State Ex Rel. North Carolina Milk Commission v. Dagenhardt

134 S.E.2d 361 (1964) 261 N.C. 281

STATE of North Carolina on Relation of the NORTH CAROLINA MILK COMMISSION
v.
Dossie S. DAGENHARDT and Curlee L. Dagenhardt, t/a Food Land Grocery Store.

No. 398.

Supreme Court of North Carolina.

January 31, 1964.

Hayes & Hayes by James M. Hayes, Jr., Winston-Salem, for defendant appellants.

Holding, Harris, Poe & Cheshire, by Charles Aycock Poe, Raleigh, and Womble, Carlyle, Sandridge & Rice, by William F. Womble, Winston-Salem, for plaintiff appellee.

PARKER, Justice.

Defendants assign as error the court's finding of fact to the effect that defendants' sales of milk on the dates specified in its order below cost was for the purpose of injuring, harassing or destroying competition with other retail grocers in Winston-Salem and its vicinity.

G.S. § 106-266.21 provides in relevant part: "The sale of milk by any * * * retailer below cost for the purpose of injuring, harassing or destroying competition is hereby prohibited. At any hearing or trial on a complaint under this section, evidence of sale of milk by a * * * retailer below cost shall constitute prima facie evidence of the violation or violations alleged, and the burden of rebutting the prima facie case thus made, by showing that the same was justified in that it was not, in fact, made below cost or that it was not for the purpose of injuring, harassing or destroying competition, shall be upon the person charged with a violation of this section." This statute then proceeds to define the "cost" paid for Grade A or Grade I milk. It seems apparent from the evidence that defendants sold Grade A milk below "cost" as defined in G.S. § 106-266.21.

G.S. § 106-266.16 provides penalties for a violation of G.S. § 106-266.21 by fine or imprisonment or both.

G.S. § 106-266.15 provides that in the event of a violation of G.S. § 106-266.21, the North Carolina Milk Commission may apply to any court of record in the State of North Carolina for relief by injunction, if necessary, to protect the public interest without being compelled to allege or prove that any adequate remedy at law does not exist.

This Court said in Huskins v. Yancey Hospital, Inc., 238 N.C. 357, 78 S.E.2d 116: "On an appeal from an order granting or refusing an interlocutory injunction, the Supreme Court is not bound by the findings of fact of the judge hearing the application for the writ. It may review and weigh the evidence submitted to the hearing judge and find the facts for itself."

There is no evidence in the record to show or to permit a legitimate inference that defendants sold or offered for sale milk below cost, as the term "cost" is defined in G.S. § 106-266.21, in order to lure customers in their store for the purpose of destructive competition with other retail grocers or that by such sales or offers to sell they diverted trade from a competitor in the retail grocery business, or otherwise injured a competitor in such business, other than the prima facie evidence created by G.S. § 106-266.21.

It is true that defendants' evidence is to the effect that the only person adversely affected by their selling milk below "cost" is the wholesaler who is dealing with the retail trade. However, the complaint alleges "that defendants' sale of milk at said price was for the purpose of injuring, harassing, or destroying competition, to wit: other retail grocers in Winston-Salem and vicinity." There is no reference at all in the complaint to wholesalers.

It is our opinion that the evidence does not support the lower court's challenged finding of fact. Reviewing and weighing the evidence, we find as a fact that defendants have rebutted the prima facie case created by the provisions of G.S. § 106-266.21, and have shown that the sales of milk by them below cost were not for the purpose of injuring, harassing or destroying competition with other retail grocers in Winston-Salem and its vicinity, as alleged in the complaint. The order entered by the court below continuing the ex parte injunction theretofore issued to the final hearing was improvidently entered and is hereby ordered vacated.

Defendants contend in their brief at length that G.S. § 106-266.21 is unconstitutional and that we should so declare it on this appeal. We decline to accede to their request. As a general rule, the constitutionality of a statute should not be decided on an interlocutory injunction and the complaint and affidavits and when no answer has been filed as here, but should be determined at the final hearing when all the facts can be shown. Schloss v. Jamison, 258 N.C. 271, 128 S.E.2d 590; Union Carbide Corp. v. Davis, 253 N.C. 324, 116 S.E.2d 792.

The temporary injunction issued below is

Reversed.

RODMAN, J., took no part in the consideration or decision of this case.