Annotate this Case

116 S.E.2d 792 (1960)

253 N.C. 324

UNION CARBIDE CORPORATION v. John T. DAVIS, Individually, and Trading as D & J Market.

No. 389.

Supreme Court of North Carolina.

November 9, 1960.

*794 Blackwell, Blackwell & Canady, T. Winfield Blackwell, Jack F. Canady, Winston-Salem, for plaintiff, appellant.

Buford T. Henderson, Abner Alexander, Winston-Salem, for defendant, appellee.

T. W. Bruton, Atty. Gen., Ralph Moody, Asst. Atty. Gen., for the State, amicus curia.

HIGGINS, Justice.

The North Carolina Fair Trade Act, Chapter 66, Article 10, was enacted as Chapter 350, Public Laws of 1937. In Lilly & Co. v. Saunders, 216 N.C. 163, 4 S.E.2d 528, 125 A.L.R. 1308, this Court analyzed the purposes and effect of the Act. Controversy has existed over its constitutional validity. Arguments and authorities for and against are exhaustively treated in the opinion and in the dissent.

Courts must pass on constitutional questions when, but only when, they are squarely presented and necessary to the disposition of a matter then pending and at issue. American Equitable Assurance Co. v. Gold, 249 N.C. 461, 106 S.E.2d 875; City of Greensboro v. Wall, 247 N.C. 516, 101 S.E.2d 413; Roller v. Allen, 245 N.C. 516, 96 S.E.2d 851. The jurisdiction of this Court is derivative. Questions of law or legal inference come to it for purposes of review. If the lower court has no jurisdiction, the Supreme Court cannot acquire jurisdiction by appeal. Baker v. Varser, 239 N.C. 180, 79 S.E.2d 757; Gill v McLean, 227 N.C. 201, 41 S.E.2d 514.

The only question presented before the superior court was whether the temporary restraining order should be continued to the hearing. Judge Johnston acted, not upon a showing or failure to show equitable grounds for continuing the order, but dissolved it solely upon the ground the General Assembly acted in violation of the State Constitution in passing the Fair Trade Act. "The constitutionality of a statute will not be determined on the question being raised in a collateral proceeding, or on preliminary motions, or interlocutory order * * *." 16 C.J.S. Constitutional Law ยง 95. "We think the court committed serious error in thus dealing with the case upon motion for temporary injunction. The question was not whether the act was constitutional or unconstitutional; was not whether the Commission had complied with the requirements of the act, if valid, but was whether the showing made raised serious questions, under federal Constitution and state law, and disclosed that enforcement of the act, pending final hearing, would inflict irreparable damages upon the complainants." Mayo v. Lakeland Highlands, Canning Co., 309 U.S. 310, 60 S. Ct. 517, 520, 84 L. Ed. 774.

"The judge hearing the order to show cause why the injunction should not be continued to the hearing had no jurisdiction to hear and determine the controversy on the merits, and his findings of fact and conclusions of law were but instruments of decision in the matter before him." Patterson v. Durham Hosiery Mills, 214 N.C. 806, 200 S.E. 906, 908.

"`When the judge below grants or refuses an injunction, he does so upon the evidence presented, and the only question is whether the order should be made, dissolved, or continued; he cannot go further and determine the final rights of the parties, which must be reserved for the final trial of the action.' N. C. Prac. & Proc. (McIntosh), Par. 876, p. 994, and cases there cited." MacRae & Co. v. Shew, 220 N.C. 516, 17 S.E.2d 664, 665; Lawhon v. McArthur, 213 N.C. 260, 195 S.E. 786; Sims v. Building & Loan Ass'n, 207 N.C. 809, 178 S.E. 568; Grantham v. Nunn, 188 N.C. 239, 124 S.E. 309; Hamilton v. Icard, 112 N.C. 589,17 S.E. 519.

Only a final judgment can become the law of the case. In the absence of agreement to the contrary, such a judgment can only be entered in term. Moore v. Cooper Monument Co., 166 N.C. 211, 81 S.E. 170. "A permanent or perpetual injunction *795 issues as a final judgment which settles the rights of the parties, after the determination of all issues raised." Galloway v. Stone, 208 N.C. 739, 182 S.E. 333.

Judge Johnston, in ordering the dissolution of the restraining order, acted under the mistaken belief the constitutionality of the Fair Trade Act was then involved. The order is set aside. The cause is remanded to the Superior Court of Forsyth County for hearing on the question whether the temporary order should be continued to the final hearing.