Court Opinion

ID: 8033684
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:18:18.856455+00
Date Added: 2024-06-11T16:37:03.384936
License: Public Domain

Rose, J., dissenting.
This is a suit in equity brought by the Standard Oil Company and Claude E. Shamp, pleading separately, plaintiffs, in the district court for Lancaster county, to enjoin the city of Lincoln and the members of its council from conducting at cost in competition with plaintiffs the business of selling gasoline and lubricating oils in the city of Lincoln. Defendants demurred to the petitions of plaintiffs on the ground that the facts stated therein were insufficient to constitute a cause of action. The district court sustained the demurrer. Plaintiffs elected to stand on their petitions and the suit was dismissed. Plaintiffs appealed to the supreme court where the dismissal was affirmed. Standard Oil Co. v. City of Lincoln, ante, p. 243. On motion of plaintiffs for a rehearing a reargument was granted. I was unavoidably absent when the cause was first submitted on appeal and took no part in the subsequent opinion and affirmance but I participated when the questions raised by the pleadings were reargued. By a majority vote a rehearing, *254upon a reconsideration of the merits of the case, was denied. Being convinced that the demurrer should have been overruled I dissented from the former opinion, adherence to which resulted in the denial of an injunction.
I do not question the validity or wisdom of legislation authorizing the state or a city to enter the domain of private enterprise with money raised by taxation whenever the government properly adopts that method of procuring for the public the necessaries of life, there being no other adequate supply; of preventing conspiracies, trusts and other combinations in restraint qf trade from stifling competition and arbitrarily fixing extortionate prices which injure the public; of counteracting the unlawful lowering of prices in some localities and recouping the losses, with profits made elsewhere, for the sole purpose of destroying the business of competitors; of exercising other legitimate functions of government generally for the protection of society. The unlawful destruction of competition and the exacting of unconscionable prices in the sale of the necessaries of life are inconsistent with freedom of contract. When prompted by hunger, thirst or cold to pay an illegal price-fixing monopoly extortionate prices for food, water and shelter, or other necessities of life, a purchaser in want may lose his liberty of contract. To prevent public calamities a state or city may enter what was formerly a private business, but under our republican form of government, as distinguishable from a socialism or a communism, public taxes are not available for a purely private business unless demanded by a public exigency. A city should not itself commit the wrongs it condemns to justify an entrance into a private enterprise.
The Constitution of the United States made provision for the protection of the individual from the unlawful aggressions of every department of government. To the private citizen the fields of invention, industry, art, science, literature and labor were opened with the prospect of honest rewards. The bills of rights in both state and federal Constitutions protect the individual in the ownership and con*255trol of property, including freedom of contract and the privilege of selecting a lawful avocation. The present industrial prosperity and all else that exalts and ennobles humanity under the state and federal Constitutions are due generally to individual effort and honorable reward without much extraneous aid from governmental meddling in the legitimate business of individuals.
Whether taxes are levied and collected for a private purpose depends on the facts of each particular case. The statute is not the test on the issue of constitutionality. For the protection of individual rights guaranteed by the Constitution, the court, when its power is properly invoked, is bound to inquire into the validity of a statute or ordinance. Neither the legislature nor the executive can prevent such an inquiry.
The decision in this case cites two former opinions which, in my judgment, are inapplicable to the admitted facts now under consideration. Standard Oil Co. v. City of Lincoln, ante, p. 243, citing Schroeder v. Zehrung, 108 Neb. 573, and Consumers Coal Co. v. City of Lincoln, 109 Neb. 51.
In the present instance plaintiffs pleaded the constitutional and legislative provisions under which the city assumed to act. It adopted a “Home Rule Charter” and under it passed an ordinance authorizing itself to engage in the business of selling gasoline and oil and to acquire the necessary real and personal property for that purpose. The ordinance limited the sale price of oil and gasoline to cost, including handling and contingencies. A municipal plant was established with public funds and the city engaged in the business of selling oil and gasoline at cost in competition with many private dealers having distributing stations in different parts of the city.
The petitions state in detail the following facts thus summarized: There has never been in Lincoln any actual or threatened shortage in the supply of gasoline and oils. The public demand for these commodities is fully supplied at all times from numerous filling stations owned and operated by private individuals and competitors at convenient places *256throughout the city. The merchants are in competition with each- other. There is no price-fixing by dealers,, combinations or trusts. In reality competition is open, active, untrameled and complete. The prices exacted by dealers generally are not exorbitant and only pay cost and a reasonable profit. Plaintiffs have invested large sums of money in permanent equipment and have acquired good will in contemplation of a long period of business activity. They cannot carry on their business without a profit nor compete with the city in prices while the latter is selling the same commodities in the same market at cost. Private dealers conduct their enterprises with private capital and are required to pay taxes, while the city is a competitor with public money and without liability for the payment of taxes. The effect of the city’s competition with its prices fixed by ordinance at cost Is to confiscate the property of plaintiffs and drive them out of business. The details of the facts outlined and other allegations of the petitions negative every emergency which could be lawfully invoked to draw the city into competition with private enterprise in the business of selling gasoline and oils. The facts showing the circumstances under which the city proceeded are fully pleaded in the petitions and are admitted by the city in its demurer.
If what is alleged in the petitions and admitted by the demurrer is true, defendants themselves are committing the very iniquities which, when committed by private individuals, would justify municipal competition with private enterprise. The ruling on the demurrer must be tested by what is pleaded in the petition. By that standard money is raised by taxation of plaintiffs’ property to destroy it. If the city may engage in a private business under the facts pleaded and admitted it may also, by the same methods and for the same reasons, conduct at cost with money raised by taxation, newspapers, department stores, groceries, plumbing establishments and every other private business. This is socialism and communism, twin enemies of the Republic. If the facts are as pleaded in the petitions, the *257money exacted in taxes from plaintiffs by the city to conduct the business of selling gasoline at cost is used for a private purpose and amounts to the taking of property without due process of law within the meaning of the state and federal Constitutions. If the city has become a competitor with the selling price fixed at cost, as alleged and admitted, the inevitable result will be to impair or destroy property of plaintiffs and deprive them of their constitutional right to pursue in Lincoln a lawful business of their own choosing, to control their own property and to exercise freedom of contract in respect to it. The governmental interference with lawful private business, the undermining of individual initiative and honorable reward and the menace of socialism and communism may well alarm all who love their country.
In my opinion the demurrer should be overruled, our former affirmance vacated, the dismissal below reversed, and the cause remanded for further proceedings.
Good, J., concurs in the dissent.
Note — See 28 Cyc. 260 (Ann.), 264 (Ann.).