Lucerne Cream & Butter Co. v. Milk Commission

Browning, J.,

dissenting.

I am not in accord with the majority opinion and in stating the reasons for my dissidence I shall go somewhat into the facts' that led up to the situation with which the Milk Commission was confronted.

The Virginia Act creating a Milk Commission first found in Chapter 357, Acts 1934, page 558, and passed by the General Assembly as an emergency measure on March 29, 1934, since amended but not in any particular of importance to this inquiry, is the subject of this litigation.

The precise act or ruling of the Commission which is challenged is rule or regulation number 4 governing the sale of milk in the Arlington-Alexandria Milk Market, which fixed the sale price of milk sold in paper or fiber containers at ifS more per quart than the same grade or character of milk sold in glass or bottle containers.

The general subject of milk control, including production, distribution and sale to dealers and to consumers has long been a disturbing and perplexing one in this and many other States. Some idea of its extent here may be had by quoting the preamble to the Act, which is as follows:

*502“Whereas, the production and distribution of milk and cream is an industry upon which to a substantial degree, the prosperity and health of the people of the Commonwealth of Virginia depend; and the present economic emergency is in part the result of the disparity between the prices of milk and cream and other commodities, which disparity has diminished the power of milk producers to purchase industrial products, has broken down the orderly production and marketing of milk and cream, and has seriously impaired the agricultural assets supporting the credit structure of • the commonwealth and local sub-divisions thereof; and
' “Whereas, unhealthful, unfair, unjust, destructive and demoralizing economic trade practices have grown up, and. are now carried on in the production, sale and distribution of milk, and milk and cream products in the Commonwealth, which impair the dairy industry in the Commonwealth, and the constant supply of pure wholesome milk to the inhabitants thereof, and constitute a menace to the health, and welfare of the inhabitants of the Commonwealth; and
“Whereas, in order to protect the well-being of the people of the Commonwealth of Virginia, and to promote the public welfare, public health and public peace, the production, transportation, processing, storage, distribution, and sale of milk and cream in the Commonwealth of Virginia, is hereby declared a business affecting the public peace, health and welfare, which should be supervised and controlled in the exercise of the police power of the Commonwealth in the manner hereinafter provided; now, therefore, etc.”

In carrying out the provisions of the Act and the accomplishment of its purposes the Commission adopted the policy of establishing geographical areas in the State, which are called markets, and looking to the welfare of all of the interests concerned it convened persons, natural and artificial, whose well being might be affected, in meetings to settle and determine issues or questions related to the industry. Parties contestant with, their witnesses and attorneys were heard.

*503The area with 'which the Commission had to do in this case-is composed of the city of Alexandria and counties in the northern part of the State, adjacent to the Potomac river and opposite the District of Columbia and the city of Washington, called the Arlington-Alexandria Milk Market. There were in this market some twelve distributors and producer-distributors when Lucerne, the appellant, applied for a license. Prior to that time it had owned and operated a sanitary milk plant in the city of Washington. The commission issued to Lucerne on August 28, 1940, a distributors license and one month later it petitioned for a modification of the price fixing regulations.

As appears, Lucerne’s grievance grew out of the fact that the Commission had established a differential of 1$ in favor of those distributors who used bottles as containers for delivery as against deliveries in containers other than glass bottles. The appellant-filed its petition with the Commission for relief based upon the alleged lack of legal authority to establish this differential.

After quite a lengthy hearing the Commission declined to abrogate the rule complained of or modify it and the case was appealed to the circuit court of the city of Richmond, in accordance with statutory requirement, which court entered an order’on December 8, 1942, holding that the Commission had the authority to adopt paragraphs “B” and “D” of Regulation No. 4 of the rules and regulations governing the Arlington-Alexandria Milk Market and that they were neither arbitrary nor unreasonable nor in conflict with constitutional or statutory law and dismissing the petition.. From this order Lucerne appealed; hence the case is before us.

The portions of the Act which are particularly germane to the questions at issue consist of the opening paragraph of Section 121 iy and the sub-paragraphs (b), (c), (h) and (j).

They are as follows:

“The commission is hereby declared to be an instrumentality of the Commonwealth, vested with power:
*504“(b) To investigate all matters pertaining to the production, processing, storage, transportation, distribution and sale of milk in the Commonwealth of Virginia.
“(c) To supervise, regulate, and control the production, transportation, processing, storage, distribution, delivery and sale of milk for consumption within the Commonwealth of Virginia.
“(h) The operation and effect of any provision of sections 1211W to 1211mm conferring a general power upon the commission shall not be impaired or qualified by the granting to the commission by this act of a specific power or powers.
“(j) The commission, after public hearing and investigation, may fix the prices to be paid producers and/or associations or producers by distributors in any market or markets, may .fix the minimum and maximum wholesale and retail prices to be charged for milk in any-market, and may also fix different prices for different grades of milk. In determining the reasonableness of prices to be paid or charged in any market or markets for any grade, quantity, or class of milk, the commission shall be guided by the cost of production and distribution, including compliance with all sanitary regulations in force in such market or markets, necessary operation, processing, storage, and delivery charges, the prices of other foods,- and the welfare of the general public.”

. Paragraphs “B” and “D” of Regulation No. 4 fix the prices, retail and wholesale, of milk in quarts delivered in glass containers and delivered in other than glass containers. They reveal the 1 (¡¡ differential which we have referred to. It seems needless to .list the prices in detail.

The appellant brought error in three particulars. The first calls in question the authority of the Commission to adopt the regulation complained of. The second assails the regulation as in violation of the Constitution of Virginia and the Fourteenth Amendment to the Federal Constitution. The third attacks the regulation as being arbitrary, unreasonable and capricious.

*505The first assignment will receive major consideration for I regard it as the most important and the burden of the appellant’s effort, I think, revolves about it.

It is urged that in no provision of the law can there be found the power given to the commission to fix different prices except for different grades of milk, in other words the price cannot be variant conditioned upon the character of container used in delivery.

The contention is that in paragraph (j) alone is perceived the Commission’s authority to fix different prices of milk and the reasoning is very nearly limited to these lines of the paragraph: “ * * * may fix the minimum and maximum wholesale and retail prices to be charged for milk in any market, and may also fix different prices for different grades of milk.” The important significance of the last sentence or clause in the paragraph is left out of view, which is to the effect that the reasonableness of prices fixed in any market for any grade, quantity, or class of milk, shall be determined by the Commission according to the cost of production and distribution, including compliance with all sanitary regulations in force in such market, operation, processing, storage, and delivery charges, the prices of other foods and the welfare of the general public.

It will be noted that the words embraced in the act, upon which the appellant well nigh rests its case, are permissive, that is, the Commission may, (if it elects or thinks wise and best,) exercise certain rights, or it may not, but its guide in determining the matter of prices is imperative. It shall, in the exercise of this most important function, be guided by and take into consideration all the elements enumerated above, the last, and I shall say the greatest, being designated, “the welfare of the general public.”

I am impressed with the thought that the Milk Commission, in the administration of the important trust with which it is charged, has been given by the legislature almost plenary power, and the underlying reason for such grant of authority is the well being of the general public. It would be impossible to conceive a more wholesome and benign purpose.

*506In its investigations the Commission found that, in round numbers, the sum of $29,000.00 per annum was saved to the milk consuming public by the 1$ reduction. Lucerne complains of its plight as compared with that of the bottle distributors in that economic field. But to me it is highly conceivable that it might readily adopt a bottle delivery and at the same time retain its fiber container and supply the demands of two types of consumer, one the general public and the other a discriminating public who might prefer the single delivery container, which is said to be perfectly sanitary, and who would be willing to pay the extra cost for this assurance.

It is also proper to state that the commission had before it witnesses, lay and expert, representing every conceivable interest to be affected and it had the benefit of a comprehensive report on costs of distributing milk in the Boston market prepared for the Massachusetts Milk Control Board by Charles F. Rittenhouse & Co., certified public accountants, Boston and New York, and a report by the Bureau of Markets to the Director of Agriculture pertaining to the costs for distributing fluid milk for the Los Angeles County marketing area, and a treatise entitled The Single Service Container and its Effect on Milk Distribution Costs, by the fluid market assistant for the California State Department of Agriculture. This constituted a reservoir of information for its guidance.

It will be further noted that in paragraph (b) the Commission is vested with the power to investigate all matters incident to supplying milk for the consumer, and that in paragraph (c) it is given the power to control and regulate the various steps between production and delivery and sale of milk.

The intention of the legislature, which is always a cardinal point to be considered in the construction of a statute, undoubtedly was, as expressed in the preamble to the Act, to promote the public welfare, public health and public peace of the Commonwealth of Virginia, and the production *507and sale of milk and cream was declared to be a business affecting all of those values.

The final pronouncement of the preamble is that the supervision and control of the business should obtain in the exercise of the police power of the Commonwealth “in the manner hereinafter provided.”

Of course, the preamble is not a part of a statutory enactment but it may always be recited as indicating the intention of the law makers and as affording the reasons for the enact-, ment.

The position of the appellant that the recitals of the preamble cannot be so employed unless there be ambiguity as tp the meaning of the act is not sound, I think, and if it were, I would say that it is difficult indeed to so frame human language in the malting of a law as not to render it susceptible to some doubt, especially if it serves the purpose of the interpreter to so view it.

My motion that the Act viewed and considered in its entirety, as it must be, affords ample warrant for the decision of the trial court becomes quite apparent. But if I had any doubt of it it would be dispelled by a fair consideration of paragraph (h). Why this provision has not had a larger place in the discussions found in the briefs in the majority opinión I do not know. To my mind it is exceedingly impressive as settling the questions at issue. It is in these words:

“(h) The operation and effect of any provision of sections 1211W to 1211mm conferring a general power upon the commission shall not be impaired or qualified by the granting to the commission by this act of a specific power or powers.” (Italics mine.)

Perhaps the lawmakers foresaw just such an effort as is here made and forestalled it by making this provision a part of the act. The creator erected a fortress to protect the structure from successful assault. This is just what that provision does in my opinion.

In the case of Reynolds v. Milk Comm., 163 Va. 957, 179 S. E. 507, this court, in an exhaustive opinion written by Mr. Justice Gregory, held the Milk Act constitutional. ' It *508withstood the vigorous attack made upon it. But for that the right of the Commission to fix prices, in any event, would doubtless be assailed.

The constitutionality of the Act was also upheld in the case of Highlands Farm Dairy v. Agnew, 300 U. S. 608, 57 S. Ct. 549, 81 L. Ed. 835, in which the late Mr. Justice Cardozo delivered the opinion, and this was said:

“The power of a state to fix a minimum price for milk in order to save producers, and with them the consuming public, from price cutting so destructive as to endanger the supply, was affirmed by this court in Nebbia v. New York, 291 U. S. 502, 78 L. ed. 940, 54 S. Ct. 505, 89 A. L. R. 1469, and in other cases afterwards.”

I have cited the above not as precisely applicable to the issues involved in this case but as showing the extent to which the Supreme Court of the United States has gone in upholding the general powers of the Commission.

Two fairly recent cases which are informative and interesting as to the questions under consideration are Borden’s Farm Products Co. v. Ten Eyck, 297 U. S. 251, 56 S. Ct. 453, 80 L. Ed. 669, and Mayflower Farms v. Ten Eyck, 297 U. S. 266, 56 S. Ct. 457, 80 L. Ed. 675. They are particularly applicable to the second assignment of error which, it will be remembered, charges discrimination and a denial of equal protection of the laws and thus offends the Virginia State Constitution and the Fourteenth Amendment of the Federal Constitution.

These cases are cited by the appellant and to some extent relied upon by it and they are analyzed by the appellee showing that the facts in each of them are quite dissimilar to those in the case at bar.

The quotation from the opinion in the Borden’s Case, supra, found in both briefs is not sufficiently full and complete to render comprehensive the meaning of the writer, who was Mr. Justice Roberts. This is what was said in full: “To adapt the law to the existing trade practice was neither unreasonable nor arbitrary. The present case affords an excellent example of the difficulties and complexities which *509confront the legislator who essays to interfere in sweeping terms with the natural laws of trade or industry. The danger in such efforts always is that unintended dislocations will bring hardship to groups whose situation the broad rules fail to fit. Where, as here, there is recognition of an existing status and an attempt to equate the incidence of the statute in accordance with it, we find a compliance with, rather than a disregard of, the constitutional guaranty of equal protection. The appellant cannot complain if, in fact, the discrimination embodied in the law is but a perpetuation of a classification created and existing by the action of the dealers. In the light of the facts found the legislature might reasonably have thought trade conditions existed justifying the fixing of a differential. Judicial inquiry does not concern itself with the accuracy of the legislative finding, but only with the question whether it so lacks any reasonable basis as to be arbitrary. Standard Oil Co. v. Marysville, 279 U. S. 582, 586, 587, 73 L. Ed. 856, 860, 861, 49 S. Ct. 430.”

This is applicable to the case at bar because there was an existing status in Virginia, as recognized in the preamble to the Act, and in the finding of fact, and an attempt is perceived to equate the incidence of the statute in accordance with it, and that was found to be a compliance with, rather than a disregard of the Constitutional guaranty of equal protection. It was held that the differential was not objectionable as destructive of equality between the two persons affected.

It is well to note that the differential between the two types of container established by the Commission by Regulation No. 4, paragraphs “B” and “D”, became effective before Lucerne or any fiber distributor came into the Market. Therefore it could not have been aimed at a particular distributor using fiber containers, but its application is general.

A finding of fact by the Commission is a part of the record and it is replete with information gleaned by it in nine separate hearings, three of which were at the instance of Lucerne, the last one in February, 1941, and consuming three days. It also sets forth quite fully its reasons for the *510differential. To recite all of them would lengthen this dissent to a tedious extent. It seems sufficient to say that what is known in the trade as a bottle deposit was adopted. Its mechanics are these: For milk sold in bottles through stores the consumer is required to deposit .3^ per bottle, which is returned when the bottle is returned. Theretofore the expense of the bottles incident to their being lost or never getting back to the distributor was substantial. It is shown that without the deposit, bottles made an average of 6 trips only and then they were lost sight of. On the other hand with the deposit obtaining a bottle would make from 46 to 73 trips. It is not difficult to see that this cost had to be paid or absorbed by someone and this someone is generally, and certainly in this case, the consumer. The Commission found by this saving in the cost of bottles the price of milk to the consumer could be reduced 1 f per quart. So that the price of the milk sold in bottles was reduced in that amount, which was passed on to the consumer, but the price fixed for the fiber container distributor remained the same, or where it was, which is a difference of 1 f per quart. Now if the bottle deposit of 3^ were eliminated the reduction to the consumer could not be had and the bottle distributor and fiber distributors would be left to their own devices as competitors, which the Commission reasons would put the business back in the confused state which theretofore existed.

■ It is also well to say that the finding of fact shows that the Commission, in fixing the prices, took into consideration all of the incidents and factors entering into the milk industry and did not base the if differential on any single item as, for instance, the container. I am impressed by the apparent thoroughness, patience and fairness of the Commission in solving the vexing problems before it and its success in adjusting a complex situation affecting such a variety of interests.

I may say that this court and like courts of other states have construed similar statutes with reference to their spirit and reason, which is obedience to a vital conception of statutory construction.

*511In the case of Enoch v. Commonwealth, 141 Va. 411, 435, 126 S. E. 222, the following excerpt was quoted with approval:

“In Black on Interpretation of Laws 48, many cases are cited in support of the following statement of the text: ‘A statute should be construed with reference to its spirit and reason; and the courts have power to declare that a case which falls within the letter of the statute is not governed by the statute, because it is not within the spirit and reason of the law and the plain intention of the legislature.’ ”

And in Stanley v. Tomlin, 143 Va. 187, 129 S. E. 379, it is said:

“ * * * it is essential that the statute be construed ‘with reference to its subject matter, and the object sought to be obtained, as well as the legislative purpose in enacting it; and its language should receive that construction which will render it harmonious with that purpose rather than that which will defeat it.’ Mapp v. Holland, 138 Va. 519, 122 S. E. 430, 37 A. L. R. 478.”

I cannot escape the conviction that the majority opinion is a grave blow to the usefulness of the Milk Commission. It is a constricted interpretation of a statute that is based upon- humane principles designed to promote and conserve the public well-being. It sterilizes a legislative effort which was conceived in a desire to thwart a growing economic evil. I fear that it is about to go the way that many critics of liberal government wish all bureaus and boards and commissions to go. To them it is a consummation devoutly to be wished. They are unpopular in the extreme. I think we must discriminate between those which serve a salutary purpose and those that are either useless or harmful.

If government is not to remain static but is to progress to a state of higher efficiency I know of no substitute for such member of its body, as this, which has been crippled, as I see it, by judicial fiat.