Ritholz v. Ammon

• Decision Date: 01 June 1942
• Citation: 240 Wis. 578,4 N.W.2d 173
• Parties: RITHOLZ et al. v. AMMON, Director of Agriculture.
• Court: Wisconsin Supreme Court

240 Wis. 578

4 N.W.2d 173

RITHOLZ et al.

v.AMMON, Director of Agriculture.

Supreme Court of Wisconsin.

June 1, 1942.

This is an appeal from parts of two orders of the Circuit Court for Dane County; August C. Hoppmann, Judge.

Reversed.

This was an action by Morris I. Ritholz, Sylvia Ritholz, Fannie Ritholz, Sophie Ritholz, Samuel J. Ritholz, Benjamin D. Ritholz, d/b/a National Optical Stores Co., against Ralph E. Ammon, Director of Agriculture, State Department of Agriculture of Wisconsin, commenced August 2, 1941, to enjoin defendants from conducting hearings or proceedings upon complaints against plaintiffs, from issuing press releases accusing plaintiffs of illegal practices or from interfering in any manner with plaintiffs' business. Plaintiffs also ask for an injunction pendente lite.

On August 2, 1941, the trial court issued an ex parte restraining order enjoining defendants from conducting any proceedings or holding any hearings upon charges against plaintiffs. Defendants interposed a general demurrer to plaintiffs' complaint. On December 26, 1941, the trial court entered an order overruling the demurrer and a separate order granting an injunction restraining defendants pendente lite from conducting any proceedings against plaintiffs. Defendants appeal. The allegations of the complaint will be summarized in the opinion.

John E. Martin, Atty. Gen., and Warren H. Resh, Asst. Atty. Gen., for appellants.

Wilkie, Toebaas, Hart, Kraege & Jackman, of Madison, for respondents.

WICKHEM, Justice.

The complaint alleges that plaintiffs are residents of the city of Chicago and copartners doing business under the name of National Optical Stores Co; that defendant, Ammon, is the duly appointed, qualified and acting director of Agriculture; that defendant, R. M. Orchard, is the duly qualified and acting assistant attorney general of Wisconsin; that the business of plaintiffs is the furnishing of optical service; that this service consists of grinding and processing lenses and the furnishing of frames, mountings and lenses pursuant to prescriptions; that plaintiffs' principal office is in the city of Chicago, where they maintain a laboratory for the preparation of lenses and their proper mounting; that orders for eyeglasses are taken by employees for future delivery from the office of plaintiffs in the city of Chicago; that the principal value of eyeglasses is not their cost but the value of the service of grinding lenses to individual requirements; that on July 30, 1941, there was served on Albert Dare and J. W. Smith of Madison, Wisconsin, a notice of hearing and purported complaint issued by the State Department of Agriculture. A copy of this complaint is attached to plaintiffs' complaint. The complaint of the Department of Agriculture asserts that plaintiffs and their agents have been engaged and are engaging in practices which constitute unfair methods of business and competition within the meaning of sec. 100.20 Wis.Stats. On information and belief this complaint charges that National Optical Stores Co. is associated with certain other individuals named as respondents; that Albert Dare is manager of a store conducted in Appleton under the name of National Optical Stores Co.; that Lewis S. Graves, of Madison, is engaged by the National Optical Stores Co. to examine eyes for the purpose of prescribing lenses; that Frank W. Marzluff is the manager of a store under the name of National Optical Stores Company at Oshkosh, Wisconsin, and that Ray Nixon, a doctor of medicine, is engaged by National Optical Stores Co. to examine eyes for the purpose of prescribing lenses. Similar allegations are to the effect that J. W. Smith is manager of the store in Madison, and F. J. Erdlitz, a doctor, is engaged at this store for the purpose of examining eyes and prescribing lenses. It is charged that on July 9, 1941, National Optical Stores Co. published, in the Oshkosh Daily Northwestern, an advertisement offering glasses for the sum of $3.45, ground on the prescription of a licensed doctor; that this advertisement purported to permit a fifteen-day free-trial of the glasses and asserted that a large factory, coupled with tremendous purchasing power, makes possible cheaper prices to the customers; that these representations induced the sale of large quantities of glasses; that the representations were not made in good faith or with intention of furnishing glasses in the terms of the representations, but as a means of inducing customers to pay large sums of money ranging from $6 to $40; that it is the practice of the National Optical Stores Co. to require persons responding to such advertising to employ the services of a doctor of medicine whose place of business is at a desk in the store and pay him a fee of from $1 to $2, more or less; that the representations made by the company in its various advertisements that “glasses no better than these are sold by other concerns for several times this price”, “Largest Opticians in America”, “Home owned outlets”, “Perfect satisfaction guaranteed or no cost”, “Lowest factory prices”, are false and misleading and constitute unfair business practices and unfair business methods of competition. Plaintiffs' complaint alleges that they have never been served with the department's notice or complaint or any other paper or document for any proceeding before the State Department of Agriculture, but that the notice and complaint have been served upon Lewis S. Graves, Ray Nixon, and F. J. Erdlitz, none of whom are engaged in the sale, manufacture or advertising of eye glasses; that Albert Dare and J. W. Smith have no duties or powers other than to take orders and remit them to plaintiffs in Chicago for execution and delivery to the person placing the order; that the charges in the department's complaint are false; that as a result of the issuance of this notice and order plaintiffs have been refused space for advertising in the newspapers and defendants have given press releases setting forth the allegations in the complaint as a result of which employees have been intimidated and have threatened to leave plaintiffs' employ; that sec. 100.20 (1) Wis.Stats. is unconstitutional as an unlawful delegation of legislative power by the legislature in violation of Art. IV, Sec. 1, Wis.Constit., and as an attempted encroachment upon the powers of the courts contrary to Art. VII, Sec. 2, and Sec. 8, Wis.Constit; that plaintiffs are not engaged in intrastate commerce and that defendants have no power whatever to regulate or prescribe any rules or regulations for their conduct in the operation of their business; that no business or trade whatever is carried on in Wisconsin; that anything that is done in Wisconsin is a mere incident to the furnishing of the services of mounting or grinding lenses in Chicago; that the entire transaction with each person placing an order is an interstate transaction and interference by defendants is contrary to the provisions of Sec. 8, Art. I, United States Constitution, granting to Congress the power to regulate commerce between the states; that all orders are filled in Chicago; that all advertising is prepared in Chicago and transmitted by mail to newspapers in Wisconsin; that all orders are subject to acceptance or rejection by plaintiffs at the Chicago office and that all exchanges and refunds are made by mail from Chicago; that all moneys received by plaintiffs' employees in Wisconsin are transmitted to plaintiffs' Chicago office by mail; that the proceeding by defendants violates the rights of plaintiffs' employees guaranteed by Art. I, Sec. 1, Wisconsin Constit., and the 14th Amendment to the U. S. Constit., in the following respects:

1. That the complaint does not allege sufficient facts to permit the parties charged to prepare a defense thereto;

2. That the complaint is filed by R. M. Orchard, as counsel for the State Department of Agriculture, whereas sec. 93.07(23) Wis.Stats. imposes upon the Department of Agriculture the duty of enforcing the provisions of Chapter 100 and does not anywhere vest authority in R. M. Orchard, attorney general, as counsel for the department to make any complaint on behalf of the department.

3. That the complaint purports to charge offenses by plaintiffs and their employees, and the Department claims the right to be both prosecutor and judge and to pass upon the existence of facts which it already claims to be true;

4. That the complaint is based wholly on information and belief;

5. That the complaint is directed to numerous persons, firms and corporations, who with the exception of plaintiff, are nonexistent.

6. That none of the plaintiffs have ever been served with any notice or complaint.

Plaintiffs are informed that the Department of Agriculture is of the belief that by serving notice upon Albert Dare and J. W. Smith, employees of plaintiff, it has obtained jurisdiction over the person of plaintiffs, and may proceed to enter an order against plaintiffs to cease and desist from the pursuit of their business; that the entry of such an order, while void, would cause plaintiffs irreparable damage; on information and belief that the notice and complaint were instigated by, and issued in connivance of private persons, the identity of whom is unknown to plaintiffs; on information and belief that a privately employed attorney representing the Wisconsin Association of Optometrists prepared the department's notice and complaint, and that their issuance by the Department was without investigation but solely on the representations of such attorney and that the Wisconsin Association of Optometrists and its attorney have agreed to, and are being permitted to conduct and control all proceedings before such department; that the object of the combination between defendant and the Wisconsin Association of Optometrists is to prevent competition with the business of members of the Optometrists Association and to permit such members to...