Borden Co. v. Thomason

Citation353 S.W.2d 735
Decision Date08 January 1962
Docket NumberNo. 48736,48736
PartiesThe BORDEN COMPANY, Plaintiff-Respondent, v. Don THOMASON, Commissioner of Agriculture, and Thomas F. Eagleton, Attorney General of Missouri, Defendant-Appellants, and Hal C. Blakeney and Thomas E. Blakeney, d/b/a Blakeney Dairy, Reiss Dairy Company, Inc., Woodlawn Farm Dairy Company, Inc., Ozark Dairy Company, Beverly Farm Dairy Company, Tucker Dairy Company, Hiland Dairy Company, Palace Bakery and Ice Cream Company, Intervenors-Appellants.
CourtMissouri Supreme Court

Joseph J. Kelly, Jr., Howard F. Sachs, Kansas City, Kyle D. Williams, Jefferson City, Joseph A. Greaves, Chicago, Ill., for plaintiff-respondent. Spencer, Fane, Britt & Browne, Kansas City, Mo., of counsel.

Thomas F. Eagleton, Atty. Gen., Wayne W. Waldo, Asst. Atty. Gen., for defendants-appellants.

Riddle, Baker & O'Herin, Veryl L. Riddle, Charles H. Baker, Edward E. O'Herin, Malden, Gray Dorsey, Chesterfield, for intervenors-appellants.

DALTON, Judge.

This is an action for a declaratory judgment and injunctive relief. The purpose of the action is to have House Bill No. 255, enacted by the 70th General Assembly and styled 'An Act relating to sales of milk and milk products,' declared unconstitutional, void and ineffective in its entirety and to have the defendants enjoined from enforcing or attempting to enforce the provisions of said Act. Certain interested parties were permitted to intervene. The Act is now designated as Secs. 416.410 to 416.560, inclusive, RSMo 1959 and is referred to as the 'Unfair Milk Sales Practices Act.' (All statutory references are to RSMo and V.A.M.S. unless otherwise indicated.) The trial court found the issues for the plaintiff and granted the relief prayed. Defendants and intervenors have appealed.

The evidence shows that respondent is a corporation organized and existing under the laws of the State of New Jersey and duly authorized to transact business in the State of Missouri. It is actively engaged in many parts of the United States in the business of manufacturing, processing, selling and dealing in dairy products of many kinds. In the State of Missouri it is and has for many years been engaged in the processing and selling (at wholesale and retail) of milk products, including market milk, pasteurized milk, vitamin D milk, homogenized milk, flavored milk or flavored milk drinks, sweet milk, whipping cream, homogenized cream, skimmed milk, buttermilk, cultured buttermilk and cottage cheese. In addition, it processes and sells (at wholesale and retail) ice cream, frozen desserts, and numerous non-dairy products. A substantial amount of such products thus processed and distributed by it are processed or made from milk and cream produced on Missouri farms. Approximately 85% of plaintiff's business is wholesale and 15% retail. It buys milk from Missouri, Kansas and Iowa farmers. It fixes wholesale prices on delivery routes, retail prices for home delivery, and dock prices to distributors who come for their products. Respondent's milk purchases annually total between two and one-half and three million dollars.

The Act in question here contains thirty-one sections and certain subsections. It is a comprehensive Act relating to the sale of milk and milk products. For our purposes at this time it will be unnecessary to set out the Act in full, but we shall briefly refer to certain of its provisions.

Sec. 1 of the Act (now Sec. 416.410) defines certain terms used in the Act.

Sec. 2 (now Sec. 416.415) deals with sales by processors or distributors of any milk product for less than cost and makes the advertising, offer to sell or sale by such persons for less than cost under certain circumstances prima facie evidence of a violation of said section.

Sec. 3 (now Sec. 416.420) deals with discrimination in price by processors or distributors of such products in different sections of the state and provides that proof of a differential in price in various parts of the state, under certain circumstances except as therein stated, is prima facie evidence of a violation of this section.

Sec. 4 (now Sec. 416.425) deals with nonprocessing retailers and prohibits the sale of any milk product by such retailers under certain circumstances for less than cost to the retailer and makes the sale or offer of sale of such products by such retailer prima facie evidence of a violation of this section.

Sec. 5 (now Sec. 416.430) deals with bulk milk handlers and prohibits the sale of dairy-milk products under certain circumstances for less than cost to them and provides that the sale of such bulk milk by the handler at less than cost shall be prima facie evidence of a violation of this section.

Sec. 6 (now Sec. 416.435) prohibits under certain circumstances any person from combining any milk product with other commodity or service at a price less than the aggregate of the cost of the milk product and the other commodity or service offered for sale, and makes such a sale prima facie evidence of a violation of this section.

Sec. 7 (now Sec. 416.440) prohibits milk processors and distributors from offering under certain circumstances their purchasers rebates, discounts, etc., and makes proof of such conduct prima facie evidence of a violation of this section and likewise prohibits a milk-product purchaser from accepting such rebate, discounts, etc., and makes proof of the acceptance of anything of value by such milk-product purchaser prima facie evidence of a violation of this section.

The mentioned circumstances referred to in the several sections are 'with the intent or with the effect of unfairly diverting trade from a competitor, or of otherwise injuring a competitor, or of destroying competition, or of creating a monopoly.'

The Act imposes a duty on the attorney general or prosecuting attorney to examine complaints of persons claiming to be injured by violations of the Act. Provision is made for the issuance of writs of injunction against such violations. Provision is also made for the issuance of licenses to those subject to the Act and for the fixing of license fees. The Commissioner of Agriculture is designated as a commissioner and authority is given for the promulgation of rules and regulations to carry out the purposes of the Act. Provision is further made for the recovery of triple damages by those injured by violations of the Act. It is further provided that the remedies provided for by the Act are exclusive and that no criminal fines or penalties shall be imposed for violation of its provisions.

In its petition the plaintiff challenged the Act in thirteen particulars and the trial court sustained plaintiff's objections on nine separate grounds summarized in three conclusions of law. Plaintiff concedes that many of the alleged defects in the Act are essentially legal questions and that most of the evidence offered was directed to one of the grounds assigned for the invalidity of one section of the Act. This evidence will be reviewed in connection with the consideration of plaintiff's attack on Sec. 2 of the Act which prohibits the sale of milk below cost.

Appellants first contend that the court erred in giving judgment for plaintiff for the reason that plaintiff's petition fails to state a claim upon which relief can be granted and that the evidence presented is insufficient to support the judgment rendered by the court. Appellants insist that the evidence indicates plaintiff is not violating any provision of the Act, but that it does show plaintiff would like to make combination sales, grant advertising allowance, furnish certain free services, make certain donations, give away certain merchandise, give or loan certain equipment and give financial aid under certain circumstances, all in carrying on its business as it desires and as it had been doing prior to the effective date of the Act and would do now if it were not prohibited by the Act. Appellants argue that plaintiff cannot point to one single right that has been curtailed or infringed, and insists that 'there is no controversy presently existing between the plaintiff and the defendants.' We find no merit in these contentions.

Plaintiff's petition alleged that: 'The provisions of the Act directly and indirectly interfere with the proper and economical conduct of plaintiff's business, the preservation and expansion of its markets, the proper handling and sale of its products to the consumer, and deprive plaintiff of its property without due process of law, in violation of the Constitution of the State of Missouri, and the Constitution of the United States * * *.'

Under the Declaratory Judgment Act, Secs. 527.010-527.140, a 'justiciable controversy' exists where an actual controversy exists between persons whose interests are adverse in fact. Plaintiff must have a legally protectible interest at stake and the question presented must be appropriate and ready for decision. State ex rel. Chilcutt v. Thatch, 359 Mo. 122, 221 S.W.2d 172, 176. We think the pleadings and evidence clearly show facts bringing this cause within the express provision of the Declaratory Judgment Act. The record is sufficient to show a controversy ripe for decision. The fact that plaintiff has not actually violated the provisions of House Bill No. 255 in question here does not make the action premature. We must and do hold that plaintiff can properly have the validity of the Act determined in this declaratory judgment action before proceeding in defince of it. Plaintiff invoked a proper remedy. City of Joplin v. Jasper County, 349 Mo. 441, 161 S.W.2d 411, 412; City of Nevada v. Welty, 356 Mo. 734, 203 S.W.2d 459, 460; Tietjens v. City of St. Louis, 359 Mo. 439, 222 S.W.2d 70, 71.

Appellants next contend that the trial court erred in declaring the Act in question unconstitutional and void in its entirety. In ruling this issue we shall for convenience consider respondent's several contentions with...

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