State ex rel. Attorney Gen. v. Wis. Constructors, Inc.

• Decision Date: 29 June 1936
• Citation: 268 N.W. 238,222 Wis. 279
• Parties: STATE EX REL. ATTORNEY GENERAL ET AL. v. WISCONSIN CONSTRUCTORS, INC., ET AL.
• Court: Wisconsin Supreme Court

222 Wis. 279

268 N.W. 238

STATE EX REL. ATTORNEY GENERAL ET AL.

v.WISCONSIN CONSTRUCTORS, INC., ET AL.

Supreme Court of Wisconsin.

June 29, 1936.

Original action.

In this action commenced by the State, on the relation of the Attorney General and the Wisconsin Trade Practice Commission, the petitioners seek a declaratory judgment under section 269.56, as to the constitutionality of section 110.08 (1), Stats.1935. This court granted leave to commence the action and took jurisdiction for the sole purpose of determining whether that section is constitutional. The parties stipulated that the amended petition stand as the complaint. The defendants duly answered.

FAIRCHILD, J., dissenting.

The substance of so much of the complaint as needs recitation, that this controversy may be understood, follows: Chapter 110 of the Statutes authorizes the Governor to prescribe reasonable codes or standards of fair competition and trade practices for certain industries. Section 110.08 (1) requires that such codes contain provisions for assessing the members of industries subjected thereto, with the cost and expense of promulgating and administering them. The Governor, pursuant to chapter 110, prescribed a code for the mason, concrete, and carpenter contractors industry, and assessed against the members subject to such code the cost and expense of promulgating and administering it pursuant to the provisions of section 110.08 (1). Wisconsin Constructors, Inc., is a Wisconsin corporation claiming a membership of some five hundred contractors residing in all parts of the state, all of whom are members of the mason, concrete, and carpenters industry. The officers of that corporation are specifically named, each of whom is asserted to be engaged in such industry either individually or as an officer of some other corporation. Wisconsin Constructors, Inc., heretofore issued a bulletin to its members in which they were advised that assessments made pursuant to the provisions of section 110.08 (1) are not collectible, for the reason that that section is unconstitutional because it vests in an appointive administrative agency the power to tax. The members of said contractors industry, specifically named, and other members thereof, have refused to pay the assessments made pursuant to section 110.08 (1). An early determination of the question whether section 110.08 (1) is constitutional is absolutely necessary if the mandate of the Legislature to the Governor and the trade practice commission organized pursuant to chapter 110, is to be carried out.

The defendants admitted the allegations of the complaint hereinbefore summarized, but denied that the administration and enforcement of the trade practice standards are dependent upon the payment of the assessments and denied that the statements made in its letter (bulletin) in any sense constituted the complete basis for their refusal to pay the assessments. The defendants, further answering the complaint and for defenses thereto, allege, among other things, that section 110.08 (1) is unconstitutional, for the reason that it unlawfully delegates legislative power to the Governor in violation of article 4, § 1, of the Constitution of this state; (2) that it also violates article 1, § 1, of our Constitution, and the Fourteenth Amendment to the Constitution of the United States; that section 110.08 (1) is not separable from other sections of chapter 110 which are asserted to be unconstitutional, and that the code approved by the Governor on August 21, 1935, for said industry, contains numerous provisions that are unreasonable and without force or effect.

James E. Finnegan, Atty. Gen., Fred M. Wylie, Sp. Counsel, of Milwaukee, and C. J. Marsh, Counsel, Trade Practice Commission, and C. H. Crownhart, Jr., Asst. Counsel, Trade Practice Commission, both of Madison, for petitioners.

Nolan, Dougherty, Grubb & Ryan and John T. Roethe, all of Janesville, Rouiller, Dougherty, Arnold & Kivett, John M. O'Brien and Charles H. McDonald, all of Milwaukee, Sanborn, Blake & Aberg, of Madison, and Barber, Keefe, Patri & Horwitz, of Oshkosh, for respondents.

Joseph A. Padway, Carl B. Rix, and Joseph G. Konop, all of Milwaukee, George R. Currie, of Sheboygan, Leonard C. Fons, of Milwaukee, and Randolph Conners, of Madison, amici curiæ.

NELSON, Justice.

It may be well to state at the outset that we shall adhere to our determination to pass only upon the constitutionality of section 110.08 (1). All questions as to the constitutionality of other sections of chapter 110, and all questions concerning certain code provisions (no code being now before us), are reserved for future determination.

Section 110.08 (1) is as follows: “Every code prescribed or approved by the governor shall contain provisions for assessing against and collecting from all persons, firms and corporations subject to the code, as employers, on a fair and equitable basis therein set forth, (a) assessments sufficient to reimburse the state for the expenses incurred by it in connection with the initial promulgation of the code and its administration, to be paid to the state treasurer at such times and upon such certifications by the governor as may be prescribed in said code; and (b) assessments sufficient to pay the expenses incurred by any code authority or administrative agency established by such code when covered by a budget of such code authority or administrative agency approved by the governor.”

In view of the attacks made by the defendants upon section 110.08 (1), two questions require determination: (1) Has the Legislature the power to assess persons engaged in certain businesses, occupations, or trades, the reasonable cost and expense of enforcing regulatory laws specifically applicable to them, the object of which laws is to destroy unfair methods of competition and unfair trade practices, assuming that the basis of the assessment is fair and equitable? (2) If so, was that power properly delegated to the Governor by section 110.08 (1)?

This court in Re State ex rel. Attorney General (Tavern Code Authority), 264 N.W. 633, 641, held that chapter 110 did not unconstitutionally delegate legislative powers to the Governor. That was the sole question decided. This court took original jurisdiction of that action for the sole purpose of determining that question only.

The court, speaking through Mr. Chief Justice Rosenberry, said: “The court assumed jurisdiction of this case upon the petition for the purpose of determining one question and one only, and that is whether the act was invalid because of an unconstitutional delegation of legislative power to the Governor and the agencies to be created by him.”

The principal attack made upon chapter 110 at that time, and the only one which this court considered, was that the Legislature had not set up sufficient standards in delegating to the Governor the power to prescribe or promulgate industrial codes.

[1] The rule which this court consistently follows when considering laws passed by the Legislature which are assailed on constitutional grounds is as follows:

The Legislature, subject to the Constitutions of the United States and of this state, is supreme in its particular field, and this court will not declare laws unconstitutional unless it clearly appears beyond reasonable doubt that they contravene constitutional provisions. See Payne v. Racine, 217 Wis. 550, 259 N.W. 437;Petition of Breidenbach, 214 Wis. 54, 252 N.W. 366;Doering v. Swoboda, 214 Wis. 481, 253 N.W. 657;State ex rel. Carnation M. P. Co. v. Emery, 178 Wis. 147, 189 N.W. 564, and the numerous earlier decisions cited therein. We approach the consideration of the question before us with that rule in mind.

[2] A reading of chapter 110 impels the conclusions (1) that the Legislature enacted that chapter as an emergency measure

for the purpose of meeting or ameliorating economic conditions which had arisen as a result of the depression, and (2) that in so doing it sought to promote the public welfare in the exercise of its police power. Whether the Legislature acted wisely in enacting chapter 110 presents a question with which this court is not concerned.

Has the Legislature the power to assess persons engaged in certain businesses, occupations, or trades, the reasonable cost and expense of enforcing regulatory laws specifically made applicable to them, the object of which laws is to destroy “unfair methods of competition and unfair trade practices,” assuming that the basis of the assessment is fair and equitable?

If the Legislature has not that power, it obviously cannot delegate it. While no attempt has been made by the Legislature itself to exercise that specific power, that fact does not warrant, much less impel, the conclusion that the Legislature does not possess that power. The power of the Legislature to license peddlers, pawnbrokers, real estate brokers, barbers, bakers, etc., and to exact from them license fees, providing such fees do not unreasonably exceed the cost of inspection and regulation, and providing such license fees are not directed to the purpose of raising general revenue, is not now subject to question.

The power of the Legislature to exact from public utility companies, insurance companies, and banks the cost and expense of examinations has likewise been sustained. Wisconsin Telephone Company v. Public Service Comm., 206 Wis. 589, 240 N.W. 411.

Fees for inspecting kerosene, gasoline, etc., for the purpose of covering the expense of such inspection have been sustained. Wadhams Oil Co. v. Tracy, 141 Wis. 150, 123 N.W. 785, 18 Ann.Cas. 779.

[3] Upon principle, the power to exact license fees, fees for examining banks, insurance companies, and public utilities, fees to cover the expense of inspection in aid of regulation deemed necessary by the Legislature, is not essentially different from the power to assess against industries that are subject to a valid code the...