Case Name: Eugene E. STONE, H. Ciremba Amick, Fred T. Mills, R. M. Hanckel, George L. Tupper, R. L. Steer, Mrs. J. Allen Lambright, W. L. Harrelson, Hampton S. Caughman, and C. G. Cushman, composing the South Carolina State Dairy Commission, Plaintiff-Respondents, v. Robert G. SALLEY, Sr., a producer on behalf of himself and all others similarly situated, Edisto Farms Dairy, Inc., a distributor, on behalf of itself and all others similarly situated, Defendants-Respondents, and E. W. Duckworth d/b/a Duckworth's Supermarket, a Store (Retailer) on behalf of himself and all other similarly situated, Defendant-Appellant, and Paradise Ice Cream Company and Piggly Wiggly Meeting Street, Charleston, S. C., Intervening-Defendants
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1964-08-06
Citations: 244 S.C. 531
Docket Number: 18251
Parties: Eugene E. STONE, H. Ciremba Amick, Fred T. Mills, R. M. Hanckel, George L. Tupper, R. L. Steer, Mrs. J. Allen Lambright, W. L. Harrelson, Hampton S. Caughman, and C. G. Cushman, composing the South Carolina State Dairy Commission, Plaintiff-Respondents, v. Robert G. SALLEY, Sr., a producer on behalf of himself and all others similarly situated, Edisto Farms Dairy, Inc., a distributor, on behalf of itself and all others similarly situated, Defendants-Respondents, and E. W. Duckworth d/b/a Duckworth’s Supermarket, a Store (Retailer) on behalf of himself and all other similarly situated, Defendant-Appellant, and Paradise Ice Cream Company and Piggly Wiggly Meeting Street, Charleston, S. C., Intervening-Defendants.
Judges: Taylor, C. J. and Lewis, J., concur.
Reporter: South Carolina Reports
Volume: 244
Pages: 531–551

Head Matter:
18251
Eugene E. STONE, H. Ciremba Amick, Fred T. Mills, R. M. Hanckel, George L. Tupper, R. L. Steer, Mrs. J. Allen Lambright, W. L. Harrelson, Hampton S. Caughman, and C. G. Cushman, composing the South Carolina State Dairy Commission, Plaintiff-Respondents, v. Robert G. SALLEY, Sr., a producer on behalf of himself and all others similarly situated, Edisto Farms Dairy, Inc., a distributor, on behalf of itself and all others similarly situated, Defendants-Respondents, and E. W. Duckworth d/b/a Duckworth’s Supermarket, a Store (Retailer) on behalf of himself and all other similarly situated, Defendant-Appellant, and Paradise Ice Cream Company and Piggly Wiggly Meeting Street, Charleston, S. C., Intervening-Defendants.
(137 S. E. (2d) 788)
Messrs. Murchison, West & Marshall, of Camden, for Appellant,
Messrs. Daniel R. McLeod, Attorney General, Grady L. Patterson, Jr., Assistant Attorney General, and Thomas F. McCutchen, of Counsel, and all of Columbia, for Plaintiffs-Respondents,
Messrs. Legare & Hare, of Charleston, and James P. Mosingo, III, of Darlington, for the Defendant-Respondent, Robert G. Salley, Sr., a Producer on behalf of himself and all others similarly situated,
N. Heyward Clarkson, Jr., Esq., of. Columbia, for the Respondent, Edisto Farms Dairy,
August 6, 1964.

Opinion:
Moss, Justice.
The State Dairy Commission of South Carolina promulgated an order, dated April 29, 1963, effective May 1, 1963, pursuant to the 1961 Dairy Commission Act, 52 Stats. 512, now Sections 32-1601 et seq., of the 1962 Code, fixing the minimum price of milk and prohibiting producers, distributors and retailers from selling such below the cost of production.
It appears that following the promulgation of the aforesaid order that eighteen separate suits were brought in various counties and courts throughout South Carolina, asserting that Sections 32-1635, 32-1640.3 and 32-1640.5 of the aforesaid Code violate Article I, Section 5, and Article I, Section 8, of the 1895 Constitution of this State, in that the attempt of the Commission to prevent sales of milk below cost of production thereof amounts to taking of property without due process of law and is a denial of the equal protection of the law.
The South Carolina Dairy Commission instituted this action under the "Uniform Declaratory Judgments Act", Section 10-2001 et seq., 1962 Code of Laws. The purpose of the action was to determine the constitutionality of the aforesaid cited sections of the Code and to have the aforesaid order of the Commission declared valid and constitutional.
The defendants in this action are Robert G. Salley, Sr., a producer, Edisto Farms Dairy, Inc., a distributor, and E. W. Duckworth, the owner and operator of a retail grocery store. These defendants are made parties in their individual capacities and as representatives of others similarly situated, pursuant to Section 10-205 of the Code. The producer and distributor above named answered the complaint herein, admitting the constitutionality of the Dairy Commission Act and joined in the prayer thereof. E. W. Duckworth, the owner and operator of a retail grocery store, by his answer, denied the constitutionality of the Dairy Commission Act in respect to the aforesaid cited sections thereof.
By consent this case was tried by the Honorable Louis Rosen, Judge of the First Judicial Circuit, without a jury. By order dated March 11, 1964, he ruled that the order of the State Dairy Commission was valid and constitutional and that Sections 32-1635, 32-1640.3 and 32-1640.5 of the Code were constitutional in giving to the Commission power to prevent sales of milk below the cost of production. Salley, the producer, and Edisto, the distributor, did • not appeal from the order of the lower Court, but Duckworth, the retail grocer, did file timely notice of appeal to this Court.
Insofar as it upheld the Commission's Order forbidding the producer and distributor from selling milk to a retailer below the cost of production as fixed by the Commission, the judgment of the lower Court is unappealed from and presents no issue for determination by this Court. To that extent it is the "law of the case." Matheson v. McCormac, 187 S. C. 260, 196 S. E. 883. Duckworth cannot obtain a decision as to the invalidity of the Act on the ground that it impairs rights of others. Tripp v. Tripp, 240 S. C. 334, 126 S. E. (2d) 9. The appellant, in his brief, asserts that there is no factual or legal basis for a distinción between the issues in the present case and the Gwynette case. Therefore the question for determination here is the one stated in Gwynette, which was:
"The only provision of the Act that is challenged here is that which purports to empower the Commission to dictate to a retail grocer the minimum price at which he may sell wholesome milk that he has purchased from a distributor at the latter's price."
The testimony shows that Duckworth purchased milk for resale from Pet, Sealtest, Foremost and Lee Dairies at 49$ per half gallon and has been selling same at retail for 39$, thus taking a 10$ loss per half gallon.
The appellant does not question the right of the State to regulate and control the production and distribution of milk with regard to sanitation and purity. Involved here, there fore, is no question of public health, safety or morals. The only provision of the Act that is challenged here is that which purports to empower the Commission to dictate to retail grocers the minimum price at which he may sell wholesome milk that has been purchased from a distributor at the latter's price, which said price has been fixed by the Commission.
The case of Gwynette v. Myers, 237 S. C. 17, 115 S. E. (2d) 673, was an action by the State Dairy Commission to enjoin a retail grocer from selling milk at a price below the minimum price fixed by the Commission for area as a controlled market. This Court, in a three to two decision, held that the business of selling milk was not affected with the public interest, regulation of milk prices was beyond state's police power, and statute which purports to give State Dairy Commission power to regulate retail price was to that extent unconstitutional. In the Gwynette case we had under consideration the 1953 and 1955 Acts of the General Assembly which had to do with the supervision and regulation of the milk industry in this State, including the production, processing, handling, distribution, and the disposal and sale thereof. The Commission was, by said Acts, authorized upon the conditions stated therein, to fix the minimum price to be charged for milk by producers, distributors and retailers. In answering the question as to whether the State had the right to fix the price at which a retail grocer could sell milk, this Court said:
"To fix the price at which the owner of a thing may sell it is to that extent, to deprive him of his property; for one's ownership of property consists not only of his right to possess it, but also of his right to use it as he pleases, to sell it at his own price, and to give it away if he wishes to do so. Rogers-Kent, Inc. v. General Electric Co., 231 S. C. 636, 99 S. E. (2d) 665.
"The right of a citizen to engage in lawful business, to make contracts, and to dispose of his property, is not absolute; it is subject to regulation and control by the state in the exercise of its police power. But that power, though an essential attribute of sovereignty, is also not absolute; it may be exercised only for the protection of the public in its health, safety, morals or general welfare. Gasque, Inc. v. Nates, 191 S. C. 271, 2 S. E. (2d) 36."
In the Gwynette case we also held that the State has power to regulate and control the price that one in private business may charge for goods or services where such business is "affected with a public interest" and conversely it may not fix prices in a business not so affected, is manifest not only from the fact that the police power is concerned with public, not private, welfare, but also for the reason that such governmental intermeddling with business essentially private in nature is repugnant to the fundamental concept of free enterprise.
We also held in the Gwynette case that whether or not the private status of a business, with its attendant freedom from regulation has changed to one in which the public has such an interest as to justify its regulation by the State, is always a matter for judicial inquiry; the mere declaration by the Legislature that a business is affected with the public interest is not conclusive of such inquiry. The extent to which a business affected with a public interest may be regulated by the State is not a matter solely within the legislative discretion. It depends on the nature of the business, on the feature which touches the public, and on the abuse reasonably to be feared.
We also held in Gwynette that the State may not dictate prices in a private industry merely because the industry is large and important or because the public may be concerned in respect of its maintenance, but such control is justifiable under the police power only when the industry is affected with a public interest in a sense that it may fairly be said that it has been devoted to the public use.
The appellant contends that the above cited sections of the Code should be declared unconstitutional for the reasons assigned in the Gwynette case. The re spondents contend that different facts are before this Court than were presented in Gwynette and that such case is not here controlling. It is true that the 1961 Dairy Commission Act repealed the Milk Acts considered in the Gwynette case. However different the Acts may be in verbiage, the manifest purpose of the repealed Acts and .the present Act was to set up a Commission to supervise and regulate the milk industry, including the fixing of prices to be charged for such milk by producers, distributors and retailers. In effect there is no difference in principle between allowing a Commission to set a retail minimum price as was done under the previous Acts and in allowing the Commission to set a minimum price based upon production costs of their own determination.
It is true, as is stated by the respondents, that the Gwynette case was decided upon a demurrer to the complaint, without the benefit of any testimony. However, it must be remembered that the demurrer admitted the well pleaded facts stated in the Gwynette complaint, which are not at material variance with the evidence submitted in the instant case. In the Gwynette case this Court considered the findings of fact with respect to the dairy industry, as was stated in the aforesaid Acts, together with its impact upon the public welfare and the economic factors involved in such industry, including the right to fix the price of milk, under the condition stated in the Act, as a means and method for the supervision and regulation of the milk industry. We concluded that the business of selling milk at retail was not affected with a public interest and the regulation of milk prices at the retail level exceeded the police power of the State and the statute which purported to give the Dairy Commission the power to regulate milk prices was unconstitutional.
We are fully cognizant that the right of a State to control the prices at which milk may be sold has been sustained by the Courts of many States and by the United States Supreme Court. However persuasive these decisions may be they are not binding upon and do not control us in the interpretation of our own Constitution, under which the issue here arises.
It is apparent from the order under appeal and from the argument of the respondents that the purpose of the price-fixing here under attack is to protect the economy of the milk industry rather than the public health and welfare. But, as pointed out in Gasque, Inc. v. Nates, 191 S. C. 271, 2 S. E. (2d) 36, that is not a proper basis for the exercise of the State's police power.
If it be conceded that the General Assembly may authorize price-fixing as a means of regulating the milk industry for the general welfare and public good, in order to insure the public an adequate supply of wholesome and healthful milk, such has been accomplished, according to the facts in this case, because the appellant does not question the order of the Commission to fix the price that he must pay the distributor for the milk he purchases and which is later sold at retail to the public.
When the retail dealer purchases milk from the distributor at the price established by the Commission, and the producer receives from the distributor the price fixed and required by the milk control Act, it is difficult to see how the interest of either, or of the public at large, can be prejudiced or threatened by the retail dealer selling at such price as he sees fit. The sale of milk by the retail dealer below the price established by the Commission, where he has purchased such milk at the price established by the Commission, cannot adversely affect the producer and distributor. It seems to us that the sale of milk at a reduced price by a retailer, such retailer absorbing the loss, would increase the sale of milk and therefore be beneficial to the producer and distributor. Certainly, the public at large would have no complaint because of their ability to purchase milk at a reduced price.
We find no factual or legal basis for a distinction between the issue in the present case and that which was decided in the Gwynette case. We adhere to the decision made in Gwynette because the legal conclusion there reached is sound. It follows that so much of the Act in question as attempts to fix the price at which the appellant may sell milk at retail is violative of due process and the equal protection clauses of our Constitution. This is the only question at issue in this appeal.
Reversed.
Taylor, C. J. and Lewis, J., concur.
Bussey and Brailsford, JJ., dissent.