Gibson Auto Co. v. Finnegan

• Decision Date: 05 March 1935
• Citation: 259 N.W. 420,217 Wis. 401
• Parties: GIBSON AUTO CO., INC., v. FINNEGAN, ATTY. GEN., ET AL.
• Court: Wisconsin Supreme Court

217 Wis. 401

259 N.W. 420

GIBSON AUTO CO., INC.,

v.FINNEGAN, ATTY. GEN., ET AL.

Supreme Court of Wisconsin.

March 5, 1935.

Appeal from a judgment of the Circuit Court for Dane County; A. G. Zimmerman, Circuit Judge.

Reversed,

This action was begun by the Gibson Auto Company, Inc., against James E. Finnegan, Attorney General of the state of Wisconsin, A. L. Simpson, district attorney, Fond du Lac county, Raymond P. Dohr, district attorney, Outagamie county, R. Curtis Laus, district attorney, Winnebago county, Lawrence C. Whittet, state code administrator, L. D. Frint, deputy administrator of Wisconsin Motor Vehicle Retailing Code, and Jesse A. Smith, director, Wisconsin Motor Vehicle Retailing Code, to restrain the defendants from enforcing the provisions of chapter 110, Wis. Stats. (section 110.01 et seq.), relating to emergency promotion of industrial recovery (chapter 476 of the Laws of 1933). There was a trial, and, from a judgment in favor of the defendants, the plaintiff appeals. The action was begun on August 23, 1934, and judgment was entered on October 19, 1934.

The case of Henneman et al. v. Finnegan et al (Wis.) 259 N. W. 425, raises the same questions as are raised in this case. The two cases were argued together, the briefs in both cases have been considered, and it will be necessary to write but one opinion, although there must be separate mandates.

In the complaint the nature of plaintiff's business is set out and described with some detail, the steps by which the code for the Wisconsin motor vehicle retailing trade was proposed and adopted are set forth, and it is alleged that compliance with the code has resulted in heavy assessments for payment of costs and expenses, the plaintiff has been subjected to an injunctional proceeding for claimed violations thereof; that the enforcement of the statute seriously affects the rights and property of the plaintiff; that plaintiff and its agents are thereby prevented from carrying on their legitimate business and from enjoying, using, and disposing of its property; that the plaintiff and those similarly situated have no adequate remedy at law; that the penalties provided by law are so severe as to render it impracticable to test the validity of the law by violating the provisions of said code.

It is then alleged that the law violates the provisions of the Constitution of the state of Wisconsin and Fourteenth Amendment to the Constitution of the United States and article 1, § 10, of the Constitution of the United States, because (a) the act and the code are unreasonable, arbitrary, oppressive, and discriminatory; (b) that the exemption granted by section 110.07 is discriminatory; (c) that the plaintiff is not permitted to carry on a lawful business in a lawful manner; (d) that prices for commodities are regulated in a trade which is not dedicated to public use; (e) that an effective judicial review is not provided for; (f) that it is an unlawful and unauthorized delegation of legislative authority; and other allegations which sufficiently raise the questions to be considered upon this appeal. The defendants answered. Upon the trial the court found that the Wisconsin Motor Vehicle Retailing Code was duly and regularly adopted and all of the provisions of chapter 110 relating to procedure were complied with; that the provisions of chapter 110 are not unreasonable, arbitrary, or capricious, and bear a real and substantial relation to the object sought to be achieved thereby. Judgment was entered accordingly dismissing the plaintiff's complaint.

Barber, Keefe, Patri & Horwitz and Lloyd D. Mitchell, all of Oshkosh (W. Mead Stillman, of Oshkosh, of counsel), for appellant.

James E. Finnegan, Atty. Gen., Joseph G. Hirschberg, Deputy Atty. Gen., C. G. Mathys, Sp. Counsel, of Madison, and Carl B. Rix, of Milwaukee, for respondents.

ROSENBERRY, Chief Justice.

A proper determination of the questions raised requires us to state at some length the principal provisions of chapter 110 (emergency promotion of industrial recovery). It is evidently patterned after the National Industrial Recovery Act, chapter 90, 73d Congress Sess. 1 (N. I. R. A.), 48 Stat. 195.

Section 110.01, after declaring that an emergency exists, provides: “It is hereby declared to be the policy of the legislature to remove obstacles to business recovery, to promote the organization of industry for the purpose of co-operative action among trade groups, to induce co-operation between employers and employees, to eliminate unfair competitive practices, to reduce and relieve unemployment, to improve standards of labor and otherwise rehabilitate and conserve the natural resources of the state.”

Section 110.02 fixes the duration of the act as two years after the date of its enactment.

Section 110.03 provides that the Governor may delegate any of his functions and powers and may utilize voluntary and uncompensated services.

Section 110.04 (1) (a) provides:

“Upon application to the governor by one or more trade or industrial associations or groups, the governor may approve a code or codes of fair competition and trade practices for the conduct of the intrastate business of the trade or industry or subdivision thereof, if the governor finds (1) that said code has been approved by a preponderant majority of persons engaged in such trade or industry or subdivision thereof, which majority of persons control a preponderant amount of volume of business in dollars and units of output, and pay a preponderant amount of wages paid in such trade or industry or subdivision thereof, (2) that such associations or groups impose no inequitable restrictions on admission to membership therein and are truly representative of such trades or industries or subdivisions thereof, (3) that such code or codes are not designed to promote monopolies * * * (4) that such code or codes are not inequitable. * * * The governor may, as a condition of approval of any such code, impose such conditions (including requirements for the making of reports and the keeping of accounts) for the protection of consumers, competitors, employees, and others. * * *

(b) Upon the approval of any such code covering any trade or industry or subdivision thereof, all persons, firms or corporations engaged in such trade or industry or subdivision thereof, shall, as to the intrastate trade or business carried on by them, be bound by such code and any standards adopted and approved by the governor subject only to such exemptions to the application thereof as may be provided in the approved code or imposed by the governor as a condition of the approval of the code.”

(2) Codes of fair competition and business practices shall establish standards of maximum hours of labor, minimum rates of pay and working conditions, and shall contain the following conditions: (a) Right of employees to bargain collectively; (b) that no employee shall be required to join any company union or refrain from joining a labor organization of his own choosing.

(3) Provides for the publication of the code.

(4) Any violation of the provisions of the code are deemed an unfair method of competition and penalized as prescribed in section 99.29.

(5) The circuit courts of the state are vested with jurisdiction to prevent violation of any code of fair competition and business practices.

Section 110.05 provides for modification of any code by the Governor.

Section 110.06 makes provision for reports, right of examination of books, etc.

Section 110.07 provides an exemption from the anti-trust laws corresponding to the exemption of trade or industry from the antitrust laws of the United States.

Section 110.08:

“The costs of administration of chapter 110 shall be defrayed as follows:

(1) Those charges incurred by the governor in connection with the initiation and supervision of codes and agreements shall be assessed as far as possible to the trade or industrial association or group to whom the code or agreement in question applies, and

(2) Those charges not directly assessable under (1) shall be defrayed from a fund to be built up by adding to the direct charges assessed a percentage thereof sufficient to defray charges not assessable; provided, that the additional assessment for such charges shall not exceed twenty-five per cent of the direct charges.”

Section 110.09 provides for the method of co-operating with the federal government.

Pursuant to the authority conferred by this chapter, the motor vehicle retailing trade proposed a code. Article I thereof relates to declaration of policy. Article II defines the terms used in the code. Article III relates to employment regulations insuring the right of labor to organize and bargain collectively, governing the age of employees, the wages and hours, classifying areas and prescribing the wages within areas, fixing a minimum wage, in all twelve separate paragraphs.

Article IV relates to trade regulations, including (a) used car allowance; (b) marketing rules; and (c) trade practice rules.

Article V creates a state executive committee, empowers the committee to propose changes in the code, also to require reports from county associations or local associations or from individual dealers, to inquire into the operation of the code, and make rules and regulations necessary for financing the administration of the enforcement of the code.

Article VI relates to statistics.

Article VII relates to the manner in which the code itself shall be interpreted and for various extensions of the code provisions.

[1] In entering upon a consideration of the questions raised upon this appeal, we may appropriately repeat what has been said many times before that under our system of government the court is not called upon to consider the economic, social, and political matters dealt with in the act. Whatever conclusion may be reached as the result of our deliberation, it in no way involves the determination by the court of the social value of the objectives...