State Ex Rel. Landis v. S.H. Kress & Co.
| Decision Date | 08 June 1934 |
| Court | Florida Supreme Court |
| Parties | STATE ex rel. LANDIS, Atty. Gen., et al. v. S. H. KREES & co. |
En Banc.
Quo warranto by State, on the relation of Cary D. Landis Attorney General of Florida, and others against S. H. Kress & Co. to oust respondent from its permit to do business in the state. On respondent's demurrer to information and motion to quash it.
Demurrer and motion overruled, and respondent given twenty days in which to interpose its answer or plea.
COUNSEL Cary D. Landis, Atty. Gen., and Robert H. Givens, Jr., and Edwin Brobston, both of Tampa, for corelators.
Knight, Thompson & Turner and A. G. Turner, all of Tampa, and George C. Bedell, of Jacksonville, for respondent.
An information in the nature of quo warranto was filed in this court in September. 1933. Its purpose was to obtain an order to oust S. H. Kress & Co., a foreign corporation organized and existing under the laws of the state of Texas, from its permit to do business in the state of Florida. A writ of quo warranto was issued requiring respondent to show cause why it should not be ousted of its permit to do business in Florida. By stipulation entered into between counsel for the respondent and the Attorney General and counsel appearing for certain persons named in the information as corelators, an amended information was filed in October.
It appears from the information that S. H. Kress & Co. is a Texas corporation and has its principal place of business in New York City; that it obtained a permit to do business in this state in September, 1927. It is one of a group of several corporations consisting of S. H. Kress & Co., a New York corporation, another by the same name created by and existing under the laws of California, another by the same name created in Colorado, and the respondent, the Texas corporation.
The respondent owns and operates eleven stores in Florida, one of which is located in Key West. Respondent sells 'hundreds of articles of merchandise, including toilet articles, notions, novelties, hardware, stationery, office supplies, confectionery and clothes.' They are sold in competition with 'independent merchants of the State of Florida,' one of whom is John A. Gardner named as corelator, who conducts a business known as 'Gardner's Pharmacy' in which he sells 'drug and medical supplies, toilet articles, stationery and sundry other articles.'
The group of Kress corporations operates in many cities of the United States and as the 'co-relators are reliably informed and believe and therefore aver' there are two hundred and thirty such stores in 'which merchandise is sold to the American public in the approximate sum of One Hundred Million Dollars ($100,000,000.00) annually.'
The information alleges that the respondent is 'engaged in a combination of capital, skill and acts' with the S. H. Kress & Co. corporation of New York and other corporations and with the officers and agents of such corporations 'for the purpose of creating and carrying out restrictions in the full and free pursuit of businesses authorized and permitted by the laws of the State of Florida.' Those businesses are described in the petition as the 'businesses of retail and wholesale merchandising' of the articles above described.
On the information of the corelators it is alleged the Kress New York corporation owns the 'entire capital stock of said corporation, as well as the entire capital stock of the California and Colorado corporations.' The information, by way of argument, alleges that the 'combination' exists because of the reliable information coming to corelators that the New York corporation owns the entire capital stock of the other three Kress corporations 'and by reason of the fact that three of the principal officers of said Texas corporation are also officers of the New York corporation' and 'by reason of the fact that S. H. Kress & Company, a New York corporation, owned and operated most of the stores now owned and operated by the respondent in the State of Florida prior to the 10th day of September, A. D. 1927, on which date the New York corporation withdrew from the State of Florida, and on which date the Texas corporation began doing business in Florida.'
It is alleged that as a 'part of said combination and in pursuance thereof' the Texas corporation has from that date 'created and carried out restrictions in the full and free pursuit of businesses authorized and permitted by the laws of the State of Florida.'
The information alleges an incident occurring in the city of Tampa to show the effect of the alleged combination upon lawful trade. The incident was the sale by the Kress store of a 'Greystone Tea Kettle No. 70' for 35 cents which could not be purchased by a retail merchant in the city at the date of the sale for less than $7.90 per dozen, and which 'could not be sold profitably by any retail merchant in said City on said date for less than 80¢ each.' It is also alleged that other articles of merchandise were sold by the respondent at about the same time at prices below the prices at which independent merchants were 'able to retail said goods.'
The remainder of the information sets up another and different attack upon the respondent. It alleges that the 'combination' alleged to exist has great financial resources of which it avails itself in the matter of purchasing articles of merchandise for sale and distribution; that it is enabled to obtain large quantities of merchandise and dispose of it at prices with which independent merchants cannot compete; that the combination operates at a less overhead expense, employs what is known as the 'direct to consumer' method of merchandising and thus eliminates 'wholesale' merchandising of the articles sold; that by reason of that method of merchandising, made possible by the large resources of the 'combination' and its system of doing business, many independent merchants in the state have been unable to successfully compete with the stores of the respondent and have in consequence sustained financial loss and many have been required to suspend business, and employees and merchants have found 'difficulty in securing employment.' It is alleged that by reason of that method employed 'brokers, common carriers, hotels, restaurants, artisans and professional men have lost business and sustained financial loss and have found it necessary to curtail their business and reduce their number of employees.'
The information concludes with two propositions of law alleged to be applicable. First that the respondent is exercising its permit to do business in Florida in violation of the anti-trust laws of the state; second, that the act of the Legislature under which the respondent obtained a permit as a corporation to do business in this state is unconstitutional and void in its application to the respondent because it operates to permit 'intercorporate relations as have been alleged' to exist in the information to the detriment of public welfare in contravention of the Preamble of the Constitution of Florida in which it is declared that the 'constitution was ordained to insure domestic tranquillity and the public welfare.'
A demurrer to the information and motion to quash it were interposed by respondent.
The information is filed in the name of the state on relation of the Attorney General and 'John Kilgore, trading and doing business as The State (a newspaper) and John A. Gardner, trading and doing business as Gardner's Pharmacy, by their undersigned attorneys, and on behalf of themselves and independent merchants and citizens of Florida similarly situated and affected.'
In the case of the State of Florida ex rel. Moodie v. Bryan and others as the State Board of Control, 50 Fla. 293, 39 So. 929, 947, this court said that 'under the laws of this state the Attorney General is as much the representative of the State of Florida in the Supreme Court, as the King's Attorney General is his representative in the Court of King's Bench; indeed, more so, as in the Court of King's Bench there are for certain causes representatives of the King other than the Attorney General, while here, it is his sole duty to 'appear in and attend to, in behalf of the state, all suits or prosecutions, civil or criminal, or in equity, in which the state may be a party, or in any wise interested, in the Supreme Court of this state”; that the office of Attorney General is in many respects judicial in character and he is clothed with a considerable discretion; that
The court then proceeded to treat the information as brought in the name of the Attorney General though in a somewhat informal manner, 'considering the mention of the so-styled relators as mere surplusage and in no way affecting the validity of the information, nor in any way affecting the absolute control of the case by the Attorney General in his official capacity.'
That action was begun by an information in the nature of quo warranto to test the validity of chapter 5384, Laws 1905, and the right of certain persons to be known as the board of control and to function as the act directed.
In the light of that decision the naming of other persons and the inclusion generally of unnamed persons supposed to be affected by the operation of the alleged combination of corporations was merely surplusage having no added influence conveying no additional power upon the Attorney General and...
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