59 A.2d 471 | N.H. | 1948
This case presents the constitutionality of the Unfair Sales Act (R. L., c. 204) as applied to the agreed statement of facts quoted above. In preliminary summary the act makes it a misdemeanor for any retailer or wholesaler, "with intent, or effect, of injuring competitors or destroying competition," to advertise or sell merchandise at less than cost as defined in the act. The advertisement or sale at less than such cost "shall be prima facie evidence of a violation of this chapter." (S. 2). The statutory base for determining *176 "cost to the retailer" is invoice cost or replacement cost, whichever is lower, less trade discounts to which is added freight and cartage charges and "a mark-up to cover in part the cost of doing business, which mark-up, in the absence of a proof of a lesser cost, shall be six percent of the total cost at the retail outlet." S. 1 (I). Numerous exceptions are made by the act (s. 3) so that it does not apply under stated conditions to isolated transactions, clearance sales, perishable merchandise, imperfect or damaged merchandise, final liquidation sales, sales to relief agencies and for charities, sales to state or municipal agencies, sales in good faith to meet legal competition or sales under court order. The act also provides that violations may be enjoined by the Superior Court. (S. 4).
The legislative history of the act begins in 1939 when an unsuccessful attempt was made to obtain an advisory opinion as to its constitutionality. Opinion of the Justices,
It is urged specifically that section 2 which prohibits the sale of merchandise below cost with the "effect of injuring competitors or destroying competition" is unconstitutional because it is unduly oppressive and contrary to accepted economic and social standards. Loughran Co. v. Company,
That part of section 2 providing that advertisements or sales below cost are prima facie evidence of a violation of the Act is also attacked. *177
Since no conclusive presumption of guilt is crested, Wigmore sees no constitutional problem. 4 Wig. Ev. (3d ed.) s. 1356. So long as there is a rational connection between the fact to be proved and the fact presumed, the statute is valid. State v. Bozek,
One of the exceptions to the act is "where the price of merchandise is made in good faith to meet legal competition." S. 3 (h). If this required the retailer to examine his competitor's books to ascertain whether the competition was legal, it would be of doubtful validity. Commonwealth v. Zasloff,
The term "cost to the retailer" the statute provides "shall mean bona fide costs." S. 1 (IV). This is proper. However, the rest of this paragraph states that in computing replacement cost, a cost calculation based on sales or purchases "which cannot be justified by existing market conditions within this state" is disallowed. The indefiniteness and uncertainty of this latter provision renders it invalid. State v. Walgreen Drug Co.,
While s. 1 (I) contains meticulous detail of the items in "cost to the *178
retailer," the defendants complain that there is no guide to determine "a lesser cost" than the mark-up of "six percent of the total cost at the retail outlet." S. 1, I (3). As the act now stands the doubt or ambiguity should be resolved in favor of the defendant. If this places a temporary obstacle to the effective enforcement of the act, it is a defect inherent in the statute and not one manufactured by the judiciary. The flexibility of cost accounting procedures makes the determination of cost a difficult one but the defendant is entitled to offset its benefits against its detriments. The determination of cost must not be in "bad faith" (Dikeou v. Food Distributors Ass'n,
In 1903, Art. 83 of the Constitution was revised. The Legislature was given the authority of the state to protect "free and fair competition in the trades and industries" against monopolies "or any other unfair means." Such is the avowed purpose of unfair sales statutes although there is much controversy whether they are adapted to accomplish that aim or in fact do so. There are some indications, at least in New England, that the statutes are used by the large sellers against the small sellers to prevent local price cutting rather than protecting the small seller against a concerted campaign of underselling by the larger units. United States v. N.Y. Great A. P. Tea Co.,
Case discharged.
*179All concurred.