Bright Belt Warehouse Ass'n v. Tobacco Planters Warehouse
| Decision Date | 23 November 1949 |
| Docket Number | 452 |
| Citation | 56 S.E.2d 391,231 N.C. 142 |
| Parties | BRIGHT BELT WAREHOUSE ASS'N, Inc. v. TOBACCO PLANTERS WAREHOUSE, Inc., et al. |
| Court | North Carolina Supreme Court |
This suit was instituted to enjoin the defendants from conducting auction sales of leaf tobacco in their warehouses other than in accordance with the rules and regulations promulgated by plaintiff's Board of Governors, and specifically to prevent defendants from selling tobacco during the season of 1949 without the presence of an adequate number of buyers as defined by the resolution of said Board. It was alleged that the defendants were members of plaintiff Association and under obligation to observe the rules properly determined and declared which pertain to the business of conducting auction sales of tobacco on warehouse floors. Upon the verified complaint a temporary restraining order and notice to show cause were issued. The defendants answered setting forth several defenses to plaintiff's suit, and on the hearing before Judge Frizzelle demurred ore tenus to the complaint and moved for judgment that on the facts alleged plaintiff was not entitled to continuance of the restraining order. The demurrer was overruled, the motion denied, and the restraining order continued until final judgment. Defendants excepted and appealed.
William T. Joyner, Raleigh, and William T. Joyner, Jr., Raleigh, for plaintiff appellee.
Battle Winslow & Merrell, and Spruill & Spruill, Rocky Mount, for defendants appellants.
The plaintiff bases its right to enjoin the defendants from violating rules promulgated by plaintiff's Board of Governors upon allegations that defendants are tobacco warehousemen engaged in the business of conducting sales of leaf tobacco by auction, and that this business has grown to such an extent that it became necessary that rules and regulations be established to prevent disorder and injury to growers and warehousemen alike; that to effectuate this purpose and to encourage fair trade practices plaintiff Corporation was organized. It was alleged that the defendants who operate fourteen warehouses in Rocky Mount, North Carolina, are members of or affiliated with plaintiff Association, and are under obligation to comply with all its reasonable rules and regulations.
It was stated in the complaint that in 1948 growers in North Carolina produced 750,000,000 pounds of flue cured brightleaf tobacco which was sold under the auction system on warehouse floors for approximately $375,000,000, and it is alleged that in view of the expanded proportions of the industry and the keen competition between warhousemen and markets for the patronage of growers, and in order to carry out plaintiff's declared purpose of promoting the orderly marketing of tobacco and encouraging fair practices in the conduct of auction sales in the interest of growers warehousemen and buyers, the plaintiff Association at its annual meeting June 6-8, 1949, adopted a resolution authorizing its Board of Governors to determine not later than July 1st market opening dates, and 'to announce and publish such rules and regulations as may in the opinion of the Board best provide for the proper and orderly marketing and handling of tobacco on auction warehouse floors. ' Pursuant to this delegation of authority the Board of Governors met June 30, 1949, and announced and published the opening dates of markets, and rules and regulations for 'orderly marketing and handling tobacco on warehouse floors,' which related to the speed of sales, the size of piles, and selling hours. On July 20 the Board of Governors again met and adopted the following resolution:
'1. That an essential element of a bona fide sale of tobacco at auction is that there shall be assigned to such sale an adequate set of buyers prepared to bid at the competitive sale. The minimum requirement of an adequate set of buyers is the following:
'(a) Buyers for each of the three major domestic tobacco companies (Reynolds Tobacco Company, American Tobacco Company, and Liggett & Myers Tobacco Company), and
'(b) Buyers of at least three other recognized companies purchasing tobacco for export or for export and domestic consumption.
It was alleged that defendants have complied with all rules and regulations promulgated by plaintiff's Board of Governors except those referring to sales made in absence of an adequate set of buyers as defined by the plaintiff's Board of Governors; that four sets of buyers are assigned by the three major domestic companies to the Rocky Mount market permitting four simultaneous sales on that market, but the defendants in addition thereto have conducted and continue to conduct an additional or fifth sale of tobacco on the floors of defendants' warehouses when the buyers present do not include representatives from each of the three major domestic companies; that notwithstanding requests from plaintiff and farm organizations to discontinue this practice the defendants have refused and have announced their purpose to continue such sales.
Plaintiff further alleges that defendants' failure to discontinue these additional sales will result in injury to the growers of tobacco in deficiency of price, and to the plaintiff and other members of plaintiff Association who are abiding by plaintiff's reasonable marketing regulations, and will cause dissatisfaction with the auction system of marketing tobacco; that such injury cannot be readily calculated in money, and is irreparable.
The defendants, answering, admit that they are proprietors of warehouses in Rocky Mount wherein auction sales of leaf tobacco are conducted, and that plaintiff Association has been incorporated for the purposes therein declared, but defendants say the plaintiff has no capital stock and it has set up no definite procedure to determine membership; that it is merely a...
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