Adwon v. Oklahoma Retail Grocers Ass'n

• Decision Date: 27 February 1951
• Docket Number: No. 34707,34707
• Citation: 228 P.2d 376,204 Okla. 199
• Parties: ADWON v. OKLAHOMA RETAIL GROCERS ASS'N, Inc.
• Court: Oklahoma Supreme Court

Page 376

228 P.2d 376

204 Okla. 199

ADWON v. OKLAHOMA RETAIL GROCERS ASS'N, Inc.

No. 34707.

Supreme Court of Oklahoma.

Feb. 27, 1951.

Syllabus by the Court.

1. The Legislature is itself the judge of the conditions which warrant legislative enactments, and they are only to be set aside when they involve such palpable abuse of power and lack of reasonableness to accomplish a lawful end that they may be said to be merely arbitrary, capricious, and unreasonable, and hence irreconcilable with the conception of due process of law.

2. It is only where an act of the Legislature is clearly, palpably, and plainly inconsistent with the terms and provisions of the Constitution that the courts will interfere and declare such act invalid and void. The action of the lawmaking power must in all cases be upheld, unless its action is manifestly in contravention of the Constitution.

3. Record examined, and held, that the Unfair Sales Act, S.L.1949, p. 103, 15 O.S.Supp.1949, §§ 598.1-598.11, is not violative of the due process clauses of the State or Federal Constitutions.

Carroll Samara, Oklahoma City, for plaintiff in error.

Miskovsky & Miskovsky, Oklahoma City, for defendant in error.

LUTTRELL, Vice Chief Justice.

This action was brought by Oklahoma Retail Grocers Association, Inc., against Earnest Adwon, d/b/a Earnest Adwon Grocery to enforce compliance by the defendant Adwon with the provisions of the Unfair Sales Act, S.L.1949, p. 103, 15 O.S.Supp.1949, §§ 598.1-598.11.

Plaintiff's petition alleged that defendant on a certain date, in violation of the Unfair Sales Act, offered for sale and sold at retail for less than cost certain items of merchandise, and that unless enjoined and restrained defendant would continue to so violate the Unfair Sales Act. It was also alleged that the acts of defendant were done with the intent and purpose of impairing and preventing fair competition by diverting trade from his competitors, and that such sales constituted unfair competition and were injurious to the public welfare, and prayed for an injunction restraining defendant from further violations of the Act. Upon the filing of the petition the trial court issued a temporary restraining order, and set the matter for hearing. Defendant demurred generally to the plaintiff's petition upon the ground that it did not state facts sufficient to entitle plaintiff to the relief sought, and also demurred on the ground that the Act was unconstitutional and void because it was indefinite and uncertain, and for the further reason that it violated certain sections of the state and federal constitutions. The trial court overruled the demurrer, and defendant elected to stand thereon and gave notice of appeal. The trial court on the same date granted plaintiff a temporary injunction and set the matter for trial on its merits. Defendant appeals.

In Englebrecht v. Day, 201 Okl. 585, 208 P.2d 538, we held a prior Unfair Sales Act, enacted in 1941, unconstitutional for the reason that in section 3 of the Act, 15 O.S.1941 § 593, a sale at less than cost with the intent or effect of injuring or preventing fair competition, etc., was violative of the state and federal constitutions in that it punished a sale for less than cost regardless of any wrongful intent. In the opinion we also pointed out that that part of the prior Act providing that purchases made at prices which could not be justified by prevailing market conditions could not be used in determining the cost, had been held unconstitutional, giving as our reason for calling attention to this provision the fact that the Legislature might decide to amend and readopt the Act.

Subsequent to the handing down of this opinion the Legislature, in 1949, adopted the present Act, eliminating the objectionable matter pointed out in the opinion in the above case.

Defendant attacks the present law on the ground that the policy of the Act is bad in that it is in conflict with freedom of enterprise. In his brief he quotes articles from the Yale Law Journal and from the Harvard Law Review in which the writers assert that instead of protecting the small merchants by preventing destructive competition, such laws in fact are injurious to small merchants and tend to destroy free competition. We are not impressed with this contention. In Herrin v. Arnold, 183 Okl. 392, 82 P.2d 977, 119 A.L.R. 1471, we held that laws of this nature were enacted under the police power; that the Legislature was primarily the judge of the necessity of the enactment; that every possible presumption was in favor of its validity, and that although the court might hold views inconsistent with the wisdom of or necessity for the law, it would not annul the law unless the same was palpably in excess of legislative power. The statements made in this case were approved in Jack Lincoln Shops v. State Dry Cleaners Board, 192 Okl. 251, 135 P.2d 332, and in Application of Richardson, 199 Okl. 406, 184 P.2d 642, 643. In the latter case we said; 'The Legislature is itself the judge of the conditions which warrant legislative enactments, and they are only to be set aside when they involve such palpable abuse of power and lack of reasonableness to accomplish a lawful end that they may be said to be merely arbitrary, capricious, and unreasonable, and hence irreconcilable with the conception of due process of law.'

Defendant next contends that the Act is violative of the 5th and 14th Amendments to the Federal Constitution, and sections 2 and 7, art. 2, of the Constitution of the State, the due process clauses of the said constitutions. In support of this argument he cites and relies upon Commonwealth of Pa. v. Zasloff, 338 Pa. 457, 13 A.2d 67, 128 A.L.R. 1120, and State v. Packard-Bamberger & Co., 123 N.J.L. 180, 8 A.2d 291, 295. Examination of these cases, however, discloses that the laws which were declared unconstitutional in each case flatly prohibited the advertisement, offer for sale, or sale of any merchandise at less than cost. The acts involved in these cases contain no provision making the violator of the law liable only when his sales were made with wrongful intent, and are therefore not comparable to the provisions of our 1949 law, which makes such an intent an essential ingredient of the offense. This is repeatedly pointed out in both decisions last above referred to. Thus, in State v. Packard-Bamberger & Co., supra, the court said: 'In the case presently pending, there is no definition of wrongful intent or purpose to limit fair competition or to inflict injury upon anyone. Indeed, intent or motive or the existence of injury to anyone are not essential to punishment under this act. As above stated, guilt may obtain without knowledge of the violation of any of its provisions. A person might believe he was complying with the provisions of this act in all respects, and find himself guilty of its violation because he purchased goods at a price not justified by market conditions, of which he was unaware, or that he met the price of a competitor, believing such price to be a lawful one, when it was not a 'lawful price."

In each case the law was held unconstitutional for this reason.

Laws similar to our present Act have been generally held valid. See Note 128 A.L.R. p. 1127, and 162 A.L.R. p. 532. In the brief of defendant no specific provision of the law which deprives the defendant of any constitutional right is pointed out, nor does defendant assert that any specific provision of the Act makes it unconstitutional.

In State v. Langley, 53 Wyo. 332, 84 P.2d 767, and in Wholesale Tobacco Dealers B v. National Candy & T. Co., 11 Cal.2d 634, 82 P.2d 3, 118 A.L.R. 486, the Supreme Courts of Wyoming and California in elaborate opinions upheld the validity of the respective Unfair Sales Act of their states. In these opinions, as in Englebrecht v. Day, supra, many of the decisions of the various states relating to similar enactments are analyzed and discussed, and therefrom it appears that in each instance where the law was held unconstitutional it was because of the invalidity of some particular section thereof by reason either of indefiniteness or uncertainty, or by the failure of the law to make wrongful intent an essential ingredient of the offense.

Defendant asserts that the mere amendment of the Act by striking out the 'or effect' phrase and the 'prevailing market conditions' phrase, which we condemned in Englebrecht v. Day, supra, did not render it valid and constitutional, and urges that we 'again search the entire record and transcript, and again strike down this dangerous legislation, which strikes at the very heart of free enterprise.'

In Herrin v. Arnold, supra; Jack Lincoln Shops v. State Dry Cleaners Board, supra, and Application of Richardson, supra, we held that this court would indulge every possible presumption that an act of the Legislature was constitutional. In School Dist. No. 25 of Woods Co. v. Hodge, 199 Okl. 81, 183 P.2d 575, 579, we said: 'Where the constitutionality of an act of the legislature is in question all reasonable doubt will be resolved in favor of the questioned authority and the act will be declared constitutional unless it can be clearly demonstrated that the legislature did not have the power or authority exercised or that its authority was exercised arbitrarily and capriciously, for instance as to classification or delegation of authority, to the prejudice of the rights of some of the citizens.'

Numerous decisions announcing and upholding this statement or rule are cited in support thereof in that case.

In Pawnee County Excise Board v. Kurn, 187 Okl. 110, 101 P.2d 614, 617, we said: 'It is only where an act of the Legislature is clearly, palpably, and plainly inconsistent with the terms and provisions of the Constitution that the courts will interfere and declare such act invalid and void. Munroe v. McNeill, 122 Okl. 297, 255 P. 150; Protest of Downing, 164 Okl. 181, 23 P.2d 173. The...