Court Opinion

ID: 3999381
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:56:40.004217+00
Date Added: 2024-06-11T07:44:23.673065
License: Public Domain

"Nothing may endure but mutability." (Shelley.)
Under the modern trend we are given new lords, therefore new laws; in fact, under some delusion as to economic security, we are surrendering our liberties. If we continue on this course we deserve, in the words of Benjamin Franklin, "Neither liberty nor safety."
True, we held in State v. Sears, 4 Wn.2d 200,103 P.2d 337, in construing the unfair practices act (Laws of 1939, chapter 221, p. 923), that the police power extends to the preservation and promotion of the public welfare, and that the legislature is vested with a wide discretion in determining what the public *Page 388 
interest requires, and what measures are necessary to protect those interests. We were not so mindful of that rule in Pattonv. Bellingham, 179 Wn. 566, 38 P.2d 364, 98 A.L.R. 1076, in which we held that an ordinance regulating barber shops unreasonably interferes with individual rights and is an unwarranted exercise of the police power, where it undertakes to dictate the hours for opening and closing shops.
The fair trade act grants to a producer or distributor the right to enter into a contract with any retailer whereby such retailer agrees that the commodity in question shall not be sold at less than a certain unit price, in which event such contract becomes binding upon each person within this state selling or offering for sale such commodity, if notice thereof is given to such other person, and thereby such contract becomes binding not only upon the parties thereto, but upon all parties having notice of such contract.
In other words, the legislature, in violation of Art. XII, § 22 of the state constitution, attempts to legalize a contract which has for its sole purpose the fixing of the sale price of a product or commodity. The statute plainly confers upon the producer, owner, or distributor the right to make a valid contract with one individual which would fix an arbitrary resale price of a product or commodity, which arbitrary price fixing may be made binding upon every person reselling such product or commodity who has received notice of the existence of the basic contract.
We are not bound by the decisions of the supreme court of other states, nor have we hesitated in the past to align this court with the minority view on a number of questions. Even where a Federal constitutional question has been presented — the United States supreme court's interpretation of the Federal constitution is binding on us — we have followed an overruled *Page 389 
state supreme court decision. See Shively v. Garage EmployeesLocal, 6 Wn.2d 560, 108 P.2d 354; American Federation ofLabor v. Swing, 312 U.S. 321, 61 S.Ct., 568; Swing v. AmericanFederation of Labor, 298 Ill. App. 63, 18 N.E.2d 258,372 Ill. 91, 22 N.E.2d 857.
The case at bar is not within the principles of law announced in State ex rel. Hamilton v. Standard Oil Co., 190 Wn. 496,68 P.2d 1031, respecting the fixing of retail prices by contract between a manufacturer and his retailers. See FisherFlouring Mills v. Swanson, 76 Wn. 649, 137 P. 144, 51 L.R.A. (N.S.) 522, in which we held that a manufacturer may legally enter into a contract with the retailer requiring the latter to maintain a certain price on a commodity, and that the manufacturer may legally refuse to sell his product to such retailer if such contract is not kept by the retailer.
The rule in that class of cases is limited to cases wherein an actual contract is made between the manufacturer and the retailer; that is, the minds of the parties meet and a contract is actually executed between them. In the case at bar, the situation is quite different. A manufacturer may enter into an actual contract with one retailer and by operation of law, upon the giving of notice, compel every other retailer within the jurisdiction to conform to the contract so made with the original retailer; this regardless of the wishes of the other retailers and without a meeting of the minds. The fair trade act of this state thus confers upon the manufacturer the right, by operation of law, to force all retailers to conform to a contract made with one retailer. Such an arrangement, is not contractual at all, but confers upon the manufacturer the permissive right to absolutely control, *Page 390 
within the jurisdiction, the retail price of his product, which he may fix at any figure he desires.
The fair trade act forces upon all retailers, under severe penalties, the duty to sell a product at a price fixed by the manufacturer and in such case, although the dealer may buy this commodity in the open market, he may only resell it at a fixed price; and this, of course, destroys the principle of the free market upon which our economic form of distribution is based.
It is argued that, while it is illegal under our constitution to fix by contract or otherwise the price of all of a commodity by what has been termed horizontal price fixing, it is legal to fix the price, by so-called contract or otherwise, all of a certain brand of a commodity by what has been termed vertical price fixing. A sufficient answer is that no such distinction is found in our constitution. The argument was refuted by us inAmerican Export Door Corp. v. Gauger Co., 154 Wn. 514,283 P. 462, which forecloses (if a question can be foreclosed) the question presented on this appeal and obviates necessity of resort to persuasive opinions of other state supreme courts.
In American Export Door Corp. v. Gauger Co., supra, the facts were that about eighty-five per cent of the manufacturers of fir doors in Washington and Oregon formed a corporation to act as sales agent for the manufacturers. Those manufacturers entered into a formal agreement, permitting the export company not only to act as its sales agent, but also to determine the price at which the fir doors should be sold to the export trade. We held that such an arrangement was illegal as creating a monopoly, and was an arrangement for the fixing of the price of a commodity. It is, of course, apparent that doors are made from material other than fir. Doors are made of pine, oak, metal, various kinds of wood, plywood, and other materials, and yet we *Page 391 
held that an attempt by contractual arrangement to fix the price by a vertical arrangement of one special commodity was illegal. We said:
"In the ordinary case the market is free, and independent dealers can buy from any one of many sources. Here, there is but one source, which is monopolized, and, as the evidence clearly shows, the independent dealers for export were virtually put out of business. Clearly such a condition is an unreasonable restraint of trade under the common law, and, as hereinbefore indicated, it offends against our constitutional provision against monopolies."
I quote, as follows, the apt language of counsel for appellants in answer to the argument that for economic reasons a manufacturer should be granted the right to fix retail price of his product:
"It has been strenuously contended that for good and sufficient economic reasons a manufacturer should have the right to fix the retail price at which his product should be sold. On this question of course, as is the case in most questions, there is a great deal to be said on both sides but when the Constitution of our state was adopted the makers of that document decided that the public policy of this state was opposed to contracts fixing the price of merchandise. If this rule is an economic fallacy the Constitution should be amended and we will not concern ourselves further over questions of policy or expediency."
The judgment should be reversed.