Scarborough v. Webb's Cut Rate Drug Co.

• Citation: 150 Fla. 754,8 So.2d 913
• Parties: SCARBOROUGH, Director of State Beverage Department v. WEBB'S CUT RATE DRUG CO., Inc.
• Decision Date: 27 March 1942
• Court: Florida Supreme Court

8 So.2d 913

150 Fla. 754

SCARBOROUGH, Director of State Beverage Department v. WEBB'S CUT RATE DRUG CO., Inc.

Florida Supreme Court

March 27, 1942

On Rehearing June 23, 1942.

WHITFIELD and CHAPMAN, JJ., dissenting.

Certiorari to Circuit Court, Pinellas County; T. Frank Hobson, Judge.

J Rurner Butler, of Jacksonville, LeRoy Allen, of Tampa, John B. L'Engle, of Jacksonville, and Joseph I. Davis, of Miami, for petitioner.

Whitaker Brothers of Tampa, and J. Lewis Hall, of Tallahassee, for respondent.

CHAPMAN, Justice.

This case is before the Court on petition for writ of certiorari to review interlocutory orders entered by the Circuit Court of Pinellas County, Florida: (a) denying a motion to dismiss the bill of complaint; and (b) restraining the Director of the State Beverage Department from enforcing the several provisions of Chapter 21001, Acts of 1941, Laws of Florida. The suit was brought by a licensed retail liquor dealer. Chapters 16774, Acts of 1935, 18015, Acts of 1937 and 19301, Acts of 1939, created the State Beverage Department of Florida and enumerated and specified its several duties.

Chapter 18395, Acts of 1937, is an Act designed to protect trade mark owners producers, distributors, and the general public against injurious and uneconomic practices in the distribution of competitive commodities bearing a distinguishng trade mark, brand or name, through the use of voluntary contracts establishing minimum resale prices and providing for refusal to sell unless such minimum resale prices are observed. Chapter 19201, Acts of 1939, is an Act designed to protect good will represented by trade marks, names or brands against injury by authorizing contracts establishing resale prices on commodities bearing them and defining as unfair competition and making actionable knowingly and wilfully to advertise and sell such commodities at less than the prices established in the contracts authorized thereby, whether or not such party so advertising is a party to the contract.

The challenged orders held invalid and unconstitutional Chapter 21001, Acts of 1941. Section 1 provided that the Act shall be administered, construed and controlled by the several Acts, supra, applicable to the Beverage Department of Florida. Section 2 of the Act provides:

'Section 2. Fair Trade Contracts, Minimum Resale Prices, Provisions, Concerning. No distiller, rectifier, blender, distributor or vendor, or anyone for them, who holds a license in this State to sell intoxicating liquors, as defined in Section 5 of Chapter 16774, Laws of Florida, 1935, and any and all amendments thereto, which bears a trade mark, brand, label or name of the producer or owner and which is in fair and open competition with commodities of the same general class produced by others, shall offer any intoxicating liquors for sale in this State in any manner or at all without complying with the provisions of this act.

'All intoxicating liquors sold in this State by any licensee, licensed to distribute intoxicating liquors, must be sold according to a fair trade contract, and each such licensed distributor shall file with the Beverage Department a complete list of all intoxicating liquors offered for sale which list shall indicate minimum resale prices on all intoxicating liquors according to the size of containers in which sold and in addition thereto such distributor shall file with the Beverage Department all minimum resale price changes as they shall occur from time to time which such price list and changes thereto shall constitute a fair trade contract under this Act and as provided in Chapter 18395, Laws of Florida, 1937; Chapter 19201, Laws of Florida, 1939, and any and all amendments thereto, which fair trade contracts must provide the following minimum resale prices.'

Subsection (a) of Section 2 provides that a minimum mark-up resale price shall not be less than forty per cent; (b) all minimum mark-up resale prices shall be calculated on the actual price to the retailer, plus transportation costs and taxes; (c) provides a penalty for a violation thereof; (d) the entire State of Florida shall constitute a single trade area. Section 3 requires that the Beverage Department shall iron out difficulties arising under the Act. Section 4 requires that a copy of all the fair trade contracts shall be filed with the State Beverage Department. Section 5 requires that copies of all amendments to the fair trade contracts, if any, shall be filed with the Beverage Department. Section 6 provides that vendors can reduce the minimum resale prices on closeout sales for certain enumerated reass appearing therein. Secti 7 provides a penalty for a violati of the Act. Secti 8 provides:

'Section 8. The purpose of this Act is to require that fair trade contracts be filed with the Beverage Department and enforced in every respect.

'The Beverage Board is hereby vested with plenary powers to make rules and regulations, and the Department is required to provide forms from time to time that may be necessary to regulate the liquor industry and to make this Act effective in its entirety.

'When there has been, in the opinion of the Director of the Beverage Department, by any licensee, any wilfully and knowingly offering for sale or selling, any intoxicating liquor at less than the price stipulated in any fair trade contract entered into pursuant to the provisions of this Act, or any violation of any rule or regulation promulgated by the Beverage Department in enforcing this Act, the licensee so charged shall be deemed guilty of unfair competition and subject to any of the penalties prescribed in the Beverage Act (consisting of Chapter 16774, Laws of Florida, 1935; Chapter 18015, Laws of Florida, 1937; and Chapter 19301, Laws of Florida, 1939, and any and all amendments thereto), as the Beverage Board may determine.'

Section 10 requires the Director and supervisors of the Beverage Department to enforce the several provisions of Chapter 21001, Acts of 1941.

The courts will presume in favor of the constitutionality of a statute and will be inclined to a construction favorable to its validity. Smetal Corporation v. West Lake Investment Co., 126 Fla. 595, 172 So. 58. If a doubt exists as to the constitutionality of a statute, the doubt should be resolved in favor of its constitutionality. Williams v. Town of Dunnellon, 125 Fla. 114, 169 So. 631. It is presumed that a statute is constitutional and the burden rests on the party claiming the contrary to clearly establish his contention. Neisel v. Moran, 80 Fla. 98, 85 So. 346.

The owner of property has an inherent right to fix a price at which he will sell. The Federal and State Constitutions protect an owner of property or a business from price regulations arbitrarily and discriminately enacted. Although these principles are well established, the police power of the Constitution grants to the Legislature the power to enact legislation in behalf of the general welfare, health, morals, safety, or business or property affected with a public interest, it may enact reasonable regulations or prices, rates and charges without discrimination or may delegate such power to a Commission. Regulations of this type have been sustained in enumerated cases, viz: '* * * attorney's fees for services in presenting claims against the federal government, or against the Bureau of War Risk Insurance, or in bringing suit under a workmen's compensation statute; barber's charges; employment agency charges; live stock market agency charges; milk prices; insurance rates; rents; steam heating rates; tobacco warehouse charges; used car price allowances; and wage assignment discounts. Also, in exerting the war power of the nation congress may authorize the president to prescribe coal prices, without violating the due process clause of the Fifth Amendment, and an ordinance merely requiring the filing of a schedule of prices as a condition precedent to the issuance of a license to engage in the laundry business, is not violative of due process requirements. Furthermore, prices in respect of goods identified by such means as trade-marks, labels, and brands may be fixed under legislative leave by contract between the parties without violation of constitutional due process guaranties, and, although there is authority to the contrary, legislation of this character has been upheld constitutionally even where it binds third persons not parties to the contract.'

See 16 C.J.S., Constitutional Law, § 690, pages 1445, 1446; 11 Am.Jur. par. 282, pages 1042-3; Nebbia v. People of New York, 291 U.S. 502, 54 S.Ct. 505, 78 L.Ed. 940, 89 A.L.R. 1469; Old Dearborn Distrib. Co. v. Seagram-Distillers Corp., 299 U.S. 183, 57 S.Ct. 139, 81 L.Ed. 109, 106 A.L.R. 1476; West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330; United States v. Rock Royal Co-Op., 307 U.S. 533, 59 S.Ct. 993, 83 L.Ed. 1446; Mayo v. Lakeland Highlands Co., 309 U.S. 310, 60 S.Ct. 517, 84 L.Ed. 774; Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S.Ct. 907, 84 L.Ed. 1263; Carter v. Carter Coal Co., 298 U.S. 238, 56 S.Ct. 855, 80 L.Ed. 1160; Olsen v. Nebraska, 313 U.S 236, 61 S.Ct. 862, 85 L.Ed. 1305, 133 A.L.R. 1500; Duckworth v. Arkansas, 62 S.Ct. 311, 86 L.Ed. 294.

Pertinent provisions of the contract to be enforced between the plaintiff retailer and the distributor of branded liquors are viz: '* * * the Distributor hereby agrees to sell and does offer to sell to _____, Retailer, the brands of intoxicating liquors listed on the following pages hereof in the size containers and at the prices listed under the caption 'Sales Price to Retailers'; and the Distributor further agrees to make the brands listed in this contract available to the Retailer for purchase so...