"The Carolene Products Company is a Michigan corporation, whose sole business is the sale of three products, known respectively as `Milnot,' `Milnut,' and `Carolene.' Milnut was, briefly, a product resulting from the mixture of coconut oil, skimmed milk, and fish oils. Milnot was the same product except that cottonseed oil was substituted for coconut oil. Both of these products are sold under the name of `Carolene.' Since, for the purpose of this case the distinction between the three products is entirely immaterial, I will refer to the company's product as `Carolene' throughout this opinion.
"Carolene is manufactured by the Litchfield Creamery Company, a corporation, operating creameries in Litchfield, Illinois, and Warsaw, Indiana. Throughout this opinion all dates, when material, will be as of the year 1941, unless specifically stated otherwise.
"The defendant, Charles Hauser, was President of the Carolene Products Company; was one of the original incorporators thereof, and a director of that company. The defendant William H. Hartke was President of the Litchfield Creamery Company and Vice-President of the Carolene Products Company. The main offices of the Carolene Products Company were maintained at the Litchfield Creamery Company's Litchfield plant and the same rooms in that plant served for offices of both the Carolene Products Company and the Litchfield Creamery Company. Charles Hauser's office was in the Litchfield Creamery Company's plant, from which office he carried on his duties in relation to both companies. This same office was used by Hartke to transact his business in connection with the two companies. In short, the Carolene Products Company was a corporation, which marketed one of the products of the Litchfield Creamery Company.
"The indictment in this case, as noted above, is brought under Title 21 U.S.C.A. Sections 61, 62, and 63, which read as follows:
"`Section 61. Filled Milk; definitions. Whenever used in sections 62 and 63 of this title —
"`(a) The term "person" includes an individual, partnership, corporation, or association.
"`(b) The term "interstate or foreign commerce" means commerce (1) between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; (2) between points within the same State, Territory, or possession, or within the District of Columbia, but through any place outside thereof; or (3) within any Territory or possession, or within the District of Columbia; and
"`(c) The term "filled milk" means any milk, cream, or skimmed milk, whether or not condensed, evaporated, concentrated, powdered, dried, or desiccated, to which has been added, or which has been blended or compounded with, any fat or oil other than milk fat, so that the resulting product is in imitation or semblance of milk, cream, or skimmed milk, whether or not condensed, evaporated, concentrated, powdered, dried, or desiccated. This definition shall not include any distinctive proprietary food compound not readily mistaken in taste for milk or cream or for evaporated, condensed, or powdered milk, or cream where such compound (1) is prepared and designed for feeding infants and young children and customarily used on the order of a physician; (2) is packed in individual cans containing not more than sixteen and one-half ounces and bearing a label in bold type that the content is to be used only for said purpose; (3) is shipped in interstate or foreign commerce exclusively to physicians, wholesale and retail druggists, orphan asylums, child-welfare associations, hospitals, and similar institutions and generally disposed of by them.
"`§ 62. Same; manufacture, shipment, or delivery for shipment in interstate or foreign commerce prohibited. It is declared that filled milk, as herein defined, is an adulterated article of food, injurious to the public health, and its sale constitutes a fraud upon the public. It shall be unlawful for any person to manufacture within any Territory or possession, or within the District of Columbia, or to ship or deliver for shipment in interstate or foreign commerce, any filled milk.
"`§ 63. Same; penalty for violations of law; acts, omissions, and so forth, of agents. Any person violating any provision of sections 61 and 62 of this title shall upon conviction thereof be subject to a fine of not more than $1,000 or imprisonment of not more than one year, or both. When construing and enforcing the provisions of said sections, the act, omission, or failure of any person acting for or employed by any individual, partnership, corporation, or association, within the scope of his employment or office, shall in every case be deemed the act, omission, or failure, of such individual, partnership, corporation, or association, as well as of such person.'
"The indictment is in eight counts, charging eight separate shipments of filled milk from Warsaw, Indiana, to Clarksburg, Parkersburg, Weston, Morgantown, and Moundsville, in the Northern District of West Virginia. All these shipments were made between February and July of the year 1941, and totalled 5,800 cases, of 48 cans to the case.
"Many of the pertinent facts were stipulated upon the trial of this case. Such proof as the Government did introduce was not denied by the defendants. Therefore, there is really no dispute as to the facts involved. They are briefly as follows:
"The Litchfield Creamery Company would bring into its Warsaw, Indiana, plant, whole milk procured from the farmers in that vicinity. The cream was then separated from this milk. To the skimmed milk thus obtained was added a sufficient quantity of cottonseed oil to replace the butter fat extracted with the cream. There was also added a small quantity of high potency fish-liver oil to introduce vitamins A and D into the product. The entire product was then evaporated to the consistency of that ordinarily found in condensed whole milk. It was then homogenized; that is, it was forced under great pressure through small openings, resulting in the breaking up of the fat globules in the cottonseed oil and distributing the same evenly through the entire body of the resulting mixture, thus insuring that when this product was canned the oil would not rise to the top but would remain suspended through the entire volume of milk. Upon the completion of the evaporation and homogenization, the product was placed in cans, the cans labeled and packed in cases. The cases, in turn, were placed in the warehouse at Warsaw. Thompson, the manager of the Warsaw plant, was originally employed by Hauser. He received his orders as to bills of lading from Hartke and Hauser.
"The Company had salesmen calling upon the various wholesale grocers in the country and soliciting and taking orders for `Carolene.' These orders were sent into the main office at Litchfield, and the Litchfield Office would then contact the plant at Warsaw, usually by telephone, sometimes by written order, and instruct the Manager of the Warsaw plant to ship a designated number of cases of Carolene to a given purchaser. These cases were shipped by railway freight, the Carolene Products Company being designated as consignor. Payment for the goods was made to the office at Litchfield, checks being banked with a rubber-stamp endorsement of the Carolene Products Company.
"This same business was being carried out at the Litchfield plant; however, in this particular case, all shipments were actually made from Warsaw.
"In the year 1941, the Warsaw plant sold 440,000 cases, and the Litchfield plant, 1,150,000 cases, of Carolene. Approximately half of this total output was shipped in interstate commerce.
"The product `Carolene' looked, tasted, and smelled like condensed whole milk and was of practically the same texture and consistency. It was packed in cans of the same size and shape customarily employed by packers of condensed, whole milk. * * *
"The contention of the defendants was that the product `Carolene' was a wholesome, nutritive article of food; that their labels properly branded the article; and that no fraud was perpetrated upon the public by its sale. For this reason they maintained that the filled milk act did not apply to this product. There is no contention by the Government that the defendants' labels violate any Act of Congress or regulation passed thereunder, and the labeling question is completely outside of this case. The other part of the defense, namely, that the product is wholesome and nutritive was argued at great length and with much ability by counsel for the defendants, both in their oral presentation and in their briefs filed with the Court. That argument boils down to about this contention, that about the time the filled milk act was passed, the commercial fortification of food products by the addition of vitamins not naturally present was not known to science. They contend that in 1923 medical science knew very little about vitamins. They further...
