Griffiths v. Robinson

43 P.2d 977, 181 Wash. 438, 1935 Wash. LEXIS 574

• Court: Washington Supreme Court
• Decided: April 11, 1935
• Docket: No. 25466. En Banc.
• Status: Published

Opinions

Holcomb, J.

The 1933 extraordinary session of the legislature enacted chapter 12 [Laws of 1933, Ex. Ses., P. 26], known as the Washington agricultural adjust ment act. Section 1 sets forth the economic conditions deemed by the legislature to require the enactment:

“That the present acute economic emergency being in part the consequence of a severe and increasing disparity between the prices of agricultural and other commodities, which disparity has largely destroyed the purchasing power of farmers for industrial products, has broken down the orderly exchange of commodities and has seriously impaired the agricultural assets supporting the state credit structure, it is hereby declared that these conditions in the basic industry of agriculture have affected transactions in agricultural commodities with a public interest, have burdened and obstructed the normal currents of commerce in such commodities, and render imperative the immediate enactment of this act.” Rem. 1934 Sup., § 3035-1 [P. C. § 77-11].

Section 2 declares it 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.” Eem. 1934 Sup., § 3035-2 [P. C. §77-12].

Section 4 (Eem. 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 of the act is as follows:

“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 snch 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 issuing licenses or permits to processors, manufacturers, associations of producers, and all other persons engaged in intrastate commerce of agricultural commodities, and for the revocation of such licenses, upon notice and hearing, for the violation of its terms and conditions. Under the terms of § 9 (Rem. 1934 Sup., §3035-9 [P. C. §77-19]), it is made the duty of the director to issue the licenses or permits provided for to any person handling agricultural commodities, upon application therefor and on the agreement on the part of the applicant that he will comply with the terms and conditions of any marketing agreement approved or prescribed by the United States secretary of agriculture or state director of agriculture. As to the issuing of the licenses, a discretion is reserved in the director to refuse a license to any person who intends engaging in the processing or wholesaling of agricultural products in any place within the state when he shall be satisfied that the market in such territory is amply supplied and that the granting of a license to the person applying therefor, not theretofore engaged in such business within the territory, would unnecessarily tend to increase the cost to the consumer and increase the purchasing price to the producer. In relation to the suspension or cancellation of licenses issued under the act, provision is made for notice and hearing, and an appeal to a board of review consisting of the secretary of state, director of conservation and development, and the director of the extension service of the Washington state college, which board is given authority to review the actions of the director of agriculture.

Section 12 (Rem. 1934 Sup., § 3035-12 [P. O. § 77-22]), makes it unlawful and punishable as a gross misdemeanor for any person to engage in handling, processing, wholesaling or retailing agricultural produce without obtaining a license, for each day of such violation.

Section 14 (Rem. 1934 Sup., § 3035-14 [P. C. § 77-24] ) provides that the director of agriculture, with the consent of the governor, shall prescribe the license fees to be charged in order to defray the expenses of administering the act; that the license fee shall not be less than one dollar nor more than twenty-five dollars per annum for retailers of agricultural produce, nor less than fifty dollars nor more than two hundred and fifty dollars per annum for processors or wholesalers.

Section 15 (Rem. 1934 Sup., § 3035-15 [P. O. § 77-25] ) appropriates the sum of fifty thousand dollars for the administration of the act by the director, with the proviso that in no case shall the expenses exceed the receipts from licenses collected.

Section 16 provides:

“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 gradé 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. G. §77-26].

Acting under the authority of this act, after holding meetings with producers and distributors, the director, with the approval of the governor, issued certain orders in relation to the production and marketing of milk and its products in the district defined as the Seattle area, and particularly order 103, being the code or marketing agreement in force at the time of the institution of this suit.

Order 103 provides for the organization of a committee of twelve members to be known as the milk industry board, whose purpose is to aid the director in the administration and enforcement of the order.

Certain exhibits defining the boundaries of the Seattle marketing area, adopting a schedule of prices at which fluid milk is to be sold by producers and purchased by distributors for distribution and consumption in the marketing area, a plan for the control of production, schedules governing the prices to be charged by distributors in the marketing area, and a schedule of prohibited trade practices, were adopted.

This order 103 and plan and schedules are unnecessary to set out because of our conclusion as to the validity of the law itself.

Appellant Griffiths is a distributor of milk in the Seattle area, and the other appellants are producers of milk in that area. In a voluminous complaint, they challenge the act and order 103 issued thereunder upon numerous grounds, involving the constitutionality of the act and the right of the director to make the order and the manner of its enforcement. They allege that the act and the order are in contravention and denial of § 3 of Art. I of the state constitution, which provides that “No person shall be deprived of life, liberty or property without due process of law,” and in contravention and denial of § 7 of Art. I, providing that “No person shall he disturbed in his private affairs . . . without authority in law,” and in contravention of § 10 of the same article, which provides that “Justice in all cases shall be administered openly.” They charge that the act and order are in contravention of § 12 of Art. I, providing that

“No law shall be passed granting to any citizen, . . . or corporation, other than municipal, privileges or immunities which, upon the same terms, shall not equally belong to all citizens or corporations ;”

and in contravention of Art. XII, § 22, directed against monopolies and trusts. They also complain that the act is an unlawful delegation of legislative authority.

The prayer of the complaint is that the act be declared void, in so far as the court finds it to be unconstitutional, and that the order be held illegal and set aside, in so far as the court finds it to be without authority in law; and, pending a hearing, that the director be enjoined from enforcing the order against plaintiffs, or any of them, and from enforcing or collecting any assessments or charges thereunder in the particulars complained of.

Respondent interposed a demurrer to the complaint based upon statutory grounds, and afterwards filed, in substance, a general denial of the facts alleged in the complaint, and alleged as an affirmative defense that the order complained of was enforced by him in good faith as director, and pursuant to the authority vested in him by the agricultural adjustment act.

After trial to the court, judgment was entered denying the relief prayed for and dismissing the action, from which plaintiffs appeal.

The challenge by appellants to the act and the order of the director will be decided only on the constitutional power of the legislature under two relevant provisions of our state constitution.

We have just decided in a concurrent case, Uhden, Inc., v. Greenough, ante p. 412, 43 P. (2d) 983, that the delegation of power to the Federal secretary of agriculture, the governor, and the state director of agriculture, is invalid, and there is no need to further discuss that matter herein. We also decided in that case that the legislation does not offend against § 22, Article XII, of our state constitution prohibiting monopolies and trusts. In addition to what was there said, we deem it unjustifiable and inexpedient to so bind, limit and restrict the state itself in dealing with such matters by its own laws, and that constitutional provision never so intended.

We are practically unanimous that such a law as that now before us would be an appropriate exercise of the police power of the state in regulating such matters as this law attempts to regulate, and that milk is one of the basic agricultural commodities of the state, affected with a public interest, but not such a basic agricultural commodity as was found, declared to be, and adjudged as, a “paramount, basic commodity” in New York, in Nebbia v. New York, 291 U. S. 502, 54 S. Ct. 505, 89 A. L. R. 1469.

We have recently been told by that high authority that an emergency does not create power, nor increase granted power, nor diminish restrictions imposed upon power granted or reserved, but that emergency may cause the exercise of power theretofore dormant. Home Building & Loan Association v. Blaisdell, 290 U. S. 398, 54 S. Ct. 231, 88 A. L. R. 1481. The more recent decision by that court in Panama Refining Co. v. Ryan, 55 S. Ct. 241, fortifies us in our conclusion that, since Congress cannot abdicate or transfer to others its legislative functions under the Federal constitution, neither can our legislature do the same thing under our constitution, especially by such a nebulous, indefinite grant of power as this act attempts.

See, also, United States v. Schechter, 8 Fed. Supp. 136; Franklin Process Co. v. Hoosac Mills Corporation, 8 Fed. Supp. 552; Uhden, Inc. v. Greenough, supra, and the cases therein cited.

For these reasons, and those set forth in the Uhden case, supra, the judgment of the trial court is reversed, and remanded with direction to enter judgment conforming hereto.

Millard, C. J., Beals, and Mitchell, JJ., concur.