or designation by
     any other expression or characterization similar to any of the
     foregoing, and giving notice to the public that the goods, wares
     or merchandise offered for sale have been damaged.
        (3)  The term "defunct business sale" shall include, but not
     be limited to, all sales advertised, represented or held forth
     under the designation of "adjuster's sale," "administrator's
     sale," "assignee's sale," "bankrupt sale," "bankrupt stock
     sale," "benefit of administrator's sale," "benefit of creditor's
     sale,' "benefit of trustee's sale," "creditor's committee sale,"
     "creditor's sale," "executor's sale," "insolvent sale,"
     "mortgage sale," "receiver's sale," "trustee's sale," and any
     other advertising or designation by any other expression or
     characterization similar to any of the foregoing, and conveying
     the same meaning or giving notice to the public of a sale
     resulting from death, business failure, or other adversity.
        (4)  "Unusual purchase or addition" shall mean any purchase
     of goods, wares or merchandise during the ninety days preceding
     the application for a license, the total value of which is at
     least twenty-five percent greater than purchases made by the
     applicant for a like ninety-day period during any one of three
     years next immediately preceding the year in which the
     application is made or his peak purchases for any ninety-day
     period if he has been in business for less than three years.
        (5)  "Person" shall mean any individual, partnership,
     association, firm or corporation.
        Section 4.  Application Requirements.--(a) Any person
     desiring to conduct a sale regulated by this act shall make a
     written application under oath to the treasurer of the city, or
     to the secretary of the borough, or the secretary of the board
     of commissioners of the township or board of supervisors in
     which the sale is to be held.
        (b)  If the application is for a "closing out sale" or a
     "defunct business sale," it shall be filed as least fifteen days
     prior to the date on which such sale is to commence.
        (c)  If the application is for a "sale of goods damaged by
     fire, smoke or water," it may be made at any time prior to the
     date on which such sale is to commence.
        (d)  All applications for a licensed sale regulated by this
     act shall set forth and contain the following information:
        (1)  The name and address of the applicant who must be the
     true owner of the goods, wares or merchandise to be sold, and if
     the applicant be a partnership, the names and addresses of all
     partners, or if the applicant be a corporation or association,
     the date and place of incorporation or organization, the address
     of the principal office within the Commonwealth and the names
     and addresses of all the officers of the applicant.
        (2)  The name and address of the person or persons who will
     be in charge and responsible for the conduct of such sale.
        (3)  The exact address of the place at which the proposed
     sale is to be conducted and the length of time the applicant has
     been engaged in business at such location.
        (4)  The date on which it is proposed to begin the sale.
        (5)  The nature of the occupancy where such sale is to be
     held, whether by lease or otherwise, and the effective date of
     termination of such occupancy.
        (6)  The reason for the urgent and expeditious disposal of
     the goods, wares or merchandise to be offered at such sale.
        (7)  A statement of the descriptive name of the sale and the
     reasons why the name is truthfully descriptive of the sale.
        (8)  A statement that the business is to be terminated
     permanently or reopened at another location; the location of the
     premises at which the business is to be moved if the applicant
     intends to resume the operation of the business upon the
     termination of the sale; and the name or designation under which
     such business is to be resumed.
        (9)  A full, complete, detailed, and itemized inventory of
     the goods, wares, and merchandise to be offered at such sale as
     disclosed by applicant's records, which inventory shall:
        (i)  Itemize the goods to be offered for sale and contain
     sufficient information concerning each item, including quantity,
     make, brand name, model and manufacturer's number, if any, to
     clearly identify it;
        (ii)  List separately any goods to be offered for sale which
     were purchased and received during a ninety-day period
     immediately prior to the date of making application for the
     license;
        (iii)  The total retail value of the inventory of goods,
     wares, and merchandise to be offered at such sale based on the
     inventory used for applicant's most recent Federal income tax
     return adjusted for sales and purchases;
        (iv)  If the application is for a license to conduct a "sale
     of goods damaged by fire, smoke, or water" and the applicant was
     not the owner at the time when the goods, wares, and merchandise
     to be offered at the contemplated sale were damaged, he shall
     attach to the said application certified copies of the bill of
     sale and all other documents connected with such transfer
     obtained by him from the previous owner of such goods, wares,
     and merchandise;
        (v)  If the application is for a license to conduct a
     "defunct business sale," and the applicant was not the owner of
     the goods, wares and merchandise to be offered at the
     contemplated sale at the time of occurrence of the circumstances
     warranting the termination of such business, he shall attach to
     the application certified copies of the bill of sale and the
     official appraisal made by the trustee, receiver, assignee for
     benefit of creditor, referee in bankruptcy, or the personal
     representative of a decedent.
        (10)  A statement that no goods will be added to the
     inventory after the application is made.
        (11)  A statement that all goods included in such inventory
     have been purchased by the applicant for resale on bona fide
     orders without cancellation privileges and that said inventory
     comprises no goods purchased on consignment.
        (12)  A statement that no merchandise listed in the inventory
     has been the subject of a licensed sale conducted within one
     year prior to the date of the application, unless such
     merchandise was damaged by fire, smoke, or water while in the
     possession of the applicant.
        Section 5.  Exemptions.--(a) The provisions of this act shall
     not apply to nor affect the following persons:
        (1)  Persons acting pursuant to an order or process of a
     court of competent jurisdiction;
        (2)  Persons who are required to file an accounting with a
     court of competent jurisdiction;
        (3)  Persons acting in accordance with their powers and
     duties as public officers such as sheriffs, constables and
     marshals;
        (4)  Any publisher or employe of a newspaper, magazine, or
     any operator or employe of a radio or television broadcasting
     station, who publishes or broadcasts any such advertisement in
     good faith without knowledge of its false, deceptive and
     misleading character, or without knowledge that the provisions
     of this act are not being complied with.
        (b)  Nor shall the provisions of this act apply to any sale
     advertised as an "alteration sale," "remodeling sale,"
     "clearance sale," "surplus stock liquidation sale," or "special
     purchase sale."
        Section 6.  Bond Required.--No license shall be issued unless
     there is filed with the treasurer of the city, or the secretary
     of the borough, or the secretary of the board of commissioners
     of the township where such is to be held, a bond payable to the
     Commonwealth of Pennsylvania conditioned upon the faithful
     observance of all the provisions of this act, and the
     indemnifying of any purchaser at such sale who suffers any loss
     by reason of misrepresentation made in connection with such
     sale, and for the payment to any municipality or the
     Commonwealth of all taxes due and owing or which may become due,
     and authorizing actions thereunder by the city, borough, or
     township and by any purchaser at such sale for damage or loss
     suffered by him by reason of any misrepresentation made in
     connection with such sale: Provided, however, That the aggregate
     liability of the surety for all breaches of the conditions of
     the bond shall in no event exceed the amount of said bond. The
     amount of said bond shall be determined as follows: five percent
     of the first one hundred thousand dollars ($100,000) of the
     retail value of all the goods, wares and merchandise to be
     offered at such sale; two percent of the next four hundred
     thousand dollars ($400,000); and one percent of the balance.
     Said bond shall be approved as to form and sufficiency by the
     city, borough, or township solicitor and by the city treasurer,
     borough council, or township board of commissioners or board of
     supervisors.
        Section 7.  Branch Stores and Warehouses.--If the applicant
     for a license hereunder owns, conducts or operates more than one
     store or a warehouse in connection with such store or stores,
     the license issued will apply only to the one store or warehouse
     for which it was issued, and no other store, branch or warehouse
     may advertise or represent in any way that it is cooperating
     with or participating in any way in the licensed sale, nor shall
     the licensed store or any person advertise or represent that any
     other store or warehouse is cooperating with or participating in
     the licensed sale. The licensed sale conducted by any store of a
     chain or group of stores shall be conducted solely at the
     location of the store for which the license was obtained and no
     goods, wares or merchandise shall be brought from any other
     store and placed on sale at the store licensed to conduct a sale
     hereunder.
        Section 8.  Substitution, Addition and Commingling of Goods;
     License Void; Certain Purchases Prohibited.--(a) Any
     substitution for or addition to goods described in an inventory
     filed pursuant to this act, or any change in the time or place
     for a sale conducted pursuant to this act, shall be unlawful and
     shall void any license issued to conduct a sale pursuant to this
     act, and such license shall be revoked.
        (b)  In the case of a sale licensed under this act conducted
     by the applicant in addition to conducting a business of selling
     other goods, wares or merchandise not included in the inventory
     accompanying the application, the goods to be sold at such sale
     shall be clearly and distinctly segregated, marked or
     identified, and advertised if at all, so that both on display
     and in advertising such goods may be readily distinguished from
     other stocks, and their identity readily ascertained. Any
     commingling of such goods with other stocks of the licensee in
     such a manner as to cause the goods to lose their separate
     identity, either on display or in advertising, shall be unlawful
     and shall void any license issued to conduct such a sale
     pursuant to this act, and such license shall be revoked.
        Section 9.  Investigation of Application; Grounds for Denial;
     Revocation of License.--(a) Upon receipt of the application, the
     treasurer of the city, or the secretary of the borough, or the
     secretary of the board of commissioners or board of supervisors
     of the township in which such sale is to be held may, in his
     discretion, make or cause to be made an examination, or order an
     investigation of the applicant, and all the facts contained in
     the application and inventory in relation to the proposed sale.
     A license shall be denied or refused if any one or more of the
     following facts or circumstances are found by him to exist:
        (1)  That the applicant has not been the owner of the
     business advertised or described in the application for a
     license hereunder for a period of at least three months prior to
     the date of the application, or if the applicant be a
     partnership, corporation or association, controlling interest in
     the corporation or association was transferred within six months
     prior to the date of the application for a license hereunder,
     except--
        (i)  Where the application is for a license for a "sale of
     goods damaged by fire, smoke, or water," or a "defunct business
     sale," and the inventory listed in the application contains only
     those goods, wares or merchandise which were on the premises at
     the time of the occurrence of the circumstances warranting the
     granting of a license hereunder;
        (ii)  Upon the death of a person doing business in this
     Commonwealth, his or her heirs, distributees, devisees,
     legatees, or their successors and assignees, shall have the
     right to apply at anytime for a license hereunder;
        (iii)  Where a business is required or compelled to be
     discontinued because the premises whereupon it is being
     conducted has been condemned, taken for purposes of urban
     renewal or development or because the premises must be vacated
     because of legal or judicial proceedings.
        (2)  That in the case of a "closing out sale," the applicant,
     either as owner, partner, member of an association, or principal
     stockholder of a corporation, was granted a prior license
     hereunder within one year preceding the date of the filing of
     the application.
        (3)  That the inventory contains goods, wares or merchandise
     not purchased by the applicant for resale on bona fide orders
     without cancellation privileges.
        (4)  That the inventory contains goods, wares or merchandise
     purchased by the applicant on consignment, except if the
     consigned goods, wares or merchandise have been damaged while in
     the consignee's possession.
        (5)  That the applicant, except in the case of an application
     for a license to conduct a "sale of goods damaged by fire,
     smoke, or water," or a "defunct business sale," either as owner,
     partner, officer of an association, or principal stockholder of
     a corporation, was granted a prior license hereunder within one
     year preceding the date of the filing of the application at the
     particular location for which the license is sought, or within
     one year prior to the date of filing of the application, has
     conducted a sale in connection with which he advertised or
     represented that the entire business conducted at the particular
     location for which the license is sought was to be closed out or
     terminated.
        (6)  That the applicant has within one year prior to the
     filing of the application been convicted of a violation of this
     act.
        (7)  That the goods, wares or merchandise as described in the
     inventory, where transferred or assigned to the applicant prior
     to the date of the filing of the application and that said
     transfer or assignment was not made for a valuable and adequate
     consideration.
        (8)  That the inventory contains goods, wares or merchandise
     purchased by the applicant or added to his stock in
     contemplation of such sale and for the purpose of selling the
     same at such sale. For this purpose any unusual purchase or
     addition to the stock of such goods, wares and merchandise made
     within ninety days prior to the date of the filing of such
     application shall be presumptive evidence that such purchase or
     additions were made in contemplation of such sale and for the
     purpose of selling the same at such sale.
        (9)  That any representation made in the application is
     false.
        (b)  Revocation. Upon written and signed complaint being
     filed with the treasurer of the city, or the secretary of the
     borough, or the secretary of the board of commissioners or board
     of supervisors of the township where such sale is to be held, by
     a resident of the municipality or township, or a resident of any
     adjoining municipality or township, or upon the initiative of
     such treasurer or secretary after making an investigation, the
     treasurer or secretary shall revoke any license granted under
     the provisions of this act if he shall determine:
        (1)  That any sale by the applicant is conducted in violation
     of any provision of this act.
        (2)  That the applicant has made any material misstatement in
     his application for said license.
        (3)  That the applicant has failed to include in the
     inventory, required by the provisions of this act, the goods,
     wares or merchandise required to be contained in such inventory.
        (4)  That the applicant has added or permitted to be added to
     said sale or offered or permitted to be offered at said sale,
     any goods, wares or merchandise not described in the original
     application and inventory.
        (5)  That the applicant made or permitted to be made any
     false, misleading or deceptive statements in advertising said
     sale, whether written or oral, or in displaying, ticketing, or
     pricing goods, wares or merchandise offered for sale.
        Section 10.  Appeal from Denial or Revocation of License.--
     Any applicant for a license, who is aggrieved by the denial,
     refusal or revocation of a license, may appeal within five days
     from the date of denial, refusal or revocation of the court of
     common pleas of the county in which the license is sought. The
     appeal shall be upon petition of the applicant for an injunction
     prohibiting the denial, refusal or revocation of a license. A
     copy of such appeal shall be served upon the treasurer of any
     city, or the secretary of any borough, or the secretary of the
     board of commissioners of the township who has refused, denied
     or revoked the license. The court shall hear the application for
     an injunction expeditiously at a time as it shall fix of which
     notice shall be given to the treasurer of the city, or the
     secretary of the borough or the secretary of the board of
     commissioners of the township from whose refusal, denial or
     revocation of a license the appeal has been taken. The court
     shall either sustain the denial, revocation or refusal of the
     license or order the issuance of the license to the applicant.
        Section 11.  Copy of Application, Inventory and License to be
     Posted; License to be Referred to in Advertisements.--A copy of
     the application for a license to conduct a sale under this act,
     including the inventory filed therewith, shall be posted in a
     conspicuous place in the sales room or place where the
     inventoried goods are to be sold, so that the public may be
     informed of the facts relating to the goods before purchasing
     same. Any advertisement or announcement published in connection
     with the sale shall conspicuously show on its face the number of
     the license, the date of its expiration, and if applicable, the
     location where the business is to be resumed.
        Section 12.  Duration of Sale; License Fee.--A license to
     conduct a sale issued pursuant to this act shall be good for no
     more than a period of thirty consecutive calendar days and may
     be renewed for one consecutive period not exceeding thirty
     consecutive calendar days upon the affidavit of the applicant
     that the goods listed in the inventory have not been disposed of
     and that no new goods have been or will be added to the
     inventory previously filed pursuant to this act by purchase,
     acquisition, on consignment or otherwise. The application for
     renewal shall be made not more than ten days prior to the time
     of the expiration of the license and shall contain a new
     inventory of the goods remaining on hand at the time the
     application for renewal is made, which new inventory shall be
     prepared and furnished in the same manner and form as the
     original inventory. The treasurer of the city, or the secretary
     of the borough, or the secretary of the board of commissioners
     or board of supervisors of the township where such sale is to be
     conducted shall receive from the applicant for such license,
     upon the granting thereof, a fee of fifty dollars ($50), and
     upon the renewal thereof, a fee of one hundred dollars ($100).
     The applicant shall not be entitled to a refund of the fee paid
     if said application is refused, denied or revoked.
        Section 13.  Opening of a Similar Business.--Opening of a
     business similar to the one for which the sale, licensed
     pursuant to this act, was conducted, except the licensed "sale
     of goods damaged by fire, smoke or water," by the person,
     partnership, association, corporation, or partner of a
     partnership, officer of an association or principal stockholder
     of a corporation, who or which conducted the sale upon the same
     premises within one year of the termination of the sale, shall
     constitute a violation of this act. Every day in which business
     is conducted within the prohibited period of one year shall
     constitute a separate violation of this act.
        Section 14.  Records.--(a) Suitable books and records
     concerning said sale shall be kept by the licensee for the
     duration of the licensed sale and one year thereafter, and shall
     be open for inspection by the treasurer or the secretary of
     their duly authorized representative.
        (b)  Upon the termination of a sale licensed hereunder, the
     applicant shall, within thirty days of such termination, file a
     statement with the treasurer of the city, or the secretary of
     the borough, or the secretary of the board of commissioners or
     board of supervisors of the township in which the sale was held
     stating:
        (1)  The total retail value of the goods, wares or
     merchandise not disposed of during the sale; and
        (2)  The ultimate disposition thereof, and if transferred to
     another, the name and address of the transferee.
        Section 15.  Common Pleas Court Jurisdiction.--Upon complaint
     of any person, the common pleas court of the county wherein a
     violation of this act occurred shall have jurisdiction in equity
     to restrain and enjoin any act forbidden or declared illegal by
     any provision of this act.
        Section 16.  Penalties.--Any person, violating any provision
     of this act shall, upon conviction thereof in a summary
     proceeding, be sentenced to pay a fine of not more than one
     hundred dollars ($100) or to imprisonment for a term of not
     exceeding thirty days. Each day any sale is conducted in
     violation of this section shall be a separate violation of this
     act. The right to appeal from such conviction shall exist as in
     other cases of summary proceedings.
        Section 17.  Severability.--The provisions of this act are
     severable and, if any provision or part hereof shall be held
     invalid or unconstitutional or inapplicable to any person or
     circumstances, such invalidity, unconstitutionality, or
     inapplicability shall not affect or impair the remaining
     provisions of this act. It is hereby declared to be the
     legislative intent that this act would have been adopted if such
     invalid, unconstitutional or inapplicable provision had not been
     included therein.
        Section 18.  Repeals.--The act of July 2, 1937 (P.L.2821),
     entitled, as amended, "An act to regulate the sale and
     advertising for sale of goods, wares and merchandise purporting
     to be an insurance, bankruptcy, mortgage, insolvent, assignees,
     receivers, trustees, removal or closing-out sale, or sale of
     goods damaged by fire, smoke or water, in municipalities and
     townships, and to prevent fraudulent practices in connection
     therewith, and providing penalties for violation thereof, and
     for the imposition of license fees for permission to conduct the
     same," and all other acts and parts of acts inconsistent
     herewith are hereby repealed.
        Section 19.  Effective Date.--This act shall take effect in
     sixty days.