Case Name: State ex rel. Attorney General, Respondent, vs. Fasekas, Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1937-01-12
Citations: 223 Wis. 356
Docket Number: 
Parties: State ex rel. Attorney General, Respondent, vs. Fasekas, Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 223
Pages: 356–378

Head Matter:
State ex rel. Attorney General, Respondent, vs. Fasekas, Appellant.
October 16, 1936
January 12, 1937.
James J. Kerwin of Milwaukee, for the appellant.
For the respondent there was a brief by the Attorney General, Fred M. Wylie, special counsel, William A. Zabel, district attorney of Milwaukee county, and Arthur Schmidt, assistant district attorney, and oral argument by Mr. Wylie and Mr. C. J. Marsh of Madison, counsel for the Trade Practice Commission.

Opinion:
The following opinion was filed November 10, 1936:
Rosenberry, C. J.
The order and judgment of the court finding the defendant, Fasekas, guilty of contempt must be sustained on the authority of State ex rel. Fowler v. Circuit Court (1898), 98 Wis. 143, 73 N. W. 788, and John F. Jelke Co. v. Beck (1932), 208 Wis. 650, 242 N. W. 576. The defendant acted in entire disregard of the court's order, claiming that the code, under and pursuant to which the order was made, was invalid and unconstitutional. The defendant flouted the court and contumaciously refused to abide by an order made by a competent court having jurisdiction over his person and the subject matter of the controversy. Whether the order was right or wrong, it was the duty of the defendant to obey it until relieved therefrom in some one of the ways prescribed by law.
By his demurrer to the complaint the defendant seeks to raise an issue regarding the constitutionality of the code of fair competition for the intrastate business of the barber industry. The code itself is not set out in the complaint nor are we referred in any way to a copy of the code. In as much as we do not in this case reach the question sought to be raised, we shall not attempt to take judicial notice of it. The code was framed under and pursuant to ch. 110, Stats. 1935, entitled, "Emergency Promotion of Industrial Recovery." Sec. 110.04 (4) provides:
"All orders of the governor prescribing, approving, disapproving, modifying, amending or terminating codes shall be subject to review in the same manner in which orders and awards of the industrial commission are made reviewable by subsections (1), (2) and (3) of section 102.23, and by sections 102.24 and 102.25 of the statutes, . . . "—
except that the word "governor" is substituted for the word "commission."
Sec. 102.23 of the Workmen's Compensation Act relating to judicial review provides that findings of fact made by the commission shall be conclusive if the commission acts within its power and without fraud. It further provides that an award or order of the industrial commission may be. reviewed by commencing an action in the circuit court for Dane county for that purpose. The statute then provides:
"With its answer, the commission shall make return to said court of all documents and papers on file in the matter, and of all testimony which may have been taken therein, and of its order, findings and award. . . . Said action may thereupon be brought on for hearing before said court upon such record by either party on ten days' notice to the other," etc.
The section further provides that the award or order shall be set aside only upon the following grounds: (a) That the commission acted without or in excess of its powers; (b) that the order or award was procured by fraud; (c) that the findings of fact by the commission do not support the order or award.
Sec. 102.24 relates to the remission of the record. Sec. 102.25 provides for an appeal from the judgment of the circuit court on the award to the supreme court.
The defendant sought no review of the order made by the governor establishing the code. Ch. 110, of the statutes of 1935, was held, when properly construed, to be constitutional. Petition of State ex rel. Attorney General (Tavern Code Authority) (1936), 220 Wis. 25, 264 N. W. 633. In the course of the opinion in that case the distinction between a code of fair competition and a code which merely eliminates unfair competition and unfair trade practice was clearly pointed out, and it was there said:
"By way of illustration, neither the governor nor the code administrator can proceed under this act to deal with the whole subject of establishing maximum hours of labor, minimum rates paid, and working conditions not related to the matter of unfair trade practices and unfair methods of competition. Any regulation made under the provisions of this chapter in relation to those subjects must, as already stated, bear a reasonable relation to the elimination of unfair methods of competition in business and unfair methods of trade practices in order to conform to the standard prescribed by the act. What is unfair is one thing; what is in the interest of the industry or the general welfare is quite another thing."
Sec. 110.04 (1) (a) provides: "The governor is hereby vested with the power and jurisdiction and it shall be his duty to investigate, ascertain, declare and prescribe reasonable codes or standards of fair competition and trade practices for the various trades and industries in the state. . . . Such codes or standards of fair competition and trade practices shall be prescribed and approved by the governor after such reasonable public notice and hearing as he shall specify and if he finds (1) that such code or codes are not designed to promote monopolies or to eliminate or oppress small enterprises and will not operate to discriminate against them and will tend to effectuate the policy of this chapter, and (2) that such code or codes are not inequitable and that the interests1 of the consumers and general public will be protected, and (3) that such code is necessary for the stabilization of the intrastate business of such trade or industry. . . . "
These provisions are limitations upon the power of the governor. In order to comply with the decision in the Schechter Case (A. L. A. Schechter Poultry Corp. v. United States, 295 U. S. 495, 55 Sup. Ct. 837), the court held in the Tavern Code Authority Case that a further consideration must be added, to wit: That the codes prescribed must have some reasonable relation to unfair methods of competition and unfair trade practices in business. These are the standards prescribed by the statute. Unless the provisions of the codes are so reasonably related to unfair methods of competition and unfair trade practices, the governor is without authority under the terms of the act.
No doubt the purpose of the legislature in prescribing that the order of the governor establishing a code could be reviewed only in the manner prescribed by sec. 110.04 (4) was to insure bringing before the court the record upon which the governor acted. There is nothing before us relating to the proceedings had before the governor or the record unade upon the hearing required to be held prior to the promulgation of the code. If the statutory procedure had been followed, and a review had been sought in accordance with the statute, that record would be before us, and from it a determination could be made as to whether the governor acted in excess of and beyond his jurisdiction. Without such a record it must be presumed that the governor proceeded in the manner prescribed by statute, made the necessary findings, and that such findings are properly supported by evidence offered on the hearing. While sec. 102.23 limits the time for appeal to thirty days, we were advised upon the oral argument that a procedure has been laid down whereby any member of an industry adversely affected may have a review of the code at any time, and that the order so made may be brought before the court in the manner prescribed by statute.
Sec. 110.05 provides that the governor may modify or terminate any code or any specific provision thereof approved or issued under this chapter if he shall determine that such code or any specific provision thereof does not effectuate the purpose of this chapter. Each code approved under the provisions of this chapter shall contain an express provision to that effect.
In Corstvet v. Bank of Deerfield (1936), 220 Wis. 209, 263 N. W. 687, it was held that a dissenting stockholder who had not sought a review of the act of the commissioner of banking approving a stabilization agreement was concluded, and it was there said:
"It is a well-established principle of law that where a special tribunal is created by statute, charged with the duty and having the power to review the determination of an administrative agency, that tribunal must be first resorted to before resort is had to the courts." (Citing cases.)
It is an equally well-established rule of law that, where a new right is created or power conferred and a particular method of review is prescribed by the act creating the right or conferring the power, that method of review must be pursued. In re Jeness (1935), 218 Wis. 447, 261 N. W. 415.
While no separate tribunal is created by statute with power to review the order of the governor, the governor may review such an order upon petition or upon his own motion under the statute, so that a member of a particular industry operating under a code is not deprived of a means of a proper review of any order affecting him in the exercise of his constitutional rights.
Requiring members of an industry who are dissatisfied with the provisions of a code, or who feel their rights are unwarrantably invaded thereby, to proceed in the manner provided by statute, does not deny them recourse to the courts. It merely requires them to assert their rights in the manner provided by statute. Any order establishing a code under the statute must be made pursuant to certain findings of fact. The order therefore deals with a factual situation which is not before the court in this case.
There are two possible grounds upon which it may be argued that the defendant's demurrer to the complaint should be sustained: (1) That under no conceivable circumstance can the matter of price either for service rendered or compensation paid, have any relation to unfair trade practices and unfair methods of competition; or (2) that, if such reasonable relation between price and compensation and unfair trade practices and unfair methods of competition be established, nevertheless the legislature of a state is without power to fix wages and prices.
After fully considering the case of Morehead v. N. Y. ex rel. Tipaldo (1936), 298 U. S. 587, 56 Sup. Ct. 918, 920, 80 L. Ed. 1347, it is considered that neither of these contentions is within the doctrine of that case. The supreme court of the United States did not have under consideration either in the Morehead Case or in Adkins v. Children's Hospital (1923), 261 U. S. 525, 43 Sup. Ct. 394, 400, upon which the decision in the Morehead Case is based, anything but the power of the state to fix wages. In the Morehead Case the court said:
"The act extends to women and minors in any 'occupation' which 'shall mean an industry, trade or business or branch thereof or class of work therein in which women or minors are gainfully employed, but shall not include domestic service in the home of the employer or labor on a farm.' . It is not an emergency law. It does not regulate hours or any conditions affecting safety or protection of employees. It relates only to wages of adult women and minors."
The court further said: "The Adkins Case, unless distinguishable, requires affirmance of the judgment below. The petition for the writ sought review upon the ground that this case is distinguishable from that one. No application has been made for reconsideration of the constitutional question there decided. The validity of the principles upon which that decision rests is not challenged. This court confines itself to the ground upon which the writ was asked or granted. . . . He is not entitled and does not ask to be heard upon the question whether the Adkins Case should be overruled. He maintains that it may be distinguished on the ground that the statutes are vitally dissimilar."
While the More head Case affirms and follows the Adkins Case, neither of these cases dealt with the matter of wage and price in relation to matters which are concededly within the power of the legislature to regulate1. The matter was considered wholly apart from such circumstances. The decision in the More head Case was expressly limited by the court to determination of whether there were any grounds upon which it could be distinguished from the Adkins Case.
The elimination of unfair trade practices and unfair methods of competition have for a long time been subjects of state and national legislation. The power of the legislature to deal with these matters within the constitutional field is well established. If it be shown that as a matter of fact prices and wage are so intimately related to unfair trade practices and unfair methods of competition in a particular trade or industry that the matter can be dealt with adequately in no other way than by fixing wages and prices, a situation would be presented with which the supreme court of the United States, so far as we are advised, has not yet been called upon to consider. In view of that fact, any deter mination of the question should be deferred until the whole matter cair be heard and considered in the light of the record upon which the executive order was based.
In the Adkins Case, supra, an attempt was made to support the law on the ground that the fixing of a minimum wage was necessary to protect the morals of women workers. The court found as a matter of fact that there was no relation between earnings and morals. The court said:
"Morality rests upon other considerations than wages; and there is, certainly, no such prevalent connection between the two as to justify a broad attempt to adjust the latter with reference to the former. As a means of safeguarding morals the attempted classification, in our opinion, is without reasonable basis."
In this case under the act as construed in the Tavern Code Authority Case, the governor is not authorized to fix wages generally, but only in those cases where it can be established as a matter of fact that the fixing of wages has a relation to the elimination of unfair trade practices and unfair methods of competition. Whether or not there is shch relation is a question of fact which must be determined in the first instance by the governor. The finding cannot rest upon mere assertion; it must rest upon proof. If the relation cannot be established as a matter of fact, it was distinctly held in the Tavern Code Authority Case that the act conferred no power to fix wages and prices.
The United States supreme court, in the Morehead Case also called attention to the fact that the act there under consideration was not an emergency measure. It does not indicate what effect, if any, that fact would have upon its determination. We call attention to this distinction so that it may be properly considered when the matter is again presented here.
By the Court. — The orders appealed from are affirmed.