Grayson-Robinson Stores, Inc. v. Oneida, Limited

• Decision Date: 24 February 1953
• Docket Number: No. 18091,GRAYSON-ROBINSON,18091
• Citation: 75 S.E.2d 161,209 Ga. 613
• Parties: STORES, Inc. v. ONEIDA, Limited.
• Court: Georgia Supreme Court

Page 161

75 S.E.2d 161

209 Ga. 613

GRAYSON-ROBINSON STORES, Inc. v. ONEIDA, Limited.

No. 18091.

Supreme Court of Georgia.

Feb. 24, 1953.

Rehearing Denied March 10, 1953.

Syllabus by the Court.

1. Georgia's Fair Trade Act when enacted by the General Assembly and approved by the Governor on March 4, 1937, was contrary to and inconsistent with the provisions of the Sherman Act as they were at that time; consequently, it offended the supremacy clause as well as the commerce clause of the Federal Constitution and was, therefore, ab initio void.

2. A void statute can be made effective only by re-enactment.

3. The act of 1937 known as Georgia's Fair Trade Act is null and void since it offends article 1, section 1, paragraph 3 of the Constitution of 1945, which provides that 'No person shall be deprived of life, liberty, or property except by due process of law.'

Alston, Foster, Sibley & Miller, James E. Thomas and Philip H. Alston, Jr., Atlanta, for plaintiff in error.

Robert B. Troutman, Spalding, Sibley, Troutman & Kelley, James M. Sibley and W. K. Meadow, Atlanta, Nims, Martin, Halliday, Whitman & Williamson, New York City and Orville E. Cummings, Jr., Oneida, for defendant in error.

Gambrell, Harlan, Barwick, Russell & Smith and Robt. R. Richardson, Atlanta, for party at interest.

CANDLER, Justice.

Oneida, Ltd., brought this action against Grayson-Robinson Stores, Inc. under Georgia's Fair Trade Act of 1937, Ga.L.1937, p. 800, and particularly under section 6 of the act, which reads as follows: 'Willfully and knowingly advertising, 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, 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.' The petition in substance alleges: The plaintiff, a New York corporation, manufactures and sells in interstate commerce silverware under the trade-mark or trade name of 'Community.' Its products sold under this name enjoy a good reputation and the plaintiff's good will is associated with the trade-mark. The plaintiff has entered into contracts establishing minimum retail sale prices of its products with retailers in the State of Georgia. Sales are made by the plaintiff to retailers operating under minimum retail-sales contracts, and 'Community' silverware is advertised and sold to the retail trade at the price so fixed. The defendant operates a retail store in Atlanta, Georgia, and advertises, offers for sale, and sells 'Community' products which it purchases from sources other than the manufacturer, at prices less than the prices fixed by the plaintiff under its 'fair trade contracts.' The defendant conducts these activities in utter disregard of the fixed retail sales price schedules issued by the plaintiff and wilfully and knowingly sells merchandise bearing the name 'Community' at less than the prices so fixed. These sales by the defendant are 'loss leader' sales. The plaintiff has no adequate remedy at law for the injury to its good will and relations with its dealers, which it is incurring by reason of the defendant's sales below the plaintiff's schedule of fixed prices. The defendant has signed no contract with the plaintiff under the provisions of Georgia's Fair Trade Act, but is known in the vernacular as a 'non-signer' of the trade agreement contemplated by the act. The prayers are for process, injunction, and general relief.

The petition was demurred to generally as stating no cause of action upon the ground and for the reason that Georgia's Fair Trade Act of 1937 has no force and effect and is null and void because it was, when enacted and approved on March 4, 1937, contrary to and inconsistent with the provisions of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-7, 15 note, which Congress passed on July 2, 1890, and upon the further ground that the Georgia act of 1937, when passed by the General Assembly, offended for stated reasons enumerated provisions of the Georgia Constitution of 1877. After a hearing, the court overruled all of the grounds of the general demurrer. The defendant excepted.

1. It is contended by the defendant and argued by its counsel that Georgia's Fair Trade Act, which was approved on March 4, 1937, was ab initio void, since the General Assembly had no power to enact it. This position is well taken. The Constitution of the United States by article 6, clause 2, provides: 'This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.' Code, § 1-602. And our Constitution of 1877, art. 12, par. 1, as well as that of 1945, art. 12, § 1, par. 1, provides the same. Code, § 2-8501, Code Ann. § 2-8001. See, in this connection, Southern Ry. Co. v. Atlanta Sand & Supply Co., 135 Ga. 35, 39, 68 S.E. 807; Gainey v. Bank of Thomasville, 176 Ga. 736, 168 S.E. 877; Ford for Use of Southern Stevedoring Co. v. Lone Star Cement Co., 181 Ga. 212, 215, 181 S.E. 773. And by article 1, section 8, clause 3, of the Federal Constitution, Congress has exclusive power 'To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes'. Code, § 1-125. Exercising this power, Congress on July 2, 1890, passed the Sherman Act, 26 Stat. 209, 15 U.S.C.A. § 1, which declared illegal 'Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States or with foreign nations'. Under the provisions of the Sherman Act, as originally passed by Congress, Interstate resale price-fixing and price-maintenance arrangements, by contract or otherwise, were prohibited; they were 'in restraint of trade' and, therefore, illegal per se. Dr. Miles Medical Company v. John D. Park & Sons Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219. But Congress on August 17, 1937, passed the Miller-Tydings Act, 50 Stat. 693, 15 U.S.C.A. § 1, as an amendment to § 1 of the Sherman Act, and that amendment provides in material part that 'nothing herein contained shall render illegal, contracts or agreements prescribing minimum prices for the resale' of specified commodities when 'contracts or agreements of that description are lawful as applied to intrastate transactions' under local law. In 1951, the Supreme Court of the United States in Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384, 386, 71 S.Ct. 745, 95 L.Ed. 1035, held that the Miller-Tydings Amendment to the Sherman Act excepted only 'contracts or agreements' prescribing minimum prices for the resale of trade-marked commodities where such contracts or agreements were valid under State statute, and that a retailer who had not signed a contract for price maintenance was not to be subjected to the schedule of a price-maintenance plan. See also Sunbeam Corp. v. Wentling, 3 Cir., 185 F.2d 903; Id., 3 Cir., 192 F.2d 7. However, Georgia's Fair Trade Act was passed by the legislature prior to the Miller-Tydings amendment to the Sherman Act.

2. But it is argued by counsel for the defendant in error that Georgia's Fair Trade Act of 1937 no longer offends the Sherman Act, since it was entirely removed from its prohibitive provisions when Congress on July 14, 1952, passed the McGuire Act, 66 Stat. 632, 15 U.S.C.A. § 45, which in part recites: 'It is the purpose of this Act to protect the rights of States under the United States Constitution to regulate their internal affairs and more particularly to enact statutes and laws, and to adopt policies, which authorize contracts and agreements prescribing minimum or stipulated prices for the resale of commodities and to extend the minimum or stipulated prices prescribed by such contracts and agreements to persons who are not parties thereto. It is the further purpose of this Act to permit such statutes, laws, and public policies to apply to commodities, contracts, agreements, and activities in or affecting interstate or foreign commerce' section 1, 15 U.S.C.A. § 45 note; and which by subsection (3) also provides: 'Nothing contained in this Act or in any of the Antitrust Acts shall render unlawful the exercise or the enforcement of any right or right of action created by any statute, law, or public policy now or hereafter in effect in any State, Territory, or the District of Columbia, which in substance provides that willfully and knowingly advertising, offering for sale, or selling any commodity at less than the price or prices prescribed in such contracts or agreements whether the person so advertising, offering for sale, or selling is or is not a party to such a contract or agreement, is unfair competition and is actionable at the suit of any person damaged thereby.'

So we accordingly agree that the provisions of Georgia's Fair Trade Act are not prohibited by the Sherman Act as amended by the Miller-Tydings Act and by the McGuire Act; but we do not agree with the contention that Georgia's act became valid, without re-enactment, after the Sherman Act was thus amended. Since Georgia's Fair Trade Act was contrary to and inconsistent with the terms of the Sherman Act before it was amended by the Miller-Tydings Act and the McGuire Act, it offended the supremacy clause as well as the commerce clause of the Federal Constitution, and our Constitution of 1945 by article 1, section 4, paragraph 2, declares that legislative acts which violate the Constitution of the United States are void and the judiciary shall so...