Court Opinion

ID: 8194265
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:17:24.434833+00
Date Added: 2024-06-11T16:40:42.748144
License: Public Domain

The following opinion was filed February 12, 1924:
Owen, J.
Upon the motion for rehearing it is earnestly argued that the Co-operative law is unconstitutional because it denies the equal protection of the laws, contrary to the provisions of the Fourteenth amendment of the federal constitution. While this was obliquefy suggested upon the argument, the contention was not stressed, and did not seem to be put forth with a great measure of assurance. The earnestness, however, with which it is advanced upon the motion for rehearing merits a response from the court.
The argument, in brief, seems to be that the law is discriminatory in that it authorizes certain classes to enter into agreements in the nature of trusts, combinations, and monopolies in restraint of trade, if they do S0‘ under and by virtue of the Co-operative law, while those who are not in *593a position to avail themselves of the provisions of that law are prohibited from entering into' such agreements. As was pointed out in the main opinion, the subject is one under the control of the legislature. That body may either prohibit such agreements or authorize them. If this be not apparent from the mere statement of the proposition, it is sufficient to say that it is so declared in Quong Wing v. Kirkendall, 223 U. S. 59, 63, 32 Sup. Ct. 192. Unless there be something novel about this subject taking ft out of the general rule, the legislature may classify such agreements, condemning some and authorizing others, if there are reasonable and proper economic, political, and social reasons for making the classification. State ex rel. Milwaukee S. & I. Co. v. Railroad Comm. 174 Wis. 458, 183 N. W. 687.
In order to vindicate the Co-operative law it is not necessary to justify the exemption of farmers from the general anti-trust statute, which was condemned as vicious classification in Connolly v. Union S. P. Co. 184 U. S. 540, 22 Sup. Ct. 431. It may be remarked, however, that the decision in that case was made more than twenty years ago, since which time there is abundant evidence of a wide-spread conviction throughout our nation that the farmer is subject to economic conditions which put him in a class justifying special legislative consideration in many respects. It may be doubted whether at the present time the holding in Connolly v. Union S. P. Co., in this respect, would be followed. But we 'will not pursue this thought except as it may incidentally appear in our following discussion.
Co-operative associations are neither new nor novel to civilization. They are old institutions in many ■ foreign countries, notably in Denmark. It is well known that the United States Department of Agriculture has been active for some years in the encouragement and development of co-operative marketing associations. The War Finance Corporation, another government agency, has encouraged these associations throughout the country. Many acts of *594Congress have accorded special consideration to such associations, such as the Income Tax Law, the Sherman Antitrust Act, the so-called Capper-Volstead Act, approved February 18, 1922, and the Agricultural Credit Bill, approved March 4, 1923. State departments of agriculture throughout the country have urged the formation of such associations and at least twenty states of the Union have adopted co-operative marketing laws. Their function is to enable co-operation among the weaker and more scattered members of society, and this on the theory that the welfare of society as a whole is promoted by enabling the weaker members thereof to co-operate for the purpose of improving their condition, which is humble at the best. It is this theory which has wrought a change of governmental attitude towards, the collective efforts of laboring men, which evolution is clearly pointed out in the dissenting opinion of Mr. Justice Brandéis in Truax v. Corrigan, 257 U. S. 312, beginning at p. 354 (42 Sup. Ct. 124).
That there is an inherent difference with reference to the resulting effect to society between a combination of a strong and powerful few who are able to get together and exercise a complete control over a particular industry or commodity essential to social existence, and a combination of farmers, each weak in his individual strength and power, numbering into the millions and scattered far and wide, is reasonably apparent. The former combination is small, compact, powerful. The inevitable tendency, and too often the plain result, is oppression to society. Any combination of the latter is necessarily weak and impotent, so far as securing a unity of control and action sufficient to result in oppression is concerned. The most that is hoped for from cooperative organizations on the part of the latter is slight improvement in the condition of the agricultural classes, a stimulus to more intelligent effort and encouragement to carry on in a line of endeavor that is essential to human *595existence. It is recognized that the welfare of our agrarian population promotes the welfare of the nation. To say that society cannot prohibit combinations which are detrimental without at the same time striking down co-operative associations which are beneficial, is to deny the most fundamental basis of all classification.
A perusal of the Co-operative Marketing Law dissipates any thought that it has for its fundamental purpose the accomplishment or promotion of monopoly. Its dominant purpose is to promote the welfare of its members by stimulating co-operative effort. The law is rather carefully drawn, and many of its provisions may be cited disclosing a legislative effort to restrain the results of the law to the purposes sought to be accomplished. It is not a law to be availed of by those harboring monopolistic purposes. For instance, each member has one vote, and only one vote. Proxy voting is prohibited, except that territorial delegate voting is provided for. This contemplates that the association will be made up of numerous and scattered members. The rate of dividends upon stock is limited to eight per cent. The proceeds from the business of such corporation, after payment of all necessary expenses, are distributed to the patrons (not the members) in proportion to the volume of business transacted by said patrons with the association. The nature of the contracts' between the association and its members is clearly defined. The term of such contracts is limited to five years. The number of shares which any person may hold may be limited. The corporation may prescribe that its common stock may be sold only to persons designated and described in the by-laws, and that the stockholder shall lose the power to vote if he ceases to belong to the class of persons designated or described in the bylaws. It is obvious that great and oppressive combinations of capital, constituting the real evil which has caused the enactment of stringent anti-trust legislation, would not find *596this law very helpful, and that those having monopoly as their dominant purpose would not choose to take advantage of this law.
Granting that it is possible for a monopoly to' result from this law, it is clear that such a result is neither contemplated nor encouraged by the law. Rather there is an apparent attempt to confer benefits upon those who find the law suitable for their purposes, which benefits are to stop short of monopoly. Now granting, also, that in isolated cases the practical operation of the law results in monopoly, or something in the nature of monopoly, can it be said that for that reason the law is unconstitutional, as denying the equal protection of the law? If monopoly results it is lawful monopoly, and the legislature has a right to legalize monopoly. This it has done with reference to all of the public utilities of the state. If in the course of time operation under the law gives rise to oppressive monopolies, the legislature may either repeal the law or fence it with further restrictions, as in its opinion public interest may require. If the law should promote evil rather than wholesome results, it is not necessary that it should permanently endure.
It may be that the law does not apply to every conceivable business. It is available, however, to all persons conducting agricultural, dairy, mercantile, mining, manufacturing, or mechanical business, and, as amended by ch. 433, sec. 1, Laws 1923, now sec. 185.02, Stats. 1923, all businesses that may be conducted in corporate form under ch. 180, sec. 180.01, Stats. 1923. As was said in Missouri, K. & T. R. Co. v. Cade, 233 U. S. 642, at p. 649 (34 Sup. Ct. 678):
“These cover a wide range, and do not appear to have been grouped together for the purpose of bearing against any class or classes of citizens or corporations. Unless something of this sort did appear, we should not be justified in holding the act to be repugnant to the Fourteenth amendment.”
*597When we reflect that a state may encourage steam laundries and discourage hand laundries (Quong Wing v. Kirkendall, 223 U. S. 59, 32 Sup. Ct. 192); require a license fee of elevators situated on railroad right of way though none is required of elevators not so situated (W. W. Cargill Co. v. Minnesota, 180 U. S. 452, 21 Sup. Ct. 423); require a license tax upon persons and corporations carrying on the business of refining sugar and molasses, though excluding planters and farmers grinding and refining their own sugar and molasses (American S. R. Co. v. Louisiana, 179 U. S. 89, 21 Sup. Ct. 43) ; impose a license tax on persons in hiring laborers to be employed beyond the limits of the state, though none is required of those engaged in the business of hiring persons to labor within the state (Williams v. Fears, 179 U. S. 270, 21 Sup. Ct. 128); select the business of fire insurance as a special target for anti-monopolistic regulation (Carroll v. Greenwich Ins. Co. 199 U. S. 401, 26 Sup. Ct. 66), it is difficult to see how a law like this can be condemned because it denies the equal protection of the laws, at least upon the attack of the defendants in this case.
It is a well recognized principle that in order to enable one to attack a statute as unconstitutional he must show that the alleged unconstitutional feature of the law injures him and so operates as to deprive him of rights protected by the constitution. Southern R. Co. v. King, 217 U. S. 524, 30 Sup. Ct. 594; Standard S. F. Co. v. Wright, 225 U. S. 540, 550, 32 Sup. Ct. 784; Plymouth C. Co. v. Pennsylvania, 232 U. S. 531, 544, 34 Sup. Ct. 359. If the Bekkedals are engaged in the numerous pursuits to' which the Co-operative law is applicable, they have a perfect right to avail themselves of the provisions of the law, and if their only complaint is that they would like to create a monopoly but cannot, they are upon a precarious footing in a court of law.
The contention, of the appellants in support of their motion for rehearing cannot be sustained.
*598Appellants urge a modification of the restraining order which restrains them from “interfering in any manner whatever with the contracts of the plaintiff, and from interfering in any manner whatever with any of the business matters of the plaintiff, and particularly from buying or attempting to buy any tobacco from any persons who have contracted to sell the same to the plaintiff, and from receiving or attempting to receive any of the tobacco grown in the year 1922 by any person who is under contract to sell the same to the said plaintiff.” It is claimed that the order is in such general and ambiguous terms that it imposes upon the appellants an unreasonable responsibility in being obliged to determine for themselves just what conduct will constitute an interference with the business and contracts of.the respondent. While it may be true that the order as drawn imposes this responsibility upon the appellants, it is just as true that a court cannot look into the future and divine all of the practices which might be resorted to, to interfere with respondent’s business, and an order which attempted to detail the various acts and practices prohibited would necessarily be construed as permitting all not specifically prohibited, and deny to the respondent the full and complete remedy to which it is entitled. We think the order must necessarily be in general terms.
There is one respect, however, in which it is considered the order should be modified. If a member should voluntarily sever his relations with the pool by breaching his contract and withdrawing his membership therein and placing his tobacco for sale upon the market, no reason is perceived why appellants should be denied the privilege of buying his crop. To that extent and for that purpose the injunctional order or judgment is amended by inserting after the words above quoted the following:
“Providing, that these restraints shall not prohibit the defendants from purchasing tobacco from those who shall have voluntarily breached their contract with respondent, *599severed their relations therewith, and withdrawn their membership therein.”
As so modified the judgment is affirmed. It is considered that this modification shall not affect the question of costs. Costs will be taxed in favor of respondent.
By the Court. — Motion for rehearing denied, with $25 costs.