Court Opinion

ID: 9531417
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:10:40.732406+00
Date Added: 2024-06-11T13:28:26.413188
License: Public Domain

Dissenting Opinion
Landis, J.
I cannot agree with the opinion of the court written by Emmert, J., which holds the Fair Trade Law of Indiana is an unconstitutional delegation of legislative power and an infringement of due process in violation of Article 4, §1 and Article 1, §12 of the Indiana Constitution.
The opinion, in my view, means that we have one theory of separation of powers and due process under the Federal Constitution and a different and distinct doctrine of separation of powers and due process under the Indiana Constitution.
The language employed in the two constitutional documents is identical for our purposes, the Constitutions of the United States and of Indiana providing respectively as to the separation of legislative powers: “All legislative powers . . . shall be vested in a congress,”1 and “The Legislative authority . . . shall be vested in the General Assembly.”2 and 3 (Emphasis added.) Similarly, the expressions “due process of law” under the U. S. Constitution4 and “due course of law” under the Indiana Constitution5 have been considered of like import and used interchangeably.6
*204To consider the authorities cited in the opinion of the court, we note the court first places reliance on the 1911 decision of Dr. Miles Medical Co. v. Park & Sons Co. (1911), 220 U. S. 373, 31 S. Ct. 376, 55 L. Ed. 502, which held the restrictive contracts there involved to be an illegal restraint of trade under the common law and the Sherman Anti-Trust Act of 1890. Everyone concedes the early conflict between Fair Trade and restraint of trade, and similarly everyone now concedes that such conflict was removed by the Miller-Tydings Act of 19377 (at least as to contract-signers) as to matters in interstate commerce. The Indiana Fair Trade Act of 1937 8 similarly amended the Indiana Anti-Trust Act of 18979 so as to remove the conflict with restraint of trade within the state.
Any application of the Dr. Miles case, supra, to the case before us has therefore been removed by statute.
The next case relied upon in the opinion of the court has similarly been rendered ineffective and inapplicable by a subsequent statute. It is Schwegmann Bros. v. Calvert Corp. (1951), 341 U. S. 384, 71 S. Ct. 745, 95 L. Ed. 1035 (hereinafter referred to as the first Schwegmann case), which decided that Fair Trade contracts with non-signer provisions were in violation of federal anti-trust laws, since the Miller-Tydings Act of 1937 providing exemption from anti-trust laws did not apply to non-signer contract provisions. This statutory deficiency of the Miller-Tydings Act was shortly afterwards remedied by the McGuire Act of 195210 *205specifically exempting Fair Trade agreements from federal anti-trust laws as to both signers and non-signers, and the opinion of the court in the case at bar concedes this in a footnote.11 In considering the first Schwegmann case, supra, it should also be noted that such case did not specifically discuss any constitutional questions.12
The unquestioned landmark case in the federal courts on the constitutionality of the Fair Trade is Old Dearborn Co. v. Seagram Corp. (1936), 299 U. S. 183, 57 S. Ct. 139, 81 L. Ed. 109, 106 A. L. R. 1476, which involved the Fair Trade Act of Illinois.
In that case appellee Seagram, a Delaware corporation, was a wholesale dealer in alcoholic beverages in Illinois. Appellant operated four retail liquor stores in Chicago, but did not purchase any of the whiskey in controversy from appellee. Appellant’s charter powers included sales at both wholesale and retail.
In the Old Dearborn case the challenge was directed against §2 of the Illinois act which provided that wilfully and knowingly advertising, offering for sale, and selling any commodity at less than stipulated in any contract made under the act, whether the person doing so is or is not a party to the contract, shall constitute unfair competition, giving rise to a right of action in favor of anyone damaged thereby. In Old Dearborn there was no contractual liability shown on the part of appellant, and the U. S. Supreme Court in a unani*206mous opinion by Mr. Justice Sutherland upheld the constitutionality of the Illinois Fair Trade Act, as against the contentions that the Act violated due process and was an unlawful delegation of legislative power.
The majority opinion in the case before us attempts to distinguish the facts of Old Dearborn from the case at bar.
The evidence in Old Dearborn indicated the Old Dearborn Company purchased some of the whiskey in controversy from persons under Fair Trade contract with others, and also purchased whiskey from persons not signatories to such contracts.13 Any attempted distinction from the case at bar on this point is inconclusive as it did not appear in the case before us, where appellee Shane obtained the merchandise in question.
The observation of the majority in the case before us that, although the U. S. Supreme Court “did not take note of it,” Old Dearborn in fact “was committing a tort by inducing a breach of a distributor’s contract to Seagram Corporation” is an attempted limitation of Old Dearborn upon a basis that did not sufficiently impress the U. S. Supreme Court for it to express itself on the subject. Not only did Old Dearborn procure whiskey from contract signers and non-signers, so as to preclude any possibility of an induced breach of contract as to the latter, but even as to the former we cannot arbitrarily say there was a tort committed by Old Dearborn. Before we can conclude ex parte that Old Dearborn committed torts in inducing breaches of contract not at issue in that case, we should note that there are many situations where a defendant may be *207legally privileged to induce a breach of contract and thus not be answerable in tort.14
The majority’s attempted limitation of Old Dearborn to cases of contractual liability or inducing a tort is a strained construction of the case and entirely unwarranted.
The N. R. A. Schechter case15 relied on in the majority opinion, and decided by the U. S. Supreme Court prior to the Old Dearborn, did not involve Fair Trade and is inapplicable to the question of delegation of powers under the facts before us in this case.
The next case in the federal courts involving Fair Trade after Old Dearborn is Schwegmann Bros. v. Calvert Corp., supra (the first Schwegmann case), which has been previously treated. It was superseded by the McGuire Act passed in 1952 (excepting Fair Trade agreements from federal anti-trust laws as to both signers and non-signers), and thereafter the sec*208ond Schwegmann case16 upheld the validity of the McGuire Act and the Fair Trade Act with non-signer provisions as against the contentions that they violated due process and unlawfully delegated legislative power to private individuals.
As stated in the second Schwegmann case at pp. 791, 792 of 205 F. 2d:
“Whatever weakening effect on Old Dearborn may have been caused by Schwegmann’s [the first Schwegmann case’s] frank characterization of State fair trade statutes as involving price fixing against non-signers is more than off-set, it seems to us, by the weakening also of the broad concept against the validity of legislative price fixing assumed in Old Dearborn. For ‘the well-settled general principle that the right of the owner of property to fix the price at which he will sell it is an inherent attribute of the property itself, and as such is within the protection of the Fifth and Fourteenth Amendment.’ [Citing Old Dearborn and other U. S. Supreme Court cases.]”
In connection with the test of whether an illegal fixing of prices had occurred, the court cited the case of Nebbia v. New York (1934), 291 U. S. 502, at p. 539, 54 S. Ct. 505, at p. 517, 78 L. Ed. 940, at p. 958, 89 A. L. R. 1469, at p. 1484, where the court said:
“. . . Price control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty.”
In determining whether there was an arbitrary, discriminatory, and unlawful price fixing or price control under the Fair Trade Act in question, the court in the *209second Schwegmann case concluded at p. 792 of 205 F. 2d:
“The . . . legislature has defined with particularity the type of commodity with respect to which fair trade prices may be established and enforced; namely, ‘a commodity which bears, or the label or container of which bears, the trade mark, brand, or name of the producer of the commodity and which is in fair and open competition with commodities of the same general class produced by others.’ It was, we think, within the province of the legislature to assume that economic laws constitute a sufficient restraint against capricious or arbitrary price fixing by the producer. As pointed out long ago by Louis D. (later Mr. Justice) Brandéis, the producer ‘establishes his price at his peril — the peril that if he sets it too high, either the consumer will not buy or, if the article is, nevertheless, popular, the high profits will invite even more competition.’ We agree with the learned District Judge that Old Dearborn still controls and, further, that, if it is to be overruled, that can be done only by the Supreme Court.”
I do not believe this is the place for a prolonged discussion of whether Fair Trade appears to us to be good or bad for the economic or social life of the state.
Briefly stated, however, the proponents of Fair Trade contend that although it might appear at first blush that price cutting by a retailer is not harmful to a manufacturer, there is respectable opinion to the contrary — that the maintenance of a fair margin of profit encourages the retailer to offer a standard product of good quality to the public rather than to endeavor to substitute a sub-standard, or inferior product in an effort to meet price-cutting competition; that this, in time, affects the public.
The opponents of Fair Trade say that while in the bleak days of the 1930’s there might have been some *210justification for the Fair Trade, it is totally unnecessary in the prosperous inflation of the later 1940’s and 1950’s, and that unrestrained price-cutting by competing retailers is to the benefit of the general public. The two schools of thought on the subject have thus developed into keen controversy through the years. A sharp cleavage of views, in fact, has developed within departments of the U. S. government. The Federal Trade Commission, for example, has allegedly opposed resale price maintenance, while the Department of Commerce has apparently favored it, concluding “the case against Fair Trade is more theoretical than real.” Committees of Congress have submitted divergent reports pro and con on the matter, and the debate appears still to be going on.
The opponents of Fair Trade, including some text writers and law journal contributors, ask, however, that we enter the argument of economics and decide in the light of present-day conditions against the wisdom of Fair Trade legislation, and thus hold it unconstitutional. However, I do not believe we can have one constitution in fair weather and an entirely different constitution in foul. This court does not sit as a super-legislature to weigh the propriety of legislation, nor to decide whether it expressly offends the public welfare. The legislative power has limits, but state legislatures have power to experiment with new techniques and use their own standard of the public welfare so long as specific constitutional prohibitions are not violated.17
And as to legislative policy, we should note that while numerous changes have been made in Congressional *211legislation in recent years affecting Fair Trade, in Indiana, however, no single amendment to the Fair Trade Act has been made since it was enacted some twenty years ago, but the legislation remains in exactly the form in which it was passed at that time. As stated in a recent case18 at p. 211 of 106 A. 2d:
“The question before us is not the wisdom of this legislation; it is whether the situation presents a reasonable necessity for the protection of the public welfare, and whether the means bear a reasonable relation to the end sought. . . . And if these questions are fairly debatable, the legislative judgment must control.”
Before concluding this opinion I think we should also observe that the U. S. District Court for the Southern District of Indiana has recently held the Fair Trade Act of Indiana with non-signer provisions is valid and constitutional as against the contentions that it violates due process and is an unlawful delegation of legislative powers,19 and under the Indiana decisions that determination is highly persuasive upon this court.20
And not only is it the law in the federal courts that the Fair Trade Acts are not invalid as violating due process or being an unlawful delegation of legislative power in restricting prices, but the rule is followed in a majority of state courts.21
*212If we are to have any certainty in the law, I do not believe constitutional principles should bend according to the winds of prosperity or adversity, nor should we attempt to engraft into the Indiana Constitution a different concept of due process and separation of powers from what those identical principles have been interpreted to mean under the Constitution of the United States.
I would reverse the judgment.
Note. — Reported in 143 N. E. 2d 415.

. Article 1, §1 of Constitution of the United States.

. Article 4, §1 of Constitution of Indiana.

. There is no distinction between the words “power” and “authority,” and the two constitutional provisions for our purposes here are entirely synonymous. Webster’s New International Dictionary (Second Edition) Unabridged, p. 1936, defines “power” as follows: “Law. In general, authority, capacity, or right; . . . esp., authority or right to do or forbear derived by one person from another . . . .”

. Fifth and Fourteenth Amendments, Constitution of the United States.

. Article 1, §12, Constitution of Indiana.

. See: Albert v. Milk Control Board of Ind. (1936), 210 Ind. 283, 200 N. E. 688.

. 15 U. S. C. A., §1.

. Burns’ Indiana Statutes, §66-301 et seq., 1951 Replacement, being Acts 1937, eh. 17, §§1-10.

. Burns’ Indiana Statutes, §23-101, 1950 Replacement, being Acts of 1897, eh. 104, §1, p. 159, et seq.

. 15 U. S. C. A., §45, 1956 Supplement.

. See footnote 1 of opinion of the court in case at bar.

. See: Circuit Court of Appeals opinion to this effect in: Schwegmann Bros. Giant Super Mkts. v. Eli Lilly & Co. (1953), C. A. 5th Cir., 205 F. 2d 788, (cert. den.) 346 U. S. 856, 74 S. Ct. 71, 98 L. Ed. 369, (reh. den.) 346 U. S. 905, 74 S. Ct. 217, 98 L. Ed. 404 (hereinafter referred to as the second Schwegmann case).

. See: Printed Abstract of Record, U. S. Supreme Court, Vol. 7, Part 1, pp. 51, 52.

. For example, if a defendant has a present, existing economic interest to protect, such as the ownership or condition of property, or a prior contract of his own, or a financial interest in the affairs of the person persuaded, he is privileged to prevent performance of the contract of another which threatens it. See: Diver v. Miller (1929), 4 W. W. Harr., 34 Del. 207, 148 A. 291; O’Brien v. Western Union Telegraph Co. (1911), 62 Wash. 598, 114 P. 441; Winters v. University Dist. Bldg. & Loan Assn. (1932), 268 Ill. App. 147; Meason v. Ralston Purina Co. (1940), 56 Ariz. 291, 107 P. 2d 224; W. T. B. & T. Soc., Aplnt. v. Dougherty et al. (1940), 337 Pa. 286, 11 A. 2d 147; Owen v. Williams (1948), 322 Mass. 356, 77 N. E. 2d 318, 9 A. L. R. 2d 223; Tidal Western Oil Corporation v. Shackelford (1927), Tex. Civ. App., 297 S. W. 279; Williams v. Adams (1937), 250 App. Div. 603, 295 N. Y. S. 86, 275 N. Y. 653; Quinlivan v. Brown Oil Co. et al. (1934), 96 Mont. 147, 29 P. 2d 374; Millers Mut. Cas. Co. v. Ins. Ex. Bldg. Corp. et al. (1920), 218 Ill. App. 12; White Marble Lime Co. v. Lumber Co. (1919), 205 Mich. 634, 172 N. W. 603; Ford v. C. E. Wilson & Co. (1942), C. A. 2d Cir., 129 F. 2d 614; Knapp v. Penfield (1932), 143 Misc. 132, 256 N. Y. S. 41; Aalfo Co. v. Kinney (1929), 105 N. J. L. 345, 144 A. 715; Petit v. Cuneo (1937), 290 Ill. App. 16, 7 N. E. 2d 774; Morgan v. Andrews (1895), 107 Mich. 33, 64 N. W. 869.

. Schechter v. United States (1935), 295 U. S. 495, 55 S. Ct. 837, 79 L. Ed. 1570.

. Schwegmann Bros. Giant Super Mkts. v. Eli Lilly & Co. (1953), supra.

. See: Day-Brite Lighting v. Missouri (1952), 342 U. S. 421, 72 S. Ct. 405, 96 L. Ed. 469, (reh. den.) 343 U. S. 921, 72 S. Ct. 674, 96 L. Ed. 1334.

. General Electric Co. v. Klein (1954), Del, 106 A. 2d 206.

. Sherwin Williams v. Bargain Barn, Inc. (1954), 1954 CCH Trade Cases, No. 67,697.

. Midwestern Bet. Corp. v. State Board of Tax Com. (1934), 206 Ind. 688, 187 N. E. 882, 191 N. E. 153.

. Scovill Mfg. Co. v. Skaggs, etc. Drug Stores (1955), 45 Cal. 2d 881, 291 P. 2d 936; Burche Co., Applnt. v. General Elec. Co. (1955), 382 Pa. 370, 115 A. 2d 361; General Elec. Co. v. Masters, Inc. (1954), 307 N. Y. 229, 120 N. E. 2d 802; Lionel Corp. v. Grayson-Robinson Stores (1954), 15 N. J. 191, 104 A. 2d 304; Lilly & Co. v. Saunders (1939), 216 N. C. 163, 4 S. E. 2d 528, 125 A. L. R. 1308; Triner Corporation v. McNeil (1936), 363 Ill. 559, 2 N. E. 2d 929, 104 A. L. R. 1435.