Cox v. General Elec. Co.

• Decision Date: 10 January 1955
• Docket Number: No. 18791,18791
• Citation: 85 S.E.2d 514,211 Ga. 286
• Parties: COX et al. v. GENERAL ELECTRIC COMPANY.
• Court: Georgia Supreme Court

Page 514

85 S.E.2d 514

211 Ga. 286

COX et al. v. GENERAL ELECTRIC COMPANY.

No. 18791.

Supreme Court of Georgia.

Jan. 10, 1955.

Syllabus by the Court.

1. The right of the plaintiff to recover, under the allegations of the petition in this case, is dependent upon the existence of a valid law of the State of Georgia.

2. The Georgia 'Fair Trade Act' is unconstitutional for the reason that it violates the due-process clause of the Constitution of the State of Georgia.

General Electric Company, a manufacturer of electrical appliances, brought suit against Cox-Gardner Furniture Dealers, a partnership composed of named individuals, seeking a restraining order, temporary injunction, and permanent injunction retraining the defendant from advertising for sale, offering for sale, or selling products bearing the trademark and trade name of the plaintiff at prices which were less than the minimum prices stipulated by the plaintiff.

The petition was brought in three counts. Counts one and two allege that plaintiff's trademark, trade name, and the good will associated therewith are all property under the laws of Georgia; that defendants' conduct in selling plaintiff's products at less than the price stipulated by plaintiff injures said property; and that plaintiff is entitled to have its property protected under the laws of Georgia.

Count three of the petition alleges that defendants' conduct in selling plaintiff's products at less than the price stipulated by plaintiff is a violation of the so-called Georgia 'Fair Trade Act', Ga.L.1953, November-December Session, p. 549 et seq., and especially section 7 thereof which reads as follows: 'Wilfully and knowingly advertising for sale, offering for sale or selling any commodity at less than the price stipulated in any contract entered into pursuant to the provisions of this Act, whether the person so advertising for sale, offering for sale or selling is or is not a party to such contract, is unfair competition and is actionable at the suit of any person damaged thereby.' It is alleged in the petition that defendant has signed no contract or agreement with plaintiff.

The defendant in the court below filed a general demurrer to the petition contending among other things that the so-called Georgia 'Fair Trade Act', Ga.L.1953, November-December Session, p. 549 et seq., in so far as it applies to persons not parties to minimum resale contracts is unconstitutional as violating stated provisions of the Constitution of the State of Georgia. The general demurrer of the defendant was overruled as to each and every ground thereof. The exceptions here are to that judgment.

Cohen, Roberts & Kohler, Atlanta, for plaintiff in error.

C. Baxter Jones, Jr., Sutherland, Asbill & Brennan, Atlanta, for defendant in error.

F. M. Bird, Atlanta, Charles J. Bloch, Macon, John H. Boman, Jr., A. G. Cleveland, Jr., William H. Schroder, Jr., Henry B. Troutman, Spalding, Sibley, Troutman & Kelley, James M. Sibley, Robert B. Troutman, Atlanta, Herman T. Van Mell, Chicago, Ill., Eugene Cook, Atty. Gen., Robert H. Hall, Asst. Atty. Gen., Rogers, Hoge & Hills, New York City, Geo. M. Chapman, Bronxville, N. Y., for party at interest not party to record.

WYATT, Presiding Justice.

1. It is contended that the plaintiff in the court below (the defendant in error here) is entitled to the relief sought in so far as counts one and two are concerned irrespective of the Fair Trade Statute for the reason, as contended, that the petition seeks to protect property rights, and that the petitioner is entitled to have these property rights protected irrespective of the Fair Trade Act. This contention cannot be sustained. The Supreme Court of the United States in Kiefer-Stewart Company v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 260, 95 L.Ed. 219, in dealing with a scheme similar to the one here involved, and certainly controlled by the same legal principles, said, "Under the Sherman Act [15 U.S.C.A. § 1-7, 15 note] a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se."

In Dr. Miles Medical Company v. John D. Park & Sons Company, 220 U.S. 373, 31 S.Ct. 376, 381, 55 L.Ed. 502, where the scheme under consideration was essentially the same as the one here under consideration, and where the contentions of the medical company were in general the same as those alleged in the petition in the instant case, the Supreme Court of the United States said: 'The bill asserts complainant's 'right to maintain and preserve the aforesaid system and method of contracts and sales adopted and established by it.' It is, as we have seen, a system of interlocking restrictions by which the complainants seek to control not merely the prices at which its agents may sell its products, but the prices for all sales by the dealers at wholesale or retail, whether purchasers or subpurchasers, and thus to fix the amount which the consumer shall pay, eliminating all competition. * * * That these agreements restrain trade is obvious.' The court then held the scheme under consideration to be in violation of the Sherman Act.

In the instant case the plaintiffs in error are nonsigners, or parties with whom the manufacturer has no contract. Clearly the above rulings as to the violation of the Sherman Act by schemes such as the petition discloses in this case are controlling.

The defendant in error further contends that it is entitled to the relief sought by virtue of a valid act of the General Assembly of the State of Georgia, the socalled 'Fair Trade Act.' In view of the above rulings of the Supreme Court of the United States, of course, if plaintiff in the court below is entitled to any relief, it must be by virtue of a valid act of the General Assembly of Georgia. This contention will dealt with in the following division of the opinion.

2. Count three of the petition contends that the plaintiff in the court below is entitled to the relief sought by virtue of and under the provisions of the Georgia Fair Trade Act, Ga.L.1953, November-December Session, p. 549. As appears from the authorities cited in division one of this opinion, after the Supreme Court of the United States had declared schemes such as is here under consideration to be in violation of the Sherman Act, 26 Stat. 209, 15 U.S.C. § 1, the Congress of the United States in the Miller-Tydings Act, 50 Stat. 693, 15 U.S.C. § 1, attempted to delegate to the States the right to enact these Fair Trade Statutes. The Supreme Court of the United States in construing this act held that it could not be made to apply to persons who had signed no contract or agreement. Schwegmann Brothers v. Calvert Distillers Corporation, 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035. Thereafter, the Congress enacted the McGuire Act, 66 Stat. 632, 15 U.S.C. § 45, attempting to delegate to the States the right to enact Fair Trade Statutes applicable to all dealers or retailers whether they had signed contracts or not.

This attempt by the Congress to delegate to the States this power seems to be in the reverse of the power of delegation as we have always understood this subject under our system of government and under the provisions of the Constitution of the United States. However, that is the situation with which we have to deal.

The defendants in the court below had signed no contract or agreement of any kind. We are, therefore, not here concerned with what the situation would have been if there had been a contract between the parties because that question is not now before us. Clearly, it follows, if the scheme here under consideration is valid and if the plaintiff in the court below is entitled to the relief sought, it must be by reason of a valid law of Georgia making legal the scheme of doing business described in the petition under consideration. That the legislature attempted to make legal the scheme and method of doing business described in the petition is clear from a reading of the act of 1953, supra. The question remains, however, is this law a valid law?

This court has very recently in two cases dealt with the question of fixing prices by statute. In Harris v. Duncan, 208 Ga. 561, 67 S.E.2d 692, 693, this court was dealing with a statute purporting to give to a board the right to fix the price of milk. We there said, 'Before the General Assembly can authorize price fixing without violating the due process clause of our Constitution, among other requirements, it must be done in a business or where property involved is 'affected with a public interest,' and the milk industry does not come within that scope.' Certainly, if milk is not 'affected with a public interest,' electrical appliances are not.

Again in the Harris case, supra, we said, 'The right to contract, and for the seller and purchaser to agree upon a price, is a property right protected by the due process clause of our Constitution, and unless it is a business 'affected with a public interest,' the General Assembly is without authority to abridge that right.'

In the Harris case, supra, Chief Justice Duckworth wrote a very full and complete special concurring opinion. All that is said there by the Chief Justice is applicable here. We therefore, without the necessity of copying in this opinion what is there said, adopt that special concurring opinion as a part of this opinion. It is contended that the Harris case, supra, differs from the instant case for the reason that the court was there dealing with the power of the General Assembly to authorize a board to fix prices, while here the court is dealing with an attempt by the legislature to authorize an individual to fix the price of its own product. The clear answer to this contention is that, if the General Assembly cannot authorize a board created by the State to fix prices, certainly it cannot give this right to an individual.

In ...