BLAKE and GERAGHTY, JJ., dissent.
This action involves the constitutionality and applicability of chapter 12, Laws of 1933, Ex. Ses., p. 26 (Rem. 1934 Sup., § 3035-1 [P.C. § 77-11] et seq.), generally referred to as the Washington agricultural adjustment act.
The act first contains what is practically a replica of the Federal agricultural adjustment act in the statement of the necessity for protection of agriculture, and also contains an emergency clause declaring it to be necessary for the immediate preservation of public peace, health and safety, for the preservation of the financial structure of the state, for the preservation of agriculture, to prevent a financial crisis, and for the support of the state government and its existing institutions. By the terms of the act, it is to cease to be in effect at the expiration of two years from the date of its enactment, or sooner if the governor shall
by proclamation declare that the emergency recognized by section 1 of the act has ended.
The act was passed by the legislature on December 30, 1933, and approved by the governor on January 4, 1934, with the exception of § 22 repealing Rem. Rev. Stat., § 6242, vetoed by the governor, which the legislature failed to enact over the veto. The veto of § 22 is of no importance to the decision in this case.
Section 2 of the act reads:
"It is hereby declared to be the policy of the legislature:
"(1) To establish and maintain such balance between the production and consumption of agricultural commodities, and such marketing conditions therefor, as will reestablish prices to farmers at a level that will give agricultural commodities a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the basic period. The basic period in the case of all agricultural commodities shall be the pre-war period, August, 1909 — July, 1914.
"(2) To approach such equality of purchasing power by gradual correction of the present inequalities therein at as rapid a rate as is deemed feasible in view of the current consumptive demand in domestic markets.
"(3) To protect the consumers' interest by readjusting farm production at such level as will not increase the percentage of the consumers' retail expenditures for agricultural commodities, or products derived therefrom, which is returned to the farmer, above the percentage which was returned to the farmer in the pre-war period, August, 1909 — July, 1914. It is hereby declared to be the policy of this state to cooperate with and assist the national government in promoting the rehabilitation of agriculture and in eliminating the causes of the collapse of agricultural purchasing power, and to that end to bring about the formulation of marketing agreements as may be approved by the Secretary of Agriculture of the United States and the enforcement of such agreements within
this state between producers and distributors or marketing agencies handling the products of agriculture or subdivisions thereof engaged in transactions in or affecting intrastate commerce therein and those engaged therein in transactions in or affecting interstate or foreign commerce." Rem. 1934 Sup., § 3035-2 [P.C. § 77-12].
Section 4 (Rem. 1934 Sup., § 3035-4 [P.C. § 77-14]) provides that any marketing agreement approved or prescribed by the secretary of agriculture pursuant to the terms of the National agricultural act for such agricultural industry or subdivision thereof, shall be considered as the standard of fair competition in intrastate transactions, and the violation of such standard shall be deemed unfair competition, and shall be unlawful and punishable as a gross misdemeanor.
Section 7 reads:
"In order to effectuate and carry out the declared policy of this state and the provisions of the Agricultural Adjustment Act of the United States, the director of agriculture of this state is hereby vested and empowered (1) to make rules and regulations with the approval of the Governor and to provide for the regulation and control of production, storage, transportation, sale and distribution of the agricultural commodities or products thereof or competing commodities and products thereof for such time as the present economic emergency exists and (2) to enter into marketing agreements with processors, associations of producers, and other persons engaged in the handling, manufacturing, producing, processing, dealing or sale of agricultural commodities or products thereof in this state. The making of any such agreement shall not be held to be in violation of any provisions of the statutes of this state: Provided, That no such agreement shall be and remain in force after the termination of this act." (Rem. 1934 Sup., § 3035-7 [P.C. § 77-17]).
Section 8 (Rem. 1934 Sup., § 3035-8 [P.C. § 77-18]) provides for the issuance of licenses or permits by the
director of agriculture to processors, manufacturers, associations of producers, and all other persons engaged in the handling in the current of intrastate commerce of any agricultural commodities or products thereof, or any competing commodities or products thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing legislation or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy of this state and the restoration of normal economic conditions in the marketing of such commodities or products.
Section 8 further provides that the director may, for sufficient cause, revoke any such license, after due notice and opportunity for hearing, for violations of the terms and conditions thereof.
Section 12 reads:
"It shall be unlawful for any person to engage in handling, processing, wholesaling or retailing of any agricultural produce without first having obtained a license. Any person violating the provisions of this act shall be guilty of a gross misdemeanor, and each day during which the violation continues shall constitute a separate offense." Rem. 1934 Sup., § 3035-12 [P.C. § 77-22].
Section 13 (Rem. 1934 Sup., § 3035-13 [P.C. § 77-23]) provides for making reports, if required, by any person engaged in handling, selling or processing any agricultural commodities or products, in writing to the director, upon request, showing the true nature of the transaction.
Section 16 reads:
"As used in this act, the term `basic agricultural commodity' means wheat, field corn, hogs, beef, poultry, eggs, fruit, and milk and its products, and any regional or market classification, type or grade thereof;
but the director of agriculture shall exclude from the operation of the provisions of this act, during any period, any such commodity or classification, type or grade thereof if he finds, upon investigation at any time and after due notice and opportunity for hearing to interested parties, that the conditions of productions, marketing and consumption are such that during such period this act cannot be effectively administered to the end of effectuating the declared policy with respect to such commodity or classification, type or grade thereof." Rem. 1934 Sup., § 3035-16 [P.C. § 77-26].
Respondents are commission merchants, all located in Spokane, handling and dealing in fresh fruits, vegetables and products as such commission merchants, and have been legally licensed as such under the laws prior to the enactment of chapter 12, supra.
It was admitted at the trial in the lower court that a joint control committee of Oregon-Washington melon and tomato producers has promulgated, and the director of agriculture of the state of Washington has approved, an agreement under the act covering, or intended to cover, the sale of melons and tomatoes, fixing a minimum price at which melons and tomatoes can be sold. On behalf of that agreement, it was averred by appellants that the minimum price was arrived at after a careful analysis of the cost of production and the cost of marketing such products, and after taking into consideration the reasonable cost to the consuming public; that a small profit, and in many cases no profit at all, has resulted to the producer or grower; that the public has in no way been forced or compelled to purchase such products at an unreasonable price when the cost of production and marketing of such products are taken into consideration; that, under the preexisting conditions, the marketing in such products was demoralized and tended to
discourage the growers from further efforts to produce melons and tomatoes, and because of this fact an emergency existed, which emergency the above act has taken into consideration, and attempted to remedy the evil results existing under the old system referred to in it.
Respondents alleged that there was no emergency due to low prices of such agricultural products handled in the current of trade by each and all of them; that the price to farmers for the agricultural products handled in the current of trade by each and all of them were higher in price with respect to the purchasing power of such agricultural commodities than were such prices during the basic period adopted in the act, being August, 1909, to July, 1914; that the only marketing agreement prescribed or approved by the director, i.e., that commonly known as the melon and tomato marketing agreement, is responsible for a fixed price for melons and tomatoes greatly in excess of the price of melons and tomatoes during the basic period stated in the act; that, because such marketing agreement has caused to be fixed a price for tomatoes and melons in excess of what the public, i.e., the consumer, will pay for any substantial portion of these crops, respondents and each of them will be compelled to return to the farmers unsold melons and tomatoes delivered by the farmers to them for sale, in the event they agree to abide by any marketing agreement prescribed or approved, or to be prescribed and approved, by the director.
Respondents also alleged, and it was admitted, that appellants threatened the wrongful arrest and prosecution each and every day of each and all of respondents for failure to procure a license, which they or either of them are not required to have, and which can only be procured by each of respondents by the payment
of an additional license fee and entering into an agreement that he, they or it will comply with the terms and conditions of any marketing agreement approved or prescribed by the director. It is further alleged that the act violates the constitution of the United States and the state constitution, in that it requires by its terms that respondents and each of them, in order to conduct their businesses, must obtain a license, and makes no provision for the issuance of such license except upon application and agreement on the part of the applicant that he will comply with all terms and conditions of any marketing agreement approved or prescribed by the Federal secretary of agriculture or by the director of agriculture of Washington.
Further allegations were made that the act violates the fourteenth amendment to the Federal constitution and violates or disregards the following provisions of the constitution of Washington: §§ 1, 3, 7, 12, 16 and 23 of Article I; § 1, Article IV; the seventh amendment, being the amendment to § 1, Article II; and the tenth amendment, being the amendment to § 22, Article I, and § 22, Article XII.
The trial judge granted a temporary injunction to respondents, but apparently did not pass upon the constitutionality of the act, basing his action upon the arbitrary acts of the administrators of the act as being beyond the authority of the act itself in the present case "without impugning the general purpose and operation of the act."
[1] It is suggested by several counsel appearing as amicicuriae that respondents are in no position to seek redress in the courts because they have never attempted to secure licenses under the new act, nor to seek redress before the administrators of the law as provided therein. Each and all of respondents were
threatened with immediate and daily prosecution for the gross misdemeanor created by the law, unless they applied for licenses under the new act and agreed, among other things, to comply with any lawful orders of the director. Being thus threatened, they had the undoubted legal right to challenge the validity of the law and resist its enforcement as against them by injunction without awaiting prosecution. Huntworth v. Tanner, 87 Wn. 670,152 P. 523, Ann. Cas. 1917D, 676.
We shall also ignore the lack of finality of the injunction ordered, since appellants and all parties concede that it was to be considered as a final judgment after a complete hearing of the case and because of the vast importance to the parties and the public of a construction of the law.
[2] Able and copious briefs have been furnished us by the parties and by the several amici curiae arguing the case by leave of court, pro and con. We are unable to agree with many of the contentions of counsel for the parties or of amici curiae.
Although we realize the immense import of our decision on this law, on account of the complexity of the argument it will not be expedient to discuss many of the questions. Lack of discussion, however, does not indicate lack of studious consideration of all points. Neither shall we discuss any of the constitutional provisions except those we consider essentially involved, and for the further reason that none of respondents is immediately affected by any of those constitutional provisions except those we shall discuss in this opinion. State v. Bowen Co.,86 Wn. 23, 149 P. 330, Ann. Cas. 1917B, 625; Northern Cedar Co.v. French, 131 Wn. 394, 230 P. 837; Garretson Co. v.Robinson, 178 Wn. 601, 35 P.2d 504.
We also proceed upon the presumption that an act
of the legislature will be presumed to be valid unless there is no reasonable doubt as to its validity. State v. Bowen Co.,supra; Litchman v. Shannon, 90 Wn. 186, 155 P. 783;Standard Oil Co. v. Graves, 94 Wn. 291, 162 P. 558; Stateex rel. Hamilton v. Martin, 173 Wn. 249, 23 P.2d 1; Stateex rel. Stiner v. Yelle, 174 Wn. 402, 25 P.2d 91.
[3] It is so well settled in this state, and almost universally elsewhere in the country, as to need no citation that the legislature has power to license commission merchants or other dealers in agricultural products in the interest of proper inspection to prevent evasion, fraud and imposition. It has also been settled in this state by former decisions that commission merchants can be regulated and licensed. State v. Bowen Co.,supra; Northern Cedar Co. v. French, supra; and Garretson Co.v. Robinson, supra. If that be true, the state can afterwards impose additional regulations and exactions upon the same commission merchants, under the police power of the state, if such regulations are constitutionally enacted. Licenses theretofore granted may be revoked, even without notice to the licensee, for violation of the terms of the license, without depriving the licensee of property without due process of law.Monamotor Oil Co. v. Johnson, 292 U.S. 86, 54 S.Ct. 125, 78 Law Ed. 706. Consequently, there is no merit in the contention of respondents that the act before us, if otherwise constitutional, violates the provisions as to non-impairment of contract and the due process of law restrictions of the Federal and state constitutions.
[4] Respondents and some of amici curiae make the further contention that the act violates § 22 of Article XII of our state constitution, which reads:
"Monopolies and trusts shall never be allowed in this state, and no incorporated company, copartnership,
or association of persons in this state shall directly or indirectly combine or make any contract with any other incorporated company, foreign or domestic, through their stockholders, or the trustees, or assignees of such stockholders, or with any copartnership or association of persons, or in any manner whatever, for the purpose of fixing the price or limiting the production or regulating the transportation of any product or commodity. The legislature shall pass laws for the enforcement of this section by adequate penalties, and in case of incorporated companies, if necessary for that purpose, may declare a forfeiture of their franchise."
A minority of this bench probably agree with that contention, but the majority are against it. That provision is plainly for the prevention of combinations of persons, or associations, for the purpose of fixing the price or limiting the production of any product or commodity, directly or indirectly, thus creating private monopolies against the public welfare, but does not apply to the state itself if it should determine to establish or foster a monopoly for the production of any agricultural product, for the advantage of its people. The cases cited to sustain that contention, particularly: Washington Cranberry GrowersAssociation v. Moore, 117 Wn. 430, 201 P. 773, 204 P. 811, 25 A.L.R. 1077; and American Export Door Corporation v. GaugerCo., 154 Wn. 514, 283 P. 462, all dealt with such private monopolies, but are not apt here. State ex rel. Department ofPublic Works v. Inland Forwarding Corporation, 164 Wn. 412,2 P.2d 888, in which that constitutional prohibition was invoked by appellant, dealt with the regulation of the state's own highways and the licensing of motor vehicles thereon for the transportation of passengers and freight, where it was further contended that the granting of such certificates of convenience resulted
in monopolies contrary to the above quoted section. We held that it was not violated, and the case has no controlling force in this case.
[5] Appellants and several amici curiae forcefully argue that, since two recent decisions by the United States supreme court in cases of great public emergency, such as has been declared by the legislature in this act, the state has unlimited authority to enact such legislation as this.
The first case relied upon is Home Building LoanAssociation v. Blaisdell, 290 U.S. 398, 54 S.Ct. 231, 88 A.L.R. 1481, which involved the Minnesota mortgage moratorium law, an emergency act with a limited duration, which the supreme court of Minnesota sustained and the United States supreme court sustained against the contentions that it was repugnant to the contract, due process, and equal protection clauses of the Federal constitution. The next case is Nebbia v. New York,291 U.S. 502, 54 S.Ct. 505, 89 A.L.R. 1469.
We shall make no extended review of those cases, because it seems that their operation and effect has been explained and somewhat limited in subsequent cases by that court. See WorthenCo. v. Thomas, 292 U.S. 426, 54 S.Ct. 816, 93 A.L.R. 173;Borden's Farm Products Co. v. Baldwin, 55 S.Ct. 187. In the last cited case, Mr. Chief Justice Hughes, writing the majority opinion for the court, referring to the Nebbia case, supra, among other things, said:
"Respondent's counsel, referring to the difficulties of price regulation, say that `Apparently the fixing of prices by government discovered as many troubles as were loosed from Pandora's box.' This complexity of problems, however, makes it the more imperative that the Court in discharging its duty, in sustaining governmental authority within its sphere and in enforcing individual rights, shall not proceed upon false assumptions."
In the Nebbia case, supra, by a five to four decision, that court seemed to go to the limit in sustaining the price fixing law of New York as to milk, based on extensive investigation reported to its legislature, which was declared by the court of appeals of New York to be an article of paramount importance to the people of New York, in its decision in the same case (People v. Nebbia, 262 N.Y. 259, 186 N.E. 694).
There is grave doubt whether the Federal supreme court would sustain the inclusion of melons and tomatoes in this state as of paramount importance to the people of this state, and so justify the legislation regulating production and fixing prices. That court has also said that a state law may be invalid in some phases and perfectly valid in others. That question is, however, unnecessary here to determine.
The act before us is invalid under our constitution for one sole violation thereof, as it is incomplete and abdicates the legislative power.
Section 7 of the act authorizes the director of agriculture to make rules and regulations with the approval of the governor, and to provide for the regulation and control of production, storage, transportation, sale and distribution of the agricultural commodities or products thereof or competing commodities and products thereof, for such time as the present economic emergency exists; and to enter into marketing agreements with processors, associations of producers, and other persons engaged in the handling, manufacturing, producing, processing, dealing or sale of agricultural commodities or products thereof, in this state.
It is manifest that, under sections 2 and 7, the legislature attempted to delegate legislative power to the national secretary of agriculture and the state director to fix prices of agricultural products upon the basis
of the August, 1909, to July, 1914, period. Melons and tomatoes, however, were nowhere included in the act as basic agricultural commodities, which, under § 16, consist only of wheat, field-corn, hogs, beef, poultry, eggs, fruit, and milk and its products, and any regional or market classification, type or grade thereof.
But little attention is paid to § 16 by any of counsel, which we consider of grave importance. Little attention is paid by respondents in argument to it, but more by some of amicicuriae, to the seventh amendment to our state constitution, replacing § 1, Article II, of the original constitution, which is, in substance, that, subject to the reserved power of the people to initiate and bring about referendums by the people, the legislative authority of the state shall be vested in the legislature, consisting of a senate and house of representatives which shall be called the legislature of the state of Washington.
It is obvious that §§ 2 and 7, in delegating such power to the Federal secretary of agriculture, the state director, and the governor, are beyond the power of the legislature. The legislative power is vested exclusively in the legislature except so far as modified by the initiative and referendum provisions, and cannot be surrendered or delegated or performed by any other agency. In re Opinion of the Justices, 239 Mass. 606,133 N.E. 453. To the same effect is State v. Intoxicating Liquors,121 Me. 438, 117 A. 588; Phenix Insurance Co. v. Perkins, 19 S.D. 59,101 N.W. 1110; Wylie v. Phoenix Assurance Co., 22 P.2d (Ariz.) 845.
It is obvious that § 2 of the act is vague and indefinite in prescribing the standard by which the objects of the act are to be effectuated. There is no primary, definite standard of action by which the director of
agriculture and governor of this state are to be governed. We have repeatedly said that
"The legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend." Spokane Hotel Co. v. Younger, 113 Wn. 359,194 P. 595, and cases cited.
That principle was recognized in Vail v. Seaborg, 120 Wn. 126,207 P. 15, and in State v. Oregon-Washington Railroad Navigation Co., 128 Wn. 365, 223 P. 600.
See, also, State ex rel. Makris v. Superior Court, 113 Wn. 296,193 P. 845, 12 A.L.R. 1428; Vincent v. Seattle,115 Wn. 475, 197 P. 618; Seattle v. Gibson, 96 Wn. 425,165 P. 109.
In the Vail case, supra, this court court quoted and approved a principle announced in State v. Normand, 76 N.H. 541,85 A. 899, to the effect that the legislature cannot delegate its power to make a law, but it can make a law to delegate the power to an administrative officer to determine a fact or condition of affairs in regard to which the law makes its own action depend. That was a quotation from a Federal case in which it had been held that Congress could not delegate its power to make a law. Dastervignes v. United States, 122 Fed. 30.
On the other hand, regulations made by executive officers are valid only as subordinate to a legislative policy sufficiently defined by statute, and when found to be within the framework of such policy. Panama Refining Co. v. Ryan, 55 S.Ct. 241.
In that case, it was decided that all legislative power under the Federal constitution by virtue of Art. 1, § 1, and Art. 1, § 8, was vested in the Congress of the United States consisting of a senate and house of representatives,
which is empowered thereby to make all laws which shall be necessary and proper for carrying into execution its general powers. It was there emphatically declared that
"The Congress manifestly is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested. Undoubtedly legislation must often be adopted to complex conditions involving a host of details with which the national Legislature cannot deal directly."
Many instances of laws and decisions in which there had been such delegation of a part of the legislative power to fill up the details under the general provision made by the legislature were cited in the opinion.
It was accordingly therein held that there would be no unconstitutional delegation of legislative power by Congress in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the legislature is to apply; but that a delegation of legislative power to an administrative officer is not brought within the permissible limits of such delegation by prescribing the public good as the standard for the administrative officer's action.
It is also there held that, when a penalty or fine or imprisonment, or both, attaches to each violation of an executive order, the jurisdiction of equity is properly invoked to restrain its enforcement if it and the statute under which it is issued is found to be invalid. That accords with our rule of decision in this state as shown by the Huntworth case, supra.
The decision in the Panama Refining Co. case, supra, is very long, and most of its reasoning is very persuasive here. It was written by Chief Justice Hughes, and it is dissented from by only one justice (Cardozo).
In the instant case, the melon and tomato code is
brought into existence merely by an arbitrary edict and fiat of the governor of this state and the state director. Section 16 enumerates several products as "basic agricultural commodities," but makes no reference, directly or indirectly, to "melons or tomatoes." No direct authority was given in the act for such edict, and the effect is as an arbitrary and oppressive act.Hegeman Farms Corporation v. Baldwin, 55 S.Ct. 7. Cf. Wilentzv. Crown Laundry Service, 116 N.J. Eq. 40, 172 A. 331.
While § 2 of the act merely declares the legislative policy of the state and would not alone be an unconstitutional provision, when read in conjunction with §§ 4 and 7, constitutes an invalid attempt to delegate legislative power and renders the act unconstitutional. It is not competent for the legislature to abdicate its own power and to so delegate it to any executive or administrative officers, regardless of the worthiness of the present grantees.
The legislature is bound by the constitution when enacting legislation, and so are we in construing legislation. Even though in the presence of dire financial and agricultural calamities, the constitution cannot be set aside. It would seem that even Congress may not delegate to such agency as it selects its entire legislative power. Our legislature has done no more than Congress did in industrial recovery act in delegating such powers to the president, which the United States supreme court annulled.
This is determinative of the instant case.
Having reached the above conclusion, the order of the trial court is affirmed.
MILLARD, C.J., BEALS, and MITCHELL, JJ., concur.