Cooperative Warehouse, Inc. v. Lumberton Tobacco Board of Trade, Inc.

87 S.E.2d 25 (1955) 242 N.C. 123

COOPERATIVE WAREHOUSE, Inc.
v.
LUMBERTON TOBACCO BOARD OF TRADE, Inc.

No. 665.

Supreme Court of North Carolina.

April 20, 1955.

F. D. Hackett and Robert Weinstein, Lumberton, for plaintiff appellant.

Varser, McIntyre & Henry, Lumberton, for defendant appellee.

WINBORNE, Justice.

Appellant states this as the question presented on this appeal: "Did the court err in holding that the regulation brought into question was a reasonable exercise of the authority conferred upon the defendant by statute and that the same was not in restraint of trade?" Upon careful consideration of the subject this Court holds that the court did not so err.

In this connection, it is noted that the General Assembly of North Carolina in 1933 enacted a statute, P.L.1933, Chapter 268, entitled "An Act To Authorize Tobacco Boards Of Trade To Make Reasonable Rules And Regulations For The Sale Of Leaf Tobacco By Auction". This Act provides in pertinent part:

"Section 1. That tobacco warehousemen and the purchasers of leaf tobacco, at auction, on warehouse floors, are hereby authorized to organize, either as non-stock corporations, or voluntary associations, Tobacco Boards of Trade in the several towns and cities in North Carolina in which leaf tobacco is sold on warehouse floors, at auction.

"Sec. 2. Such Tobacco Boards of Trade as may now exist, or which may hereafter be organized, are authorized to make reasonable rules and regulations for the economical and efficient handling of the sale of leaf tobacco at auction on the warehouse floors in the several towns and cities in North Carolina in which an auction market is situated.

"Sec. 3. The Tobacco Boards of Trade in the several towns and cities in North Carolina are authorized to require as a condition to membership therein the applicants to pay a reasonable membership fee and the following schedule of maximum fees shall be deemed reasonable, to-wit: [Omitted because not pertinent to this appeal].

"Sec. 4. Membership, in good standing, in a local Board of Trade shall be deemed a reasonable requirement by such Board of Trade as a condition to participating in the business of operating a tobacco warehouse or the purchase of tobacco at auction therein. * * *

"Sec. 5. Nothing in this Act shall authorize the organization of any association having for its purpose the control of prices or the making of rules and regulations in restraint of trade.

"Sec. 6. This Act shall be in force from and after its ratification * * * 18th day of April, A.D.1933."

This statute was codified and became G.S. § 106-465.

And the General Assembly, 1951 Session Laws of North Carolina, Chapter 383, by "An Act to Amend G.S. 106-465, to provide for optional non-participating memberships in Tobacco Boards of Trade" by inserting after the paragraph reading: "Membership, in good standing * * *," provision that

"``Membership in the several boards of trade may be divided into two categories:

"A. Warehousemen.

"B. Purchasers of leaf tobacco other than warehousemen.'"

"``Purchasers of leaf tobacco may be: (1) Participating, or (2) Non-participating. The holder of a membership as a purchaser of leaf tobacco shall have the option of becoming, upon written notice to the board of trade, either a participating or a non-participating member. Individuals, partnerships, and/or corporations who are members of tobacco boards of trade, established under this Act or coming within the provisions of this Act, as non-participating members shall not participate in or have any voice or vote in the management, conduct, activities, allotment of sales time, and/or hours, fixing the dates of the opening or closing of tobacco auction markets, or in any other manner or respect.'" (Emphasis ours.)

The Act of 1951 also provided that "All laws and clauses of laws in conflict with this Act are hereby repealed", and that the Act shall become effective upon ratification, which was done 27 March, 1951.

In this connection, even before the enactment of the above statute in 1933, this Court upheld the principle that the business of operating warehouses for the public maketing of tobacco is one affected with a public interest, and subject to reasonable public regulations. The Court so held in Gray v. Central Warehouse Co., 1921, 181 N.C. 166, 106 S.E. 657, 659.

In the Gray case, supra, Clark, C. J., in writing the main opinion, quotes this principle: "The sale of tobacco at auction at tobacco warehouses is a business affected with a public interest, and those carrying it on are under the duties and obligations by common law to carry it on in a way that is reasonable and beneficial to the tobacco trade * * *." And Hoke, J., in a concurring opinion in the Gray case, supra, had this to say: "Subject to such reasonable rules and regulations as may be established by the public agencies, and when not interfering with same, the authorities in control and management of these warehouses have the power to establish for themselves such reasonable rules and regulations as may be required to promote business efficiency and insure fair and honest dealing in the transactions occurring there."

Here it may be noted that so much of the common law as has not been abrogated or repealed by statute is in full force and effect within this State. G.S. § 4-1, formerly C.S. 970. See Elliott v. Elliott, 235 N.C. 153, 69 S.E.2d 224, and cases there cited.

And since the enactment of the statute of 1933, the principle has been recognized in the light of the provisions of the statute. See Bright Belt Warehouse Ass'n v. Tobacco Planters Warehouse, 1949, 231 N.C. 142, 56 S.E.2d 391, and Kinston Tobacco Board of Trade v. Liggett & Myers Tobacco Co., 1952, 235 N.C. 737, 71 S.E.2d 21.

Indeed, in Bright Belt Warehouse Ass'n v. Tobacco Planters Warehouse, supra [231 N.C. 142, 56 S.E.2d 394], Devin, J., later C. J., speaking for the Court and of the plaintiff there, Bright Belt Warehouse Association, Inc., declared: "From the pleadings herein summarized, it appears that the plaintiff is an association of tobacco warehousemen. Although incorporated without capital stock, and given legal entity with power to sue and be sued, it is nevertheless a voluntary association organized primarily for the benefit of those engaged in this business. While apparently there is no definite criterion or procedure for determining membership therein, it would seem that those engaged in the business who affiliate with the plaintiff, contribute to its support, attend its meetings and receive whatever benefits are derived, may properly be regarded as members thereof."

And Devin, J., continued: "It follows that the articles of association for the purposes expressed in the charter and by-laws of the plaintiff constitute a contract between plaintiff and its members which imposes certain obligation on the members among themselves and with respect to the association or corporation. Hence, as a consequence of membership in an incorporated association for mutual benefit, each member is deemed to have consented to all reasonable rules and regulations pertaining to the conduct of the business which have been properly determined and promulgated * * *."

In the light of the principle so declared in Bright Belt Warehouse Ass'n v. Tobacco Planters Warehouse, supra, it is here appropriate to note that this action was instituted 25 July, 1953, and plaintiff alleges in its complaint that defendant is a corporation duly created, organized and existing with its principal office and place of business in the city of Lumberton, North Carolina, "the purpose of its creation being ``in order that persons, firms and corporations engaged in the tobacco industry of Lumberton may become associated and prescribe such reasonable rules and regulations as experience has shown was necessary for the honest, orderly and economic conduct of said business,' and functions as the supervising authority in regulating the sale of leaf tobacco at auction on the Lumberton Tobacco Market, pursuant to the laws of the State of North Carolina and particularly Section 106-465, General Statutes of North Carolina."

Defendant, answering, admits that it is a corporation, created, organized and existing, with its principal office and place of business in the city of Lumberton, North Carolina, and that it is incorporated for the purposes declared in the Charter, and in General Statutes of North Carolina, Section 106-465, and it has such powers as are vested in it by the said statute and amendments thereto, as well as the powers conferred upon trade organizations at common law, and that it functions as the supervising authority in regulating the sale of leaf tobacco at auction, on the Lumberton Tobacco Market.

Therefore, it being admitted that plaintiff has applied for membership, and paid the required membership fees, and has been accepted as a member by defendant, Lumberton Tobacco Board of Trade, Inc., it follows, paraphrasing the language used in Bright Belt Warehouse Ass'n v. Tobacco Planters Warehouse, supra, that the articles of association for the purposes expressed in the charter and by-laws of Lumberton Tobacco Board of Trade, Inc., constitute a contract between it and its members, including the present plaintiff, which imposes certain obligation on the members among themselves and with respect to the corporation. Hence as a consequence of membership in the corporation for mutual benefit, each member, including the present plaintiff, is deemed to have consented to all reasonable rules and regulations pertaining to the business which have been properly determined and promulgated.

Turning then to the provisions of the Act, Chapter 268 of P.L.1933, it is seen that the General Assembly authorized Tobacco Boards of Trade, incorporated as therein provided, "to make reasonable rules and regulations for the economical and efficient handling of the sale of leaf tobacco at auction on the warehouse floors in the several towns and cities in North Carolina in which an auction market is situated." And it is seen further that by the amendment 1951 Session Laws of North Carolina, Chapter 383, the General Assembly provided for dividing the membership into two categories. "A. Warehousemen. B. Purchasers of leaf tobacco other than warehousemen". And it is significant that the General Assembly declared that a holder of membership as a purchaser of leaf tobacco should have the option of being a participating or a non-participating member, and that a non-participating member "shall not participate in or have any voice or vote in the management, conduct, activities, allotment of sales time, and/or hours, fixing the dates of the opening or closing of tobacco auction markets * * *". (Emphasis added). These provisions clearly indicate an intent that such matters come within the authority "to make reasonable rules and regulations * * *" granted by the General Assembly. In this connection, the Court in Motsinger v. Perryman, 218 N.C. 15, 9 S.E.2d 511, 514, in opinion by Barnhill, J., now C. J., expressed the following principle: "The authority to make rules and regulations to carry out an express legislative purpose or to effect the operation and enforcement of a law is not an exclusively legislative power, but is rather administrative in its nature and may be delegated. An administrative commission, within definite valid limits, may be authorized to provide rules and regulations for the complete operation and enforcement of the law within its expressed general purpose. So long as a policy is laid down and a standard is established by statute, no unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities both 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 * * *. The authority granted is to ``fill in the details' in respect to procedural and administrative matters. Such Board may not adopt a rule under such delegated authority which has the effect of substantive law * * *." To like effect are Pue v. Hood, 222 N.C. 310, 22 S.E.2d 896; State v. Curtis, 230 N.C. 169, 52 S.E.2d 364; Carolina-Virginia Coastal Highway v. Coastal Turnpike Authority, 237 N.C. 52, 74 S.E.2d 310; Williamson v. Snow, 239 N.C. 493, 80 S.E.2d 262, and cases cited.

The 35th finding of fact seems to correctly portray the case; that is, "The plaintiff constructed a warehouse with more floor space than it needed for auction sale of tobacco, in fact, more than was needed to sell the entire allotment to the Lumberton Market; likewise, the other warehousemen had acquired much more floor space than was actually needed for the auction sale of tobacco. The only difference between the situation of the plaintiff and the situation of the other members of the defendant corporation is that the plaintiff's facilities are all under one roof."

And while there are exceptions to certain findings of fact and assignments of error based thereon, yet in brief of appellant filed in this Court no argument is advanced in support of either, and hence are deemed abandoned. Rule 28 of Rules of Practice in the Supreme Court, 221 N.C. 544, at page 562.

In the light of the findings of fact, the conclusions of law made by the trial court, on which judgment below is grounded, are proper. The judgment in accordance therewith is

Affirmed.

BARNHILL, C. J., and DEVIN, J., took no part in consideration or decision of this case.