Court Opinion

ID: 9628588
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:25:43.538501+00
Date Added: 2024-06-11T09:09:44.506260
License: Public Domain

Hunter, J.
(dissenting)—The appellants contend that the fair trade act in question should be held unconstitutional; that the case of Sears v. Western Thrift Stores of Olympia, Inc., 10 Wn. (2d) 372, 116 P. (2d) 756 (1941), should be *12overruled, and if it is not overruled, the act should be held unconstitutional on other grounds not considered in the Sears case. Being in disagreement with the views of the majority that the Sears case should be overruled, all of the contentions raised by the appellants will be considered in this dissent. .
The appellants first contend the act is in violation of Art. II, § 1, as amended by the seventh amendment of the constitution of the state of Washington, in that it delegates legislative authority to private persons without requiring the conformance to any standards prescribed by the legislature.
In the early case of C.W. & Z. R.R. Co. v. Commissioners of Clinton County, 1 Ohio State 77 (1852), that court made this distinction in regard to a delegation of powers as opposed to a mere grant of rights under a completed law:
“. . . The true distinction, therefore, is, between the .delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.”
We have in essence followed the same reasoning in this state in regard to an unlawful delegation of legislative power. In the case of State v. Storey, 51 Wash. 630, 99 Pac. 878 (1909), we made the following statement in regard to a contention of unlawful delegation, which was also approved in Royer v. Public Utility Dist., 186 Wash. 142, 56 P. (2d) 1302 (1936), and Port of Tacoma v. Parosa, 52 Wn. (2d) 181, 324 P. (2d) 438 (1958):
“. . . The mere fact that the act does not take effect until the contingency arises, does not indicate a delegation of legislative power, even where the contingency depends upon the action of certain persons. ... In such cases it cannot be said that legislative authority is delegated. The local judgment merely accepts or rejects the operation of the legislative act. ...”
In the instant case the legislature enacted a complete law; the mere fact that it does not become binding on others until it is invoked by a producer, does not constitute making *13a law as a result of the producer’s act. The producer has only the option to take advantage of the fair trade law enacted by the legislature, if his commodity is in free and open competition with commodities of the same general class produced by others.
In jurisdictions outside of this state there is a sharp division of authority as to fair trade acts similar to ours constituting an unlawful delegation of legislative power to private individuals. The line of authorities followed by the California court in its recent opinion of Scovill Mfg. Co. v. Skaggs Pay Less Drug Stores, 45 Cal. (2d) 881, 291 P. (2d) 936 (1955), is in conformity with the thinking of this court as expressed in State v. Storey, supra, which I believe to be the better rule. In the California case, the same contention of unlawful delegation was made upon the fair trade act of that state which is similar to our act. That court stated:
“ . . . Here the acts of private parties in entering into contracts for the sale of commodities constitute the facts in contemplation of which the Legislature acted, and upon the existence of which the provisions of the enactment were to be applicable. The private contracts are no more legislative in character than are other acts or conduct of private parties undertaken as a prerequisite to the application of a statute. The consequence that the statute has become applicable, and conduct in violation thereof has become actionable is in no way due to the exercise of any assumed legislative power on the part of the contracting parties. ...”
I see no unlawful delegation of legislative authority in our fair trade act in derogation of the state constitution.
It is appellants’ second contention that the act has the effect of depriving persons of liberty and property without due process of law and constitutes legislation beyond the scope of the police power of the state, having no relation to the public health, safety, welfare or morals, all contrary to Art. I, § 3, of the state constitution which provides:
“No person shall be deprived of life, liberty, or property, without due process of law.”
In the Sears case, supra, we said-:
“Does the act represent a valid exercise of the legislative power? If it does, we cannot hold it to be invalid merely *14because it may be an unwise law and of questionable expediency, or because it may be unable to correct the supposed evils that it is intended to remedy, or because of any other objection directed to its wisdom. This court is interested only in whether there has been a subversion of rights as guaranteed by the constitution.”
We then proceeded to decide the exact issue tendered here by stating:
“That this act is a valid exercise of the police power of the state is clearly established. We held in State v. Sears, 4 Wn. (2d) 200, 103 P. (2d) 337, 118 A.L.R. 506, that the police power extends not only to the preservation of the public health, safety, and morals, but also to the preservation and promotion of the public welfare. Moreover, we stated that the legislature is vested with a wide discretion in determining what the public interest requires, and what measures are necessary to protect those interests. In the case at bar, the legislature decided that trade-mark owners, distributors of identified commodities, and the public needed protection against injurious and uneconomic practices. . . . ” (Italics mine.)
Passing upon this same question the supreme court of the United States, in the case of Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U. S. 183, 81 L. Ed. 109, 57 S. Ct. 139, 106 A.L.R. 1476 (1936), held that the Illinois fair trade act, which is virtually the same as our enactment, did not violate the due process clause of the fourteenth amendment to the Federal constitution. The court there said:
“First. In respect of the due process of law clause, it is contended that the statute is a price-fixing law, which has the effect of denying to the owner of property the right to determine for himself the price at which he will sell. Appellants invoke 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 Amendments. [Citations omitted.] These cases hold that, with certain exceptions, which need not now be set forth, this right of the owner cannot be denied by legislative enactment fixing prices and compelling such owner to adhere to them. But the decisions referred to deal only with legislative price fixing. They constitute no authority for *15holding that prices in respect of ‘identified’ goods may not be fixed under legislative leave by contract between the parties. The Illinois Fair Trade Act does not infringe the doctrine of these cases.

CC

“Nor is § 2 so arbitrary, unfair or wanting in reason as to result in a denial of due process. We are here dealing not with a commodity alone, but with a commodity plus the brand or trade-mark which it bears as evidence of its origin and of the quality of the commodity for which the brand or trade-mark stands. Appellants own the commodity; they do not own the mark or the good will that the mark symbolizes. ...”
I am of the opinion that appellants’ second contention cannot be sustained, and that we correctly decided the question of due process in the Sears case, supra. Appellants argue, however, that if the act when it was enacted bore any relation to the public health, safety, or general welfare, such relationship has long since disappeared.
It appears to be clear that the fair trade act was a valid and necessary exercise of the police power for the protection of the general welfare. Our fair trade act was enacted in 1935 and re-enacted in 1937 (Laws of 1937, chapter 176, § 3, p. 685 (RCW 19.89.030)). The compelling reason for such legislation was aptly stated in 34 Mich. L. Rev. 691 (1936):
“It will be recalled that this practice [retail price cutting], which began its phenomenal growth shortly before the beginning of the present century, created what many believed to be two serious evils. Because it made the price of nationally advertised products vary from store to store and city to city, it forced the producer of such goods into virtual competition with himself, allowed others to capitalize on his extensive advertising campaigns, and eventually lowered his article in the eyes of the consumer. But worse than this, it drove to the wall many small retail merchants who, because of large overheads and small turnovers, could not compete. This latter not only seriously affected the public but deprived the trade-mark owner of available markets and tended to fetter competition in the retail trade.” (Footnotes omitted.)
Assuming, arguendo, these dangers to the general welfare no longer exist in our economy is not a reason for con-*16eluding that the act no longer bears a reasonable relation to the general welfare; but rather is a reason for concluding it has been effective as a protection from the dangers in the past and is effective as a protection from the same dangers that may arise from our economy in the future. It is inconceivable that a statute is a valid exercise of the police power when it functions to cure an existing evil, but becomes an invalid exercise of the police power when the evil no longer exists and the statute functions only to prevent recurrence of the same evil.
If, as appellants contend, the relation of the statute to the general welfare no longer exists, this does not make it incumbent upon the court to decide that the statute is an unreasonable exercise of the police power, because the reasonableness of the statute need not be tested by the facts which do now exist but by the facts which might reasonably be conceived to exist. We stated in Shea v. Olson, 185 Wash. 143, 53 P. (2d) 615, 111 A.L.R. 998 (1936):
“In determining whether a law comes within the police power of the state, it is not incumbent upon the court to find that facts which would justify such legislation actually exist. If a state of facts which would justify the legislation can reasonably be conceived to exist, the court must presume that it did exist and that the law was passed for that purpose. [Citations omitted.]”
This court cannot now say that such a state of facts can no longer reasonably be conceived to exist to justify this legislation. If the appellants believe the law is of questionable expediency, their appeal should be made to the legislature and not to this court.
The appellants next contend that the nonsigner clause of the fair trade act is in violation of Art. I, § 12, of the constitution of the state of Washington, in that it grants special privileges to a class of citizens, which privileges do not equally apply to all citizens.
In State ex rel. Bacich v. Huse, 187 Wash. 75, 59 P. (2d) 1101 (1936), we said:
“The aim and purpose of the special privileges and immunities provision of Art. I, § 12, of the state constitution *17and of the equal protection clause of the fourteenth amendment of the Federal constitution is to secure equality of treatment of all persons, without undue favor on the one hand or hostile discrimination on the other.
“To comply with these constitutional provisions, legislation involving classifications must meet and satisfy two requirements: (1) The legislation must apply alike to all persons within the designated class; and (2) reasonable ground must exist for making a distinction between those who fall within the class and those who do not.”
See, also, Adams v. Hinkle, 51 Wn. (2d) 763, 322 P. (2d) 844 (1958).
Here the act meets these requirements as above set forth, (1) it applies equally to all persons selling an identified commodity in free and open competition with other commodities of the same general class, and (2) reasonable grounds exist for the designation of the class by their investment and property right in the article and good will associated with it, as distinguished from the class of those producing an article which does not bear a trademark, brand, or name.
Appellants also contend that the fair trade act is in violation of Art. II, § 19, of the constitution of the state of Washington, in that the act embraces more than one subject and the subject embraced is not expressed in the title.
The above section of the constitution reads as follows:
“Bill to Contain One Subject. No bill shall embrace more than one subject, and that shall be expressed in the title.”
The title to the fair trade act reads as follows:
“An Act to protect trade-mark owners, distributors and the public against injurious and uneconomic practices in the distribution of articles of standard quality under a distinguished trade-mark, brand or name.”
In State ex rel. Toll Bridge Authority v. Yelle, 32 Wn. (2d) 13, 200 P. (2d) 467 (1948), we said:
“It is to be noted that this constitutional provision contains not merely one prohibition or direction to the legislature, but two, viz: (1) No bill shall embrace more than one subject; and (2) the subject of every bill shall be expressed in the title.”
*18In the case of Casco v. P.U.D. No. 1, 37 Wn. (2d) 777, 226 P. (2d) 235 (1951), we quoted with approval this portion of American Jurisprudence, 50 Am. Jur. 178, Statutes, § 197:
“ ‘. . . To constitute plurality of subject, an act must embrace two or more dissimilar and discordant subjects, that by no fair intendment can be considered as having any legitimate connection with or relation to each other. Within the meaning of the constitutional provision, matters which apparently constitute distinct and separate subjects are not so where they are not incongruous and diverse to each other. Generally speaking, the courts are agreed that a statute may include every matter germane, referable, auxiliary, incidental, or subsidiary to, and not inconsistent with, or foreign to, the general subject or object of the act.’ ”
In Randles v. State Liquor Control Board, 33 Wn. (2d) 688, 206 P. (2d) 1209, 9 A. L. R. (2d) 531 (1949), we made this statement in holding a title sufficiently complied with the foregoing constitutional provision:
“A title does not need to be an index to the contents of a measure. The purpose of a title is to call attention to the subject matter of the act, so that anyone reading it may know what matter is being legislated upon, and is sufficient when it is broad enough to accomplish that purpose. All incidentals germane to a title may be brought within the legislation although not specifically referred to in such title.
In applying these rules, it is my conclusion that the Washington fair trade act embraces only one subject: the prevention of injurious and uneconomic practices involving articles distinguished by a trademark, brand or name; and that the subject is adequately expressed in the title.
The last contention of the appellants is that the fair trade act is violative of Art. XII, § 22, of the constitution of the state of Washington, in that it authorizes contracts for fixing the price of products and commodities.
Art. XII of our constitution is entitled “Corporations Other Than Municipal” and § 22 of Art. XII provides:
“Monopolies and Trusts. Monopolies and trusts shall never be allowed in this state, and no incorporated company, copartnership, or association of persons in this state shall directly or indirectly combine or make any con*19tract with any other incorporated company, foreign or domestic, through their stockholders, or the trustees or assignees of such stockholders, or with any copartnership or association of persons, or in any manner whatever for the purpose of fixing the price or limiting the production or regulating the transportation of any product or commodity. The legislature shall pass laws for the enforcement of this section by adequate penalties, and in case of incorporated companies, if necessary for that purpose, may declare a forfeiture of their franchises.” (Italics mine.)
The appellants rely on the following language of § 22, supra:
“ . . . or in any manner whatever for the purpose of fixing the price. . . . ”
We made this statement in the Sears case, supra:
“That the framers intended that § 22 of Article XII should deal with monopolies is clearly established by its reference to ‘Monopolies and Trusts.’ Moreover, a reading of § 22, giving to each word its ordinary meaning, indicates that the language relating to price fixing cannot be lifted out of its natural context and considered apart from the rest of the provision. The entire section must be read, construed, and applied as a whole. Thus the language in § 22 with reference to price fixing must relate to the essential purpose of the provision, namely, the prohibition of monopolies.” (Italics mine.)
The best mode of ascertaining the meaning affixed to any word or sentence by a deliberative body is by comparing it with the words and sentences with which it stands connected, and a constitutional provision or a phrase in a constitutional provision must be read in connection with the context. Noscitur a sociis is a rule of construction applied to all written instruments. The obscurity of any particular word may be removed by reference to associated words. And the meaning of a term may be enlarged or restricted by referring to the object of the whole clause in which it is used. 11 Am. Jur. 663, § 53.
Language may not be lifted out of context to be considered independent of the remainder of the constitutional provision. It must be regarded as a whole, with- effect and *20meaning given to every part subjected to construction. Sears v. Western Thrift Stores, supra; State ex rel. Wolfe v. Parmenter, 50 Wash. 164, 96 Pac. 1047 (1908); Chlopeck Fish Co. v. Seattle, 64 Wash. 315, 117 Pac. 232 (1911).
I do not believe that the framers of the constitution meant anything more than to prohibit monopolies and trusts when they enacted this provision. Price maintenance is but one facet of a monopoly, as is the limitation of production or the regulation of transportation of a product or commodity, but it does not follow that price maintenance per se constitutes a monopoly.
In the case of Fisher Flouring Mills Co. v. Swanson, 76 Wn. 649, 137 Pac. 144 (1913), we held that a manufacturer, who has given a reputation to particular goods which he creates, has the right to fix in his contract of sale to retailers a reasonable minimum price at which those goods will be sold to consumers. We said:
“. . . Contracts fixing prices as incidental to some main contract, and involving less than a controlling part of a given commodity in a given market, not proceeding from, nor tending to create, or to maintain a monopoly, will be sustained when the restriction is, under the circumstances of the particular case, reasonable in reference to the interests of the parties, and reasonable in reference to the interests of the public; that is to say, when the price fixed is fairly necessary to the protection of the covenantee, and fair to the public in that it furnishes only a reasonable profit to the contracting parties. Lacking these elements, such contracts are invalid as contrary to public policy. ...” (Italics mine.)
In the case of Group Health Cooperative of Puget Sound v. King County Medical Society, 39 Wn. (2d) 586, 639, 237 P. (2d) 737 (1951), this court, in a unanimous En Banc decision, said:
“There is a well-settled rule, however, that Article XII, § 22, does not condemn price fixing and the limitation of production per se, but only when either of these results is brought about in connection with a monopoly, with resulting unreasonable restraint upon competition. Sears v. Western Thrift Stores, supra; Washington Cranberry Growers’ Ass’n v. Moore, 117 Wash. 430, 201 Pac. 773, 204 Pac. 811, *2125 A. L. R. 1077. It is therefore necessary to determine whether respondents’ combination or arrangement by which production is limited and prices are fixed with respect to prepaid medical service, amounts to a ‘monopoly’ in the constitutional sense.” (Italics mine.)
The supreme court of South Dakota, in the case of Miles Laboratories v. Owl Drug Co., 67 S. D. 523, 295 N. W. 292 (1940), held that their fair trade act, which is in substance the same as the Washington fair trade act, did not violate the following provision of their state constitution:
“ ‘Monopolies and trusts shall never be allowed in this state and no incorporated company, co-partnership or association of persons in this state shall directly or indirectly combine or make any contract with any incorporated company, foreign or domestic, through their stockholders or the trustees or assigns of such stockholders, or with any co-partnership or association of persons, or in any manner whatever to fix the prices, limit the production or regulate the transportation of any product or commodity so as to prevent competition in such prices, production or transportation or to establish excessive prices therefor.
“ ‘The legislature shall pass laws for the enforcement of this section by adequate penalties and in the case of incorporated companies, if necessary for that purpose may, as a penalty, declare a forfeiture of their franchises.’ ” (Italics mine.)
The South Dakota court said:
“A monopoly such as is meant by Section 20 of Art. 17 of our Constitution exists only whgre all or so nearly all of a product or commodity within a community or district is brought into the hands of one man or set of men, as to practically bring the handling or production of the commodity within such single control, to the exclusion of competition or free traffic therein [citation omitted]. To render the protection against monopoly more effective, this constitutional provision prohibits certain combinations and agreements dealing with the production, transportation and price of commodities insofar as they tend substantially to stifle competition. The ‘Fair Trade Law’ does not purport to give the producer the right to stifle comnetition in a commodity. The right to stabilize the price of a ‘brand’ in the manner described in the act may only be acquired or maintained if the commdoity [sic] remains in free and open competition. *22SDC 54.0402. An act which grants rights conditioned upon the maintenance of free competition does not purport to authorize the making of a ‘contract* * * or in any manner whatever to fix the prices, * * * of any product or commodity so as to prevent competition * * *. . . .’ ”
In the case of Frankfort Distillers Corp. v. Liberto, 190 Tenn. 478, 230 S. W. (2d) 971 (1950), the court, in citing Sears v. Western Thrift Stores, supra, among other decisions, held the Tennessee fair trade act did not violate the state constitutional prohibition against monopolies.
In the case of State ex rel., Banker v. Clausen, 142 Wash. 450, 253 Pac. 805 (1927), we quoted with approval this portion of Ruling Case Law, which is now embodied in 11 Am. Jur. 659, § 50, as follows:
“ ‘A cardinal rule in dealing with constitutions is that they should receive a consistent and uniform interpretation, so that they shall not be taken to mean one thing at one time and another thing at another time, even though the circumstances may have so changed as to make a different rule seem desirable. In accordance with this principle, a court should not allow the facts of the particular case to influence its decision on a question of constitutional law, nor should a statute be construed as constitutional in some cases and unconstitutional in others involving like circumstances and conditions. Furthermore, constitutions do not change with the varying tides of public opinion and desire. The will of the people therein recorded is the same inflexible law until changed by their own deliberative action; and therefore the courts should never allow a change in public sentiment to influence them in giving a construction to a written constitution not warranted by the intention of its founders.’ 6 R.C.L. 46.” (Italics mine.)
It has been the settled law in this state, by consistent and uniform interpretation, that Art. XII, § 22, of our constitution does not prohibit price maintenance per se, but is a prohibition against monopolies and trusts, and I fail to see that the fair trade act constitutes a monopoly or trust, thereby violating this provision of the constitution.
I am aware that there is a division of authority in other jurisdictions where the constitutionality of enactments similar to ours has been tested on the grounds we have consid*23ered. I believe, however, that the authorities sustaining the thinking expressed in this dissent are the better reasoned cases.
The Sears case, supra, which the appellants ask us to overrule, has been the law of this state for eighteen years, and I find no reasons more compelling in this appeal than we did then for holding the fair trade act unconstitutional, or in now overruling the established law of this state.’
The determination of the trial court that the challenged act is constitutional should be affirmed.
Ott, J., concurs with Hunter, J.