State v. Red Owl Stores, Inc.
| Decision Date | 25 July 1958 |
| Docket Number | No. 37322,37322 |
| Parties | STATE of Minnesota, Appellant, v. RED OWL STORES, INC., James Ford Bell, Jr., Glenn R. Grife and J. Ty. Sydness, Respondents, Groves-Kelco, Inc., Elliott F. Royce, Arnold A. Royce and Leonard Royce, Respondents, Minnesota State Pharmaceutical Association, Plaintiff-Intervener, Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. The legislature in the exercise of its police power may in the interest of public health and welfare regulate the sale of drugs and medicines.
2. Where the sole object of a suit is to enforce a criminal action, courts will not exercise equity jurisdiction.
3. Where acts complained of are violations of the criminal law, courts of equity will not on that ground alone interfere by injunction to prevent their commission, since they will not exercise their preventive power for the purpose of enforcing criminal laws by restraining criminal acts. However, courts of equity will interfere by injunction to restrain acts amounting to a public nuisance if they effect public rights or privileges or endanger public health, regardless of whether such acts are denounced as crimes.
4. Whether injunctive relief to restrain the commission of an offense is warranted depends upon the particular facts in each case.
5. By enacting laws and regulations requiring pharmacists to be licensed and pharmacies to be registered, the legislature has established the policy that it is injurious to the public health to permit anyone to engage in such business without a license or permit; and where it is apparent that an effective and uniform enforcement of such laws and regulations would require a multiplicity of suits, an injunction should be granted, not to punish for violation of the statute, but to prevent persons from unlawfully engaging in acts which the statute seeks to prevent for the protection of the public.
6. By enacting the Pharmacy Act, M.S.A. c. 151, the legislature has adopted a policy in the interest of the public health and welfare that the uncontrolled and unsupervised sale of drugs is inimical to the public health; and a prima facie case for injunctive relief is established where the record shows that the defendants are engaged in the sale of drugs and medicines without benefit of license or permits required by the provisions of c. 151.
7. The subject of public health is deeply involved with the sale of all drugs.
8. Where an exception to a statute appears in a different section from that containing the enacting words, the party relying upon the statute need not allege facts showing that the action does not come within the exception, such allegations being matters to be pleaded and proved by the opposing party.
Reversed and new trial granted.
Miles Lord, Atty. Gen., William W. Essling, Special Asst. Atty. Gen., Loftsgaarden & Loftsgaarden, St. Paul, for appellant.
Charles S. Bellows and Best, Flanagan, Lewis, Simonet & Bellows, Minneapolis, for respondents Red Owl Stores and others.
Theodor Herman, Minneapolis, for respondents Groves-Kelco, Inc., and others.
This is an appeal from an order of the District Court of Hennepin County denying the motions of the plaintiff and intervenor for amended findings of fact and conclusions of law or in the alternative for a new trial.
The complaints of the State of Minnesota seek to restrain the defendant corporations and certain of their officers from the alleged violation of certain provisions of M.S.A. c. 151 relating to the subject of pharmacy (L.1937, c. 354, and amendments). The complaint against the Red Owl Stores, Inc., alleges that it operates a large number of retail food markets; that it is not registered or licensed with the Minnesota Board of Pharmacy to engage in selling at wholesale or at retail drugs and medicines; that it has been unlawfully selling and distributing various 'drugs, medicines, chemicals and poisons' in the State of Minnesota, among them being Alka-Seltzer, Anacin, Bromo Seltzer, Bufferin, Pepto-Bismol, Pinex, Murine, Castoria, Ex-Lax, Feen-a-mint, Sal Hepatica, and Vick's Va-Tro-Nol; that such sales are in violation of §§ 151.15 1 and 151.25. 2 The complaint further alleges that such sales are being made in widespread locations over the State of Minnesota and also:
'* * * That to attempt to stop each of such sales would require the expenditure of large sums of money by the State of Minnesota, would require the commencement of a great multiplicity of actions throughout the State and would impose a great burden upon the Courts of this State, all without successfully preventing the continued violation of the provisions of the Pharmacy Law and sections 151.15 and 151.25 thereof.'
The complaint further alleges that the conduct of the defendants endangers the public health of the people of Minnesota and renders ineffectual the laws of the state for the protection of public health and asks that the defendant be permanently enjoined and restrained from selling at wholesale or retail drugs, medicines, etc., in violation of the section of the statute quoted, including the drugs named herein.
The complaint against Groves-Kelco, Inc., a corporation, and its officers, contains substantially the same allegations set forth in the Red Owl complaint, with the exception that it admits that the Groves-Kelco company is a wholesale dealer which does not sell at retail but is in violation because of its sale to retail dealers or pharmacies who are not registered retail dealers properly licensed to engage in the sale of drugs under the Pharmacy Act. 3
The Minnesota State Pharmaceutical Association intervened as a party plaintiff.
The defendant Red Owl corporation interposed an answer admitting that it sells at wholesale and retail the items listed in the complaint. It asserted as a defense that c. 151 and regulations adopted pursuant thereto violate the provisions of Minn.Const. art, § 1, § 7, and art. 4, § 33, M.S.A., and are also in violation of the Constitution of the United States, Amend. 14, in that the provisions deprive defendant of property without due process of law and create a special and exclusive privilege, immunity, and franchise to pharmacists or druggists, as a result of which a monopoly for the benefit of pharmacists and druggists is created. As a second defense they asserted that the articles specified are excepted from the provisions of the Pharmacy Act by § 151.26, the fourth paragraph of which provides:
'Nothing in this chapter shall apply to or interfere with the manufacture, wholesaling, vending, or retailing of non-habit forming harmless proprietary medicines when labeled in accordance with the requirements of the state or federal food and drug act; nor to the manufacture, wholesaling, vending, or retailing of flavoring extracts, toilet articles, cosmetics, perfumes, spices, and other commonly used household articles of a chemical nature, for use for non-medicinal purposes.'
For a further defense they alleged that the act of the state in attempting to restrain them from selling the articles named is in restraint of trade and in violation of the Sherman Anti-Trust Act, 15 U.S.C.A., § 1, et seq., and that the conduct of the State Board of Pharmacy is violative of the Unlawful Business Practices Act, § 623.01, et seq. In their answer to the complaint in intervention the Red Owl corporation asserted the same defenses and alleged a counterclaim against the board in the sum of $25,000.
In its answer to the complaint, the Groves-Kelco corporation and its officers, who are also named as defendants, admitted that in their business as 'rack jobber' they sell the drugs referred to in the complaint and asserted substantially the same defenses set out in the answer of the Red Owl company.
From a pretrial order entered pursuant to a conference held September 4, 1956, before the trial court, it appears that the defendant Red Owl and the named individual officers admitted that the corporation is not registered or licensed to sell at retail drugs or medicines; that the defendant corporation 'has sold and is now selling at wholesale and at retail in the State of Minnesota' the articles named in the plaintiff's complaint, and that those items are drugs and medicines within the meaning of § 151.01, subds. 5 and 6.
By the same order it appears that the defendant Groves-Kelco, Inc., and its individual officers concede that they had a drug wholesaler's license which terminated June 13, 1955; that the articles referred to in the complaint 'are all drugs and medicines within the meaning of the Minnesota Pharmacy Law, M.S.A. (s) 151.01, subdivisions 5 and 6 thereof.' Plaintiff and intervenor admitted that the individual defendants, Elliott F. Royce and Leonard Royce, officers of Groves-Kelco, are pharmacists registered by the Board of Pharmacy of the State of Minnesota.
Both actions were consolidated for trial. At the close of the state's case, defendants rested without introducing evidence. On the basis of the stipulations of facts and evidence adduced at the trial the court found that the Red Owl corporation owns 48 retail stores, referred to as 'corporate' stores, and sells merchandise at wholesale to approximately 200 other retail food stores throughout the State of Minnesota, which are known as 'Red Owl Agency' stores. 4
As a part of its findings the court noted that there had been a longstanding disagreement in the interpretation of the law between the Board of Pharmacy on the one hand and the legal department of Red Owl Stores, Inc., on the other as to whether the drugs listed in the complaint were In fact 'non-habit forming harmless proprietary medicines' excepted from the operation of the act, which disagreement the trial court found had never been determined by the courts of this state.
The court found that the defendant Red Owl corporation 'has sold and is now selling at wholesale and at retail in the State of...
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...Cassidy, 115 Ky. 690, 74 S.W. 730. A comparatively recent case that has rejected this common usage approach is State v. Red Owl Stores, Inc., 1958, 253 Minn. 236, 92 N.W.2d 103, which reaffirms many preceding holdings in that state to the effect that there must be an exclusive right of prop......
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