Chas. Uhden, Inc. v. Greenough

• Decision Date: 11 April 1935
• Docket Number: 25398.
• Citation: 43 P.2d 983,181 Wash. 412
• Parties: CHAS. UHDEN, Inc., et al. v. GREENOUGH, Pros. Atty., et al.
• Court: Washington Supreme Court

43 P.2d 983

181 Wash. 412

CHAS. UHDEN, Inc., et al. v. GREENOUGH, Pros. Atty., et al.

No. 25398.

Supreme Court of Washington, En Banc.

April 11, 1935

Appeal from Superior Court, Spokane County; Joseph B. Lindsley Judge.

Action by Chas. Uhden, Incorporated, and others, against Charles W Greenough, Prosecuting Attorney of Spokane County, and another. A temporary injunction was granted, and defendants appeal.

Affirmed.

Tustin & Chandler, of Spokane, A. C. Preston Thorgrimson & Turner, Evans & McLaren, Robert M. Burgunder Arthur M. Hare, and Theodore S. Turner, all of Seattle, Richards, Gilbert & Conklin and Cheney & Hutcheson, all of Yakima, G. W. Hamilton, Geo. G. Hannan, and E. W. Anderson, all of Olympia, and E. J. Eagen, of Seattle, for appellants.

Richard S. Munter and H. E. T. Herman, both of Spokane, for respondents.

HOLCOMB Justice.

This action involves the constitutionality and applicability of chapter 12, p. 26, Laws of 1933, Ex. Sess., generally referred to as the Washington Agricultural Adjustment Act.

The act first contains what is practically a replica of the Federal Agricultural Adjustment Act in the statement of the necessity for protection of agriculture and also contains an emergency clause declaring it to be necessary for the immediate preservation of public peace, health, and safety, for the preservation of the financial structure of the state, for the preservation of agriculture, to prevent a financial crisis, and for the support of the state government and its existing institutions. By the terms of the act it is to cease to be in effect at the expiration of two years from the date of its enactment, or sooner if the Governor shall by proclamation declare that the emergency recognized by section 1 of the act has ended. The act was passed by the Legislature on December 30, 1933, and approved by the Governor on January 4, 1934, with the exception of section 22 repealing section 6242, Rem. Rev. Stat., vetoed by the Governor, which the Legislature failed to enact over the veto. The veto of section 22 is of no importance to the decision in this case.

Section 2 of the act reads:

'It is hereby declared to be the policy of the legislature:

'(1) To establish and maintain such balance between the production and consumption of agricultural commodities, and such marketing conditions therefor, as will reestablish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the basic period. The basic period in the case of all agricultural commodities shall be the pre-war period, August, 1909-July, 1914.

'(2) To approach such equality of purchasing power by gradual correction of the present inequalities therein at as rapid a rate as is deemed feasible in view of the current consumptive demand in domestic markets.

'(3) To protect the consumers' interest by readjusting farm production at such level as will not increase the percentage of the consumers' retail expenditures for agricultural commodities, or products derived therefrom, which is returned to the farmer, above the percentage which was returned to the farmer in the pre-war period, August, 1909-July, 1914. It is hereby declared to be the policy of this state to cooperate with and assist the national government in promoting the rehabilitation of agriculture and in eliminating the causes of the collapse of agricultural purchasing power, and to that end to bring about the formulation of marketing agreements as may be approved by the Secretary of Agriculture of the United States and the enforcement of such agreements within this state between producers and distributors or marketing agencies handling the products of agriculture or subdivisions thereof engaged in transactions in or affecting intrastate commerce therein and those engaged therein in transactions in or affecting interstate or foreign commerce.'

Section 4 provides that any marketing agreement approved or prescribed by the Secretary of Agriculture pursuant to the terms of the National Agricultural Adjustment Act (7 USCA § 601 et seq.) for such agricultural industry or subdivision thereof, shall be considered as the standard of fair competition in intrastate transactions, and the violation of such standard shall be deemed unfair competition, and shall be unlawful and punishable as a gross misdemeanor.

Section 7 reads: 'In order to effectuate and carry out the declared policy of this state and the provisions of the Agricultural Adjustment Act of the United States, the director of agriculture of this state is hereby vested and empowered (1) to make rules and regulations with the approval of the Governor and to provide for the regulation and control of production, storage, transportation, sale and distribution of the agricultural commodities or products thereof or competing commodities and products thereof for such time as the present economic emergency exists and (2) to enter into marketing agreements with processors, associations of producers, and other persons engaged in the handling, manufacturing, producing, processing, dealing or sale of agricultural commodities or products thereof in this state. The making of any such agreement shall not be held to be in violation of any provisions of the statutes of this state: Provided, that no such agreement shall be and remain in force after the termination of this act.'

Section 8 provides for the issuance of licenses or permits by the director of agriculture to processors, manufacturers, associations of producers, and all other persons engaged in the handling in the current of intrastate commerce of any agricultural commodities or products thereof, or any competing commodities or products thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing legislation or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy of this state and the restoration of normal economic conditions in the marketing of such commodities or products.

Section 8 further provides that the director may, for sufficient cause, revoke any such license, after due notice and opportunity for hearing, for violations of the terms and conditions thereof.

Section 12 reads: 'It shall be unlawful for any person to engage in handling, processing, wholesaling or retailing of any agricultural produce without first having obtained a license. Any person violating the provisions of this act shall be guilty of a gross misdemeanor, and each day during which the violation continues shall constitute a separate offense.'

Section 13 provides for making reports, if required, by any person engaged in handling, selling, or processing any agricultural commodities or products, in writing to the director, upon request, showing the true nature of the transaction.

Section 16 reads: 'As used in this act, the term 'basic agricultural commodity' means wheat, field corn, hogs, beef, poultry, eggs, fruit, and milk and its products, and any regional or market classification, type or grade thereof; but the director of agriculture shall exclude from the operation of the provisions of this act, during any period, any such commodity or classification, type or grade thereof if he finds, upon investigation at any time and after due notice and opportunity for hearing to interested parties, that the conditions of productions, marketing and consumption are such that during such period this act cannot be effectively administered to the end of effectuating the declared policy with respect to such commodity or classification, type or grade thereof.'

Respondents are commission merchants, all located in Spokane, handling and dealing in fresh fruits, vegetables, and products as such commission merchants, and have been legally licensed as such under the laws prior to the enactment of chapter 12, supra.

It was admitted at the trial in the lower court that a joint control committee of Oregon-Washington melon and tomato producers has promulgated and the director of agriculture of the state of Washington has approved an agreement under the act covering, or intended to cover, the sale of melons and tomatoes, fixing a minimum price at which melons and tomatoes can be sold. On behalf of that agreement it was averred by appellants that the minimum price was arrived at after a careful analysis of the cost of production and the cost of marketing such products and after taking into consideration the reasonable cost to the consuming public; that a small profit, and in many cases no profit at all, has resulted to the producer or grower; that the public has in no way been forced or compelled to purchase such products at an unreasonable price when the cost of production and marketing of such products are taken into consideration; that under the pre-existing conditions the marketing in such products was demoralized and tended to discourage the growers from further efforts to produce melons and tomatoes and because of this fact an emergency existed, which emergency the above act has taken into consideration, and attempted to remedy the evil results existing under the old system referred to in it.

Respondents alleged that there was no emergency due to low prices of such agricultural products handled in the current of trade by each and all of them; that the prices to farmers for the agricultural products handled in the current of trade by each and all of them were higher in price with respect to the purchasing power of such agricultural commodities than were such prices during the basic period adopted in the act, being August, 1909, to ...