Case ID: ohio-st_106/html/0469-01.html
Source: Caselaw Access Project
Author: {"author": "Jones, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Columbus Packing Co. v. The State, ex rel. Schlesinger, Pros. Atty., et al.
    
      Gold storage lato — Section 1155-1, General Code (101 O. L., 594) —Storing foods not violation per se, when — Valentine antitrust law — Distinguished, and not in pari materia — Facts necessary to prove violation — Power to seise and sell property stored.
    
    1. The mere storage of pork loins by a storage company for a period of more than six months, under the provisions of the cold-storage act, Sections 1155-1 to 1155-19, General Code (107 O. L., 594), is not per se a violation of Section 13 of that act.
    2. The cold-storage act and the Valentine anti-trust law, Section 6390 et seq., General Code, are distinct in purpose, employ different remedies and provide different penalties for offenses committed. They should not be so construed in pari materia as to employ the remedies of one for the prosecution of the other. The storage of food products by a cold-storage company for a period of six months does not ipso facto violate the Valentine act, without other proof of some combination or acts or unlawful agreement entered into by two or more. (Columbus Packing Co. v. State, ex rel. Schlesinger, Pros. Atty., 100 Ohio St., 285, overruled.)
    
      3. Under the facts presented, where the action and controversy-involved .the res, or right of property, it was error for the court, on application of the plaintiff and before trial on the merits, to order the seizure and sale of such property by provisional orders, where such seizure and sale would render ineffectual a judgment thereafter obtained after trial.
    (No. 17445
    Decided December 29, 1922.)
    Error to the Court of Appeals of Franklin county.
    The present case is a sequel to the case of Columbus Packing Co. v. State, ex rel. Schlesinger, Pros. Atty., reported in 100 Ohio St., 285. In that case the question arose upon the rights of property, and the violation of law in respect thereto, adjudicated by the lower courts before the parties went to final trial upon the issues joined upon the merits of the action. Many of the facts relating to that disposition are found in the reported opinion. However, the following facts appear in the record, all of which were not disclosed in the opinion in the former case. The original action was brought by the state of Ohio through the prosecuting attorney of Franklin county, asking for an injunction, the appointment of a receiver and other relief. The petition was filed in the court of common pleas on August 6,1919. Summons was issued, returnable August 18, 1919, answer day being September 6 following.
    On the day the petition was filed, application was made for an injunction and the appointment of a receiver, all without notice to the two parties defendant; also, without notice, a receiver was appointed the same day, and on further application to the court counsel was appointed for the receiver. On the next day, August 7, the receiver filed his ápplication to sell the pork loins in controversy. On the following day, August 8, the Columbus Packing Company and the Fairmount Creamery Company, having answered, moved the court to dissolve the injunction and discharge the receiver. The application of the receiver to sell and the motions to dissolve were heard by the trial court at the same time, and on August 9 that court overruled the motion to dissolve and sustained the application of the receiver to sell the property without delay “at such place or places, and in a manner and at a price conducive to the benefit of the general public.”
    The only evidence offered by the plaintiff in sup.port of the application to sell the property was the petition, verified, and on file. The defendants in support of their motion to dissolve offered in evidence their answers then on file, together with the affidavits of five persons. One, Führer, managing agent of the Creamery Company, made affidavit that his company never did business with the Packing Company prior to this time, but had solicited this storage in the usual course of business and held the same subject to the orders of the owners, and that it, the Creamery Company, had been at all times ready to release such property from storage upon payment of charges; that it had no other agreement with the Packing Company than one to provide the desired temperature for the goods stored, which might be removed by the owner upon request at any time. The affidavits specifically denied the allegation in the petition to the effect that “said companies entered into an illegal or corrupt agreement as more fully stated in the petition.”
    
      Lamb, secretary of the Packing Company, tendered an affidavit in connection with the answer of that company, wherein he stated that on January 22, 1919, he had tendered to the United States Pood Administration all the frozen pork loins in cold storage at that time, which included the pork loins in the hands of the receiver, but that the United States Pood Administration did not accept the tender and refused to order any portion thereof. Three other affidavits were offered by the defendants to the effect that on the 8th or 9th day of July, 1919, the several affiants had entered into a contract with the Packing Company for various amounts of frozen pork loins, and that in said contract the pork loins were to be delivered in quantities as needed by the purchasers. The answers of both defendants de-, nied that either had ever entered into any agreement for the purpose's and objects set forth in the petition, especially denying that they had entered into any agreement that created any restrictions in trade or commerce.
    In this situation of direct conflict appearing in the pleadings and affidavits offered, on August 9, 1919, the trial court ordered all the property in controversy to be sold as aforesaid, and within a week, on August 14, 1919, the court of appeals had disposed of the case by final judgment, which was reviewed and affirmed by us in Packing Co. v. State, supra. The case not having been tried upon the merits assumed the second phase which is now' being considered by this court. In the meantime the receiver had sold the product, he and counsel-had been awarded fees to the amount of $6,500, and the receiver had been discharged.
    
      On October 16, 1920, the Creamery Company filed its amended answer, containing two defenses. In its first defense, as in the former answer, it admitted the delivery at its cold storage warehouse of the pork loins, which were received and stored for hire, and that they were in the possession of the Creamery Company in the warehouse at the time of the filing of the petition, and that unless restrained it would have delivered the product to the Columbus Packing Company upon its order and upon the payment of storage charges. Every other allegation in the petition was denied. As a second defense, it is specifically alleged that it was operating a cold-, storage warehouse in pursuance of an act of congress, approved April [August] 10, 1917 (40 Stat. at L., 276; Section 10186, Barnes’ Eed. Code); that it was licensed as a cold-storage warehouseman by the United States government, under an act known as the United States Pood Administration Act; and that at all the times in controversy the cold-storage business of the defendant “was conducted under and pursuant to the rules, directions and orders ’ ’ of such, department of food administration, which regulates and permits the storage in its cold-storage warehouse for a period of twelve months of the product described in the petition.
    Plaintiff in its reply to the amended answer of the Creamery Company denied every allegation contained in the second defense. The pleadings before the trial court at the time of its final judgment, on August 30, 1921, consisted of the petition of the plaintiff, the answer of the Packing Company, the amended answer of the Creamery Company, and the reply of the plaintiff, which was- a general denial. Thereupon, on August 30, 1921, the plaintiff, relator, moved for judgment in its favor on the pleadings. The trial court sustained the motion and rendered judgment on the pleadings in favor of the relator, which judgment was affirmed by the court of appeals. Whereupon plaintiff in error instituted proceedings in this court to reverse the judgments below.
    
      Messrs. Bennett, Westfall & Bennett, for plaintiff in error.
    
      Mr. John R. King, prosecuting attorney; Mr. Wilbur E. Benoy, assistant prosecuting attorney; Mr. Oscar W. Newman; Mr. T. S. Hogan and Messrs. Wilson é Rector, for defendants in error.
   Jones, J.

We are confronted, at the outset, with the decision of this court upon important features of this controversy, reported in Columbus Packing Co. v. State, ex rel. Schlesinger, 100 Ohio St., 285. The judgment in that case was based upon the conclusion that Section 1155-1 et séq., General Code (107 O. L., 594), commonly called the Cold Storage Act, should be read in pari materia with what is known as the Valentine Anti-trust Law, Section 6390 et seq., General Code (93 O. L., 143), and that the state might avail itself of equitable remedies therein implied in order to uphold the former judgment of the trial court in seizing upon and selling the pork loins in controversy before a final hearing upon the merits.

The Storage Act and the Valentine Act are not in pari materia. They were not enacted at the same time and each had a separate and distinct purpose in view, as shown by their several titles when enacted. The storage act was a health statute, pure and simple, as an examination of that act in its entirety discloses. This is evidenced by the different periods of time various food products were allowed to remain in storage before sale. The purpose of the Valentine Law is to prevent hoarding, and restraint of trade, evincing that purpose in its title, and to provide for the punishment of persons restraining “free competition in commerce and all classes of business in the state.” The remedies employed by the ‘Valentine Act did not contemplate their use for the violation of the Storage Act. The Valentine Act, specifically, in Section 6400, General Code, confines the operation of its civil remedy to violations of ‘ any provision of this chapter. ’ ’ Furthermore, Section 6400, General Code, provides for drastic action against corporations that violate the act, all of which tends to show that the specific remedies provided in the Valentine Act are to control solely the violations of that act. However, were this not so, the judgments of the lower courts should be reversed for the obvious reason that the defendants in the trial court did not have their rights determined by due course of law. Orderly procedure lies at the foundation of our state jurisprudence. Developments at the former hearing disclose that the defendant Packing Company’s property was seized by the court through the instrumentality of a receiver on the same day the petition was filed, and without notice to its owner. The record discloses that counsel was appointed on the same day, and without notice, the appointment entailing the sum of $6500 in counsel fees. Three days after the filing of the petition a hearing was had upon the affidavits and pleadings filed, and an order made by the trial court to sell the property in controversy, before the issues were finally determined by the court. While the action was nominally one in personami it was actually a proceeding in rem ag’ainst the- property seized and finally disposed of. The effect of the judgment below was to determine the rights of property in a preliminary hearing, leaving the contested issues made by the pleadings to be later determined. The query naturally arises, what boots it should the defendants win on the issues finally joined if in the meantime the res in controversy before the court has been seized by judicial process and ordered to be sold, during which process costs and fees would inevitably attach? We are of the opinion that such a judgment is a deprivation of property without the due process guaranteed by Section 16, Article I, of our Constitution, and conserved by our laws of procedure. Our code provides a time when answers and replies shall be filed, and the issues joined. In the ordinary course of procedure, either party has a right to amend his pleading. The litigants were entitled to a trial, which Section 11376, General Code, defines as a “judicial examination of the issues, whether of law or of fact.” Section 11378, General Code, requires the issues to be made by the pleadings. The original or preliminary judgment did not purport to rest upon the" merits, but was a disposition of the property before that stage was reached. That judgment was a provisional judgment, of which Williams, J., in Trustees v. McClannahan, 53 Ohio St., 403, 409, says: “The proper office of the provisional injunction is to prevent threatened irreparable injury, which should be averted, until opportunity is afforded for a full and deliberate investigation of the case at the trial, and, to preserve until that time, as far as possible, the condition of things existing when the injunction is obtained, to the end that the rights of the parties as established by the final judgment rendered on the trial, may be secured to them by the enforcement of the judgment. * * * The hearing upon the motion is not the mode provided by law for the trial of the issues joined in the action, and neither party can be deprived of the lawful mode of trial by the decision on the motion, whatever it may be. * * * A hearing upon a. motion was not designed to take the place of a trial. It may be had upon affidavits taken without opportunity for cross-examination, and is not in any proper sense a trial. Therefore, upon the overruling of a motion to vacate a provisional injunction, the court is not authorized, without a trial of the issues, to enter final judgment for the plaintiff; nor can the petition be properly dismissed, without such trial, upon the dissolution of the injunction.”

No opportunity was given to the defendants to rest their case upon the issues which should finally determine the case. This is evident from the fact that long after the case was determined in the preliminary proceeding, on August 9, 1919, one of the defendants, the Creamery Company, filed its amended answer, containing a new and distinct defense, which the trial court did not have before it for consideration, and the validity of which was not determined by it. This defense alleged that the Creamery Company was at all the times mentioned in the petition, and when its storage products were seized by the receiver, acting in pursuance of the rules and regulations of the United States Food Administration, which permitted it to hold the pork product in storage for a period of twelve months. In our opinion the litigants should obtain the judgment of the lower courts upon the legal phase of the controversy.

In the reported case, supra, this court seems to have attached considerable importance to the fact that the pork loins had been in storage for a period exceeding six months. It is true that the answer of the Packing Company admitted, in effect, that this was so, but alleged that the product had been sold prior to that time to purchasers to be delivered in quantities as needed. However, there is no proof of the violation of the Storage Act by the Creamery Company. Section 1155-13, General Code, relates only to those who “shall sell, or offer, or expose for sale,” the pork loins held in cold storage for a period of more than six months. There is no proof that the Creamery Company offended against the act, even though it be conceded that the Packing Company did so by delivering after the six months had expired. Mere storing of pork loins for a period of six months was not per se a violation of the Storage Act; that is violated only by one who “shall sell, or offer, or expose for sale” pork loins held longer than six months. Neither was the mere storing for more than six months, ipso facto, a violation of the 'Valentine Act. In a proper case the length of the storage may be considered in connection with other acts, or proof showing “combination of capital, skill or acts by two or more” (Section 6391, General Code) for the purposes indicated by the act. Therefore the prior judgment against the defendants was evidently erroneous, unless proof was offered that they had entered into an unlawful agreement within the purview of the Valentine Law. The only proof offered in that respect was the petition on file in the case. However, the answer of both defendants, the Packing Company and the Creamery Company, explicitly denied any such purpose or agreement, so that upon that phase of the case there was a lack of proper proof sustaining it. That feature of the controversy being out of the case, for lack of proof, the only civil remedy available prior to final hearing would be obtaining a provisional injunction to prevent the further threatened violation of the Storage Act.

If defendants were threatening to sell, since the Storage Act does not provide for seizure and sale of the food products, the only civil remedy available prior to a final hearing would be a provisional injunction authorized by Section 11876, General Code, restraining the defendants from committing an act, which, if committed, would make the final judgment ineffectual; or, upon proper showing, a provisional order for a receiver might be obtained under sanction of Section 11894, General Code, as auxiliary to the main action.

No pretense was made that these pork loins deposited in the cold-storage warehouse were of such perishable character as to depreciate in value, or would become so contaminated as to be unsalable. In fact the court ordered the same pork loins to be sold “at such place or places as the receiver shall deem proper. ’ ’ It may be assumed that such a judicial order would not have been made had not the product been fit for public consumption. Were it shown to. the court that these pork loins were of such a nature as to become in the immediate future perishable or so contaminated as to be unfit for public consumption, no doubt, in that event, and in the exercise of judicial discretion, the court would order a sale thereof.

In our judgment, prior to the action of the court upon the issues joined between the parties, as shown by this record, the only ancillary relief plaintiff was entitled to was that of a provisional injunction should it be shown that the Packing Company proposed to sell its product in violation of state and federal law. So far as Packing Co. v. State, supra, conflicts with the conclusions here announced, that case is overruled.

The judgment of the trial court against defendants upon the pleadings was erroneous, as was the judgment of the court of appeals in its affirmance. However, sinee'the parties have not had a trial upon the issues as they may be finally joined, we content ourselves with reversing the judgments of the lower courts and remanding the cause, to the court of common pleas for further proceedings according to law.

Judgment reversed.

Marshall, C. J., Hough, Robinson and Clark, JJ., concur.

Wanamaker, J., dissents.