Cox v. General Electric Co. , 211 Ga. 286 ( 1955 )

Wyatt, Presiding Justice.

It is contended that the plaintiff in the court below (the defendant in error here) is entitled to the relief sought in so far as counts one and two are concerned irrespective of the Fair Trade Statute for the reason as contended, that the petition seeks to protect property rights, and that the petitioner is entitled to have these property rights protected irrespective of the Fair Trade Act. This contention can not be sustained. The Supreme Court of the United States in Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U. S. 211, (71 Sup. Ct. 259, 95 L. ed. 219), in dealing with a scheme similar to the one here involved, and certainly controlled by the same legal principles, said: “Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se.”

In Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U. S. 373 (31 Sup. Ct. 376, 55 L. ed. 502), where the scheme under consideration was essentially the same as the one here under consideration, and where the contentions of the medical company were in general the' same as those alleged in the petition in the instant case, the Supreme Court of the United States said (at p. 399): “The bill asserts complainant’s ‘right to maintain and preserve the aforesaid system and method of contracts and sales adopted and established by it.’ It is, as we have seen, a system of interlocking restrictions by which the complainant seeks to control not merely the prices at which its agents may sell its products, but the prices for all sales by all dealers at wholesale or retail, whether purchasers or sub-purchasers, and thus to fix the amount which the consumer shall pay, eliminating all competition. . . That these agreements restrain trade is obvious.” The court then held the scheme under consideration to be in violation of the Sherman Act.

In the instant case the plaintiffs in error are non-signers, or parties with whom the manufacturer has no contract. Clearly the above rulings as to the violation of the Sherman Act by schemes such as the petition discloses in this case are controlling.

The defendant in error further contends that it is entitled to the relief sought by virtue of a valid act of the General Assembly of the State of Georgia, the so-called “Fair Trade Act.” In view of the above rulings of the Supreme Court of the United States, of course, if plaintiff in the court below is entitled to any relief, it must be by virtue of a valid act of the General Assembly of Georgia. This contention will be dealt with in the following division of the opinion.

Count three of the petition contends that the plaintiff in the court below is entitled to the relief sought by virtue of and under the provisions of the Georgia Fair Trade Act (Ga. L. 1953, Nov.-Dee. Sess., p. 549). As appears from the authorities cited in division one of this opinion, after the Supreme Court of the United States had declared- schemes such as is here under consideration to be in violation of the Sherman Act (26 Stat. 209; 15 U. S. C. A., § 1), the Congress of the United States in the Miller-Tydings Act (50 Stat. 693, 15 U. S. C. A., § 1), attempted to delegate to the States the right to enact these Fair Trade Statutes. The Supreme Court of the United States in construing this act held that it could not be made to apply to persons who had signed no contract or agreement. Schwegmann Brothers v. Calvert Distillers Corporation, 341 U. S. 384 (71 Sup. Ct. 745, 95 L. ed. 1035). Thereafter, the Congress enacted the McGuire Act (66 Stat. 632, 15 U. S. C. A., § 45), attempting to delegate to the States the right to enact Fair Trade Statutes applicable to all dealers or retailers whether they had signed contracts or not.

This attempt by the Congress to delegate to the States this power seems to be in the reverse of the power of delegation as we have always understood this subject under our system of government and under the provisions of the Constitution of the United States. However, that is the situation with which we have to deal.

The defendants in the court below had signed no contract or agreement of any kind. We are, therefore, not here concerned with what the situation would have been if there had been a contract between the parties because that question is not now before us. Clearly, it follows, if the scheme here under consideration is valid and if the plaintiff in the court below is entitled to the relief sought, it must be by reason of a valid law of Georgia making legal the scheme of doing business described in the petition under consideration. That the legislature attempted to make legal the scheme and method of doing business described in the petition, is clear from a reading of the act of 1953, supra. The question remains, however, is this law a valid law?

This court has very recently in two cases dealt with the question of fixing prices by statute. In Harris v. Duncan, 208 Ga. 561 (67 S. E. 2d 692), this court was dealing with a statute purporting to give to a board the right to fix the price of milk. We there said (p. 563): “Before the General Assembly can authorize price fixing without violating the due process clause of our Constitution, among other requirements, it must be done in a business or where property involved is ‘affected with a public interest/ and the milk industry does not come within that scope.” Certainly, if milk is not “affected with a public interest,” electrical appliances are not.

Again in the Harris case, supra, we said (p. 564): “The right to contract and for the seller and purchaser to agree upon a price is a property right protected by the due process clause of our Constitution, and unless it is a business ‘affected with a public interest’ the General Assembly is without authority to abridge that right.”

In the Harris case, supra, Chief Justice Duckworth wrote a very full and complete special concurring opinion. All that is said there by the Chief Justice is applicable here. We therefore, without the necessity of copying in this opinion what is there said, adopt that special concurring opinion as a part of this opinion. It is contended that the Harris case, supra, differs from the instant case for the reason that the court was there dealing with the power of the General Assembly to authorize a board to fix prices, while here the court is dealing with an attempt by the legislature to authorize an individual to fix the price of its own product. The clear answer to this contention is that, if the General Assembly can not authorize a board created by the State to fix prices, certainly it can not give this right to an individual.

In Grayson-Robinson Stores, Inc. v. Oneida, Ltd., 209 Ga. 613 (75 S. E. 2d 161), this court was dealing with a situation almost identical with that now under consideration, and there this court said (p. 619): “Moreover, and for the reasons stated in Harris v. Duncan, 208 Ga. 561 (67 S. E. 2d 692), Georgia’s Fair Trade Act of 1937 offends article I, section I, paragraph III of our Constitution of 1945, which provides that ‘No person shall be deprived of life, liberty, or property except by due process of law.’ Code (Ann.) § 2-103. And for that reason the act is null and void.” It is contended that this ruling was obiter dictum for the reason that the case had already been disposed of on the theory that the act violated the provisions of the Sherman Act. We do not agree with this contenton. However, to remove any doubt in the future, and since the language is so applicable to the act of the General Assembly now under consideration, we adopt that language as a part of this opinion as applied to the subsequently enacted Fair Trade Act now under consideration. It is argued that the Fair Trade Act of 1953, supra, is not a price-fixing statute, but is a statute enacted for the purpose of protecting the property right of the manufacturer in his trade name and trademark, and that the price-fixing feature is simply incidental. We can not agree with this argument. A mere reading of the act discloses that the purpose of the act is to authorize a manufacturer to regulate and fix the price of its product down through the channels of trade to the ultimate consumer and into the hands of persons with whom he has no contractual relation. If the price-fixing provisions are stricken from the act, the act is destroyed. Surely a provision so vital is not merely incidental.

It is further argued that this court is bound to sustain the validity of the act because of certain findings of fact by the General Assembly. We do not think that the recitals contained in the act amount to findings of fact, but are simply arguments presented by the General Assembly as to the reasons why they considered the act necessary, and their conclusions as to the effect of the act. We are convinced that any findings of fact in conflict with what has been held in this opinion would be an attempt by the General Assembly to find a fact that does not exist, and, of course, no court is bound by that sort of finding of fact by a legislative body. Of course, a manufacturer has a property right in his trade-mark and trade name, but that does not give to him the right and power to strike down the Constitution of this State and interfere with the freedom of the right to contract.

It is argued that this court can not hold the Georgia Fair Trade Act unconstitutional without questioning the motives of the legislature and imputing dishonesty to that body. We reject this fallacious argument in its entirety. We simply disagree with the General Assembly for the reasons pointed out in this opinion.

It is earnestly argued that a number of the supreme courts have upheld the validity of their Fair Trade Acts, which were almost, if not entirely, identical with the Georgia statute under consideration, and our attention is called to a number of decisions by the Supreme Court of the United States. We are aware of the fact that a number of the State supreme courts have upheld these acts, a number have not passed upon them, and others have held them invalid. We are also familiar with the conflicting decisions on this question by the Supreme Court of the United States, as pointed out in the special concurring opinion of Chief Justice Duckworth in Harris v. Duncan, supra. We are here, however, dealing with the statutes of this State and with the question of whether or not they violate the Constitution of the State of Georgia. What the courts of other States have decided is not controlling, and this is one of the few powers left to States to decide for themselves regardless of what the Supreme Court of the United States may or may not have decided. We are also familiar with the modern trend to allow the government to encroach more and more upon the individual liberties and freedoms. So far as we are concerned, we will not strike down the Constitution of our State for this purpose; neither will we follow the crowd. The scheme described in the petition now under consideration permits a manufacturer, under the guise of protecting his property rights in a trade name and trade-mark, to control the price of his product down through the channels of trade into the hands of the ultimate consumer, and into the hands of persons with whom he has no contractual relation whatever. This statute clearly violates the provisions of the due-process clause of the Constitution of the State of Georgia.

From what has been said above, it follows, the judgment of the trial court was error.

Judgment reversed.

All the Justices concur, except Almand, J., who dissents.