Liberty W'H'Se Co. v. Bur. Tob. G. Co-Op. Asso.

• Decision Date: 01 May 1925
• Citation: 208 Ky. 643
• Parties: Liberty Warehouse Company v. Burley Tobacco Growers' Co-operative Association.
• Court: United States State Supreme Court — District of Kentucky

208 Ky. 643

Liberty Warehouse Company v. Burley Tobacco Growers' Co-operative Association.

Court of Appeals of Kentucky.

Decided May 1, 1925.

1. Common Law — Legislature May Repeal Common Law in Jurisdiction. — Legislature may repeal common law prevailing in jurisdiction where it sits, as well as any prior statutory enactment.

2. Constitutional Law — Statutes — Act Providing that Co-operative Marketing Companies are Not Illegal Monopolies Not Unwarranted Classification. — Bingham Co-operative Marketing Act, section 28, providing that co-operative marketing companies shall not be considered illegal monopolies held not unconstitutional as an unwarranted classification.

3. Constitutional Law — Police Power May be Changed or Enlarged to Fit Changed Conditions. — Police power is not unalterable and fixed, but may be changed, enlarged, modified, or qualified to fit the changed conditions which it is intended to improve.

4. Evidence — Court Will Take Judicial Knowledge of History of Country and Current Events. — Court will take judicial knowledge of history of country and current events, and therefore knows that at time Bingham Co-operative Marketing Act, providing for co-operative marketing companies, was enacted, agricultural producer was at mercy of speculators, who fixed the prices with a resulting oppression which was driving producer from his farm.

5. Statutes — Act Providing for Organization of Co-operative Marketing Companies Not Special Legislation. — Bingham Co-operative Marketing Act, providing for organization of co-operative marketing associations is not special legislation and discriminatory within Constitution, section 59, as legislature may classify subjects within proper limits and enact statutes applicable to all cases coming within classification.

6. Statutes — Penalty on Warehouseman for Inducing Violation of Marketing Agreement Not Additional Cause of Action for Violation of Agreement. — Bingham Co-operative Marketing Act, section 27, imposing penalty on warehousemen for inducing violation of co-operative marketing association agreement and providing for recovery of attorney's fees, does not give additional cause of action for violation of the pooler's contract in violation of Constitution, section 59, subsec. 29, relative to special laws.

7. Constitutional Law — Legislature May Fix Reasonable Penalty for Violation of Act. — Bingham Co-operative Marketing Act, section 27, imposing penalty on warehousemen inducing breach of co-operative marketing agreement does not violate Constitution, U. S. Amend. 14, by taking from jury right to determine amount of penalty to be recovered as legislature may fix penalty, provided it is not unreasonable.

8. Constitutional Law — Statutes — Statute Providing for Recovery of Attorney's Fees Only where Plaintiff Recovers Penalty, Not Denial of Equal Protection or Discriminatory. — Bingham Co-operative Marketing Act, section 27, which imposes penalty on warehouseman, inducing breach of co-operative marketing association agreement, and provides for recovery by plaintiff of attorney's fees, where penalty is recovered, but not by defendant when he wins, does not deny equal protection of laws or discriminate in favor of plaintiff, in violation of Constitution U.S. Amend. 14, or Constitution Kentucky, section 59, subsec. 29, relative to special laws, since defendant is not liable for penalty or attorney's fees unless he violates act.

9. Agriculture — Statute Imposing Fixed Penalty, Not Unconstitutional as Limiting Recovery for Injury to Property. — Bingham Co-operative Marketing Act, section 27, imposing fixed penalty on warehouseman for inducing breach of tobacco growers' co-operative association agreement, to be recoverable by association, does not violate Constitution, section 54, as limiting the amount recoverable for injury to property.

10. Constitutional Law — Defendant May Not Object to Constitutionality of an Act which Affects Only Rights of Plaintiff. — Defendant may not object to the constitutionality of Bingham Co-operative Marketing Act, section 27, as limiting amount of plaintiff's recovery which affects only the rights of the plaintiff.

11. Commerce — Act Providing for Tobacco Growers' Marketing Co-operative Associations, Not Encroachment on Jurisdiction of Federal Government Over Interstate Commerce. — Bingham Co-operative Marketing Act, providing for tobacco growers' co-operative marketing association, held not encroachment on jurisdiction of federal government over interstate commerce, since Clayton Amendment to Sherman Anti-Trust law relinquishes superior rights to regulate interstate commerce with reference to agricultural products.

Appeal from Mason Circuit Court.

ALLEN D. COLE and J.M. COLLINS for appellant.

ROBERT H. HAYS, BROWNING & REED and AARON SAPIRO for appellee.

OPINION OF THE COURT BY JUDGE THOMAS.

Affirming.

The appellee and plaintiff below, Burley Tobacco Growers' Co-operative Association, was organized pursuant to the provisions and terms of a statute enacted January 10, 1922, commonly known as the Bingham Co-operative Marketing Act. The statute is now sections 883f-1-41, both inclusive, in the 1924 Supplement to Carroll's Kentucky Statutes. Plaintiff brought this action in the Mason circuit court against appellant and defendant, Liberty Warehouse Company, to recover the penalty of $500.00 prescribed by section 27 of the act and now section 883f-27 of the supplement to the statutes. In the petition it was charged as a ground for the recovery that defendant was a corporation and conducting a tobacco warehouse in this Commonwealth and that it had violated the provisions of the section by knowingly aiding, assisting and inducing a member of the association to violate his contract after it had been notified of the facts and before it sold the tobacco of the member on its loose leaf floor. The petition also prayed for the recovery of a reasonable attorney's fee against defendant and which is also provided for in the same section. We will not consume time in giving a detailed statement of the averments of the petition, but will content ourselves with saying that it contained all the necessary averments to authorize the recovery prayed for if the act, and particularly its section 27, does not contravene any provision of either the federal or our Constitution. The demurrer filed to the petition was overruled, followed by an answer in several paragraphs wherein the entire act was attacked as violative of the 14th amendment of the federal Constitution, since it is claimed that it contravenes practically all the guarantees contained in that amendment. It was also alleged that the statute as an entirety was invalid because it attempted to regulate and affect interstate commerce, which was exclusively within the jurisdiction of the federal government and its regulation forbidden by the legislature of a state.

Focusing the defense on the particular section creating the cause of action in favor of plaintiff (27 of the act), defendant alleged (a), that it was invalid because it prescribed a penal action in favor of plaintiff without the creation of a public offense and it was, therefore, special legislation in violation of subsections 4 and 29 of our Constitution; (b), that it violated subsections 1 and 29 of the same section of our Constitution in that it prescribed a special cause of action unknown to the common law in favor of the plaintiff only, and it is, therefore, special legislation in violation of those subsections, and also that it violates the same subsections by trenching upon the judicial authority in regulating trials before the jury by a special act; (c), that it violates the 14th Amendment to the federal Constitution by giving the action therein claimed to only co-operative associations to which plaintiff belongs for the violations contained in the section; (d), that it conflicts with section 54 of the Constitution by limiting and fixing the amount to be recovered by plaintiff for an injury to its property, i.e., its contract with its members; (e), that it violates the 14th Amendment to the federal Constitution because it takes from the jury the right to determine the amount of penalty that should be recovered for the damages to plaintiff's property based upon the facts contained in the section; (f), that it violates section 29 of section 59 of our Constitution by giving in connection with section 18 of the Bingham Act a double remedy for plaintiff's breach of contract with its member; (h), that it violates the same subsection of the same section of our Constitution as well as the 14th Amendment of the federal Constitution by denying to appellant the equal protection of the laws, since there is no provision for defendant to recover an attorney's fee against plaintiff if the latter's action to recover the penalty should be dismissed, and it is, therefore, discriminatory in favor of plaintiff. In a separate paragraph defendant alleged that plaintiff had interfered with and injured its business not only by organizing and thereby taking from defendant tobacco that it would otherwise have obtained, but also by the bringing of this action, and all in an endeavor to assert its rights contrary to the federal statute against pools, monopolies and combinations commonly known as the Sherman Anti-Trust Act, and defendant had been injured and damaged thereby in the sum of $20,000.00, and it sought recovery of treble damages ($60,000.00) allowed by that act. Demurrers and motions testing the sufficiency of the answer as a whole, including the counterclaim, were filed and made by plaintiff and sustained, and defendant declining to plead further judgment was rendered against it for the penal sum of $500.00, as provided in section 27 of the Bingham Act, and for $100.00 attorney's fee, and from that judgment it prosecutes this appeal. The constitutional ailments of the statute and relied on by the defense are so numerous that we may...