State v. Drayton

• Citation: 117 N.W. 768,82 Neb. 254
• Decision Date: 16 September 1908
• Docket Number: No. 15,534.,15,534.
• Parties: STATE v. DRAYTON.
• Court: Supreme Court of Nebraska

82 Neb. 254

117 N.W. 768

STATE

v.DRAYTON.

No. 15,534.

Supreme Court of Nebraska.

Sept. 16, 1908.

Syllabus by the Court.

The act of the Legislature entitled “An act to prohibit unfair commercial discrimination between different sections, communities, or localities, or unfair competition, and providing penalties therefor,” approved April 3, 1907 (Sess. Laws 1907, p. 490, c. 157), held not to be in violation of the Constitution.

The said act does not prevent persons and corporations dealing in commodities in general use from selling them at such price as such person or corporation may see proper to demand, nor is it class legislation within the constitutional prohibition.

The prevention of discrimination in particular localities, in prices of commodities in general use, “for the purpose of destroying the business of a competitor” by selling such commodities at a lower rate in such locality than is charged for the same elsewhere, is within the police power of the state.

Within constitutional limits, the Legislature is the sole judge as to what laws should be enacted for the protection and welfare of the people, and as to when and how the police power of the state is to be exercised.

Error to District Court, Antelope County; Welch, Judge.

Robert L. Drayton was charged with violation of the anti-competition law. From an order sustaining a demurrer to the information, the state brings error. Exceptions of the state sustained.S. D. Thornton, W. T. Thompson, and G. G. Martin, for the State.

Jackson & Kelsey and Isaac E. Congdon, for defendant in error.

REESE, J.

An information was filed in the district court of Antelope county, in which it was charged that the defendant, the agent of the Atlas Elevator Company, a corporation, incorporated under the laws of the state of West Virginia, and doing business in this state and engaged in the sale and distribution of lumber, lime, plaster, cement, and brick, commodities in general use in the village of Orchard, in Antelope county, and in the village of Brunswick, in the same county, on the 20th day of August, 1907, in the county and state aforesaid, “did unlawfully, maliciously, and intentionally, for the purpose of destroying the business of a competitor in the village of Orchard, in Antelope county, in the state of Nebraska, discriminate between different sections of the state of Nebraska, to wit, the village of Brunswick, in Antelope county, in the state of Nebraska, and the village of Orchard, in Antelope county, in the state of Nebraska, by selling such lumber, lime, plaster, cement, and brick at a lower rate in the village of Orchard, in said state and county, than is charged by the Atlas Elevator Company for lumber, lime, plaster, cement, and brick in the village of Brunswick, in said county and state, after making due allowance for the difference in the grade quality and the actual cost of transportation from the point of production of said lumber, lime, plaster, cement, and brick, contrary to the form of the statute in such case made and provided, and against the peace and dignity of the state of Nebraska.” The defendant filed his motion to quash the information, alleging the following reasons and grounds therefor:

“First. Because the legislative enactment by the Legislature of the state of Nebraska, under which the said information was filed, contravenes the provisions of the Constitution of the United States of America.

Second. Because the legislative enactment contravenes the provisions of the Constitution of the state of Nebraska, and that such enactment is unconstitutional and void.

Third. Because the facts stated in the information are not sufficient to constitute an offense under the laws of the state of Nebraska.”

The district court sustained the motion, following the order with the recital that: “It appearing to the court that no valid information can be filed against the defendant under the statute and laws of the state, under which the information was filed, it is ordered that the defendant be discharged and his bail released.” The county attorney excepted to the ruling and order of the court, and brings the case to this court for review under the provisions of sections 483 and 515 of the Criminal Code.

There is no attack made upon the form of the information in the briefs of contending parties, and nothing was said upon the subject in the oral arguments; hence no reference will here be made to it. The whole contention is as to the constitutionality of the act of April 3, 1907, published as chapter 157, p. 490, Sess. Laws 1907. The act is too long to be copied here in full, and we must be content with a reproduction of the first section, which is as follows: “Section 1. (Local Unfair Discriminations.) Any person, firm, company, association or corporation, foreign or domestic, doing business in the state of Nebraska and engaged in the production, manufacture or distribution of any commodity in general use, that shall intentionally, for the purpose of destroying the business of a competitor in any locality, discriminate between different sections, communities or cities of this state, by selling such commodity at a lower rate in one section, community or city, than is charged for said commodity by said party in another section, community or city, after making due allowance for the difference, if any, in the grade or quality and in the actual cost of transportation from the point of production, if a raw product, or from a point of manufacture, if a manufactured product, shall be deemed guilty of unfair discrimination, which is hereby prohibited and declared unlawful.” The other sections prescribe the penalties for a violation of the law and the methods of its enforcement; but which we need not here notice. We have been favored with able oral arguments at the bar of the court as well as very elaborate briefs, in which a multitude of cases are cited, and with a full discussion of the legal principles contended for, but which it will be impossible for us to refer to in detail without extending this opinion to an unreasonable length. As we understand the contention of counsel for defendant, it may be fairly summarized by the following extract from their brief: “A careful examination of the act reveals that it is directed against persons or corporations doing business in the state and engaged in the production, manufacture, or distribution of ‘any commodity in general use’; against persons or corporations dealing in commodities which, until the passage of the act, had universally, and ever since mankind began to trade had been, regarded as subjects of legitimate and unrestrained commerce and private enterprise. The act is not directed against dangers to the public health or morals. The act is not directed against so-called natural monopolies or business affected with a public interest. The act attacks trading in commodities in general use. It is the converse of an antitrust law in being an anti-competition law.” The argument is that the object and purpose of the act are not within the police power of the state; that its effects would be to stifle competition and thus foster monopolies; that it takes from the citizen the right to contract and to control his property, destroys freedom in trade, and practically compels the merchant and tradesman to conduct and carry on his business at one place only; that it is class legislation, and “operates upon and against the man who has stores in more than one place, and does not affect the dealer in but one place.” It is said that: “The fundamental error in the act is that it attempts to inquire into a man's intentions with reference to something that is his own private concern, just as much as his religion or politics. Dealing in commodities in general use is something with which the police power of the state has nothing whatever to do. The citizen is a free man, and is the keeper of his own heart and mind.” It is contended that the act is violative of the fourteenth amendment to the Constitution of the United States, which provides that no state shall deprive any person of life, liberty, or property without due process of law, and that no person shall be denied the equal protection of the laws, and that the similar provision in the Constitution of this state is also violated by this act. Many cases are cited by which it is sought to maintain this contention; but, in the view which we take of the law, we are not able to see that they can be applied. They refer, in the main, to the statutes which seek to control and limit transactions in the ordinary and lawful commerce of the country, such as the issuance of trading stamps, the conferring of presents or gratuities out of one's own property for the purpose of drawing custom, the right of the individual to engage in any line of lawful business he may see proper to follow; that acts which discriminate in favor of one as against another class of persons engaged in the same lawful business are infractions of the Constitution, and therefore void, as well as acts declaring specified transactions unlawful, but exempting from their provisions certain named classes of persons and lines of business; the maintaining by mining or manufacturing companies of stores, truck shops, etc., by which they sell their goods and wares to their employés on credit at a higher price than is charged other customers who buy for cash; that classifications of persons or things must be general, and apply to all similarly situated; acts which seek to destroy the right of every competitior to fix his own price upon commodities which he may lawfully sell, or money which he may lawfully loan (subject of course to usury laws), and, in general, such acts as seek to invade the reserved right of every individual to transact and carry on his lawful business according to his own judgment, in his own way, untrammeled by discriminatory laws, by which others similarly situated are given preferences...