Court Opinion

ID: 3542472
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:54:01.310406+00
Date Added: 2024-06-11T13:55:12.403479
License: Public Domain

This is an appeal from a judgment in an action seeking to enjoin the defendants from violating the provisions of Chapter 80 of the Laws of 1937, commonly known as the "Unfair Practices Act."
The lower court sustained a demurrer to the plaintiff's complaint interposed by defendant International Harvester Company, and overruled the plaintiff's demurrer to the answers interposed by the other defendants and to the complaint in intervention filed by the state. The plaintiff elected to stand on the complaint and appealed from the judgment rendered against it dismissing the action.
The complaint alleges a violation by defendants of Chapter 80, Laws of 1937, by selling automobiles to the state of Montana at a price below the minimum fixed by that Chapter. The constitutionality of the Act has already been determined. (Associated Merchants of Montana v. Ormesher, 107 Mont. 530,86 P.2d 1031.)
Defendants contend, and the court found, that the sale of merchandise to the state of Montana is excepted from the provisions of the Act. The correctness of that conclusion determines the propriety of the judgment appealed from. The Act itself deals solely with sellers and imposes no restrictions, qualifications or penalties upon buyers. The state of Montana is not mentioned in the Act, and sales to it are thus not expressly exempted; nor does the Act in anywise define the term "buyer." It simply denounces sales made below cost when the purpose is to injure competitors or to destroy competition. The cost is to be determined according to a certain formula fixed in the Act.
We are called upon to determine whether it was the legislative[1]  intent to exempt sales made to the state of Montana from the provisions of the Act. Defendants contend that the legislature did not intend that sales to the state be included in the Act, because to do so would be to violate the general *Page 4 
rule of statutory construction that "the state is not bound by the provisions of a general statute, where the effect of such statute would be to restrict the rights of the state, to affect its interests, or to impose liabilities upon it, unless it is named expressly." (Morris v. State ex rel. Walcott, 88 Okla. 189,212 P. 588; and see Aetna Accident  Liability Co. v. Miller,54 Mont. 377, 170 P. 760, L.R.A. 1918C, 954.)
As before stated, the state is not mentioned in the Act. Whether the Act would apply to the state as a seller we need not now determine. It does not restrict the state or affect its legitimate interests as a buyer. The purpose to be accomplished by Chapter 80 can as well be defeated by sales to the state as to others. If sales below cost when made to individuals for the purpose of injuring competition and destroying competition are unlawful, then such sales to the state for the same purpose are likewise unlawful — absent any express exception in favor of those selling to the state. Compare City of Billings v. PublicService Com., 67 Mont. 29, 214 P. 608, where it is held that a statute preventing discrimination in utility rates applies to rates imposed against a municipality as well as to individuals.
It is urged that since the Act does not expressly amend[2]  section 293.3, Revised Codes, the intent is manifest that the legislature exempted sales made to the state. Section 293.3 provides for the purchase of state supplies by awarding contracts to the lowest responsible bidder. Chapter 80, which makes no exception in case of sales to the state, when read in conjunction with section 293.3, contemplates that sellers to the state will confine their bids within the limit fixed as legitimate by Chapter 80. The enactment of section 293.3 was to guard against overcharges against the state. Chapter 80 gives protection to sellers from unfair competition. The two work harmoniously together and it cannot be said that because section 293.3 was not changed, the legislature intended that Chapter 80 should not apply to sales made to the state. Language used in the case ofB.T. Johnson Pub. Co. v. Mills, 79 Miss. 543, *Page 5 31 So. 101, which apparently reaches a different conclusion, is not persuasive under statutes such as ours.
The complaint in intervention as well as the answer of the two defendants who answered, contain general denials of the allegations of the complaint to the effect that the sales below cost were made for the purpose of injuring competitors and destroying competition; hence, to that extent, they constitute a defense to the complaint, and it was proper to overrule the general demurrers thereto. It was error, however, to sustain the demurrer of the defendant International Harvester Company to plaintiff's complaint.
The judgment is reversed and the cause remanded with directions to set aside the order sustaining, and to enter an order overruling the demurrer to plaintiff's complaint, and awarding the defendant International Harvester Company a reasonable time, to be fixed by the court, to plead further.
MR. CHIEF JUSTICE JOHNSON and ASSOCIATE JUSTICES MORRIS, ARNOLD and ERICKSON concur.