State Ex Rel. Johnson v. Sunshine Food Markets

South Dakota Supreme Court

State Ex Rel. Johnson v. Sunshine Food Markets

171 N.W.2d 508, 84 S.D. 345, 1969 S.D. LEXIS 117

CourtSouth Dakota Supreme Court

DecidedOctober 22, 1969

DocketFile 10589

StatusPublished

Cited by2 cases

This text of 171 N.W.2d 508 (State Ex Rel. Johnson v. Sunshine Food Markets) is published on Counsel Stack Legal Research, covering South Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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State Ex Rel. Johnson v. Sunshine Food Markets, 171 N.W.2d 508, 84 S.D. 345, 1969 S.D. LEXIS 117 (S.D. 1969).

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Opinions

RENTTO, Judge.

This appeal brings before us, for the first time, the Dairy Industry Marketing Act which came into our law as Ch. 9, Laws of 1966 and appears now in SDCL 1967 37-3-8 to 37-3-72, inclusive.

In addition to prohibiting enumerated practices in the marketing of selected dairy products, it created a South Dakota Dairy Products Marketing Commission, and charged it with the duty of determining minimum dock and wholesale prices--of designated dairy products. The act itself prescribes the manner in which minimum retail prices are determined on products for which wholesale prices have been fixed. This litigation involves a claimed violation of the required minimum price in the retail sale of ice cream.

The Secretary of Agriculture is entrusted by the act with its administration and enforcement. On the claim that the defendant is violating the act 'by selling ice cream in 1/2 gallon containers at less than the minimum retail price, the secretary, [347]*347as specifically authorized in SDCL 1967 37-3-63, brings this action to enjoin the defendant from continuing such violations. On a trial to it the court held the sales involved permissible. From a judgment dismissing his complaint the secretary appeals.

The defendant processes its own ice cream and sells it at retail in the eight markets it operates in Sioux Falls in 1/2 gallon containers for $.59. The secretary claims that the minimum price applicable to such sales is $.649. He claims that the defendant in so doing violates the provisions of SDCL 1967 37-3-10. That section states:

"It shall be unlawful for any processor, distributor or retailer to sell, advertise, or offer for sale any dairy product for less than the wholesale price established by the dairy products marketing commision, or the wholesale price plus that portion of the cost of doing business, as defined in § 37-3-9, when sold by a retailer."

Since the sales in question were at retail the minimum price applicable must be determined pursuant to the last phrase of the quoted section.

The first portion of this statute making it unlawful to sell any dairy product for less than the wholesale price established by the commission applies only to processors or distributors. While retailers are named therein the last phrase of the statute removes them from its operation. Retailers are made subject to the second phrase and required thereby to sell such product for not less than the wholesale price plus a portion of their cost of doing business. Manifestly they could not be subject to both aspects of the statute.

The legislature has itself designated those who come within the coverage of the second phrase. In § 37-3-9(7) it provided that:

" 'Retailer' shall mean any person engaged within this state in the business of operating any retail establish-[348]*348merit including drugstores, grocery stores, hotels, restaurants or automatic vending machines from which sales of dairy products are made for consumption and not for resale."

Clearly the defendant is a retailer within the meaning of this provision. It is as such that he is charged with violating the law in this proceeding. Even though he may be a distributor as defined in § 37-3-9(6), in selling at retail he is subject to the requirements of § 37-3-10 made applicable to retailers.

The secretary reads this language as prohibiting the defendant from selling its ice cream at less than the minimum wholesale price established by the commission, which was $.59 in 1/2 gallon containers, plus its cost of doing business. The defendant urges that since it processes its own ice cream it should be permitted to use its costs of production as its "wholesale price". The court adopted the view of the defendant and found its cost of producing 1/2 gallon of vanilla ice cream to be $.433. Adding to this its proportionate cost of doing business by reason of the product involved, the court concluded that defendant's sales were not in violation of the required minimum price. In so doing we think it erred.

The court in arriving at its conclusion relied on SDCL 1967 37-3-9(10) which states that:

" 'Cost to the retailer' shall mean the wholesale price paid by the retailer for dairy products plus that portion of the retailer's overhead or cost of doing business properly allocable to such dairy products, which cost of doing business shall include the same items as are enumerated in the definition of cost to the processor distributor. There shall be a presumption that, in the absence of specific evidence to the contrary, the cost to a retailer is not less than the net price paid by the retailer for a unit or package of a dairy product, or, in the case of a retailer which processes its own dairy products, its cost thereof at its plant dock, plus an amount representing such retailer's cost of doing business, computed [349]*349as ten per cent of 'such net price or cost where delivery to the retail store is not performed by the retailer, and fifteen per cent where delivery is performed by the retailer."

We believe that "cost to the retailer" as determined by using this formula was not intended by the legislature to be substituted for or be the equivalent of the term "wholesale price" appearing in § 37-3-10 as applied to this defendant as a retailer.

The intention of the legislature is to be ascertained primarily from the language used in the statute. Argo Oil Corp., v. Lathrop, 76 S.D. 70, 72 N.W.2d 431; National College of Business v. Pennington County, 82 S.D. 391, 146 N.W.2d 731. By the term "the wholesale price" as used in the last phrase of § 37-3-10, the legislature obviously intended "the wholesale price established by the Dairy Products Marketing Commission" which term it had used in the first phrase of the section. The general term relates back to the specific and is limited thereby. 82 CJ.S. Statutes § 332. With language which is plain and unambiguous there is no occasion for construction. State ex rel. Widdoss v. Esmay, 72 S.D. 270, 33 N.W.2d 280. Nor are we at liberty to disregard plain, clear words used by the legislature in a statute. Accordingly, we concur in the secretary's view of this portion of the statute.

If the legislature had intended by this term to mean "cost to the retailer" we think it would have said so. That is what it did in proscribing a related marketing practice. In defining an element of the marketing practice prohibited by § 37-3-11 the legislature used this language—"to sell any dairy product for less than the cost thereof to such processor, distributor or retailer". To make definite what it meant by the quoted language it adopted § 37-3-9(9) as to processors or distributors and § 37-3-9 (10) as to retailers.

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RENTTO, Judge.

This appeal brings before us, for the first time, the Dairy Industry Marketing Act which came into our law as Ch. 9, Laws of 1966 and appears now in SDCL 1967 37-3-8 to 37-3-72, inclusive.

In addition to prohibiting enumerated practices in the marketing of selected dairy products, it created a South Dakota Dairy Products Marketing Commission, and charged it with the duty of determining minimum dock and wholesale prices--of designated dairy products. The act itself prescribes the manner in which minimum retail prices are determined on products for which wholesale prices have been fixed. This litigation involves a claimed violation of the required minimum price in the retail sale of ice cream.

The Secretary of Agriculture is entrusted by the act with its administration and enforcement. On the claim that the defendant is violating the act 'by selling ice cream in 1/2 gallon containers at less than the minimum retail price, the secretary, [347]*347as specifically authorized in SDCL 1967 37-3-63, brings this action to enjoin the defendant from continuing such violations. On a trial to it the court held the sales involved permissible. From a judgment dismissing his complaint the secretary appeals.

The defendant processes its own ice cream and sells it at retail in the eight markets it operates in Sioux Falls in 1/2 gallon containers for $.59. The secretary claims that the minimum price applicable to such sales is $.649. He claims that the defendant in so doing violates the provisions of SDCL 1967 37-3-10. That section states:

"It shall be unlawful for any processor, distributor or retailer to sell, advertise, or offer for sale any dairy product for less than the wholesale price established by the dairy products marketing commision, or the wholesale price plus that portion of the cost of doing business, as defined in § 37-3-9, when sold by a retailer."

Since the sales in question were at retail the minimum price applicable must be determined pursuant to the last phrase of the quoted section.

The first portion of this statute making it unlawful to sell any dairy product for less than the wholesale price established by the commission applies only to processors or distributors. While retailers are named therein the last phrase of the statute removes them from its operation. Retailers are made subject to the second phrase and required thereby to sell such product for not less than the wholesale price plus a portion of their cost of doing business. Manifestly they could not be subject to both aspects of the statute.

The legislature has itself designated those who come within the coverage of the second phrase. In § 37-3-9(7) it provided that:

" 'Retailer' shall mean any person engaged within this state in the business of operating any retail establish-[348]*348merit including drugstores, grocery stores, hotels, restaurants or automatic vending machines from which sales of dairy products are made for consumption and not for resale."

Clearly the defendant is a retailer within the meaning of this provision. It is as such that he is charged with violating the law in this proceeding. Even though he may be a distributor as defined in § 37-3-9(6), in selling at retail he is subject to the requirements of § 37-3-10 made applicable to retailers.

The secretary reads this language as prohibiting the defendant from selling its ice cream at less than the minimum wholesale price established by the commission, which was $.59 in 1/2 gallon containers, plus its cost of doing business. The defendant urges that since it processes its own ice cream it should be permitted to use its costs of production as its "wholesale price". The court adopted the view of the defendant and found its cost of producing 1/2 gallon of vanilla ice cream to be $.433. Adding to this its proportionate cost of doing business by reason of the product involved, the court concluded that defendant's sales were not in violation of the required minimum price. In so doing we think it erred.

The court in arriving at its conclusion relied on SDCL 1967 37-3-9(10) which states that:

" 'Cost to the retailer' shall mean the wholesale price paid by the retailer for dairy products plus that portion of the retailer's overhead or cost of doing business properly allocable to such dairy products, which cost of doing business shall include the same items as are enumerated in the definition of cost to the processor distributor. There shall be a presumption that, in the absence of specific evidence to the contrary, the cost to a retailer is not less than the net price paid by the retailer for a unit or package of a dairy product, or, in the case of a retailer which processes its own dairy products, its cost thereof at its plant dock, plus an amount representing such retailer's cost of doing business, computed [349]*349as ten per cent of 'such net price or cost where delivery to the retail store is not performed by the retailer, and fifteen per cent where delivery is performed by the retailer."

We believe that "cost to the retailer" as determined by using this formula was not intended by the legislature to be substituted for or be the equivalent of the term "wholesale price" appearing in § 37-3-10 as applied to this defendant as a retailer.

The intention of the legislature is to be ascertained primarily from the language used in the statute. Argo Oil Corp., v. Lathrop, 76 S.D. 70, 72 N.W.2d 431; National College of Business v. Pennington County, 82 S.D. 391, 146 N.W.2d 731. By the term "the wholesale price" as used in the last phrase of § 37-3-10, the legislature obviously intended "the wholesale price established by the Dairy Products Marketing Commission" which term it had used in the first phrase of the section. The general term relates back to the specific and is limited thereby. 82 CJ.S. Statutes § 332. With language which is plain and unambiguous there is no occasion for construction. State ex rel. Widdoss v. Esmay, 72 S.D. 270, 33 N.W.2d 280. Nor are we at liberty to disregard plain, clear words used by the legislature in a statute. Accordingly, we concur in the secretary's view of this portion of the statute.

If the legislature had intended by this term to mean "cost to the retailer" we think it would have said so. That is what it did in proscribing a related marketing practice. In defining an element of the marketing practice prohibited by § 37-3-11 the legislature used this language—"to sell any dairy product for less than the cost thereof to such processor, distributor or retailer". To make definite what it meant by the quoted language it adopted § 37-3-9(9) as to processors or distributors and § 37-3-9 (10) as to retailers. The only portion of the latter that has any relation to the matter in issue is the definition of the retailer's cost of doing business. This item is separate and apart from the cost of the product to it.

[350]*350Manifestly by the part of § 37-3-10 here involved the legislature intended that a retailer who is able to process its own product for less than the wholesale price fixed by the commission, may not disregard that price in determining the price at which it will sell its product at retail. Apparently it desired to bring a measure of price stability to the industry, which is thought by some to be desirable. § 37-3-8. In view of the disposition made of this matter by the trial court it did not reach the question whether the legislature could constitutionally do this. Consequently, it is not presented on this appeal. Nor is it urged, briefed or argued here.

Reversed.

BIEGELMEIER, P. J., and HOMEYER, J., concur. ROBERTS, J., dissents. HANSON, J., concurs in dissent.

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171 N.W.2d 508, 84 S.D. 345, 1969 S.D. LEXIS 117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-johnson-v-sunshine-food-markets-sd-1969.

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