*1
DRINK, INC., Plaintiff-Appellant, BABCOCK, Liq
Howard Chief of Division of Control, Revenue, uor Bureau of Defendant-Appellee.
No. 7942.
Supreme Court of New Mexico.
Nov. 1966. Rehearing to Intervene and for
Motion Denied Jan.
last resort on the ruling^ It statute identical to ours. follows jurisdictions from the decisions other ' help. are little are concerned with We particular language of the New statutes. Act enacted amend-
ch. Laws 1939. Section (§ ch. N.M. ed Laws 1941 S.A.1953) prohibits the of alcoholic Cornish, Hannett, Hannett & William standard, uniform, liquors “unless Schaab, Albuquerque, appellant. for C. posted fair-trade be set thereon Gen., Witt, Atty. M. Car- Boston E. Joel article accordance with section Gen., son, Overstreet, Attys. Tom Asst. package.” Sec- when sold [46-9-1] Fe, appellee. Santa 46-9-1, N.M.S.A.1953) turn (§ tion 1301 con- of fair-trade authorizes creation OPINION al- relating resale of tracts to the sale or trademark, bears the coholic NOBLE, Justice. *3 brand, producer. name This con- of the appeal requires our determination This buyer will not may provide tract that the and mini- whether the fair-trade contract stipu- liquor price except at the resell such Liquor of the Con- mum require that by producer, may and lated the trol Act are constitutional. dealer) agree purchaser (retail subsequent a price except he will not resell liquor corporation, retail Plaintiff a two stipulated by producer. The sec- dealer, declaratory sought judgment to by distiller, require interplay to tions 46-9-1, constitutionality determine and contract, to wholesale establish 1953,-or, 46-9-11, and N.M.S.A. prohibit the product prices of his retail alternative, injunction prohibit to liquor bearing an not trademarked sale of provisions of the law enforcement those price. published established by liquor director of the division. trial there failure to court held that was a N.M.S.A.1953, goes (c), 46-9-1 Section prove challenged provisions to un- trademarked declare that sales of on to injunctive denied relief. constitutional and price con- contract liquor than-the at less appeal This followed. a sale competition. Such unfair stitute n by anyone called, gives right of action not nor rise Our attention has been the seller subjects thereby, and any damaged can find the decision of court of we penalties, policy he reasonably to criminal whether is or is economic pro- deemed to party pro- welfare, public not a to the contract. Other mote the may enforce gross profit policy by appropriate visions of this Act limit such a legislation by stipulated to be the contract to without contravening process long 331/$% due so selling price legislation of the retail for retailers as such has a reasonable relation selling price for proper legislative of the wholesale to a purpose and is 18%oo% arbitrary wholesalers. neither discriminatory. nor Rocky Mountain Wholesale Co. v. Ponca legislature recognize that the We Wholesale Mercantile 68 N.M. power regulate the sale has the P.2d 643. suppress it beverages, of alcoholic but to provide Sections 46-9-3 46-9-1 and entirely, may liquor in impose generally non-sign- what is referred to as a dustry stringent regulations than on more agreement,” fixing er or “vertical the re- the manufac other businesses. But when commodity by of a contract be- lawful, as it ture and sale of tween the manufacturer and wholesaler laws, providing for under our statutes regard without to whether the retailer is a regulation are limited of the business party validity to the contract. The of the guaranties fall constitutional and must non-signer provisions of the Fair- proper exercise of the state’s within challenged denying appel- Trade Act is police power. process equal protection lant due and the testing In of the law. statutes, every pre indulge in courts must appellant The record discloses validity sumption in favor of the non-signer liquor dispenser. Although is a 187, 42 legislation. Perez, N.M. Baca v. specific finding the trial court made no 162; Armstrong, 31 N.M. P. State v. a contract authorized 46-9-1 between § 333; Thompson, N.M. 243 P. State v. wholesaler, pro- a distiller 46-9-3 and a 370; rel. Dickson v. P.2d State ex any beverage un- hibits sale of alcoholic 205; Saiz, ex 308 P.2d State price stipulated less the has been therefor Hovey rel. Mec Concrete Products v.Co. published in a a fair-trade contract and 1069; hera, Brad 316 P.2d journal. that such The court did find trade bury v. Bureau & Constr. Co. Stamm *4 prices published, as fol- fair-trade were so Revenue, 226, This P.2d 808. 372 lows: principle applies equal in a with force may
determination of whether a amounts “3. The minimum statute power. proper police charged to a the sale of alcoholic bev- exercise of the be in the may adopt erages an in Mexico are listed have said that the state New We
281 1953, opinion Skaggs and are of the that Journal, a trade Beverage New controlling requires and our determination publication.” 46-9-3, supra, that and 46-9-1 are uncon- §§ Supreme Courts argues that The state Comment, stitutional and void. See validity of upheld the many have states Natural Resources 189. J. are aware such fair-trade statutes. We Appellant mandatory next attacks the the generally adopting the those decisions 1410, ch. contained in § ory Distributing Co. v. Dearborn of Old 258, 236, 2, 1939, Laws as amended ch. § 183, Corp., Seagram 299 U.S. Distillers 46-9-11, (§ 1953), Laws N.M.S.A. L.Ed. 106 A.L.R. S.Ct. being price-fixing constituting statute dealers, by purchasing trade that improper police pow- exercise of the state’s the fair- goods knowledge of marked with question, (B), er. The section in 46-9-11 contract, impliedly to the trade assented advertising, N.M.S.A. declares thereby became contract and ratified and sell, beverages or offers sales of alcoholic adopting this rea bound it. The courts by either retailers at less wholesalers or non-signer fair- soning conclude that such than cost: price-fixing trade laws are not statutes. “ validity non-signer fair-trade of such * * * with the intent or effect of State, laid rest in this how statutes was at purchase merchan- inducing the of other ever, Drug Skaggs Cen our decision dise, unfairly diverting trade from
ter Electric v. General competitor, injuring a or of otherwise There, quot discussing and P.2d after competitor, impair prevent free com- many ing length from of the decisions public petition, contrary and are to the views, expressing conflicting other states state, this and are violations of policy of price- we held that such do amount laws this section.” statutes, fixing and said: price then defined as the delivered Cost is “ * * * opinion we are of labels, con- beverage, including taxes, logic reasoning better are to tainers, etc., plus markup amounting to not operation in quoted at minimum cost of decisions above less than the found in those liquor by effi- handling the most length some which have declared the ab- retailer. In cient wholesaler or Fair unconstitutional Trade Acts contrary, satisfactory proof to the sence of void.” chief of to the made before markup division, liquor control perceive distinction be We no valid on liquor, wine and 12j4% on on tween fair-trade statutes considered 18% 23% wholesaler, and is Skaggs beer for the N.M.S.A. 46-9-1 38%o% *5 prescribed by and for the the 46-9-5 46- limits beer liquor §§ and wine on 25%’ markup 9-6. Because the minimum both retailer. Liquor the Act and that section of Control the of arguing that this section Appellee, purport prohibit Cigarette of to the Act Cigarette liquor to the statute similar is sales, least, principle at the below-cost Act, N.M.S.A. to 49-3-1 §§ markup Liquor minimum of the section Rocky heavily Whole- upon 'Mountain relies appear Act face to a Control would its be Mercantile sale v. Ponca Wholesale Co. power police under valid exercise of the prohibition supra, held the holding Rocky In of Mountain Wholesale. cigarettes price a below cost at sales practice, however, Liquor Act the Control competitors or injure lessen with intent to has a different It cannot be doubted effect. competition a valid exercise markups statutory prescribed by that the § conversely, police power. Appellant, state’s profit in a satis- 46-9-11 have resulted net argues Rocky Mountain is Wholesale great factory to wholesalers and to all controlling not of 46-9- because effect § majority of made mani- retailers. This is prohibit not below-cost sales to findings: fest the court’s fixed, standard, but uniform to establish a price for liquor and contains a built-in “ [*] [*] $ protection profit liquor of a net dealers. to computing price “4. In of alcohol succinctly opposing state These contentions beverages, price liquor ic the base for is- before court. issue price charges the cost the distiller wholesaler, New then to the base statutory construing
In particular price freight there is rate intent, added into- provisions legislative to determine Mexico, taxes, mark-up- New together an entire act to read so that be plus Y2X/2%, additional tax on the- provision may be in its each considered wholesaler, liquor and the total said' part, every legis relation other figure represents price at which the- purpose f gleaned lative intent- and rom wholesaler can sell to retailer. 2 Suther consideration of the whole act. Statutory Construction, land, 4703 and price The retail of alcoholic bev- “5. Liquor was enact 4704. The Control Act by adding to erages is the- determined comprehensive regulate legislation ed price equal to an amount wholesale 25%. beverages. of'alcoholic control the-sale case of beer thereof 35%. It the fair-trade cannot doubted that spiritous thereof in the of wines and case provisions, uncon which we have said are liquors. stitutional, protection gross of a authorized profit to wholesalers and retailers within « [*] - [*] [*] ' statutory by any markup whole- could nevertheless not liqtior No is sold “7. Beverage price stipulated a fair-trade over the sell below price at a that is saler contract established the distiller. 46- quoted price; Journal reading A permit any 9-3, N.M.S.A. 1953. Division would price, fair-trade so-called “trade-control” price than scheduled less level; provisions ch. together retail Laws either wholesale or *6 prohibit to legislative than the a intent sell for more demonstrate and some retailers liquor selling Bev- at less than the published in the dealers from suggested price prices by fair-trade established contracts erage Journal. « [*] [*] [*] >» posted in the trade journal. Cigarette between the Two distinctions firmly It is that laws established Rocky Whole Act considered in Mountain prohibit sales of merchandise below under Liquor now Control Act sale and the only purpose cannot be cost sustained if First, become obvious. consideration Wiley illegal, to make v. is such sales markup markup for wholesalers 8% 2% Sampson-Ripley Co., 151 Me. 120 A.2d presumed to cigarettes, for retailers of 289; Rocky v. Mountain Wholesale Co. obviously not operation, was their cost of Co., supra. Ponca Wholesale Mercantile n designedto insure the profits afforded not, legislature may guise in the of The markups liquor. Sec and 38.5% 12% interest, arbitrarily protecting public only prohibits ondly, Cigarette Act unreasonably private inter interfere with n dealerfrom individual selling at below his statutory A claim that restriction ests. n cost, any accepted account established public mere in the interest cannot rest on pur ing procedure. It is evident that supported by conjecture, but some must be enacting the legislature in pose of the thing ex rel. Newman of substance. State pro only to Act Cigarette Fair-Trade 106; Wyo. 74, City Laramie, 40 275 P. v. of sales, and or loss-leader hibit below-cost Hall, 595, 131 City 171 of Alexandria v. La. doing proof if of a cost of that was made pricing apparent So. 722. It n businessother presump statutory than the Liquor have provisions of Control Act cost, legislation all no allowed tion of uniform, purposes fixing of for their n dealers doing adopt that cost of business. charged particu prices for a standard to be not concerned with wheth This statute was product. lar pro only prices uniform but with er were then, 46-9-11, supra, notwith- Reading Section hibiting sales. below-cost purpose prevent- whole, appar standing of its announced Liquor as a it is Control Act of the unrealis- ing estab below-cost sales because a wholesaler or retailer ent that even (cid:127) ac- doing markups, of business” doing below the tic “cost lishing cost . .a business 284
tually price-control markup to a contempla- amounts unreasonable not within the requiring police power. the wholesalers’ and retailers’ tion of state’s pro- selling price to be one which We hold that the fair-trade con profit. Liquor tects to them a net Con- Liquor tract and Ohio, Louisiana, trol Acts of Florida and manifestly Act are Control unreasonable respect. some other states are in this similar legislation, appropriate not an are exercise upholding We are aware of those decisions police power, of the state’s and are in fair-trade, liquor II, 18 violation of article 4 and statutes, upon price-fixing generally the New Mexico Constitution. ground “[f]ixing price, at which We want to make it clear that the liquor sold, is to be is an ancient method to legislature power sub has to act on the prevent commodity abuse in the use of ject below-cost sales and their effect disadvantage.” g., of much social E. Gaine competition, may adopt legis on free Burnett, See, v. 4 A.2d N.J.L. relating establishing lation also, Liquor Nocera Bros. v.Mart beverages on alcoholic with the view Hearing Board, R.I. purpose regulating controlling the 652; Pompei Winery Liq- A.2d Board of v. public business in the interest of the Control, uor 146 N.E.2d Ohio St. are here concerned with welfare. We 430; Kelly, Schwartz 140 Conn. *7 mandatory the fair-trade contract and uni 89, A.2d to cite of them. some form The discussed. view, purpose In our no re- useful would police power validly not in was exercised conflicting sult from a discussion of the de- specific provisions. the enactment of these respecting price-fixing manda- cisions agree apparent We cannot with the tory-markup liquor reject statutes. We the position of the trial plain court that the upholding view of those decisions the con- tiff, declaratory in judgment action to test stitutionality paraphrasing laws. In of such pro price-fixing Skaggs Electric Drug Center v. General Act, visions of the re Co., supra, opinion are we quired by to establish evidence in the case reasoning logic better are to be found provisions the fact that promote such do not Schwegmann Bros. Louisiana v. Board public peace, health, safety. welfare and Control, 148, Beverage Alcoholic 216 La. question mandatory of whether such 248, 680; 43 So.2d 14 A.L.R.2d and Scar- markups by attempt constitute a reasonable Inc., Co., borough Drug v. Webb’s Cut Rate state, general the interest of their 754, 913, 150 8 man- holding Fla. So.2d such welfare, protect free competition, is one datory markups manifestly to be rather law than of Schweg- fact. See
285
upon suggestion
party
of Alcoholic
tute
of death
Louisiana Board
for
mann Bros. v.
been,
Control,
Scarborough
supra,
appeal
who has
after
Beverage
died
has
Inc.,
supra.
Drug
Ferguson-Steere
taken. See
Motor
Cut Rate
Co. v.
v. Webb’s
Corporation Commission,
220,
State
59 N.M.
agree that there is no
can we
Nor
However,
OPINION Haiberg, America v. 364 P.2d N.M. REHEARING VENE AND FOR 358; Caffo, Guardianship In re 848; Saavedra, 320, 366 P.2d Montano v. PER CURIAM: 824; v. N.M. 373 P.2d Gibson parties by persons Helms, 429; Shelley The motion 381 P.2d 243; made Norris, to' intervene or be McDonald to the action below N.M. 386 P.2d Supreme parties Hospital, in the Court to the action v Artesia . General 708; Supreme Rule 8 au Higgins is denied. Court N.M. 386 P.2d v. Board *8 add, Supreme par thorizes the Court to as Hos Directors New State court, pital, pending ties in those 616. A non- cases 389 P.2d parties jurisdictional question who were below but who were cannot be raised for appeal joined parties Supreme and to substi- first time in Court where in the trial court. invoked ruling was no Severson, 379 P.2d
Davis v. assert- error neither Fundamental
774. nor invoked here.
ed to inter- the motion that both
It follows pending parties the action
vene or add motion Supreme Court
rehearing must be denied.
It is ordered. so
CHAVEZ, J., and COMP- C. NOBLE J.,
TON, C. HENSLEY, Jr„ T. JJ., E. SPIESS, J., Ct.
Ct.App., and WALDO
App., concur.
Carroll GALLUP, Mexico, Incor-
CITY New OF porated municipality, and Mountain States Casualty Company, corporation, Mutual Defendants-Appellants.
No. 7865.
Supreme Court of New Mexico.
Oct. 1966.
Dec.